The role of transaction costs in the delivering of urban infrastructure services: an overview of brazilian and portuguese municipalities
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abstract
The present paper explores the different options for delivering public services by Portuguese and
Brazilian municipalities. With reduction of human and financial resources and increase in demand,
large municipalities need efficient arrangements to deliver public services. In fact, the conditions
for providing these services influence the quality of life, the economic development and are
directly related to the capacity of institutions to find the most appropriate governance
mechanisms. In this context, the use of Transaction Costs Theory (TCT), specifically economic
and political costs, reveals an appropriated tool to understand the ways how public services can
be delivered. Existing research and theory point out several studies around the world that analyze
how different governance mechanism’s choice (hierarchy, market and network) can be explained
based on TCT. This paper contributes to expand this topic to Brazilian’s municipalities context,
due to the lack of studies in this country. Contrariwise, there are more studies about Portuguese’s
municipalities, but as a dynamic process, it’s becomes interesting update such studies in order to
expand the existing database. In this sense we addressed a preliminary step whose objective is
to identify the different options for public service delivery, finding similarities and differences in
these two countries, following a qualitative approach. As results, we find that governance
mechanisms adopted by two countries are very similar. The differences result from regional level
in Brazil that allows recourse to state's business sector, as opposed to Portugal. In turn,
Portuguese municipalities have several options that result from municipal associations, options
that are more limited in Brazilian case.
