Adding public value: The limits of corporate responsibility

It is suggested that natural resource companies undertaking large-scale projects may be expanding the scope of corporate social responsibility by working to enhance the capabilities of the public sector. Naturally companies are concerned to protect their investments, and to ensure their viability. They will therefore invest in necessary infrastructure and facilities of all types, where those are lacking. Such investment often provides benefits to the wider community, but with a few exceptions these are normally incidental byproducts rather than inherent objectives. The motivation for companies to provide resources of all types in order to enhance the capabilities of the public sector to provide public services is usually an expectation is that the tangible benefits will exceed the costs, rather than altruism. One driving force is to secure and maintain a company's social licence to operate. More recently competition from Chinese firms is prompting private sector companies to offer comparable investments in infrastructure. It is unclear whether investment in public sector capabilities is cyclical and liable to cutbacks when market conditions deteriorate. Changing market conditions affect not just corporate willingness to spend but also host countries’ bargaining strengths. In boom periods host countries will be more able to secure straightforward financial benefits through higher tax receipts than when markets are weak. Beyond the specific needs of individual projects corporate policies are strongly influenced by the beliefs of senior managers. External pressures both from international institutions and from NGOs also drive corporate behaviour. The success of investment in public sector capabilities relies in the end on the responses of host countries, and on how closely the objectives and interests of the government are aligned with maximising the nation's long term wealth and welfare. Where they are not corporate resources may be frittered away. There are also questions over the legitimacy of corporate investments, especially by foreign-owned companies. They have a right to offer advice and protect their legitimate interests, but these may not always coincide with those of their host countries. There is a range of questions about the appropriate role of companies, which lead on to feasible and effective ways of improving weak governance.     

Refuting the paradigm of water services privatisation

The aim of this article is to question the fundamental assumptions behind privatisation and public–private partnerships. The article shows that instead of radically increasing private sector involvement, public sector reforms should be seriously considered. Public–private partnerships should be implemented so that the strengths of all the stakeholders may be fully utilised.     

The effect of environmental regulation on firms' competitive performance: the case of the building & construction sector in some EU regions

There is a considerable debate on the effects of environmental regulation on competitive performance. Based on survey data, this paper analyzesthe two main research questions, derived from literature, on the links between environmental regulation and competitiveness, by focusing on firms operating in the building and construction sector, i.e.: 1) whether environmental policy stringency affects the competitive performance of firms in the building and construction sector 2) and how a specific form of environmental regulation (direct regulation, economic instruments and soft instruments) affects this performance? By applying a regression analysis, we find that a more stringent environmental regulation, measured by inspection frequency, provides a positive impulse for increasing investments in advanced technological equipment and innovative products and on business performance. Moreover, a well-designed “direct regulation” appears to be the most effective policy instrument for prompting the positive impact of environmental policies on innovation and intangible performance while economic instruments do negatively affect business performance.     

Local economic development — the changing public/private sector relationship

The paper examines changing approaches to local economic development in the period since 1974. Initially, it proposes an ‘orthodox’ model of local economic development policies which emphasised the provision of a better industrial fabric, and of financial assistance to small, inner city firms. It suggests three recent directions of change in emphasis from this orthodox model: help in the creation of new entrepreneurs; replacement of public sector by private sector action; local authority shareholding in local firms by use of Enterprise Boards. Each approach makes different assumptions about the public/private sector relationship, the last two involve a more explicitly ideological stance on this issue.     

Green economy: Private sectors’ response to climate change

The focus of this paper is to present a discussion of the role of the private sector in response to the need for climate change adaptations. The study, which was conducted through a literature review, investigates the concept of the green economy and climate change, as well as businesses’ commitment to advance climate actions in ways that build resilience in vulnerable communities in developing countries. The paper calls on companies with national, regional, and/or global reach to adopt or develop strategies that improve resource efficiency, reduce greenhouse gas emissions, and reduce the loss of biodiversity. Businesses can accelerate this transition by aligning their investments with climate change adaptation opportunities, and thus, “green” the economy. In addition, green growth could be achieved through tactical public and private investments in mitigating climate change. The paper concludes that the private sector is a key sector in addressing the challenges of vulnerable communities, and it has much to contribute to the planning, development, and implementation of climate adaptation strategies, including sector‐specific expertise, technology, efficiency, financing, and entrepreneurship. Finally, some social conditions and environmental boundaries have been highlighted in this paper to attract the attention of business leaders who are trying to build initiatives and advance climate actions that will reduce socio‐community risks from climate change. Also, comprehensive initiatives and strategies have been recommended to private companies seeking to address climate vulnerabilities.     

