The Local Agencies for the Public Services: the Italian case. ∗
Carla Scaglioni June 2005
Abstract The work aims to analyse and evaluate the local regulatory agencies’ effectiveness in affecting the local political decision making process. A series of ratios were computed on the basis of monitoring and reporting activities to the local political institution, performed by the two main Italian local agencies: Rome and Turin. As expected, the results are quite controversial, and this is essentially because the same subject (the Local institution) plays the role of provider and regulator at the same time. JEL Classification Numbers: H11, H41, H77, H83 Key Words: • multi-level governance • institutional evaluation • accountability • integrated programmes public services
∗
University of Rome “Roma Tre”, the paper was written while the author was Research Fellow at the Department of Political Institutions and Social Sciences. MEF-DPS-UVAL, Regional Public Accounts, Via Gaeta 3, Rome, Italy, email:
[email protected]. I am grateful to Carlo Chiama and Alessandro Gobbi for the data provision and Fabio Fiorillo, Emma Galli and Anders Hanberger for helpful comments. Any remaining errors are the responsibility of the author. The opinions expressed herein are those of the author and do not necessarily reflect those of the author’s employers.
1
Introduction and a review of the literature The need to reform public service supply represents a central issue in the current policy agenda not only in Italy. Public governments are implicated in a significant number of regulatory activities, such as public utilities or financial institutions, in order to ensure a certain desired outcome. Therefore, regulation implies public intervention within the markets as a response to some mixture of normative objectives and private interests expressed through politics (Baron, 1987; Sappington and Stiglitz, 1987). Following a recent definition, we consider as “public services” all the goods whose consumption produces collective benefits and whose supply in an unregulated market would be under-provided (Besley and Ghatak, 2003). The point claimed is not to emphasized the importance of the regulatory theory in general, but to analyse its effectiveness in giving the correct response to the citizen’s demand, i.e. if decentralising the provision of public services produces an increase in their efficiency and effectiveness. In fact, the main widespread criticisms raised against the centralised government provision are i) absence of choice (different needs and preferences are not taken into account properly); ii) inefficiency in
2
production (citizens are still not considered as “customer” as in private sector). Traditionally, the standard model of local services provision was represented by public monopolies, bureaucratic organisation and largescale direct employment. Starting from the radical Tory reformers at the beginning of the 1980s in UK, a new approach to the problem was proposed, addressing that a likely method to pursue efficiency in public services delivery was to open up the local monopolies to competition, within a regulatory system, where local Agencies could represent citizens’ interests This rises of course a problem of incentives and agency costs. As synthesized (Besley and Ghatak, 2003), the literature1 identified two main different approaches to the provision of public services. In the hierarchical or centralised model, the consumers delegate the elected government, who becomes responsible in dealing with the services providers. In this case, the citizens have no an active role within the game. It is also possible to observe a problem of asymmetric information, both between the citizens and the politicians and between the politicians and the providers.
1
For a review, see Archibugi et al. (2000), Besley and Ghatak (2003).
3
Figure 1-The hierarchical or centralised model
Citizens
Government Providers
Source: Elaboration on Catanoso and Scaglioni (2001), Archibugi et al. (2000) and Besley and Ghatak (2003)
On the other side, we have a horizontal model, where citizens are considered as residual claimant i.e. consumers. This means a closer link between consumers and services providers.
