Plural Governance for the Management of Local Public Services: An Empirical Investigation on the French Car Park Industry

  • Zoé Le Squeren Université de Lille (IAE), Lille, France
Keywords: Plural sourcing, Concurrent sourcing, Public services, Governance choices, Local data


This paper investigates the use of plural governance for the provision of local public services. Most of the studies conducted on local data compare direct public provision (i.e., in-house provision where governments produce public services themselves, using their own equipment and employees) to contracting out. But governments actually face a more complex set of choices than the simple make-or-buy dichotomy. In particular, cities can simultaneously opt for the ‘make’ and ‘buy’ alternatives for the provision of the same public service, and thus produce a portion of the service themselves while contracting with external (public or private) companies. We show how contractual perspectives and the resource-based view of the firm help to understand the rationales behind plural sourcing. Organizations appear to be able to adopt this governance structure to enhance efficiency since it enables them to employ benchmarking strategies. However, authors in public management insist on the specificities of public sector contracting, and our analysis also includes political measures, such as the number of changes of political affiliation at the head of cities. Our empirical analysis examines data about car park management by 97 municipalities in 2010. We use a multinomial logit to compare three distinct alternatives: total internal provision, complete externalization, and plural sourcing. Our results clearly indicate that plural sourcing is a strategic choice that is adopted by municipalities to reduce the cost of service delivery when they suffer from high levels of fiscal stress. Plural governance does not result from the alternation of political parties in power, indicating that political factors do not play a significant role in explaining that sourcing decision.


Download data is not yet available.


Akerlof, G. A. (1978). The market for ‘lemon’: Quality uncertainty and the market mechanism. In K. J. Arrows (Ed.), Uncertainty in economics (pp. 235–251). Elsevier Inc. doi: 10.1016/B978-0-12-214850-7.50022-X

Amaral, M., Saussier, S. & Yvrande-Billon, A. (2009). Auction procedures and competition in public services: The case of urban public transport in France and London. Utilities Policy, 17(2), 166–175. doi: 10.1016/j.jup.2008.07.006

Baffray, L. & Gattet, P. (2009). Gestion des parcs de stationnement, perspectives de marché en 2009, forces en présence et stratégie de croissance. Xerfi Etudes.

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. doi: 10.1177/014920639101700108

Bel, G. & Fageda, X. (2009). Factors explaining local privatization: A meta-regression analysis. Public Choice, 139(1–2), 105–119. doi: 10.1007/s11127-008-9381-z

Bel, G. & Fageda, X. (2017). What have we learned from the last three decades of empirical studies on factors driving local privatisation? Local Government Studies, 43(4), 503–511. doi: 10.1080/03003930.2017.1303486

Bel, G., Fageda, X. & Warner, M. E. (2010). Is private production of public services cheaper than public production? A meta-regression analysis of solid waste and water services. Journal of Policy Analysis and Management, 29(3), 553–577. doi: 10.1002/pam.20509

Beuve, J., Le Lannier, A. & Le Squeren, Z. (2018). Renegotiating PPP contracts: Opportunities and pitfalls. In S. Saussier & J. de Brux (Eds.), The economics of public-private partnerships. Theoretical and empirical developments (pp. 135–152). Springer International. doi: 10.1007/978-3-319-68050-7_6

Beuve, J. & Le Squeren, Z. (2016). When ºdoes ideology matter. An empirical investigation of French municipalities’ make-or-buy choices. Chair EPPP working paper.

Beuve, J., Moszoro, M. W. & Saussier, S. (2019). Political contestability and public contract rigidity: An analysis of procurement contracts. Journal of Economics & Management Strategy, 28(2), 316–335. doi: 10.1111/jems.12268

Boyne, G. A. (2002). Public and private management: What’s the difference? Journal of Management Studies, 39(1), 97–122. doi: 10.1111/1467-6486.00284

Bradach, J. L. & Eccles, R. G. (1989). Price, authority, and trust: From ideal types to plural forms. Annual Review of Sociology, 15(1), 97–118. doi: 10.1146/

Brown, T. L. & Potoski, M. (2003). Transaction costs and institutional explanations for government service production decisions. Journal of Public Administration Research and Theory, 13(4), 441–468. doi: 10.1093/jpart/mug030

Cabral, S. (2017). Reconciling conflicting policy objectives in public contracting: The enabling role of capabilities. Journal of Management Studies, 54(6), 823–853. doi: 10.1111/joms.12269

Cabral, S., Lazzarini, S. G. & De Azevedo, P. F. (2013). Private entrepreneurs in public services: A longitudinal examination of outsourcing and statization of prisons. Strategic Entrepreneurship Journal, 7(1), 6–25. doi: 10.1002/sej.1149

