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Local public services, liberalization is not optional

We publish the preface by Franco Bassanini to the essay "Public companies and local services" by Adriana Vigneri and Mario Sebastiani published by Maggioli which presents the results of an extensive research conducted by Astrid on the reform and modernization of local public services: it becomes increasingly opening to the market is essential, but liberalization requires good regulation

Local public services, liberalization is not optional

The reform and modernization of local public services has been one of the privileged objects of Astrid's research since its foundation 15 years ago, which is now collected in the volume "Public companies and local services" edited by Adriana Vigneri and Mario Sebastiani published by Maggioli publishers. The reason for this constant attention/dedication to the issue lies in the crucial contribution that modern and efficient local public services can make to the achievement of some public policy objectives, which constitute fundamental common public goods: social cohesion and the quality of life of citizens, families, local communities'; the growth and competitiveness of the economy and the recovery of employment; the rebalancing of public finances and especially of local finance; the creation of territorial environments favorable to the initiatives and investments of private companies. And it also lies in the observation that this contribution is still modest in Italy today; which could be much greater, if courageous choices, in terms of regulation, public policies, organization and management, triggered a process of modernization and efficiency improvement of the world of local utilities, capable of overcoming some obvious critical issues. This new research also moves from these convictions and from this observation. Like the previous ones, the approach is free from any ideological bias. We do not think that private management is per se better than public management, nor vice versa.

We do not believe that the market always guarantees maximum efficiency and the best mix of quality and cost of services for users and the community. But we think that confrontation and competition, between private individuals and also between public and private, within the framework of a well-tempered regulation and under the supervision of independent and competent regulatory and control authorities, can ensure - as demonstrated by many international experiences - services better quality public services at more sustainable costs for the community and for users, through competition in the market between multiple operators or the competitive selection of the most efficient operator (public or private). Exceptions are possible, first of all with regard to the ownership of infrastructure under a natural monopoly. But the exceptions must be adequately and honestly motivated (and controlled), in the light of the interests of the community and not of sectoral interests or the defense of an improper intermediation of politics. And a clear distinction must in any case be safeguarded and applied between the powers and roles of those who dictate the rules, of those who define and control the objectives and standards of the public service, and of those who organize, manage it and derive a fair remuneration or profit from it . The first task belongs to the legislator and the regulatory authorities, the second to the territorial institutions, the third to the managers, whether public or private. I would add that, today, a decisive factor plays a decisive factor in favor of the market, and therefore of the liberalization of the most important services (those on the network).

Their modernization requires huge investments, especially in water services, local transport, waste collection, gas and electricity distribution. In the presence of good industrial and financial plans, the necessary resources can now be found on the market, where liquidity is not lacking. But the crisis has left a heavy legacy for Italy's public finances. The fiscal consolidation process necessary to reduce the high public debt (and imposed by the constraints of the European Stability Pact, but also by the financial markets and by responsibility towards future generations) will last a long time, and will be made more difficult by low inflation and from the aging of the population. In this context, it is difficult for local institutions to resort to new debt, even to finance investments. On the other hand, private individuals can easily resort to it, taking advantage of interest rates that are exceptionally low today. Openness to the market is therefore today, for this too, a sine qua non condition for the modernization of the sector. Asking the public hand, as we do with the proposals contained in these pages, that the liberalization processes be well constructed and well regulated, that the universal rights to the use of services are guaranteed to all, that the quality, quantity, accessibility and sustainability of services are carefully monitored, that prices and tariffs do not favor speculative logics, that adequate industrial policy choices and instruments encourage the rationalization of the sector. In short, that the private interest does not prevail over the general interest of the community. The indications that emerged from the research were promptly reported to those in the government responsible for the reorganization of the sector, in implementation of the mandate for the reform of the PA. Quite a few seem to have been accepted. At present, one crucial point remains unresolved: adaptation to the new regulations, without exception, of the direct assignments in progress. Failing that, the reform runs the risk of failing most of its objectives. We trust in a second thought.

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