Academic journal article Economics, Management and Financial Markets

The Effective Municipal Property Management in South-East European Cities - Recording Issues. the Case of Bucharest Municipality1

Academic journal article Economics, Management and Financial Markets

The Effective Municipal Property Management in South-East European Cities - Recording Issues. the Case of Bucharest Municipality1

Article excerpt

ABSTRACT. This paper focuses on formulating a conceptual framework of recording municipal property so as to lay the foundations of an effective strategic management. The empirical part of the paper refers to the case of Bucharest Municipality, defining a series of characteristics of the entities included in the corresponding database. This discussion is in line with the concepts of public real property, public asset management, municipal property and recording municipal property, which are considered within the context of a large project aiming to improve the management of municipal properties in South-Eastern European cities (SEE - PROMISE).

JEL Classification: R33, R52, R53

Keywords: municipal property concepts, municipal property recording, SouthEastern Cities, Bucharest

1. INTRODUCTION

Samuelson's characterization (1954) of a pure public good as nonexcludable and in infinite supply in order to lead consumption to be nonrivalrous or non-exclusive was generalised in 1965 by Buchanan, who introduced a new category of goods, more general, named 'club goods'. Pure public and pure private goods were introduced in this category, as special cases. Along with Olson, Buchanan contributed to the scientific literature in the field, by introducing new concepts, such as impure public goods. This type of goods refers to the ones which are both congestible and excludable under certain conditions, but which also remain uncongested and/or non-excludable under other conditions. One potential example can refer to local public goods, defined as public goods for which consumption benefits fall off with distance. These public goods present an externalitysimilar problem, respectively ill-defined property rights, imperfect information and high transaction costs. From the point of view of an individual consumer, externalities -in Cornes and Sandler (1996) opinionrefer to goods that are consumed by others which raise or lower an individual's utility, but they also are considered to be third-party effects that remain non-excludable, unpriced and in the public domain. One type of externalities in which everyone's individual quantities of goods demanded combine together into a single collective good which all co-consume is represented by pure public goods. Other two types of externalities -where the influence of other people's consumption is moderated by the number of co-consumers or by the distance from the source of the public good- are local public goods and club goods (Webster, 2010).

The possession of property rights by the state or its extensions refers to state ownership, but some of these rights may be transferred temporarily to private users or to communities. One practical example for such a transfer can be represented by the rental of state land or by the permission to graze over state land (Musole, 2009).

The transition from public ownership of real property, increased recognition of public real estate as a productive asset, and the assumption of private sector praxis are part of the public asset management. Governments are usually known as inefficient land and property owners and/or managers. Practices supporting the previous statement were identified in Kaganova and Nayyar-Stone (2000). For example, in developing countries, the results of governmental ownership of land could generate huge amounts of illegal construction, shortages of buildable areas, overcrowding of existing housing, under-utilization of buildable sites in prime locations, etc.

In the public sector, the activities implied by the real estate asset management often refer to acquisition, holding, disposition, allocation of public land for development and public participation in land development. The activity of acquisition of land made by a government often means payment below the market value or no payment at all, leading to a low level of interest shown by the authorities in properly capitalize the land. As an example, many countries in transition in Central and Eastern Europe utilized as an acquisition practice a "free" shift away of land from different level of governmental hierarchy, leading to further selling to private sector at low prices, without properly exploiting land's value. …

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