Cabral, S., Mahoney, J. T., McGahan, A. M. & Potoski, M. (2019). Value creation and value appropriation in public and nonprofit organizations. Strategic Management Journal, 40(4), 465–475. doi: 10.1002/smj.3008

Coase, R. H. (1937). The nature of the firm. Economica, 4(16), 386–405. doi: 10.1007/978-1-349-24002-9_3

Dumez, H. & Jeunemaitre, A. (2010). The management of organizational boundaries: A case study. M@n@gement, 13(3), 152–171. doi: 10.3917/mana.133.0152

Dutta, S., Bergen, M., Heide, J. B. & John, G. (1995). Understanding dual distribution: The case of reps and house accounts. Journal of Law, Economics, & Organization, 11(1), 189–204. doi: 10.1093/oxfordjournals.jleo.a036866

Fabrizio, K. R. (2012). Institutions, capabilities, and contracts: Make or buy in the electric utility industry. Organization Science, 23(5), 1264–1281. doi: 10.1287/orsc.1110.0680

Gradus, R., Dijkgraaf, E. & Wassenaar, M. (2014). Understanding mixed forms of refuse collection, privatization, and its reverse in the Netherlands. International Public Management Journal, 17(3), 328–343. doi: 10.1080/10967494.2014.935237

Guérin-Schneider, L. & Lorrain, D. (2003). Note de recherche sur une question sensible. les relations puissance publique – firmes dans le secteur de l’eau et de l’assainissement. Flux, 2–3(52), 35–54. doi: 10.3917/flux.052.0035

Hart, O., Shleifer, A. & Vishny, R. W. (1997). The proper scope of government: Theory and an application to prisons. The Quarterly Journal of Economics, 112(4), 1127–1161. doi: 10.1162/003355300555448

He, D. & Nickerson, J. A. (2006). Why do firms make and buy? Efficiency, appropriability and competition in the trucking industry. Strategic Organization, 4(1), 43–69. doi: 10.1177/1476127006061031

Hefetz, A., Warner, M. & Vigoda-Gadot, E. (2014). Concurrent sourcing in the public sector: A strategy to manage contracting risk. International Public Management Journal, 17(3), 365–386. doi: 10.1080/10967494.2014.935242

Heide, J. B. (2003). Plural governance in industrial purchasing. Journal of Marketing, 67(4), 18–29. doi: 10.1509/mkg.

Heide, J. B., Kumar, A. & Wathne, K. H. (2014). Concurrent sourcing, governance mechanisms, and performance outcomes in industrial value chains. Strategic Management Journal, 35(8), 1164–1185. doi: 10.1002/smj.2145

Hensher, D. A. & Johnson, L. W. (2018). Applied discrete-choice modelling. Routledge. doi: 10.4324/9781351140768

Hood, C. (1991). A public management for all seasons? Public Administration, 69(1), 3–19. doi: 10.1111/j.1467-9299.1991.tb00779.x

Jia, N. (2018). The ‘make and/or buy’ decisions of corporate political lobbying: Integrating the economic efficiency and legitimacy perspectives. Academy of Management Review, 43(2), 307–326. doi: 10.5465/amr.2016.0148

Kidwell, R. E. & Nygaard, A. (2011). A strategic deviance perspective on the franchise form of organizing. Entrepreneurship Theory and Practice, 35(3), 467–482. doi: 10.1111/j.1540-6520.2011.00439.x

Klein, P. G., Mahoney, J. T., McGahan, A. M. & Pitelis, C. N. (2013). Capabilities and strategic entrepreneurship in public organizations. Strategic Entrepreneurship Journal, 7(1), 70–91. doi: 10.1002/sej.1147

Krzeminska, A., Hoetker, G. & Mellewigt, T. (2013). Reconceptualizing plural sourcing. Strategic Management Journal, 34(13), 1614–1627. doi: 10.1002/smj.2062

Levin, J. & Tadelis, S. (2010). Contracting for government services: Theory and evidence from US cities. The Journal of Industrial Economics, 58(3), 507–541. doi: 10.1111/j.1467-6451.2010.00430.x

Mayer, K. J. & Salomon, R. M. (2006). Capabilities, contractual hazards, and governance: Integrating resource-based and transaction cost perspectives. Academy of Management Journal, 49(5), 942–959. doi: 10.5465/amj.2006.22798175

Miranda, R. & Lerner, A. (1995). Bureaucracy, organizational redundancy, and the privatization of public services. Public Administration Review, 55(2), 193–200. doi: 10.2307/977185

Moszoro, M., Spiller, P. T. & Stolorz, S. (2016). Rigidity of public contracts. Journal of Empirical Legal Studies, 13(3), 396–427. doi: 10.1111/jels.12119

OECD (2019). Government at a glance 2019. Technical report. Paris: Organization for Economic Co-operation and Development.

