Municipalization is the transfer to municipal ownership of corporations or other assets. The transfer may be from private ownership (usually by purchase) or from other levels of government.

History of municipalization

There have been two main waves of municipalization in developed countries. The first took place in the late nineteenth and early twentieth century, when municipalities in many developed countries acquired local private providers of a range of public services. The driving reason in most cases was the failure of private providers to sufficiently expand service provision outside wealthy parts of urban areas.

The second wave took place in the early 1990s, when after the end of communism in eastern Europe state-owned companies in many public service sectors were broken up and transferred to municipal control. This was typical in sectors such as water, waste management and public transport, although not in electricity and gas. The latter largely remained as regional state-owned companies, which from the late 1990s onwards began to be privatised to foreign investors, in countries such as Hungary and Bulgaria. There has also been some privatization of the newly municipalised companies, typically by concession contract or management contract, most notably in water in the Czech Republic, where more than half of the water sector has been privatised.

References

• Scott E. Masten, Public Utility Ownership in 19th-Century America: The “Aberrant” Case of Water, Business School, University of Michigan [1] (http://groups.haas.berkeley.edu/imio/masten021904.pdf)
• David Hall, Public Services Work! - Information, Insights and Ideas for our Future, PSIRU, University of Greenwich [2] (http://www.psiru.org/reports/2003-09-U-PSW.pdf)