What happens when municipalities run corporations? Empirical evidence from 290 Swedish municipalities

Local governments are increasingly relying on municipally owned corporations (MOCs) to provide public services. Some describe this development as a rational response austerity challenges and emphasise the cost-efficiency of MOCs (‘the optimistic view’). Others identify complications associate with weak supervision, lack accountability, corruption risks sceptical Hitherto, no studies have analysed these opposing claims in one same inquiry. We address gap by focusing Sweden, which has experienced dramatic growth number MOCs. examine association between MOCs, business climate, satisfaction local government, tax rates, index for all 290 Swedish municipalities. Putting ‘optimistic view’ into doubt, results indicate that municipalities heavily associated more perceived higher taxes but do not satisfied citizens nor better climate.