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Why do municipalities cooperate to provide local public services? An empirical analysis

Germà Bel (), Xavier Fageda and Melania Mur ()
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Melania Mur: University of Zaragoza

No 201118, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics

Abstract: Intermunicipal cooperation is being increasingly adopted in various countries as a part of local service delivery reforms. This paper draws on survey data from Spain’s municipalities to examine the reasons underpinning the decisions of local governments to engage in intermunicipal cooperation and privatisation. Our empirical analysis indicates that small municipalities prefer to rely on cooperation for reducing costs, while their larger counterparts prefer to privatise the delivery of services. By cooperating, scale economies can be achieved with lower transaction costs and fewer concerns for competition than is the case via private production.

Keywords: Privatization; cooperation; solid waste JEL classification:L33; R51; H72 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2011-10, Revised 2011-10
New Economics Papers: this item is included in nep-ure
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