We document that switching from laissez-faire production to
public procurement in residential waste collection in Finland reduces
the number of firms active in the local market, but induces a
statistically significant and large decrease in unit prices on average.
While public procurement, thus, seems to be desirable from the citizens’
perspective, not all municipalities adopt public procurement. We
provide descriptive evidence that municipal council composition is
associated with the chosen regime. This suggests that local politics may
be one obstacle for the efficient provision of local public goods.