4
Figure 2-The horizontal model
Choice on the services delivered
Local Government
Demand for participation
Vote
Taxes, transfers Regulated Provision
Service Provider
Citizens/ Consumers Service Demand
Source: Elaboration on Catanoso and Scaglioni (2001), Archibugi et al. (2000) and Besley and Ghatak (2003)
As it is quite intuitive, in this second case the accountability structure is better defined, delimiting the rules of games, i.e. “the chain of command and control and the formal authority that each principal and agent is governed by” (Besley and Ghatak, 2003: 5). Consequently, the main point here is to define the role that the local public agencies could play within a
5
horizontal approach to the service provisions, having clearly in mind which is the general task of a Regulatory Authority. According to the market structure, an Authority could be asked just to have a pure control power i.e. just controlling if the providers are following the market rules imposed by law. This is the case of competitive market. On the other hand, the Authority could be asked to be a real Regulator Body, with specific powers in terms of incentives, price and punishment, which can be used on the providers. Connected to this aspect, there is of course a problem of evaluation of the Authority’s performance. Some authors (Levy and Spiller, 1996; Baldwin and Cave, 1999) have indicated two main dimensions for helping this evaluation process: the regulatory governance and the regulatory incentive. The former emphasises the trade-off between independence and accountability, towards the local government and citizens. The latter covers all the internal rules, which drive the Authority’s decision-making process. The result is that we could take into account in our evaluation analysis five benchmarks: the respect for legislative mandate, the accountability, the due process, the expertise and the efficiency. The question is now if this theoretical framework works or not in reality. Are these bodies helpful in supporting the local government in the
6
services delivering process? Or are they just an other more sophisticated way to increase the power of the local bureaucracy? In order to try to understand better their function and their role, we thought to consider the case of Italy, where the regulatory framework is still quite “young” if compared with others experiences. This case study seems to be quite interesting even for the recent federalist reform, which occurred and could play a decisive role in the definition of the regulatory system. The aim of this work is to redefine the role of the local public regulator through an empowerment of the local public Agencies. The proposal for the case of Italy is to shift towards a regional network, in which the national authorities can convey their expertise and where it would be possible for governments to account for the use they make of citizens’ inputs received through feedback, public consultation and active participation. The analysis is structured as follows: the first part is devoted to the definition of a methodology to evaluate the behaviour of a local public Agency. In the second one, it is presented the regulatory legislation framework in Italy. The third part deals with to two case studies in Italy: Turin and Rome. The findings and the possible implications in terms of policy are discussed in the concluding remarks.
7
The relevance of an evaluating system within a regulatory programme
Investigating the role played by a local Agency within a local regulation framework means to determine if such a body is useful in improving local services provision in terms of efficiency and effectiveness. This last consideration has driven the work towards the definition of a general model, pushing to use the methodology already consolidated by the European Commission in order to evaluate the socio-economic programmes, financed through the Structural Funds. The result is a system of indicators that take into account the activities, carried out by the Agency, and the possible impact on the standards of services provided. As already underlined, “an indicator produces quantified information with a view to helping actors of public interventions to communicate, negotiate or make decisions. Within the framework of evolution, the most important indicators are linked to the success criteria of public interventions”(European Commission, 1999). Of course, there is a variety of indicators. In this case, following the European terminology, we use two different typologies: the indicators related to the phase of completion of
8
the intervention, made by the Agency and the ones related to evaluation criteria. A programme involves the use of resources (financial, human and institutional) with a specific aim: achieving a global objective. This happens for the creation of a regulation programme, too. The principal aim in this case is to improve the quality of the provided services, using the resources mobilised in an efficient way. The role played by a local Agency is an important part of this process. It is possible to define the indicators by level of objective. According to the literature, each level involves different categories of people concerned by the regulation system. Regarding to the key actors, we can distinguish between financing authorities, operators, direct and indirect addresses or recipients. In this case, the financing authorities can be seen as the local government, which supports the public provision, deciding if intervening directly or letting the market to the liberal competition. Instead, the operators consist of both the local Agency and the services providers. They are the one, who use the resources and monitor their use.
9
The programme addressees or recipients correspond to all the people, the citizens, or organizations on which the programme has a negative or positive effect2, as represented in the following figure. Figure 3- Implementation of the programme and its effects
Implementation of the programme
Actors
Funding authorities
Operators
Social, Natural and Economic Environment
Citizens Direct addresses or recipients
Indirect addresses or recipients
Source: Elaboration on graph in the Means Collection, European Commission 1999
As far as the types of indicators are concerned, we can find: resource indicators, that inform on the typology of inputs used to implement the provision. It could be the local public expenditure used directly by the local authority to supply or produce the public good, a fund devoted to incentive a private company, which provides the goods and the services 2
The definition for effect here adopted is the same used by the European Commission and includes both results and impacts; they cause a change in the system and are provoked by the implementation of the programme.
10
required, the budget allocated to let the Agency to carry out its tasks. Outputs indicators show the product of the operators’ activity. “More precisely, an output is considered to be everything that is obtained in exchange for public expenditure”(European Commission, 1999). In this case, we should consider the amount of services supplied, the interventions made by the Agency. Result indicators, instead, represent the direct effect on the citizens, providing information on changes occurred as consequence of the public interventions. For instance, if the Town Council accepts the Agency’s opinions, this contributes to increasing the quality of services. Impact indicators, vice versa, indicate the indirect effects, measurable in the mid-long term. Here we consider the sustainable improvement in the efficiency of the public services, caused by the Agency evaluation and monitoring activity, exercised on the providers, in orders to protect the citizens’ utility. The following table tries to sum up what said up till now, applying the definition of the indicators to the Agency work.
