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Direct Management or Inter-Municipal Cooperation in Smaller Municipalities? Exploring Cost Efficiency and Installed Capacity in Drinking Water Supply

José Luis Zafra-Gómez (), Victor Giménez-García (), Cristina María Campos-Alba () and Emilio José Higuera-Molina ()
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José Luis Zafra-Gómez: University of Granada
Victor Giménez-García: Universitat Autònoma de Barcelona
Cristina María Campos-Alba: University of Granada
Emilio José Higuera-Molina: University of Granada

Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), 2020, vol. 34, issue 13, No 21, 4289-4302

Abstract: Abstract The aim of this study is to determine whether, in small municipalities, drinking water services are supplied more efficiently under direct public provision or through inter-municipal cooperation. This analysis focuses on the use made of installed capacity, examining whether similar-sized municipalities have optimised their fixed infrastructure and/or physical inputs. A sample of 750 Spanish municipalities, each with fewer than 5000 inhabitants, was analysed, with data for the period 2014–2016, using a new order-m directional method with data panel and calculating the technological gap ratio, to evaluate the impact of different management forms on the efficiency obtained, thus measuring the use made of installed capacity. The main results obtained show that municipal direct management is more cost efficient but that inter-municipal cooperation makes better use of installed capacity. However, in similar-sized municipalities there are no significant differences in the latter respect according to the management form adopted, and therefore the differences observed in cost efficiency between the two management forms are associated with variable costs.

Keywords: Cost efficiency; direct provision; Inter-municipal cooperation; Drinking water supply (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s11269-020-02676-4

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