From enthusiasm to disenchantment: an analysis of the termination of Portuguese municipal enterprises

Abstract

This paper explores determinants of continuity and change of municipal organizations designed for service delivery. Focusing on the political and financial costs of termination, it addresses the question of what determines the process of voluntary closing of Portuguese municipal enterprises – a type of mixed firm with municipal control but an independent budget that operates under private labor law – from 1998 until 2012. The results suggest that the survivability of this type of organization relates with financial and economic aspects, as opposed to the structure of the local government that seems to be less important.