Is time really important for research into contracting out public services in cities? Evidence for urban water management in Southern Spain

Local governments are responsible for the supply of important public services in cities. On many occasions the management of those services is externalized. There is extensive literature analyzing the explanations for the governance option taken by local governments, aiming to ascertain the reasons why the management of certain services is externalized. Recent research has highlighted the fact that time has not been contemplated by research dealing with explanatory factors in the decision to contract out municipal services. This is a key issue in order to identify the real reason behind policymakers’ decisions about the management of the services in cities. This paper tests the importance of taking into account time in the research into contracting out. This is undertaken by means of two methodological tests in the design of variables from a dataset containing 744 municipalities in Southern Spain. Using this empirical analysis as a basis, it is concluded that considering time contributes towards enhancing the specification of the model and that omitting this aspect could lead to misunderstanding the motivation behind such decisions.