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Cooperation among Local Councils for the Provision of Public Goods

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  • David Bartolini
  • Fabio Fiorillo

Abstract

In order to provide local public goods, municipalities can cooperate and exploit economiesof scale and scope. We present an analytical model of the costs and benefits of two such forms of cooperation:Consortia and Unions. We find that the efficiency of these two forms of cooperation depends onthe number of participants, the transaction costs, and most importantly the type of local public good. Inparticular, the elasticity of substitution among the services pertaining to a particular public good plays adecisive role. For services with a high elasticity of substitution the Union performs better than the Consortium,and vice versa. This provides a guidance for the decision on which institution provides whatpublic good.

Suggested Citation

  • David Bartolini & Fabio Fiorillo, 2011. "Cooperation among Local Councils for the Provision of Public Goods," Rivista italiana degli economisti, Società editrice il Mulino, issue 1, pages 85-108.
    • Handle: RePEc:mul:jqat1f:doi:10.1427/33904:y:2011:i:1:p:85-108
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    Cited by:

    1. Blaeschke, Frédéric & Haug, Peter, 2014. "Does Intermunicipal Cooperation Increase Efficiency? Evidence from the Hessian Wastewater Sector," IWH Discussion Papers 11/2014, Halle Institute for Economic Research (IWH).
    2. 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.
    3. 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.
    4. Christian Bergholz & Ivo Bischoff, 2018. "Local council members’ view on intermunicipal cooperation: does office-related self-interest matter?," Regional Studies, Taylor & Francis Journals, vol. 52(12), pages 1624-1635, December.

    More about this item

    Keywords

    regional economics; partnerships; D23; H77; R50.;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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