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«Path dependence and change in the governance of organized systems The case of water services in three German municipalities (1990-2010) ...»

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Dissertationen am FB Wirtschaftswissenschaft der Freien Universität

Berlin

Path dependence and change in the

governance of organized systems

The case of water services in three German

municipalities (1990-2010)

Inaugural-Dissertation

Zur Erlangung des akademischen Grades eines Doktors der

Wirtschaftswissenschaft des Fachbereichs Wirtschaftswissenschaft der

Freien Universität Berlin

vorgelegt von Thomas Blanchet

aus Saint-Nazaire (Frankreich)

Berlin, 2015

Erstgutachter:

Prof. Dr. Arndt Sorge Universität Potsdam

Zweitgutachter:

Prof. Dr. Ronnie Schöb Freie Universität Berlin Tag der Disputation: 22 November 2013 Path dependence and change in the governance of organized systems Content List of figures

List of tables

List of abbreviations

Introduction

Theoretical background and research questions

Research design

Theoretical contributions

Structure of the thesis

Chapter 2: Theoretical background

Path dependence: a classical perspective

From technological to organizational path dependence

Key concepts of path-dependence analysis

The limits of the classical perspective

Path dependence: a social-constructivist perspective

Presentation and scope of the perspective

The limits of the perspective and central problems of the thesis

The strategic analysis of collective action

Introduction to strategic analysis

Key concepts of strategic analysis

Comparing both frameworks

Similarities and differences between path dependence and strategic analysis................. 42 A strategic analysis of organizational path-dependence and change

Research focus

Chapter 3: Methodology

General approach: a qualitative comparative case study

Selection of the empirical setting and choice of the cases

Selection of the empirical setting

Selection of the cases

Data collection

Semi-structured interviews

Documents

Field access

Data analysis

Quality of the research

Chapter 4: The constitution of the German water sector as a path-dependent process............ 73 Path-dependence analysis in urban services

The German water sector: a path-dependent process

The constitution of the German water sector

The mechanisms structuring the German water sector

The stakeholders involved in water services

Path dependence and change in the governance of organized systems

Chapter 5: The recent development of the German water sector: field continuity despite environmental changes

The German water sector in a post-Reunification context

The impact of Reunification and energy liberalization on the German water sector....... 96 Criticisms of the German water sector

The growing participation of private operators in the ownership of German municipal utilities

The development of private operators following Reunification

The development of private operators following energy liberalization

The municipal financial crisis

The stability of the German water sector despite pressures to change

The reaction of domestic actors to reforming water services

Limited organizational changes at the local level

Chapter 6: Path development in three German municipalities

Frankfurt water services as a case of path inflection

Introduction: overview of the municipality and its water utility

Path-dependent mechanisms: toward a stronger integration of urban services............. 128 Power distribution and actors’ strategies in reforming water services

Systems effects following the reform of water services

Summary of the case

The Berlin water services as a case of path-breaking

Introduction: overview of the municipality and its water utility

Path-dependent mechanisms: keeping urban services independent of each other......... 162 Power distribution and actors’ strategies in reforming water services

Systems effects following the reform of water services

Summary of the case

The Leipzig water services as a case of path maintenance

Introduction: overview of the municipality and its water utility

Path-dependent mechanisms: Toward an integrated model of urban services............... 202 Power distribution and actors’ strategies in reforming water services

Systems effects following the reforms of the urban services

Summary of the case

Chapter 7: A comparative analysis of the three cases

An overall comparison of the organization of water services

A comparison of organizational changes over time

A comparison of the policy reforms

The mechanisms structuring the water services

Variation in the influence of mechanisms across local settings

Evolution of the mechanisms over time

Municipal financial crisis as a trigger for privatization

Actors’ strategies during the privatization process

The power distribution across local cases

The openness to privatization

The strategies of local actors

The emergence of systems effects following the reform

The modification of the relationships between actors





Increasing tensions within the system

An upsurge of political debates and conflicts

Path dependence and change in the governance of organized systems

Chapter 8: Discussion and conclusion

Critical Discussion

A variety of local changes in a field marked by a strong continuity

The significant role of strategic embedded agency in explaining the variety of paths.. 255 The origins and consequences of stability and change in organized systems................ 257 Toward a dialectical perspective on path dependence and change

Conclusion

Further developments

Theoretical contributions

Practical implications

Appendix

Appendix 1:

Appendix 2:

Zusammenfassung

Summary

Acknowledgements

References

–  –  –

Figure 1: Various degrees of change in water services

Figure 2: Standardized structure of the interviews

Figure 3: Integration's rate

Figure 4: The formal organization of Stadtwerke

Figure 5: A contrasting path: the development of the French water sector

Figure 6: The stakeholders of the German water system

Figure 7: The various strategies of French global players in the German water sector......... 106 Figure 8: Sunk cost trap and potential conflicts among central stakeholders

Figure 9: Comparison of the size structure of water operators in 2003

Figure 10 : Comparison of the type of water operators in 2003

Figure 11: Frankfurt Rhine/Main Region

Figure 12: The organizational structure of Mainova

Figure 13: The formal structure of BWB following the partial privatization

Figure 14 : Population in Berlin between 1990 and 2009

Figure 15: KWL’s geographical area of activity

Figure 16: KWL organizational structure

Figure 17: The demographic development in Leipzig after Reunification

Figure 18: Ballot paper for the Leipzig local referendum

–  –  –

Table 1 : Mechanisms structuring a path-dependent process

Table 2 : Some exemples of system effects

Table 3: Characteristics of the three local cases in 2010

Table 4: Case-study database

Table 5: List of the interviewees

Table 6: Legal forms of the municipal utilities

Table 7 : Size structure of water supply utilities

Table 8 : Size structure of wastewater plant operators

Table 9 : Forms of business organization among German water suppliers.

