Improving service quality in China's waste management industry

Abstract

Privatization of public service delivery has achieved success through collaborations between public and private sector. China has privatized its waste management industry, but labor strikes have escalated. The industry is stuck in a failure mode in which private companies struggling to meet earning target, frontline sanitation workers suffering from increased workload and reduced resources, residents dissatisfied with falling service quality, and local governments frustrated with the negative public image from labor strikes. Around the world, development of privatization has different approaches and forms. United States leverages free market competition to create a market-level collaboration in which public and private sector provide identical services in a single jurisdiction. Spain creates large size state-owned enterprises and hybrid ownership companies to benefit from the economies of scale. Based on the theory of capability trap, I develop a system dynamics casual loop diagram to illustrate the system structures that explain realities observed in all markets - the success in United States and Spain and the failure in China. Finally, five policies are recommended to major stakeholders in China's waste management industry to escape from the trap: improving employee experience, involving frontline in operational improvement, establishing legal protection for labor rights, providing sustainable development guidance, and investing in waste reduction education.