Municipalization
Municipalization is the transfer of
corporations or other
assets to
municipal ownership. The transfer may be from private ownership (usually by purchase) or from other levels of government. It is the opposite of
privatization and is different from
nationalization.
There have been two main waves of municipalization in developed countries. The first took place in the late nineteenth and early twentieth century, when municipalities in many
developed countries acquired local private providers of a range of
public services. The driving reason in most cases was the failure of private providers to sufficiently expand service provision outside wealthy parts of urban areas.
The second wave took place in the early 1990s, when after the end of the
communist states in eastern Europe state-owned companies in many public service sectors were broken up and transferred to municipal control. This was typical in sectors such as
water,
waste management and
public transport, although not in
electricity and
natural gas.
Such regional companies either remained under municipal control, or were
privatized. Privatization was done variously: by selling them to investors, by giving a
concession or a
management contract. Examples include the water sector in the
Czech Republic, over half of which has been privatized.
In the
U.S., municipalization often refers to
incorporation of an entire
county into its municipalities, leaving no
unincorporated areas. This generally ends
de facto the county's own home rule, which in most states allows it to act as the municipal service provider in those unincorporated areas. The county is left offering only those services
mandated of it by the state
constitution, which are generally only extensions of state
government like
courts and
sheriff departments. As with utilities, the county's assets usually end up being distributed among the cities, though this is less likely if the process is gradual rather than all at once.
One example of municipalization is the Sacramento Municipal Utilities District, or
SMUD, of
Sacramento,
California.
*Scott E. Masten,
Public Utility Ownership in 19th-Century America: The "Aberrant" Case of Water, Business School, University of Michigan [
1]
*David Hall,
Public Services Work! - Information, Insights and Ideas for our Future, PSIRU, University of Greenwich [
2]
