A municipally owned corporation is a corporation owned by a municipality. They are typically "organisations with independent corporate status, managed by an executive board appointed primarily by local government officials, and with majority public ownership." Some municipally owned corporations rely on revenue from user fees, distinguishing them from agencies and special districts funded through taxation. Municipally owned corporations may also differ from local bureaucracies in funding, transaction costs, financial scrutiny, labour rights, permission to operate outside their jurisdiction, and, under some circumstances, in rights to make profits and risk of bankruptcy.
The causes and effects of municipally owned corporations are posited to be different from those of state-owned enterprises. Corporatization may be more utilised locally rather than nationally allowing more hybrid or flexible forms of public service delivery such as public-private partnerships and inter-municipal cooperation. It also allows charging user fees. Effects can be different because of lower regulator expertise, lower contracting capacity for municipalities, and the higher presence of scale economies. Current research shows that municipally owned corporations are frequently more efficient than bureaucracy but have higher failure rates because of their legal and managerial autonomy. An additional problem is the fact that municipally owned corporations often have more than one municipal owner, and conflict between municipal owners can lead to reduced output for the municipally owned corporation due to various negative spillovers.
