Video on corporatization by the Municipal Services Project

Professor Peter Dietsch

Department of Philosophy, Université de Montréaal

In recent years, there has been a general trend towards the privatization of basic utilities like water, electricity or waste management. While the main argument presented in favour of these reforms is promoting efficiency, critics maintain that outcomes are often unjust in terms of accessibility or pricing for vulnerable populations. This talk argues that the private vs public debate is a distraction from the important questions of social justice and of efficiency that providing these services does indeed raise. Instead, the debate should focus on both the regulatory framework of the service in question and the incentive structures in place both for providers and for consumers. 

Professor David McDonald

Department of Global Development Studies, Queen's University

Co-director Municipal Services Project

What is public? It is a curiously obscure question, despite its seemingly common-sensical meaning, and its apparent role as a contrast to private. What appears as a simple binary is in fact a much more complex set of public-private relations, leading to conflicting and ambiguous definitions of the public sphere. Nowhere is this more true than with 'public services' (such as water, health care and electricity), where public and private are intertwined in practice, and open to radically different interpretations in theory. This talk summarizes the emergence and contradictions of a marketized public sphere, highlighting competing notions of counter-publics and how they manifest themselves in debates around the future of public service delivery.

Professeur Peter Dietsch

Département de philosophie, Université de Montréal

Dans les dernières années, il y a eu une tendance générale vers la privatisation de sociétés en services publics tels en approvisionnement en eau, en électricité ou en gestion des matières résiduelles. Alors que l’argument principal utilisé pour défendre ces réformes est de promouvoir l’efficacité, plusieurs critiques soutiennent que les résultats de ces réformes sont souvent injustes en termes de l’accessibilité ou des prix de ces services pour les populations plus vulnérables. La présente discussion soutient que le débat opposant les secteurs public et privé est une distraction qui éloigne de questions importantes d’injustice sociale et d’efficacité qui sont soulevées par l’approvisionnement de ces services. Le débat devrait plutôt se concentrer autant sur le cadre règlementaire de ces services que sur les structures incitatives qui s’adressent autant aux fournisseurs qu’aux consommateurs.

Professeur David McDonald

Départment d'études en développement global, Queen's University

Co-directeur Municipal Services Project

Qu’est-ce le public ? Malgré son sens apparemment banal comme opposition au privé, le public est curieusement difficile à définir. Ce qui apparait comme une opposition simple fait référence à un ensemble complexe de relations public-privé, menant à des définitions contradictoires et ambigües de la sphère publique. Cela n'est nulle part plus vrai qu’avec « services publics » (tels que l'eau, les soins de santé et l'électricité), où public et privé sont étroitement liés dans la pratique, et ouverts à des interprétations radicalement différentes dans la théorie. Cette présentation résume l'émergence et les contradictions de la marchandisation de la sphère publique. Elle souligne les perspectives en concurrence des contrepublics et leur importance pour les débats sur l'avenir de la prestation de service public.

The Public Shareholder workshop explores an increasingly important but little studied issue related to the growth of and change in public utility corporations for services like water and electricity. By public utility corporations, I refer to organizations for the delivery of utility services that are regulated by corporate law but whose sole or majority shareholders are public (i.e. local or senior governments). This is interesting because it implies new roles, risks, and opportunities for local and state governments in their responsibility for essential services.

With respect to the provision of services like water and energy, most research concerned with neoliberalism has focused on privatization, resulting in a public/private framing that draws attention away from a range of important reforms and issues (Budds & McGranahan, 2003). Among these is a shift in the nature and focus of public corporations. In particular, while such entities existed primarily at the state level for the delivery of government services of a “commercial” character throughout the 20th century (Wettenhall, 2001), under neoliberalism the social focus and public character of these entities has weakened in favour of a private sector ethos focused on “market profitability” (Thynne, 1994).

Empirically, two trends are visible: a new focus on market expansion (both domestically and internationally) and profit generation, and the creation of new public corporations at the local scale. Ethical questions related to the role of the state, regulation and risk arise because profits (while public) arise from utility rates imposed on users in another locality, or on particular groups of users, and because the investments required for market expansion imply new and often important risks to public shareholders, ultimately the residents of the shareholding locality.

Recently, for example, the Swedish state-owned hydroelectric company Vattenfall has been embroiled in a range of controversies as a result of its investment in Germany’s nuclear energy sector. In the Netherlands, regulations to limit the market growth of public energy companies have been created following similar risk taking in German energy markets. For water, the parallel innovation involves the growth of municipal corporations. Despite the ideology that such corporations should be “independent” from government, they have been found to act as “municipal profit centers” (Vinnari & Näsi, 2008). Like their counterparts in energy, moreover, many are engaged in domestic and international market expansion.

To explore the ethics, regulation and risk of the above shifts in utility policy, the Public Shareholder workshop will gather 12 international scholars at the Centre de recherche en éthique de l’Université de Montréal (CREUM). As a multi-disciplinary research center on ethics, the CREUM presents an apt forum to discuss issues related the reform of public service delivery, from subsidy to profitability. The proposed workshop will focus on the exchange and improvement of academic contributions for a joint publication.