Governance of local public service provision: between policy, efficiency and sustainability

Purpose Balancing economic efficiency and public governance is a challenge in the provision of local environmental services. This study aims to examine how alternative organisational arrangements may reconcile efficiency requirements with public control in light of circular economy objectives and incentive regulations. Design/methodology/approach Focusing on municipal solid waste and integrated water service management, this paper develops an analytical framework to examine potential welfare gains from integration. The study discusses an inter-municipal cooperation model centred on a utility, analysing how coordination, scale and governance interact. Findings The framework clarifies the relationships between service scale, governance capacity and social welfare. The analysis highlights potential economies of scale and scope while also identifying governance trade-offs associated with organisational expansion. Institutional arrangements based on coordinated public ownership can partially mitigate these trade-offs by supporting collective oversight and strategic alignment with circular economy objectives. Practical implications The framework clarifies the relationships between service scale, governance capacity and social welfare. The analysis highlights potential economies of scale and scope while also identifying governance trade-offs associated with organisational expansion. Institutional arrangements based on coordinated public ownership can partially mitigate these trade-offs by supporting collective oversight and strategic alignment with circular economy objectives. Originality/value This study offers an integrated analytical framework that links industrial organisation, public governance and sustainability, providing interpretative insights into emerging coordination models for environmental services.