11
Table 1- Definition of indicators by level of objective Level of objective
Type of indicator Resource (input)
Definition
Budget devolved by financing authorities to the Agency, public funds, used to incentive private providers, local public expenditure allocated in producing public services Operational Output Agency’s activity objective Provision and production of the goods and services Immediate Result Immediate improvement specific objective (Immediate in the services quality Outcome) and efficiency for the citizens Sustainable Specific impact Sustainable improvement specific objective (Sustainable in the services quality Outcome) and efficiency for the citizens Strategic Global impact Global effect for the objective (Outreach) entire population Aim concerned
Key actors Financing authorities, Agency and public and private providers
Agency and public and private providers Resident citizens
Resident citizens
Resident citizens
Source: Elaboration on table in the Means Collection, European Commission 1999
The previous indicators help us to locate the Agency’s task within a programme of regulate provision of public services, vice versa the following ones give us the possibility to evaluate it. These very useful indicators allow finding some criteria, which drive the regulator to understand better the importance covered by this kind of local public
12
entities. They are relevance, effectiveness, efficiency and performance indicators. Relevance indicators show how important is the aim that Agency wants to reach. Effectiveness indicators indicate the ability of the Agency to reach the aim. They are computed by dividing the observed value at a given point in the time and the objective initially set. Efficiency indicators are the reconstructed dividing the measurement of what was obtained to the measurement of resources mobilised to obtain it. Performance indicators enclose the effectiveness and efficiency of outputs, results and impacts. Broadly speaking, the result and impact indicators are the most important for evaluation and monitoring. The scheme below illustrates the different types of indicator according to the operators’ responsibility.
13
Figure 4- Different types of indicator according to the operators’ responsibility
Resources
Outputs
Results
Impacts
Operators… …Are directly responsible for outputs (monitoring)
…are indirectly responsible for results since they can be observed …do the impacts (not control evaluation) Source: European Commision, 1999
As it was observed, “The reason for the most of the public activities is their effectiveness. In others words, It makes sense the public Government uses the resources in order to provide services, able to give some results, modifying the reality, that were in absence of the public intervention, politically (or socially or economically, or ethically, etc.) unacceptable. Therefore, the effectiveness is more important than efficiency, because the former is the last aim of the Public Administration. …Nevertheless, the decision maker, when he defines the quality and quantity of the desired result, cannot ignore the resources he needs to involve, expressed both in physical features (quantity and quality of employed work, of the plants, of the
14
goods and services purchasable on the market) and in monetary value, in term of budget e.g. in a balance sheet” (Bondonio and Scacciati, 1990: 53).
In order to test, the theoretical framework just described, we have applied it to the case studies chosen and presented in the following part of the work. The regulatory framework in Italy
Regulatory reform in Italy has implied a radical redefinition of the role of the State and its effectiveness. In particular, since 1997, after the introduction of the so-called “Bassanini reforms”, a huge programme for public sector revitalisation helped the Country in improving its use of best practice tools for regulatory quality. Therefore, the relationships between the state, citizens, and market were rethinked, engaging citizens actively in the policy making process. Within this course of actions, a variety of incentives, such as service contracts (Contratti di servizio) and citizens charts (Carte dei Servizi) for public services were introduced in order to improve the quality of the public services (transports, sanity, energy, communications), and to provide commitments to performance criteria and compensation for customer non-satisfaction.
15
According to it, Italy has undertaken a substantial program to liberalise local public utilities, to introduce market principles in water distribution, energy (other than electricity), public transport, and waste management. A series of laws were approved changing the regulatory environment. The result was the last Government interventions (Legge Finanziaria 20043), in which the tendering constraint was removed for all the local governments and it was converted in a mandatory procedure only in the case that private companies participate to the tender. Additionally, the Constitutional Reform occurred in 2000 and stated with the Constitutional Law n.3/2001, has modified substantially, Regions competences attributing to them new prerogatives, as shown in the following table.
3
Before the last Budget Law for 2004 the key feature of this process has been implemented, introducing the competition in mentioned sectors, comprehending the franchise-auction system. It was chosen a regulatory framework with a strong differentiation between the infrastructure planning and use and management of them. The former would have continued to be under the responsibility of the municipalities, instead the latter would have been open to private companies, pursuant the licenses. The local governments could have decided either to assign concessions by auctions or, for some services, to allow competition in the market, or finally, to maintain direct controls.
