What have we learned from the last three decades of empirical studies on factors driving local privatisation?

Scholarly empirical studies on factors that motivate local privatisation have greatly grown in the last decade. As well, having available better and more comprehensive databases and using more refined empirical techniques have made possible to enhance our understanding of the dynamics of local privatisation, particularly in many European countries. The influence of fiscal stress, cost considerations – scale economies as well as transaction costs – and political partisan interests is usually confirmed. Furthermore, ideological attitudes appear to be more influential than they seemed to be, particularly when considering social services, rather than the technical ones

On the optimal distribution of traffic of network airlines

Network airlines have increasingly focused their operations on hub airports through the exploitation of connecting traffic. However, in this paper we show that they may also have incentives to divert traffic away from their hubs. More precisely, we examine how the optimal distribution of traffic of network carriers can be affected by the two major recent innovations in the airline industry: the regional jet technology and the low-cost business model. On the one hand, we show that a network airline may find it profitable to serve thin point-to-point routes with regional jets when the distance between endpoints is sufficiently short and there is a high proportion of business travelers. On the other hand, we observe that a network airline may be interested in serving thin point-to-point routes by means of a low-cost subsidiary when the distance between endpoints is longer and there is a high proportion of leisure travelers. We conclude that network airlines are using those innovations to provide services on thin routes out of the hubs

Airline consolidation and the distribution of traffic between primary and secondary hubs

Several airline consolidation events have recently been completed both in Europe and in the United States. The model we develop considers two airlines operating hub-and-spoke networks, using different hubs to connect the same spoke airports. We assume the airlines to be vertically differentiated, which allows us to distinguish between primary and secondary hubs. We conclude that this differentiation in air services becomes more accentuated after consolidation, with an increased number of flights being channeled through the primary hub. However, congestion can act as a brake on the concentration of flight frequency in the primary hub following consolidation. Our empirical application involves an analysis of Delta's network following its merger with Northwest. We find evidence consistent with an increase in the importance of Delta's primary hubs at the expense of its secondary airports. We also find some evidence suggesting that the carrier chooses to divert traffic away from those hub airports that were more prone to delays prior to the merger, in particular New York's JFK airport

Reinterpreting EU air transport deregulation: a disaggregated analysis of the spatial distribution of traffic in Europe, 1990-2009

This paper analyses the spatial distribution of seat capacity in the EU from 1990 to 2009 and sheds light on the contrasting results in the literature. It contributes to the debate on the deregulation and whether the rise of hub-and-spoke networks and the success of low-cost carriers lead to concentration or deconcentration. We use the Gini index and its decomposition to evaluate the contribution of airport subgroups and airline networks to the overall concentration of seat capacity. We conclude that, overall, seat capacity follows a spatial deconcentration pattern. While intra-EU seat capacity became more spatially deconcentrated, extra-EU seat capacity concentrated. However, our results do not support the general view that network carriers tend to increase concentration levels and low-cost carriers to decrease them, leading us to a reinterpretation of the impacts of air transport deregulation. The results show the increasing importance of foreign carriers and new strategies such as hub-bypassing

Similar problems, different solutions: Comparing refuse collection in the Netherlands and Spain

Because of differences in institutional arrangements, public service markets, and national traditions regarding government intervention, local public service provision can vary greatly. In this paper we compare the procedures adopted by the local governments of The Netherlands and Spain in arranging for the provision of solid waste collection. We find that Spain faces a problem of consolidation, opting more frequently to implement policies of privatization and cooperation, at the expense of competition. By contrast, The Netherlands, which has larger municipalities on average, resorts somewhat less to privatization and cooperation, and more to competition. Both options-cooperation and competition-have their merits when striving to strike a balance between transaction costs and scale economies. The choices made in organizational reform seem to be related to several factors, among which the nature of the political system and the size of municipalities appear to be relevant. © 2010 Blackwell Publishing Ltd