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Stronger together? Assessing the causal effect of inter-municipal cooperation on the efficiency of small Italian municipalities

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  • Luca, Davide
  • Modrego, Felix

Abstract

When local governments are small and fragmented, promoting inter-municipal cooperation (IMC) among them is seen as a tool to improve the management of public services by reaping economies of scale and scope. Yet, the empirical evidence on the impacts of IMC on local governments' efficiency is scarce and inconclusive. In this paper, we investigate the experience of Italy's municipal unions (Unioni di comuni). We develop an index of technical efficiency by means of robust data envelopment analysis. We then exploit nearest-neighbor matching and fuzzy regression discontinuity design estimators to explore whether municipal unions have any impacts on the administrative efficiency of member municipalities. We fail to find any strong, significant effect.

Suggested Citation

  • 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.
    • Handle: RePEc:ehl:lserod:108193
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    Cited by:

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    2. Marco Di Cataldo & Licia Ferranna & Margherita Gerolimetto & Stefano Magrini, 2023. "Splitting Up or Dancing Together? Local Institutional Structure and the Performance of Urban Areas," Economic Geography, Taylor & Francis Journals, vol. 99(1), pages 81-110, January.
    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. de la Higuera-Molina, Emilio José & Campos-Alba, Cristina María & López-Pérez, Germán & Zafra-Gómez, José Luis, 2023. "Efficiency of water service management alternatives in Spain considering environmental factors," Utilities Policy, Elsevier, vol. 84(C).
    5. Jose-Luis Zafra-Gómez & Germán López-Pérez & Marta Garrido-Montañés & Elisabeth Zafra-Gómez, 2023. "Cost Efficiency in Municipal Solid Waste (MSW): Different Alternatives in Service Delivery for Small and Medium Sized Spanish Local Governments," Sustainability, MDPI, vol. 15(7), pages 1-14, April.

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    More about this item

    Keywords

    data envelopment analysis; efficiency; inter-municipal cooperation; Italy; matching; regression discontinuity design;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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