Explaining the Partial Privatization of Public Service Provision: The Emergence of Mixed Ownership Water Firms in Italy (1994-2009)

Abstract

Within the area of study of privatization, some attention has been placed on the emergence of mixed public-private ownership firms for the provision of public services. Mixed ownership firms may provisionally result during an intermediate stage within a process oriented towards full privatization of formerly state-owned enterprises. Sometimes, instead, they are deliberately designed as providers of public services that are jointly owned by public authorities and private investors. Why does the government decide to retain some ownership share of a public service provider rather than giving up full ownership to private investors? Based on the case study of the emergence of mixed ownership water firms in Italy in the period 1994-2009, this paper argues that the decision to partially privatize public service delivery firms may be especially related to particular features of the historical and institutional context, including initial conditions of the privatized industry, characteristics of the privatization reform content, and attributes of the privatization process.