16
Table 2- Main Areas on which the Region have nowadays both legislative and administrative competence Social Services - Health system
care -
- School Aid
-
- Cultural Supply
-
- Professional Training
-
- Social Aid
-
- Welfare assistance
Planning and use of the Government of Economics territory Urban and territorial - Tourisme planning - Commerce Water and sewage system - Agriculture Defence of the territory - Fishery Protection of the environment - Handicrafts Transports planning with the possibility to give transfer funds in order to help local inefficient public companies
As it emerges, Regions have implemented their local power, both on the public goods provision and on the definition of the local regulatory system. This raises a series of contradicting evidences4. It is clear, reading the art. 117 of the Constitution, that it must be given a definitive asset to the regulatory framework, which must include all the levels of Government. As observed, what is stated in the article means that “the national government has the duty to define the level of output of public services and the level of benefits that citizens have the right to expect from 4
The last legislative interventions are quite contradictory compared with the previous choices, confirming a general preference for direct assignments of the service contracts. For a review, see OECD (2001) and Confservizi (2004).
17
regional government activities on the entire national territory. Regional governments have to abide to this determination. The prevision is strong and unequivocal in its final objective: an indisputable quest for uniformity”(Giarda, 2004: 21).
This drives to something even more complicated to solve i.e. the problem of how to interpret the assert “essential levels of outputs” or “of performance”, because this needs to define in a very clearly the output that must be reached in the public services provision and welfare programs. Again, “what criterion for choosing the level of output? What is really meant by “essentially” and how the concept is matched with fiscal budgetary conditions?” (Giarda, 2004: 22). The feeling is that the current regulatory Italian framework is quite affected by a big interests conflict between the three main levels of government: national, regional and local. Who regulates whom? Who provides what? And most important, how? The answer to this dilemma could be found somehow in the creation of National Independent Authorities, which were created during the 1990s in some strategic sectors such as competition, public utilities, energy, privacy, communications, public procurements, “pension funds”, nonprofit activities. They can have several kinds of powers to intervene
18
(administrative, quasi-legislative, quasi-judicial) and this has an impact on their way of regulating. Nevertheless, as it was recently remarked in reality, “after, quite short spring season, in the past few years independent authorities have come under severe scrutiny, particularly from political officials, under counts of lack of democratic legitimacy, scarce accountability, high cost (both direct and for the enterprises), and so on”(Parcu, 2004:5). The result was not a reforming process of the existing bodies, but just the end of the creation of other new previously announced sectoral Authorities for transportation, railways, mail services and water, leaving many sectors under this uncertain regulatory situation, where in some case traditional ministerial bodies, or the Italian Antitrust Authority were asked to intervene in substitution (Parcu, 2004:5). Considering he local level, the situation is even worse. The national legislator has introduced with the law 474/1994 the possibility to create some local independent authorities, in order to regulate the local public services. Their constitution is quite far to be a reality, since we can still count just few cases (Turin, Rome, Grosseto, Bologna, Palermo, Venice). Additionally they are Agencies that have just substantial characteristics of ordinary administrative departments, loosing even the, already weak, prerogatives of the national authorities.
19
Accordingly, it seems to be clear that a redefinition of the role of the local public regulator cannot be any longer postponed. One attempt could be an empowerment of the local public Agencies, creating a regional network, in which the national authorities can convey their expertise and where it would be possible for governments to account for the use, they make of citizens’ inputs.
The case of Rome and Turin
Since, as mentioned before, there are not so many and significant cases of local Agencies in Italy, we have decided to considered the two main experiences: Turin and Rome. Unfortunately, we need to start saying that available data were not sufficient, to allow a punctual comparison between the two Agencies. Nevertheless, we have identified their main characteristics, putting in evidence their nature, functions, tasks and powers, financial resources, composition and structure5. This first comparison indicates that there are not so big differences between them. They have more or less the same power and functions. In both cases, they are asked to support the Town Council in order to collect 5
See the tables 1.1 and 1.2 in the Annex.
20
all the required information, necessary to the Council to exercise its tasks. It is interesting to notice that for the Agency of Rome it is empathized its nature of third body between the consumers and the services providers in order to monitor the level of the supplied quality and eventually proposing new strategies to increase the standards in consumers’ favour. The only power they have is the access to all the information and the documents of the services providers that they need. All the information collected is processed to advice the Town Council on how to structure the service contracts and on how to modify the technical conditions, according to which, the public services should be provided. Moreover, they verify how the services are provided, how they are let know to the public, how they are implemented; and estimate the complaints and indications, made by the customers and their associations, promoting the Town Council’s initiatives. Likewise, they define the qualitative standards for the public services and monitor that these were respected. In particular, the Agency of Turin is asked to estimate the conformity of the citizens charts, according to Law Decree 286/1999, asking to the Town Council to intervene when necessary.