Parmigiani, A. (2007). Why do firms both make and buy? An investigation of concurrent sourcing. Strategic Management Journal, 28(3), 285–311. doi: 10.1002/smj.580

Picazo-Tadeo, A. J., González-Gómez, F., Wanden-Berghe, J. G. & Ruiz-Villaverde, A. (2012). Do ideological and political motives really matter in the public choice of local services management? Evidence from urban water services in Spain. Public Choice, 151(1–2), 215–228. doi: 10.1007/s11127-010-9744-0

Porcher, S. (2016). Neither market nor hierarchy: Concurrent sourcing in water public services. Journal of Public Administration Research and Theory, 26(4), 800–812. doi: 10.1093/jopart/muw037

Puranam, P., Gulati, R. & Bhattacharya, S. (2013). How much to make and how much to buy? An analysis of optimal plural sourcing strategies. Strategic Management Journal, 34(10), 1145–1161. doi: 10.1002/smj.2063

Quelin, B. V., Cabral, S., Lazzarini, S. & Kivleniece, I. (2019). The private scope in public–private collaborations: An institutional and capability-based perspective. Organization Science, 30(4), 831–846. doi: 10.1287/orsc.2018.1251

Quelin, B. V., Kivleniece, I. & Lazzarini, S. (2017). Public-private collaboration, hybridity and social value: Towards new theoretical perspectives. Journal of Management Studies, 54(6), 763–792. doi: 10.1111/joms.12274

Rainey, H. G. (2009). Understanding and managing public organizations. John Wiley & Sons.

Sclar, E. (2001). You don’t always get what you pay for: The economics of privatization. Cornell University Press.

Silverman, B. S. (1999). Technological resources and the direction of corporate diversification: Toward an integration of the resource-based view and transaction cost economics. Management Science, 45(8), 1109–1124. doi: 10.1287/mnsc.45.8.1109

Spiller, P. T. (2008). An institutional theory of public contracts: Regulatory implications (No. w14152). National Bureau of Economic Research. doi: 10.3386/w14152

Sundell, A. & Lapuente, V. (2012). Adam Smith or Machiavelli? Political incentives for contracting out local public services. Public Choice, 153(3–4), 469–485. doi: 10.1007/s11127-011-9803-1

Teece, D. J., Pisano, G. & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. doi: 10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z

Warner, M. & Hebdon, R. (2001). Local government restructuring: Privatization and its alternatives. Journal of Policy Analysis and Management: The Journal of the Association for Public Policy Analysis and Management, 20(2), 315–336. doi: 10.1002/pam.2027

Warner, M. & Hefetz, A. (2002). Applying market solutions to public services: An assessment of efficiency, equity, and voice. Urban Affairs Review, 38(1), 70–89. doi: 10.1177/107808702401097808

Warner, M. & Hefetz, A. (2008). Managing markets for public service: The role of mixed public–private delivery of city services. Public Administration Review, 68(1), 155–166. doi: 10.1111/j.1540-6210.2007.00845.x

Williamson, O. E. (1976). Franchise bidding for natural monopolies: In general and with respect to CATV. Bell Journal of Economics, 7(1), 73–104. doi: 10.2307/3003191

Williamson, O. E. (1981). The economics of organization: The transaction cost approach. American Journal of Sociology, 87(3), 548–577. doi: 10.1086/227496

Williamson, O. E. (1985). The economic institutions of capitalism. The Free Press.


1. Organisation for Economic Co-operation and Development.

2. In 2007, public procurement accounted for 30.2% of total expenditure.

3. Loi sur la Nouvelle Organisation Territoriale de la République.

4. Observatoire des finances et de la gestion publique locales.

5. Data from the French National Federation of Parking Activities (FNMS).

6. The CEREMA (Centre d’Études et d’expertise sur les Risques, l’Environnement, la Mobilité et l’Aménagement) is a French public administration, which is under the supervision of two ministries: the Ministry of Ecology and Sustainable Development and the Ministry of Transportation.

7. The words ‘public companies’ refer to the French ‘Sociétés d’Économie Mixte (SEM),’ which can also be translated as ‘semi-public companies.’ In such firms, there must be at least one private company among the shareholders, and the participation of public entities cannot exceed 85% of the capital.

8. Potential endogeneity problems are discussed with results hereafter.

9. Values of 0.2–0.4 for pseudo R2 represent an excellent model fit (Hensher & Johnson, 2018).

How to Cite
Le Squeren, Z. (2020). Plural Governance for the Management of Local Public Services: An Empirical Investigation on the French Car Park Industry. M@n@gement, 23(4), 28–43.
Original Research Articles