Municipal real properties and the challenges of new public management: a spotlight on Romania
| Author | Daniela-Luminita Constantin,Constantin Mitrut,Raluca Mariana Grosu,Alina Elena Iosif,Marius Profiroiu |
| Date | 01 March 2018 |
| DOI | 10.1177/0020852315596212 |
| Published date | 01 March 2018 |
| Subject Matter | Articles |
International Review of
Administrative Sciences
2018, Vol. 84(1) 122–143
!The Author(s) 2016
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DOI: 10.1177/0020852315596212
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International
Review of
Administrative
Sciences
Article
Municipal real properties
and the challenges of new
public management: a spotlight
on Romania
Daniela-Luminita Constantin,
Constantin Mitrut,
Raluca Mariana Grosu, Marius Profiroiu
and Alina Elena Iosif
Bucharest University of Economic Studies, Romania
Abstract
In the transition and developing countries the use of surplus real property might be a
good response to the acute need for local sources of revenues provided the require-
ments of the new public management regarding efficiency, effectiveness and quality
of public services are carefully observed. The research has focused on the case of
Romanian cities’ real properties, aiming to reveal the problems of the existing municipal
real property (MRP) management system in relation to both overall city conditions and
the characteristics of the institutional and organizational framework. A questionnaire-
based survey followed by nonparametric statistical tests have been employed in this
respect, confirming the working hypothesis which points to the importance of the
existence of an MRP plan, an MRP strategy and an MRP unit at municipality level for
the effective use of these assets. A series of viable solutions to the problems identified
have been also formulated.
Points for practitioners
The article emphasizes the decisive role of the strategic approach and corresponding
instruments for effective MRP management, putting forward valuable recommendations
for making MRP an important source of revenue for municipal governments. They are
derived from the findings obtained within the EU-funded project entitled ‘Municipal
Property Management in South-East European Cities’ (PROMISE) by the Bucharest
University of Economic Studies team, one of the 13 partners involved. Its contribution
has been nominated by the International Project Management Association among the
Corresponding author:
Daniela-Luminita Constantin, Bucharest University of Economic Studies, Piata Romana 6, Bucharest, sector 1,
010374, Romania.
Email: danielaconstantin@ase.ro
five finalists of the Achievement Award global competition, category Community
Service/Development Project 2013.
Keywords
case study, nonparametric statistical test, questionnaire, Romanian cities, strategic
public property management
Introduction
In the past few decades a new system of values established in the private sector has
had an important impact on the organization and management of public sector
institutions: awareness and concern with the issue of efficient use of public sector
resources have recorded a significant increase in these organizations. As a result, a
quasi-market management approach is applied in the new governance of the public
sector, which encourages the public organizations to introduce competition and
market discipline so as to ensure a more effective use of public resources and,
consequently, to provide more benefits to society (Bryson, 2010; Ferlie et al.,
1996; Osborne and Gaebler, 1992). In addition, opportunities have been created
for introducing new techniques and models – in some cases originating from the
private sector – into the public service (Rocha and Aranjo, 2007).
The management of municipal real property (MRP) – buildings, infrastructure
assets and land – as a major component of the new public management brings
about a new vision of the public nature of municipal property, concentrating on the
efficiency, effectiveness and quality of public services. According to Ecke, MRP
management is defined as ‘the active, results oriented, strategic and operational
management of public real estates plus the cost sensitive provision of real estate
required for public services under consideration of economic and public interests’
(Ecke, 2004: 15). It applies a series of private sector practices that address the
municipal properties as productive assets, able to generate cash revenues
(Constantin et al., 2012a, 2012b; Galera and Bolivar, 2011; Hookana, 2011).
However, an important difference between the management of corporate real
estates and the management of the public ones still remains, consisting in the
fact that ‘the public sector must recognize the public interest and constitutionality
of its tasks’ (Schulte and Ecke, 2006: 232).
Many local governments are interested in implementing strategic MRP manage-
ment, which enable them to approach the real estate ‘portfolio’ in a dynamic vision.
The main idea in this context is the possibility to change the destination of various
portfolio items so as to find a rational balance between the need for property use
for administrative purposes, social uses and as investment (Kaganova and Nayyar-
Stone, 2000; Utter, 1989). The creation of a strategic portfolio has an important
contribution to good functioning and development of MRP in relation to the
quality and effectiveness of the activities of municipal governments: it supports
the urban policies which envisage sustainable city development, an increase in
Constantin et al. 123
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