Business Partnerships in Local Government

Abstract

This study tests the predictive ability of a number of factors that affect local municipal business partnerships, including development policy, municipality size, geographical location, national priority and the characteristics of the municipality and its leader. Using original survey data and a variety of data sources, the research model tests the influence of these institutional, individual and environmental factors on the scope of municipal business partnerships. The paper suggests that political factors are still dominant in local decision making processes and finds a dramatic rise in business partnerships and mixed public-private delivery (joint contracting) of city services.

Local government’s response to dissatisfaction with centralized policies: the “do-it-yourself” approach

“…Israeli local governments became increasingly dissatisfied with the central government as early as 2000, when the latter unilaterally decided about the transfer of budgets, cuts and the division of responsibilities between the two levels of government (Sarig, 2014). Funds earmarked for local authorities did not always arrive in a timely fashion, forcing local governments into short-term loans.…”

“…For example, the Ministry of Education has many discretionary budget lines. Rather than issuing uniform criteria for receiving these budgets, the money is allocated unequally among local authorities, resulting in a surplus in some locales and a gap in others (Sarig, 2014). Another issue concerns frequently insufficient funds earmarked for the provision of state services.…”

“…In 2010, the mayors protested the distribution of grants made to cover budgetary overruns, a practice that has caused major rifts between local governments (Sarig, 2014). Despite appeals to the Prime Minister and the Ministers of the Interior and Finance, none of their requests was granted.…”

“…The delay in approving the national budget itself obviously adversely affected local governments. Moreover, as mentioned, banks were unwilling to lend to local authorities (Sarig, 2014). Local authorities provided services and then appealed to have their budgets approved retroactively.…”

The rise and fall (?) of public-private partnerships in Israel’s local government

“…Even the lists at the Ministry of Interior, which approves most MPP, were incomplete and did not go back in time: a study prepared for the Ministry lacked quantitative estimates and included only several case studies (Sphinx Research & Consulting 2019). An attempt to obtain data through questionnaires sent to all municipalities failed to provide a reliable count (Sarig 2015). Our interviews revealed a lack of complete information even within municipalities, because key persons were familiar only with some functions and the number of tenured senior employees with long organisational memory has diminished.…”