21
It is already clear that both are quite distant from being Independent Authority6. They cannot directly intervene on the providers, incentiving or sanctioning them. They can just try to intervene signalling to the Town Council deviating behaviours, which can produce a bias in the services provision. The point claim here is that to be effective a regulatory programme should identify unequivocally the level of regulation and control. Instead, in the way, these Agencies are operating and designed, there is a clear confusion between the local monitoring and incentives schemes, which will point out better in the following part. All the previous considerations aim to create an indicators framework, in order to evaluate the Agency’s activity, according to the relevance given to the citizens’ utility safeguards. Actually, the data available are only the one for the Agency of Turin’s activity7. We have tried to define some criteria in order to emphasize the importance to the previous element, given by the Agency during its enquiries. These criteria are constructed on the proposal, made by the Agency of Rome on the minimum elements that must be present in a service contract (Agency of Rome, 2003).
6 7
Even though they have their own budget. The Agency of Rome has not monitored its activity, yet.
22
The resulting indicators can be traced to the relevance, effectiveness, efficiency and performance ones. This exercise represents a first attempt to evaluate Agencies work, even though we are aware that it is not exhaustive. At moment, as we have illustrated in the first part, the literature on this topic is quite few and theoretical, here we try to go a little bit further in the analysis. The Agency of Rome has conducted recently a research on the whole of service contracts stipulated by the Municipality of Rome during the last decade. They cover all the public utilities sectors: energy, transports, environment and water resources, implying water provision, sewage and waste, public illumination, assistance for nursery pupils. The aim is to define a regulatory scheme, which could help to improve the efficiency and the quality of services supply. The result is a grid composed by 13 elements that should be included within the service contracts. Four of these elements are present in all the contracts, and correspond to the minimum common denominator among them. They are a) the validity period, b) the object or the service supplied in terms of quantity; c) the amount of subsidies received by the Municipality and the and cost schemes chosen; d) the definition of the pricing structure. Of course, these features are quite important but the do not cover fully the main aim of a regulatory programme that is not just to provide the
23
minimum quantity of services, rather to define the quantity and quality of service required by the territory. This last aspect is taken into account by the others elements, considered by the Agency, but that are less frequent or absent in the contracts analysed. In particular, we have e) the levels of quality of the services provided and the annual targets, f) the definition of monitoring means; g) the definition of economic supervising means; h) the ensuring clauses subscribed by the providers, i) penalties and sanctions; j) the forms for the resolution of the controversies, k) the forms of changing the contracts during the application period; l) citizens charts; m) the information given to the customers. No doubts that these last features are relevant as well as the previous ones, and the fact they are not present in majority of the contracts denotes a serious lack in the regulatory system. The Agency states that many of them were signed without a preliminary analysis conducted by the Agency itself and this is equivalent to invalid its role within the regulatory framework. The main task of the Agency is to be a “third body” between the citizens and the providers, but in most cases the Agency, the providers and the Municipality coincide and contribute in increasing a confused situation between the controlled and controllers. If we consider the data furnished by the Agency of Turin, it occurs that on the four analyses conducted in the period 2003-2004, none
24
of the judgments given to the Town Council was fully accepted; most of them result to be admitted only partially. This fact shows a clear conflict of interests within the local government, questioning the effectiveness of the Agency. Another fundamental aspect regards the sanctions or the penalties against the providers, if they do not respect the contracts, in terms of both quantity and quality. Here again, it is clear that a coherent incentives scheme cannot work properly without an adequate mechanism of reward and punishment. According to this second aspect, it even more difficult the Agencies’ position, since they cannot intervene directly on the providers, asking them to adequate the services supply or sanctioning them in case they do not respect the quality standards. As it is emerged, the current nature of a simple department is already a condition of failure for the Agency activity, because even though it represent a technical body, its analysis are mediate through a political institution, that can bias the final result. This becomes even more relevant when we are in presence of a direct assignment or a public company, where the majority of the shares belongs to the Municipality itself. Once again, it is denied to the citizens their role as the residual claimant of the regulatory scheme, since they are still not protected as required. It is not trivial that all the clauses, in which the citizens’ defence is involved,
25
are not present in the Roman contracts or not taken into account in the case of Turin. In the table 2., presented in the Annex, we show the main key indicators we have considered in our assumptions. For each of them is given a definition based on the general one, proposed in the previous pages. According to them, we have tried to give a score to the Agency’s activity, but for most of the indicators, this is almost impossible, since data are not available. For the others, we have used the data given by the Agency of Turin. We have compounded them with the elements provided by the Agency of Rome, ranking them in one to five, attributing more relevance to the suggestions, whose object was related to citizens’ defence or the introduction of sanctions in case of a lack both of quantity and quality service provision. In particular, the score obtained reveals that the Town Council has accepted the suggestions that were less substantial in terms of changing the services contracts. This reinforces our opinion about the limited role of these agencies. In addition, we have the feeling hat the political power run the Town Council cancels de facto the technical role attributed to the Agencies, penalising mostly the citizens.
