The impact of GATS on public services and local governments

Abstract

Globalisation has put considerable strain on trade in public services. This paper deals with the tremendous impact of the General Agreement on Trade in Services (GATS), which involves the liberalisation and privatisation of public services. The overall goal is to explore the main challenges to success factors of local government implementation of the privatisation of public services. The main hypothesis is that market orientation in public management will lead to greater efficiency for governments, without having negative side effects on other local objectives and considerations. With regard to these effects the paper concentrates on the sustainable management of public services. This paper is structured in five main sections, as follows: After some introductory thoughts about public services and governance, Section 2 examines the multifaceted process of the privatisation of public services. Based on an examination of WTO documents and discussions, Section 3 outlines a theoretical framework for measuring the aggregate attribute of the GATS and examines its effects on governance. In Section 4 the author proposes success factors for achieving competitive local governance and suggests local strategy objectives with a view to strengthening strategic planning, adequate funding, transparency and public participation. The concluding remarks in Section 5 highlight the main public management considerations for local governments. © Periodica Polytechnica 2009.