Ownership and control in local public utilities: the Italian case

Abstract

The paper discusses the ownership and control structures of local public utilities by showing evidence from the Italian case. In this discussion, the focus is on three main aspects: the ownership structure, the board composition and independence, and citizens’ involvement (service charters). The main results from this study reveal that there are controversial aspects, which need further investigation. The existence of a principal–principal conflict is clearly arising from an in-depth analysis of the ownership structures. In addition, the board of directors, because of the lack of actual independence, does not seem to be a useful arena to manage and solve these conflicts. Other governance mechanisms are thus needed, to increase accountability to citizens. Within this, service charters seem to be a useful tool to protect the “public interest”. However, service charters content analysis suggests that further implementation actions are due. The paper contributes to the debate on conflicts of interests and governance mechanisms in local public utilities suggesting possible developments of agency theory and discussing implications for further research.