INSTITUTIONAL BARRIERS TO WATER MARKETING IN THE WEST1

ABSTRACT: Water marketing has been proposed as one means of reallocating water supplies in the western United States. While markets for western water currently exist and may be expected to expand, the institutional constraints within which the markets must operate will limit the ultimate size and efficiency of those markets. Lack of articulation of public interests in the water resource itself leads to incomplete definition of the private rights to use the water, and it is those private rights which are sold or leased in the market. The increase in size and efficiency of any market in water rights will be dependent on the willingness of legislatures to specifically define the nature and extent of public interests in water supplies, and detailed definition is unlikely.     

Private sector participation in urban water and sanitation: Realising social and environmental objectives in developing countries

There has been a large increase in private sector participation (PSP) in the urban water supply and sanitation (WSS) sector in recent years. However, even with increased PSP, public authorities will still have to: ensure that the service providers do not use their market power to exploit customers; internalise public health and environmental externalities; provide mechanisms whereby water consumption is sustainable and allocated efficiently between alternative uses; and stand as a guarantor of a level of service provision that is consistent with a basic standard of living. While there is considerable literature addressing the first of these four issues, the latter three are rather less adequately addressed. Through a review of a number of case studies (Abidjan, Buenos Aires/Cordoba, Mexico City and Manila), this paper provides an overview of the issues involved and some of the mechanisms available to the authorities responsible for the regulation of the sector.     

New strategy in urban water management in Mexico: the case of Mexico's Federal District

This paper focuses on the strategy of Mexico's Federal District to achieve better water management. It highlights some of the main aspects of the current institutional framework. The article starts by providing a general overview of the current state of the water sector in Mexico. An analysis of the new strategies for the provision of water services in Mexico's Federal District is presented as a case study. It exemplifies the type of private sector participation that has recently been adopted in the water sector in Mexico. The article analyzes the functions of agencies involved in water distribution in the Federal District, and discusses the performance of private firms as well as some of the main difficulties encountered. Lessons have been learned from this application. It can be concluded that long-term commitment on the part of both public and private entities is one of the key factors in achieving a more efficient urban water management. The article reflects plans implemented and approved as of January 1998.     

WATER MARKETS AND DECENTRALIZED WATER RESOURCES MANAGEMENT: INTERNATIONAL PROBLEMS AND OPPORTUNITIES1

ABSTRACT: Because of its importance and the perceived inability of private sector sources to meet water demands, many countries have depended on the public sector to provide water services for their populations. Yet this has resulted in many inefficient public water projects and in inadequate supplies of good quality and reliable water. Decentralization of water management, including the use of water markets, cannot solve all of these water problems, but it can improve the efficiency of water allocation. When given adequate responsibility and authority, water user associations have effectively taken over water management activities at a savings to tax payers. Moreover, water markets add the potential benefit of improving water efficiency within a sector as well as providing a mechanism for reallocating water among sectors. The key question involves developing innovative mechanisms for reducing the transaction costs of organizing water users and of making water trades. Water rights need to be established which are recorded, tradable, enforceable, and separate from land if markets are to operate effectively. Also, institutions are needed that effectively resolve conflicts over water rights, including third party impacts and water quality concerns.     

The small-scale water provider in Paraguay: bringing private sector efficiency to water resource use and the provision of drinking water to the poor

This article provides a case study of small-scale private sector provision of water supply in Paraguay, where the Government has sought sector policy reforms that would encourage private investment in drinking water supply. Ironically, while the Government has focused almost entirely on garnering the interest of large private international water companies, much smaller local firms have already made significant investments in drinking water services for the poor, all without any participation or encouragement from the Government. Outside Paraguay's two major cities, Asunción and Ciudad del Este, large numbers of aguateros currently provide piped potable water to lower-income people. Though the aguateros have little legal footing — they are in many respects informal and unregulated —they have constructed as much as one third of all the new drinking water connections in these two cities over the past 20 years. The small-scale water systems in Paraguay offer a model of financial, economic, and water-use efficiency. This article asserts that an abundance of groundwater resources, cheap access to electricity for pumping, and a spirit of informal investment, among other variables, has spawned widespread use of this approach. This article documents and analyzes the features of these independent small-scale water providers in Paraguay and the efficiency they bring to the use of water resources in meeting drinking water demands among the poor. It also cautions against policies that may trample on such entrepreneurial spirit in the name of State-managed privatization.     

Integrating waste, manufacturing and industrial symbiosis: an analysis of recycling, remanufacturing and waste treatment firms in Texas

The continually increasing volume of the waste stream has led to numerous calls for strategies to close the loop on material use through industrial symbiosis strategies which direct used material and products (wastes) back to production processes. By use of a survey of recycling, remanufacturing and waste treatment firms in Texas, this paper asks if these firms can operate as a bridge between production and consumption/waste to efficiently increase the flow of used materials and products back to production processes at the local level. The results suggest that while most materials and used products are collected locally, only some can be re(consumed) locally. Moreover, the firms face negative perceptions about their activities from industry and the public at large that likely slow both the rate of entry of new firms into these markets and the expansion possibilities of existing firms. In addition, the types of conventions that characterize the interactions of more successful firms are not well developed in this sector(s). It is unlikely that recycling, remanufacturing and waste treatment firms can become central players in the production, consumption and waste cycle loop until society develops production design, marketing and consumption philosophies that include recycling and remanufacturing at a fundamental level.     