Table 10 : Organizational form of the wastewater disposal

Table 11 : Sales revenues from Mainova in 1998

Table 12: The organizational development of Frankfurt’s water services

Table 13: The organizational development of Berlin’s water services

Table 14: Strengths and weaknesses of the private companies competing for BWB............ 187 Table 15 : Evolution of the interest rate over time

Table 16: The organizational development of Leipzig water services

Table 17 : A comparison of the organizational changes and reforms across the three cases. 235

–  –  –

AG: Aktiengesellschaft (Joint-stock company) AöR: Anstalt des öffentlichen Rechts (Public corporation) AöW: Allianz der öffentlichen Wasserwirtschaft (Allicance of public water industry) APRIL: Netzwerk Antiprivatisierung Leipzig (Leipzig's network against privatization) ATV: Abwassertechnischen Vereinigung (Association of sanitation techniques) BBVL: Beratungsgesellschaft für Beteiligungsverwaltung Leipzig mbH (Leipzig consulting group for administrative participation) BDEW: Bundesverband der Energie und Wasserwirtschaft (Federal Association of Energy and Water Industries) BEWAG: Berliner Städtische Elektrizitätswerke (Berlin electricity utility) BGW: Bundesverband der Gas und Wasserwirtschaft (Federal Association of Gas and Water Industries) BSR: Berliner Stadtreinigung (Berlin City Cleaning Utility) BUND: Bund für Umwelt und Natürschutz Deutschland (German Alliance for the protection of the Environment and the Nature) BVG: Berlin Verkehr Gesellschaft (Berlin Public Transportation Utility) BWB: Berliner Wasserbetriebe (Berlin Water Utility) BWH: Berliner Wasser Holding (Berlin Water Holding) BWI: Berlin Wasser International (Berlin Water International) BZ: Berliner Zeitung CBL: Cross Border Leasing CCI: Chamber of Commerce and Industry CDU: Christlich-Demokratische Union (Christian Democrats) Path dependence and change in the governance of organized systems CGE: Companie Générale des Eaux (Became after that Vivendi and then Veolia) DSt: Deutsche Städtetag (Association of German Municipalities) DStGB: Deutscher Stäte und GemeindeBund (German Association of Towns and Municipalities) DVWK: Deutscher Verband für Wasserwirtschaft und Kulturbau (German Association for Water management and Land improvement) DVGW: Deutscher Verein des Gas- und Wasserfaches (German Association for Gas and Water) DWA: Deutsche Vereinigung für Wasserwirtschaft, Abwasser und Abfall (German Association for Water Waste Water and Waste) ENBW: Energie Baden Wüttenberg EVP: Energieversorgung Potsdam GmbH (energy utility Potsdam) FDP: Freie Demokratische Partei (Liberal) FR: Frankfurter Rundschau GASAG: Berlin Gaswerke AG (Berlin gas utility) GDF: Gaz de France GDR: German Democratic Republic GFR: German Federal Republic GmbH: Gesellschaft mit Beschränkter Haftung (Limited liability company) GWF: Gas und Wasserfach KWB: Kompetenzzentrum Wasser Berlin (Berlin Center of Competence for Water) KWL: Kommunale Wasserwerke Leipzig GmbH (Leipzig Water Utility) LdE: Lyonnaise des Eaux LVB: Leipziger Verkehrsbetriebe (Leipzig Public Transportation Utility) LVV: Leipzig Versorgung und Verkehrsgesellschaft mbH. (Leipzig Society for Distribution and Transportation) LVZ: Leipziger Volkszeitung MNC: Multinational company

–  –  –

ÖTV: Öffentliche Dienste, Transport und Verkehr (Union for Public Services, Transportation, and Traffic) PDS: Partei des Demokratischen Sozialismus (Party of Democratic Socialism) PPP: Public-private Partnership PREAG: Preussen Elektra AG SPD: Sozialdemokratische Partei Deutschlands (Social Democrats) SVZ: Sekundärrohstoff-Verwertungszentrum Schwarze Pumpe (secondary raw materials/recycling centre) SWF: Stadtwerke Frankfurt/Main (Frankfurt/Main Utility) SWL: Stadtwere Leipzig (Leipzig energy utility) TAZ: Die Tageszeitung THA: Treuhandanstalt (Agency in charge of privatizing East German enterprises) VEBWAB: Volkseigene Betriebe Wasser Abwasser (East German national company for water services) VGF: Verkehrsgesellschaft Frankfurt (Frankfurt Public Transportation Utility) VKU: Verband Kommunaler Unternehmen (Association of Municipal Utilities) WPB: Wasserbetriebe Potsdam GmbH (Water utility Potsdam GmbH) ZfK: Zeitschrift für Kommunalwirtschaft ZVWALL: Zweckverband Wasser Abwasser Leipzig Land (Association for water and sanitation Leipzig Region)

–  –  –

Theoretical background and research questions During the last decade, the concept of path dependence has enjoyed a widespread popularity within the social sciences (for a literature review, see Beyer,



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