26
Concluding remarks
According to the new regulative interventions occurred in the local public services provision, this work has tried to investigate the role of the local public Agencies, i.e. if there are helpful for the referring Municipality in ensuring a defined quantity and quality of service required by their communities. The main consideration, emerged from this analysis, is that these Agency are more or less just administrative department, without any relevant powers, apart from the relevance given to them time by time by the Town Council. The impression is that they are quite underestimated and not used in a proper way. Most of the suggestions made on relevant aspects were reject in the case of Turin, and in the case of Rome, the Agency itself has declared to be not involved in the preliminary steps. Moreover, as said at the beginning, the new regulatory interventions have de facto reintroduced the so called “in house service provision”, where the public company belongs directly to the Municipality. In other cases, we have company that because of their shareholders, behave like monopolists.
27
Given this current framework, we proposed to define clearly the borderline between the controlled and the controllers. According to the federalist laws and attitude, to create a network of multiutility Agencies, that should operated at a regional level. We have already in Italy such an experience, the Optimal Territorial Authority, which are encharged by the local municipalities that are their shareholders, to manage the water provision and the sewage system, behaving as a third body between the providers and the municipalities8. We could replicate this “authority governance” model for the regional ones. In this way, the Municipalities will be not loose their prerogatives, but there will a substantial solution to the conflict of interests present now. Additionally it should be possible to create a synergy between these regional authorities with the sectorial national one, in order to support the technical aspects. This should be able to give power and independency to
8
The Law 36/94, (so called Galli Law) has established new local water authorities Autorità d’ambito Territoriale Ottimale (ATOs) and a separation between water resource planning and the operation of water utilities. The regulatory governance is based on the definition of the integrated management of waste through regional and provincial plans. ATOs, whose borders are set by the Italian Regions, have the task of -defining the resource planning; -assigning the operation to a private provider, selected through auction; -setting the price (tariff) cap for the water utilities (including aqueduct systems, sewage systems and treatment plants); -drawing up the Piano d’Ambito (a 30 year plan) which includes the timing and level of infrastructure investments, and ensures that the provider respects the contract requirements; -ensuring the operation and the management of the waste according to the plans and in collaboration with the Regions, Provinces and Municipalities.
28
the regional authorities, helping to reduce the current fragmentation in the Italian regulatory system. The last result of all this process should be the increasing of the citizens’ care.
29
References Afonso, A. and C. Scaglioni (2005), ‘Public Expenditure in Italian Regions: a Non-Parametric Efficiency Analysis’, ISEG/UTL – Technical University of Lisbon, Economics Department, WP 2/2005/DE/CISEP, http://ssrn.com/abstract=670741, forthcoming in State and Local Economics: Issues and Developments, ed. F. Columbus, Nova Science Publishers, New York Afonso, A., L. Schuknecht and V. Tanzi (2003), Public Sector Efficiency: An International Comparison, ECB Working Paper n 242, July, forthcoming in Public Choice. Afonso, A. and M. St. Aubyn (2004). Non-parametric Approaches to Public Education and Health Expenditure Efficiency in OECD countries, ISEG/UTL – Technical University of Lisbon, Economics Department, WP 1/2004/DE/CISEP/UECE, forthcoming in Journal of