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Is there strength in unity? Some preliminary evidence on inter-municipal cooperation in Italy

Author

Listed:
  • Stefano Manestra

    (Bank of Italy)

  • Giovanna Messina

    (Bank of Italy)

  • Anna Peta

    (Bank of Italy)

Abstract

This paper focuses on municipal unions, the most structured form of inter-municipal cooperation in Italy. Using information from multiple sources, we have built up an administrative database covering more than 500 municipal unions over the period 1998-2015. By cross-checking the information on the municipalities participating in each union with the figures from their financial statements, we have been able to follow the trend in their expenditure both before and after joining the union, acknowledging that time is needed for the effects of the cooperation to manifest themselves. We have replicated this analysis for single municipal functions in order to detect potential heterogeneity in the resulting economies of scale. The results show that belonging to a union has led to a reduction in expenditure only for some municipal functions (such as general administration, local police, roads and traffic) and over a certain time period. The main contribution of our work is that we have studied the effects of inter-municipal cooperation from a temporal perspective largely unexplored in previous studies of the Italian case.

Suggested Citation

  • Stefano Manestra & Giovanna Messina & Anna Peta, 2018. "Is there strength in unity? Some preliminary evidence on inter-municipal cooperation in Italy," Questioni di Economia e Finanza (Occasional Papers) 452, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_452_18
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    More about this item

    Keywords

    Municipal Unions; public expenditure; economies of scale;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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