Legal frameworks, especially in Europe, encourage private participation and competition in the management of public services. However, many local public authorities concentrate the various services they have in charge in the hands of a single operator, leading to horizontal integration which a...

French municipalities often contract out the provision of local public services to private companies, and regularly choose the same private operator for a range of different services. We develop a model of relational contracts that shows how this strategy may lead to better performance at lower...