This paper evaluates the performance of Italian local public enterprises (LPEs) with respect to their private sector counterparts. We address the following questions: i) do LPEs perform worse than (comparable) private firms?; ii) does the performance gap depend on the ownership structure (the...

1. Market power and the form of enterprise -- 2. Asymmetric information and the form of enterprise -- 3. Externalities and the form of enterprise -- 4. The predominance of capitalist firms in the market economy -- 5. An alternative system of business organization in the market economy.