The Renaissance of the Local Public Enterprises: the French Model

Ms. Anna Hazan

Are We Witnessing the Renaissance of Local Public Enterprises? The French Model

Anna Hazan
University of Haifa

Local public enterprises (LPE) are municipal arms engaged in local service provision and urban development, positioned in-between public service provision and privatization. LPE are a perpetual theme in central-local state relations, revolving over their tasks and regulations on performing these tasks. My study assesses the changing status of LPE in France, focusing on the pendulum between public monopoly and public-private partnerships. It is based on a review of legal reforms between 1926 and 2017 and their outcomes, with a focus on post-2008 trends. The French case may not be typical, but provides a multitude of lessons, given the complexity of the multi-level non-hierarchical unitary French state. Findings reveal that the swinging pendulum has produced diverse types of LPE, acting concurrently. A major aspect of this variety concerns the role of the private sector in mixed economic companies. Mixed private-LPEs had an important role in rebuilding France following the two World Wars, but suffered a retreat in the 1970s, regarded as unregulated “faux-nez”, acting improperly to promote political interests. Decentralization laws of the 1980s empowered local government to engage in urban economic development, hence giving LPE a crucial role, only to be reversed due to the real estate crisis of the 1990s and new regulations that constrained their ability to perform local tasks without a tender. The proliferation of intercommunalité, failed privatizations and pro-active regulation set the context for the substantial role of LPE in the process of remunicipalization during the post- 2008 crisis. Elected mayors fully control LPE in France, and their power over regulatory policies stems also from their power positions in the French Parliament. Hence, the elimination of multiple mandates in 2017 may imply on the future autonomy of LPE and their ability to partner with the private sector.