Applied Economics. Archibugi, D., G. Ciccarone, M. Marè, B. Pizzetti and F. Violati (2000) “Relazioni triangolari nell’economia dei servizi pubblici”, Economia Pubblica, 5, pp.47-82 Balassone, F., M. Francese, and R. Giordano (2002), Efficienza nei servizi pubblici: una rassegna della letteratura, in L’efficienza nei servizi pubblici, Banca d’Italia, Roma Baldwin, R. and M. Cave (1999) Understanding Regulation, Oxford, oxford University Press Baron, D. (1987) Design and Regulatory Mechanisms and Institutions, mimeo Becchis, F. (2002) Le fatiche del Regolatore: Fattori di debolezza nella regolazione dei SPL –, Fondazione per l’Ambiente Blair, H., (2000) Participation and Accountability at the periphery: democratic local governance in six countries, World Development, 28 (1), 21-39 Boitani. A, and C. Cambini (2001) La riforma del trasporto pubblico locale in Italia: problemi e prospettive -, Hermes - Working Paper 5 Bondonio, P. and F. Scacciati (1990) Efficienza e produttività negli enti locali, NIS, Roma Catanoso, P. and C. Scaglioni (2001) Partecipazione Politica ed Efficienza Pubblica,–Soc. Italiana di Economia Pubblica, WP 29/2001. Coelli, T., D. Rao, and G. Battese (2002), An Introduction to Efficiency and Productivity Analysis, sixth edition, Massachusetts, Kluwer Academic Publishers Comune di Roma, (2003) I contratti di servizio del Comune di Roma http://www.agenzia.roma.it/rassegna/documenti/monitoraggi/p0203_ambiente.pdf; http://www.agenzia.roma.it/elementiatti/atti.pdf Comune di Torino, http://www.comune.torino.it/agenziaservizi/statuto.htm and elaborations for data provision
30
Delbono, F. and G. Ecchia (1998) “Servizi pubblici e autonomie locali: il ruolo di un’Agenzia consiliare”, Economia Pubblica, 4, pp.61-80 European Commission (1999), MEANS Collection: Evaluation of socio-economic programmes, Brussels. Fama, E.F. and M.C. Jensen (1983) “Separation of ownership and control”, Journal of Law and Economics, 26: 301-26 Färe, R., S. Grosskopf and K.C.A. Lowell (1985), The Measurement of Efficiency of Production, Boston , Kluwer Farrell, M.J., (1957), The Measurement of Productive Efficiency, Journal of the Royal Statistical Society, serie A, General, n.120, 253-81 Fiorillo, F. and P. Polidori (2002) Le Autorita` per i Servizi Pubblici fra obiettivi locali, efficienza e soddisfazione dei cittadini –Soc. Italiana di Economia Pubblica, WP 119/2002. Fried, H, Lowell, C.A.K. and Schmidt, S. (eds), (1993), The Measurement of Productive Efficiency- Techniques and Applications, New York, Oxford University Press Giarda, P., (2004), Decentralization and intergovernmental fiscal relations in Italy: areview of past and recent trends, paper presented at the Special Session on “Reforming the Italian public sector: outcomes, lessons, perspectives” of the 60th Congress of the International Institute of Public Finance- Milano, Università Bocconi, August 23-25, mimeo Istat, (2001), I servizi pubblici e di pubblica utilità: utilizzo e soddisfazione, Roma Levy, B. and P.T. Spiller (1994), The Institutional Foundations of Regulatory Commitment: A Comparative Analysis of Telecommunication Regulation, The Journal of Law, Economics & Organization, 2 Parcu, P.L., (2004), Italian Authorities and regulatory Reforms: towards a European framework, paper presented at the Special Session on “Reforming the Italian public sector: outcomes, lessons, perspectives” of the 60th Congress of the International Institute of Public Finance- Milano, Università Bocconi, August 2325, mimeo Parker, D. (1994) “Ownership, Organizational Changes and Performance”, in Clarke, T. e Pitelis, C.(eds), The Political Economy of Privatization, London, Routledge Sappington D.E. M. and J.E. Stiglitz 1987Information and regulation, in Bailey R (ed.) Public regulation: New Perspectives, MIT Press, Cambridge, Mass., Wallis, J. and W. Oates (1988), Decentralization in the Public Sector: an Empirical Study of State and Local Government, in Rose, H. (ed), Fiscal Federalism: Quantitative Studies, Chicago, University of Chicago Press.
