Government Watch. On the Proposed Amendments to the Law on Self-Governance

The Lithuanian Free Market Institute has examined draft amendments to the Law on Local Self-Governance aimed at the removal of the regulatory safeguards against the expansion of economic activity by municipality-owned enterprises. In its position paper the Lithuanian Free Market Institute delineated the following arguments, calling for the rejection of the draft law:

  • according to the Competition Council, municipality-owned enterprises struggle to provide value for money, waste public resources and harm consumers as they cannot ensure competitive price levels (they are usually from 5 to 100 per cent higher than those offered by the private sector);
  • some municipalities support their enterprises by increasing their authorized capital from public funds;
  • according to Transparency International, public procurement processes are carried out in a rather transparent manner in merely 8 out of 60 municipalities;
  • according to the Competition Council, in 2015 a warning was imposed on 20 municipalities due to possible infringements on the Law on Competition.

The full position paper (in Lithuanian) is available here.