Commercialization of Local Public Services

Abstract

The most important reason to decentralise the public services delivery is to make the citizens' needs better known by the local governments, so it follows to act more efficiently to their satisfaction. Nonetheless it has been found an opportunistic use of these agencies to avoid legal limits on indebtedness imposed on sub-national administrations, generating fiscal illusion. Accordingly, the aim of this study is to analyse the effect of the functional decentralisation processes on public revenues and financing. The results show that the use of decentralisation process, especially companies are created by left-wing political parties in order to raise more income from commercialization of public services. It was also found that these practices are strongly linked to the municipality's fiscal pressure.