Integrating waste,manufacturing and industrial symbiosis: an analysis of recycling,remanufacturing and waste treatment firms in Texas

The continually increasing volume of the waste stream has led to numerous calls for strategies to close the loop on material use through industrial symbiosis strategies which direct used material and products (wastes) back to production processes. By use of a survey of recycling, remanufacturing and waste treatment firms in Texas, this paper asks if these firms can operate as a bridge between production and consumption/waste to efficiently increase the flow of used materials and products back to production processes at the local level. The results suggest that while most materials and used products are collected locally, only some can be re(consumed) locally. Moreover, the firms face negative perceptions about their activities from industry and the public at large that likely slow both the rate of entry of new firms into these markets and the expansion possibilities of existing firms. In addition, the types of conventions that characterize the interactions of more successful firms are not well developed in this sector(s). It is unlikely that recycling, remanufacturing and waste treatment firms can become central players in the production, consumption and waste cycle loop until society develops production design, marketing and consumption philosophies that include recycling and remanufacturing at a fundamental level.     

Equitable distribution of green stormwater infrastructure: a capacity-based framework for implementation in disadvantaged communities

This study seeks to understand the factors that influence the variability in distribution of public and private sector investments in green stormwater infrastructure (GSI) projects across the diversity of neighbourhoods in the City of Philadelphia, PA, U.S.A. using indicators of community context and capacity. For this study, context is defined as characteristics of disadvantaged communities and capacity as factors that facilitate individual and collective action. Community context and capacity are deemed integral to the success of the Philadelphia GSI programme as the Philadelphia Water Department is relying upon collaborative approaches to facilitate public investments in neighbourhoods and voluntary implementation of GSI practices on publically and privately owned lands. Private sector investments in GSI mandated by stormwater regulations for new construction and major rehabilitation also are assessed in relation to these two sets of indicators. The geographic information systems and statistical analyses reveal an inequitable distribution of GSI projects, which largely is driven by market forces. The paper concludes with a community capacity-based framework to prioritise public sector investment in disadvantaged communities to achieve more equitable distribution of GSI projects and associated benefits.     

State Forest Practice Regulatory Programs: An Approach to Implementing Ecosystem Management on Private Forest Lands in the United States

/ Implemented in the context of a long history ofintense public debate, forestry practices applied on private forest land areregulated in some form by 38 states. State regulatory activities can involvemany agencies implementing numerous regulatory laws, a single forestry agencyadministering a comprehensive regulatory program, or a combination of thetwo. Regulatory programs are designed to protect resources such as soils,water, wildlife, and scenic beauty. Program administration often involvesrule promulgation, harvest plan reviews, coordination of interagency reviews,and pre- and postharvest on-site inspections. Forest practice rules usuallyfocus on reforestation, forest roads, harvest procedures, and wildlifehabitat protection. Emerging regulatory trends include growth of multiagencyregulatory authority and associated jurisdictional conflicts, increasedtendencies to narrowly specify standards in statutes and rules, emergence ofcontingent regulations, growing sensitivity to processes enabling theadoption of new forest practice technologies and an ability to addresscumulative effects, interest in collaborative rule-making stemming fromheightened concern over legalization of administration processes, and growingconcern over the constitutional foundations for regulatory programs and thegovernment and private sector cost of implementing such programs.KEY WORDS: Ecosystem management; Forestry practices; Private landowners;Regulatory programs; State government     

The influence of institutions and organizations on urban waste collection systems: an analysis of waste collection system in Accra, Ghana (1985-2000)

Urban waste collection system is a pivotal component of all waste management schemes around the world. Therefore, the efficient performance and the success of these schemes in urban pollution control rest on the ability of the collection systems to fully adapt to the prevailing cultural and social contexts within which they operate. Conceptually, institutions being the rules guiding the conduct of public service provision and routine social interactions, waste collection systems embedded in institutions can only realize their potentials if they fully evolve continuously to reflect evolving social and technical matrices underlying the cultures, organizations, institutions and social conditions they are designed to address. This paper is a product of an analysis of waste collection performance in Ghana under two different institutional and/or organizational regimes; from an initial entirely public sector dependence to a current mix of public-private sector participation drawing on actual planning data from 1985 to 2000. The analysis found that the overall performance of waste collection services in Ghana increased under the coupled system, with efficiency (in terms of total waste clearance and coverage of service provision) increasing rapidly with increased private-sector controls and levels of involvement, e.g. for solid waste, collection rate and disposal improved from 51% in 1998 to about 91% in the year 2000. However, such an increase in performance could not be sustained beyond 10 years of public-private partnerships. This analysis argues that the sustainability of improved waste collection efficiency is a function of the franchise and lease arrangements between private sector group on the one hand and public sector group (local authorities) on the other hand. The analysis therefore concludes that if such franchise and lease arrangements are not conceived out of an initial transparent process, such a provision could undermine the overall sustainability of private sector initiatives in collection services delivery in the long term, as in the case of the Accra example.     

