Strengthening competitiveness of local public service providers in Germany

Abstract

This article discusses the challenges for providers of local public services to adapt to increasing marketization and competition in the public sector. Based on some empirical evidence from local government in Germany, the article describes different adaptive measures in the past and shows the legal restrictions to strengthening performance and particularly competitiveness. Furthermore, the article presents some findings from good practice cases of local service providers in Germany who have successfully exposed themselves to market mechanisms. Finally, the article discusses observed results of increased competitiveness in the local government sector, with special regard to quality, efficiency and public employment. The article concludes with describing necessary elements of a competitive regime for public services and with some general reflections about the role of competition in the public sector.