Inter-municipal Companies and TheirSubsidiaries in Comparative Law Perspective: The Need for Public Law Applicability andDemocratic Control

Marie Decock*, Kris Wauters

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

his paper explores the increasing trend whereby local governments create private legal entities to deliverpublic services or purely commercial activities. This phenomenon is known as'corporatization'.Inrelation specifically to inter-municipal cooperation, this tendency to resort to subsidiaries and participationin legal entities under private law results in an opaque tangle of subsidiaries and participations whoselegal position is unclear. The study examines the challenges arising from these complex inter-municipalstructures in relation to transparency, applicability of public law mechanisms,and democratic control,particularly in Belgium and the Netherlands. The paper parallels broader corporatization trends in theUK and France, where public authorities utilize private law instruments and contracts, leading topotential issues of democratic accountability and of balancing profit-making with the public interest. Thepaper argues that in a state governed by the rule of law, public law mechanisms are crucial for democraticoversight, even when legal entities created by private law are involved in public service provision. Usingthe private contractual route cannot exclude, therefore, the application of public law principles, given thatboth the'nature of the power'and the'public function'of the private legal entity can trigger theapplication of administrative law, administrative law principles, and judicial review.
Original languageEnglish
Pages (from-to)301-330
Number of pages30
JournalEuropean Public Law
Volume30
Issue number3
DOIs
Publication statusPublished - 1 Aug 2024

Keywords

  • inter-municipal cooperation
  • local government
  • corporatization
  • public/private divide
  • democratic control
  • accountability

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