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Does inter-municipal cooperation help improve local economic performance? – Evidence from Poland

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  • Banaszewska, Monika
  • Bischoff, Ivo
  • Bode, Eva
  • Chodakowska, Aneta

Abstract

This paper aims at testing whether inter-municipal cooperation (IMC) in policies to promote local business development has a positive impact on local economic performance. We analyze panel data covering 1825 Polish municipalities between 2004 and 2017. We use the unemployment rate, the number of firms per 1000 inhabitants and the rate of population growth as proxies for local economic performance. To control for selection into treatment and the role of time-varying covariates, we apply weighted least squares based on inverse-probability of treatment weights as well as two-way fixed effects models with analogous weights. We do not find IMC to impact the number of firms per 1000 inhabitants or the rate population growth. But IMC is found to reduce local unemployment rates by 0.4 percentage points. Our results suggest that the effect is driven by an improved coordination of municipal policies rather than expenditures funded through the union budget.

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  • 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).
    • Handle: RePEc:eee:regeco:v:92:y:2022:i:c:s0166046221001083
    DOI: 10.1016/j.regsciurbeco.2021.103748
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    1. 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.
    2. Sylwia Klus & Leszek Wanat & Tomasz Potkanski & Rafal Czarnecki & Vladislav Kaputa & Władyslaw Kusiak & Jan Sikora & Karolina Smetkiewicz, 2021. "Selected Mesoeconomic Indicators of Regional Development in Poland Based on Intermunicipal Cooperation," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 4), pages 704-715.

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    More about this item

    Keywords

    Inter-municipal cooperation; Local business development; Unemployment rate; Weighted least squares; Inverse-probability of treatment weighting; Poland;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H80 - Public Economics - - Miscellaneous Issues - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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