Legal and Economic Analysis of Municipal Contracts Regarding Urban Services

Abstract

Municipalities, as the institutions responsible for providing urban services and ensuring citizens' rights, are obligated to deliver such services. However, the provision of these services requires a robust financial foundation. Given the current circumstances of municipalities, coupled with the central government's inclination toward municipal financial independence and the insufficient allocation of government budgets to these institutions, this obligation is not fully and adequately fulfilled. As a result, experts in the relevant field strongly advocate for the involvement of the private sector in this domain. According to them, the entry of the private sector not only enhances the quality of urban service delivery but also mitigates the municipalities' financial challenges to a significant extent. The delegation or collaboration in the provision of such services is realized through urban contracts whose boundaries and terms are clearly defined. In many cases, these contracts foresee specific advantages for municipalities as public institutions safeguarding the general welfare. However, these conditions often result in the private sector's reluctance to engage in this area. This study examines the legal and economic shortcomings of municipal contracts concerning the provision of urban services. The primary question of the research is whether the provision of urban services to citizens is an exclusive duty of municipalities. This research is applied in terms of purpose and descriptive-analytical in terms of nature and methodology. In this context, principles of the Constitution, ordinary laws, and other higher-level laws and regulations are examined and analyzed to identify and evaluate the legal and regulatory frameworks concerning municipal contracts.