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Does intermunicipal cooperation promote efficiency gains? Evidence from Italian municipal unions

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  • Massimiliano Ferraresi
  • Giuseppe Migali
  • Leonzio Rizzo

Abstract

Intermunicipal cooperation is a common way to provide local public services, exploit economies of scale, and internalize externalities. However, little is known about possible efficiency gains. We test their existence in terms of local public expenditures reductions, by investigating the Italian experience of municipal unions. We adopt quasi‐experimental methodologies using administrative data on municipalities in the Emilia Romagna region. We find that being in a municipal union reduces the total per capita current expenditures by around 5 percent, without affecting the level of local public services. The effect is robust, persistent, and increasing up to six years after entrance.

Suggested Citation

  • Massimiliano Ferraresi & Giuseppe Migali & Leonzio Rizzo, 2018. "Does intermunicipal cooperation promote efficiency gains? Evidence from Italian municipal unions," Journal of Regional Science, Wiley Blackwell, vol. 58(5), pages 1017-1044, November.
    • Handle: RePEc:bla:jregsc:v:58:y:2018:i:5:p:1017-1044
    DOI: 10.1111/jors.12388
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    1. Anna Laura Mancini & Alfredo Bardozzetti & Giacomo Ziglio & Paolo Chiades & Vanni Mengotto, 2023. "Criticit? e prospettive della finanza comunale nel Mezzogiorno alla vigilia del Covid-19," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2023(1), pages 33-95.
    2. Enrique J. Buch‐Gómez & Roberto Cabaleiro‐Casal, 2020. "Turnout, political strength, and cost efficiency in Spanish municipalities of the autonomous region of Galicia: Evidence from an alternative stochastic frontier approach," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 533-553, June.
    3. Clémence Tricaud, 2019. "Better alone? Evidence on the costs of intermunicipal cooperation," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2019-12-ccr, Condorcet Center for political Economy.
    4. Banaszewska, Monika & Bischoff, Ivo & Bode, Eva & Chodakowska, Aneta, 2022. "Does inter-municipal cooperation help improve local economic performance? – Evidence from Poland," Regional Science and Urban Economics, Elsevier, vol. 92(C).
    5. Giovanna Di Ielsi & Fabio Fiorillo & Francesco Porcelli, 2022. "Le unioni di comuni in Italia: modelli di gestione associata a confronto (The Italian "unioni di comuni": A comparison among different management models of intermunicipal cooperation)," Moneta e Credito, Economia civile, vol. 75(297), pages 11-40.
    6. repec:hal:journl:hal-03380333 is not listed on IDEAS
    7. Tommaso Agasisti & Francesco Porcelli, 2019. "Local governments’ efficiency and its heterogeneity – empirical evidence from a Stochastic Frontier Analysis of Italian municipalities 2010-2015," Working papers 81, Società Italiana di Economia Pubblica.
    8. Notsu, Naruki, 2024. "Inter-municipal cooperation cloud and tax administrative costs," Regional Science and Urban Economics, Elsevier, vol. 105(C).
    9. Giuseppe Gori & Patrizia Lattarulo & Francesco Porcelli & Leonzio Rizzo & Riccardo Secomandi, 2023. "Does inter-municipal cooperation increase efficiency? Evidence from Italy," Working papers 111, Società Italiana di Economia Pubblica.
    10. Vincenzo Bove & Leandro Elia & Massimiliano Ferraresi, 2023. "Immigration, Fear of Crime, and Public Spending on Security," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 39(1), pages 235-280.
    11. Massimiliano Ferraresi & Maurizio Conti & Nikolaos Benos & Stelios Karagiannis, & Michail Papazoglou, 2022. "Structural reforms during the greek economic adjustment programme: the amalgamation of municipalities," Working papers 109, Società Italiana di Economia Pubblica.
    12. Germà Bel & Marianna Sebo, 2018. "“Does inter-municipal cooperation really reduce delivery costs? An empirical evaluation of the role of scale economies, transaction costs, and governance arrangements”," IREA Working Papers 201816, University of Barcelona, Research Institute of Applied Economics, revised Jul 2018.
    13. Giuseppe Liddo & Michele G. Giuranno, 2020. "The political economy of municipal consortia and municipal mergers," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(1), pages 105-135, April.
    14. Touria Jaaidane & Sophie Larribeau & Matthieu Leprince, 2024. "Inter-municipal cooperation and public employment: evidence from French municipalities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 72(3), pages 987-1014, March.
    15. Luca, Davide & Modrego, Felix, 2020. "Stronger together? Assessing the causal effect of inter-municipal cooperation on the efficiency of small Italian municipalities," LSE Research Online Documents on Economics 108193, London School of Economics and Political Science, LSE Library.
    16. Davide Luca & Felix Modrego, 2021. "Stronger together? Assessing the causal effect of inter‐municipal cooperation on the efficiency of small Italian municipalities," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 261-293, January.
    17. Alfredo Bardozzetti & Paolo Chiades & Anna Laura Mancini & Vanni Mengotto & Giacomo Ziglio, 2022. "Weaknesses and perspectives of municipal finance in southern Italy in the eve of Covid-19," Questioni di Economia e Finanza (Occasional Papers) 708, Bank of Italy, Economic Research and International Relations Area.
    18. Germà Bel & Thomas Elston, 2022. ""When the Time is Right: Testing for Dynamic Effects in Collaborative Performance"," IREA Working Papers 202212, University of Barcelona, Research Institute of Applied Economics, revised Jul 2022.
    19. Jing Xiong & Zening Xu & Liwen Li & Xu Liu, 2022. "The Effect of Cross-Boundary Supply on the Accessibility of Public Services in Urban Governance: An Example of Shanghai," Sustainability, MDPI, vol. 14(19), pages 1-13, October.
    20. Ricardo Dahis & Christiane Szerman, 2023. "Decentralizing Development: Evidence from Government Splits," Monash Economics Working Papers 2023-18, Monash University, Department of Economics.
    21. Sonia Paty & Morgan Ubeda, 2021. "Inter-municipal cooperation and the provision of local public goods," Working Papers 2121, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    22. Michal Struk & Eduard Bakoš, 2021. "Long-Term Benefits of Intermunicipal Cooperation for Small Municipalities in Waste Management Provision," IJERPH, MDPI, vol. 18(4), pages 1-16, February.
    23. Eva Wolfschuetz, 2020. "The Effect of Inter-municipal Cooperation on Local Business Development in German Municipalities," MAGKS Papers on Economics 202005, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    24. Giampaolo Arachi & Debora Assisi & Berardino Cesi & Michele G. Giuranno & Felice Russo, 2022. "Inter-municipal Cooperation in Public Procurement," CEIS Research Paper 548, Tor Vergata University, CEIS, revised 19 Dec 2022.

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