Academic journal article Public Administration Quarterly

Non-Public Shareholders' Ownership and Economic Performance in the Urban Public-Transport Companies. Empirical Evidence from European Union

Academic journal article Public Administration Quarterly

Non-Public Shareholders' Ownership and Economic Performance in the Urban Public-Transport Companies. Empirical Evidence from European Union

Article excerpt


Urban mobility (henceforth UM) is an increasingly important field in European Union policy agenda for manifold reasons. First of all, 72.9 per cent of the European population lives in urban zones (United Nations, 2011) and over 85 per cent of gross domestic European product is generated in these areas. From this standpoint, the Commission of the European Communities (2007: 3), in its Green Paper named "Towards a new culture for urban mobility", claims that "Urban areas now constitute the living environment of the vast majority of the population, and it is imperative that the quality of life in these areas should be as high as possible. That is why we must now pool our thoughts and consider the question of urban mobility".

In addition, UM represents an important factor for the economic growth. The existence of a well-developed urban transport system is essential, inter alia, to limit both the late arrival of people at work as well as goods to their destination. Respect for these conditions is fundamental to preserve the economic vitality of urban areas (Commission of the European Communities, 2007).

Moreover, decisions regarding UM systems have a great impact on environmental preservation. Indeed, the presence of even more congestion is closely correlated to the increase in both the CO2 emissions and acoustic pollution levels.

These considerations have encouraged the European Union to develop effective measures and rules to spur improvement of UM systems in European cities. From this perspective, the Commission of the European Communities (2009), in its "Action Plan of Urban Mobility" proposes a sum of actions for UM. In particular, the Commission suggests six main areas of intervention:

1. promotion of integrated policies inherent to UM between European cities and regions;

2. focus on the citizens, in order to ensure "a high level of protection of passenger rights, including of passengers with reduced mobility" (Commission of the European Communities, 2009: 5);

3. achievement of "green" urban transport through the definition of mobility policies more compatible with environmental needs;

4. increase in resources dedicated to UM. For the future, this can be achieved by the optimization of existing resources and a better definition of the urban transportation needs;

5. sharing of experience and knowledge between different European areas and actors;

6. optimization of UM, as the "integration, interoperability and interconnection between different transport networks, are key features of an efficient transport system" (Commission of the European Communities, 2009: 10).

Public administration is essential to attain the European Union objectives, as they provide the bulk of the resources allocated for the definition of UM systems. The main sources of funding are national, regional and local taxes.

However, in recent years, the growing complexity of citizens' needs and the criticalities related to the global economic downturn have reduced the amount of public expenditure that can be invested to cover the UM system requirements. As a result, private funding contribution is unavoidable (Pollitt, 1993; Lawter, 2005; Hodge & Greve, 2007; Borgonovi et al. 2009; Girard et al., 2009). Moreover, governments started to realize that the introduction of competitive mechanisms in the organization of public services can represent an adequate way to improve the efficiency and the quality of the public services in general and, specifically, of the UM (Amaral et al., 2009). In other words, public-private partnerships (henceforth PPPs) can be seen as a governance tool that can generate benefits both for the public and private sector, combining the specific qualities of each of them and sharing the risk (Vaillancourt Rosenau, 2000; Hodge & Greve, 2007).

On the basis of these considerations, the European Union recently began to bolster the involvement of private investors in managing UM systems through the creation of "innovative public-private partnership schemes" (Commission of the European Communities, 2009: 8)1. …

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