A MODEL FOR ACHIEVING CONSISTENCY FOR COST SHARING IN WATER RESOURCE PROGRAMS1

ABSTRACT: Three basic principles of responsibility have influenced the Federal/non-Federal cost sharing rates for water resources programs (1) full payment by beneficiaries (2) exclusive Federal assumption of costs and (3) joint Federal/non-Federal sharing. The efforts to determine appropriate cost sharing rates have resulted in several hundred complex arrangements involving contributions, user charges and direct sales based on many variations of payment terms. This basic present value model was developed to determine the non-Federal cost shares which are expected to be paid for 32 different functional purposes emanating from Federal water resources programs and projects for both implementation and OMR stages. The model introduces the concept of a composite (implementation plus OMR) cost share as a focus developing appropriate cost sharing rates for the private, public and mixed outputs produced through public water resources investments. The model can be used as a focus for policy decisions on cost sharing which seek to achieve consistent and equitable cost shares for purposes provided while maintaining an efficient allocation of resources within water programs.     

The production of uneven access to land and water in peri-urban spaces: de facto privatisation in greater Accra

ABSTRACT

Peri-urban spaces are frontiers of privatisation where inequalities in access to land and water evolve. In this article, we analyse a particular mode of land and water privatisation in peri-urban spaces of the Greater Accra Metropolitan Area (GAMA), Ghana. We illustrate that in the domain of land, traditional authorities tend to act as private owners rather than custodians of customary land, while in the domain of water, multiple private water providers have emerged next to the official water utility. A combined reading and analysis of these processes as forms of de facto privatisation contributes to understanding the similarities in the control over and access to land and water in peri-urban spaces. We show that in the de facto privatised control context of the peri-urban GAMA, access gained to land and water has to be actively maintained. Both gaining and maintaining access exhibit socio-economic inequalities and this is particularly so in the case of maintaining access. The article is a call for a better connection between land and water studies in order to deepen understanding of the processes at play in peri-urban spaces.     

Estimating the Relative Efficiency of Brazilian Publicly and Privately Owned Water Utilities: A Stochastic Cost Frontier Approach1

Abstract: This paper assesses cost efficiencies of Brazilian public and private companies of water supply. To measure the efficiency, we used a stochastic frontier model derived from the translog family – a specification similar to a Cobb‐Douglas including a quadratic term in log output. The model parameters are estimated by maximum likelihood using Brazilian data for the year 2002. Statistical inference leads to the conclusion that there is no evidence that private firms and public firms are significantly different in terms of efficiency measurements.     

OWNERSHIP AND WATER SYSTEM OPERATION1

ABSTRACT: Two types of organizational systems provide most of the water service in the United States. The investor-owned firm operates on a profit basis generally subject to state commission regulation. The government-owned firm is generally confronted by local control. The comparative efficiency of private versus government firm provision of water services is essentially an empirical issue. Unit costs and other operating statistics are examined for water firms of each ownership form. The analysis shows that private firms tend to have higher operation costs than do government firms, possibly attributable to wage-salary differentials. The analysis also indicates that capital investment in large government firms may result in diseconomies. The analysis creates serious doubt as to whether efficient provision of water services can be better facilitated by large mergers of either ownership form.     

Institutional Isomorphism and Food Fraud: A Longitudinal Study of the Mislabeling of Rice in Taiwan

A number of high-profile mislabeling incidents have led to many studies exploring the decision-making processes that firms make around performing illegal acts. However, it remains unclear why the proportion of firms conducting these acts constantly fluctuates and never disappears. Therefore, this study investigated this by carrying out a longitudinal analysis of food labeling in the Taiwanese rice industry. Drawing on the institutional isomorphism theory, it was found that the degree of mislabeling is negatively correlated with both the level of control of inspection regulations and public attention toward food regulations, and positively correlated with the previous proportion of firms mislabeling their products. Thus, there is a feedback loop between regulatory control, public attention, and the amount of mislabeling, with the amount of mislabeling not only being affected by the former degree of regulatory control, public attention, and mislabeling, but also modifying the future status of each of these. These findings further our understanding of the causal effects of illegal actions in the institutional agricultural environment.