31
Annex Table 1.1-Principal features of the Local Agencies of Rome and Turin Agency for the control and quality of the Local public services of the Municipality of Rome Constituency Decision n. 39/2002 Act Agency nature It is a public body, that doesn’t exercise any commercial or profit activity; It exercises its activity just on all local public services, provided within the territory of the Municipality of Rome and carries out functions and tasks ex art.4, evaluating in an independent way, having as benchmarks the principles of universality, no discrimination, continuity and competition. Functions It is asked to be a third body between the consumers and the services providers in order to monitor the level of the supplied quality and eventually proposing new strategies to increase the standards in consumers’ favour; It has supporting and propositive functions towards the Mayor, the Town Council and the Giunta. Tasks
- It determines not compulsory technical procedures in writing the balance sheet; -It makes suggestions on how to structure the service contracts and on how to modify the technical conditions, according to which the public services should be provided within the territory of the Municipality of Rome; - It verifies how the services are provided, how they are let know to the public, how they are implemented. -It estimates the complaints and indications made by the customers and their associations. -It defines the qualitative standards for the public services and monitors that they are respected. The Agency can access and ask for all the information and the documents of the services providers, that it needs.
Powers Financial resources
The provisional economic balance sheet is approved together with the annual report within the end of the previous exercise and in any case before the Municipality of Rome has approved its own balance sheet. The director is responsible of managing the budget.
Composition and structure
It is formed by the president and two members, designed by the Town Council, among a list of experts in Local public services The structure is articulated in areas and services. Each of them represents an organised unit, responsible for its relative activities unit. The areas are: Studies and economic analyses, customers care. The services are: communication and public relations; personal and administration; monitoring of the services quality; documentation and library Within each area or service, it is possible to have some offices, with an act decided by the Agency. The Town Council decides the areas, services, and offices managers, on the basis of one of the member’s suggestion For specific multidisciplinary topics, the council can create special working groups, indicating the members and the coordinator
Source: Elaboration on the Memoranda of Association Municipality of Rome
32
Table 1.2 Principal features of the Local Agencies of Rome and Turin Agency for the Local public services of the Municipality of Turin Constituency Act Decision n. 2002 03358/002 Agency nature
In any time It must support the Town Council in order to collect all the required information, necessary to the Council to exercise its tasks The access to the information, collected by the Agency, is possible as foreseen by the Town Council Regulation ex art 70.
Functions
It exercises its functions of regulation and control on the local public utilities and in any case in those sectors related to energy, transports, environment and water resources.
Tasks
- It determines not compulsory technical procedures in writing the balance sheet; - It makes suggestions on how to structure the service contracts and on how to modify the technical conditions, according to which the public services should be provided; - It expresses its preventive opinions on all the acts, made for entrusting the services provision; - It verifies how the services are provided, how they are let know to the public, how they are implemented; - It estimates the complaints and indications made by the customers and their associations, promoting the Town Council’s initiatives; - It can make observations and proposals to Town Council on those services given in concession or been authorised; - It estimates the conformity of the citizens charts, according to Law Decree 286/1999 asking to the Town Council to intervene when necessary; - It advises the Town Council on the pricing structures, analysing the different impacts they could have on the prices structure; - It operates in strict collaboration with the Civic Defender, in order to collect information on the level of customers satisfaction.
Powers
It has controlling powers and can access and ask for all the information and the documents of the services providers, that it needs The Town Council finances the Agency by a special fund, allowing the Agency to be independent in its budget decisions. The fund has a different consistency between 0,06% and 0,15%, of the earnings of the last year, for the services provided within the urban territory, by each of the services provider.
Financial resources
Composition and It is formed by five members, designed by the Mayor, among a list of structure experts in Local public services The members can elect their President Source: Elaboration on the Memoranda of Association Municipality of Turin
33
Table 2. Evaluation of the Agency of Local services of the Municipality of Turin Indicator Definition Relevance Indicators Numbers of interventions requested on the total of contracts signed Numbers of suggestions accepted by the Town Council on the total produced Numbers of suggestions by key elements¹ on the numbers of suggestions accepted Efficiency Indicators Numbers of enquiries conducted on the total requested Duration on average for each enquiry Effectiveness Indicators²
Performance Indicators
Score Max 40% Not available 0,51 -1,6 Max 20% 0,75 Not available
Max 40% Increasing in the number of Not available resident population serviced Introduction of a controlling 1 system Introduction of penalties in 0,50 case of a not satisfactory service Reduction in the services Not available prices and tariffs Increasing in the numbers of 0,50 citizens charts Introduction of clear Not available refunding clauses Increasing in the numbers of 0 call centres and others means of communications with the customers Improvements in the quality Not available services delivered Increasing of monitoring Not available surveys in order to test the quality provided They are a weighted sum of all the previous indicators, including the results and impacts ones
Notes: ¹ The score is computed on the 13 elements indicated by the Agency of Rome, listed on a rank of five levels, according to the relevance attributed to each element. Attention to the customers’ care and penalties are considered more relevant. ² Due to the Agency activities.
34
