Abstract

The availability of stocks of public goods and public services is an obvious necessity for any process of economic and social development. Less obvious is the specific role that these stocks may play in the economic and social development of localities. The issue is gaining attention in Italy where local public services are undergoing complex processes of restructuring. The first aim of this paper is to recall the technological, institutional and economic conditions supporting such processes, taking into account various and important functions played by lo cal public services. We consider with particular attention the possibility of dis-integration of different specialised activities within the production systems of such services. Effective dis-integration tends to make room for the coexistence of different organisational mechanisms along the filiere of each local public service. This also means an increase of market mechanisms in fields traditionally dominated by the public hand. Secondly, the paper aims at emphasising the relationship between the growth in the efficiency of the public services' production systems and the local development. Generally, public effects (goods) necessary for social cohesion and for the dynamism of local clusters of economic activities are favoured by an appropriate provision of local public services. More particularly, the dis-integration, when supported by an effective combination of privatisation, competition, regulation, helps the embedding of nuclei of sophisticated industrial organisation at the local level. However, the generation of positive effects depends also on the strengthening of local governance.