Topic: Local services and Infrastructure - Institutions, Regulation, Finance

 

 

In the field of public administration the European Union does not have a policy in relation to Member States. Furthermore, the EAS concept is particularly relevant at local level where citizens’ expectations are naturally higher, the network of relationships amongst actors is particularly dense and where civil servants and decision-makers need more capacity building to handle innovations and anticipate problems and opportunities.

The working group intends to tackle a deep analysis of EAS, focussing on local services and infrastructures, with an analysis that takes into consideration the following:

- the role of local institutions,

- the absence or presence of a regulatory framework,

- the role of traditional and innovative financial institutions and tools at local level.

 

Local institutions and public administration at the local level

Historically, the provision of so-called local public services and the design, tendering, management and operation of local infrastructures have been carried out with different local institutional and administrative frameworks in different geographical areas.

A separate analysis of institutions and public administration frameworks could be a fruitful way to approach the issue: institutions here are defined as a combination of formal rules and informal constraints which structure political, economic and social interactions (North, 1991 and Williamson, 1998). In this regard, the institutional framework deals with formal and informal rules and strategic policy goals. The administration is based upon local institutions and indeed is greatly influenced by the expectations coming from individual citizens and society as a whole and it is characterised by standards whose drivers and impact on local services might vary greatly across regions, underlining the need to evaluate European-wide harmonisation processes and best practices diffusion.

Service provision and regulatory frameworks at the local level

At the local level, customers of regulated services are typically very sensitive to quality and price and can express their discontent in vociferous ways. Additionally, the regulated firms can often enjoy relatively close ties with the local public authorities, either institutions or administrations, with the result that boundaries between the regulators and the regulated are blurred (e.g., ‘revolving doors’ mechanisms), making more complex the daily work of local public administrators. Moreover, at the local level, the regulators and administrators may lack the capacity to deal with complex regulatory systems and techniques, which could be acquired through various forms of direct or vicarious learning or policy transfer programmes.

The local level, therefore, poses some special issues that especially originate from the deep intertwining of social relations between local actors. This origin entails various sources of resistance to enforce the ‘hardest’ parts of regulation, e.g., managing tender competitions for the award of franchises, monitoring investments, costs and tariffs, and inflicting sanctions for poor performance or contract breach. This resistance (and the improper costs that might be imposed upon regulatory agencies, regulated actors and indeed public administrators) can potentially undermine the efficiency and effectiveness of regulatory systems in ways that are relatively alien to the concerns of national and super-national regulators.

Hence, when designing local service provision and regulation, an important issue to consider is the nature of the actors involved (e.g. franchisers, local government, local administrators, administrative magistrates, banks and other financial actors, insurers and reinsurance companies, consumers, and environmental lobbies), their information endowment and exchange, the incentives that drive their choices, and the types of relationships established. These are all features that influence the outcome of policies and projects, their success or failure, notwithstanding the institutional, administrative and regulatory framework officially established. To this aim, the Turin School of Local Regulation has developed a tool called FIELD – Framework of Incentives to Empower Local Decision-Makers, which can be chosen by paper authors to structure their analysis or to derive useful hints (www.turinschool.eu/FIELD).

 

The role of traditional and innovative financial actors and tools at local level

Investment in infrastructure and services is indeed the big current issue, due to the current scarcity of public funds in western countries, especially at local level.

Moreover, when the infrastructures and local public services are characterised by revenue streams that directly affect citizens, specific attention is required to protect the public interest and to achieve a fair allocation of risks whilst maintaining the solvency and the ability to attract a sufficiently large number of funding operators. The question is whether consumers should pay, and to what extent, the higher bills involved, and the consequent implication for general fiscal engagement. Investors, on their side, look carefully at what they will ultimately get, in particular from tariffs and fees paid by consumers, balanced with possible equity injections from the public side. Until that becomes clear, in times of dire public finance, involving private finance in large numbers, building sound and effective public-private partnerships will probably remain wishful thinking. A possible answer to start facing these current challenges is stakeholders, local regulators’ and local administrators’ capacity building: this is strongly needed.

The most interesting local level to study today is indeed the urban level. Cities today represent an extremely valuable attractor of investments, especially because of the paradigm shift in infrastructure and services that the framework of a "smart city" is keen to foster and promote. Smart city development is high-ranked across the political agenda worldwide and the ability to attract relevant investment is real.

The challenge in terms of skills, capacity, financial innovation that local administrators and decision-makers will have to face is relevant and theoretical and/or evidence-based research on this topic is necessary.

Considering these background elements, the Working Group on "Local services and infrastructure: institution, regulation, finance” is seeking paper proposals for the 24th NISPAcee Annual Conference as much as possible with a multi-disciplinary approach as contributions from economics, finance, political science, laws, and sociology can indeed provide a richer and broader perspective.

In particular, papers tackling the following research topics are particularly welcome:

1) Asset ownership and service delivery in local public services (*).

2) Regulatory framework of local public services (*).

3) Innovative project financing initiatives and administrative procedures for infrastructure and local public services.

4) Disruptive technologies, smart city platforms and local institutions and administrations.

5) Relationship between local and central regulation.

6) Trust, uses, culture and ethnical aspects: the impact on local services.

7) Distributional aspects, tariffs, equity, phenomena of arrears in utility bills, subsidisation.

8) Is the harmonisation of administrative standards s sufficient to ensure the desired quality and performance of local public services? How can local policy diffusion be enhanced?

9) Innovative capacity building processes and frameworks for the public sector involved in the regulation and provision of local public services.

Papers can present specific case studies from the NISPAcee region or provide a comparative analysis within different NISPAcee countries or between NISPAcee countries and other geographical areas.

 

(*). Templates and methodologies developed by the Turin School of Local Regulation are available at http://turinschool.eu/lorenet/table and www.turinschool.eu/FIELD