IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/108193.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/108193/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Edoardo Di Porto & Angela Parenti & Sonia Paty & Zineb Abidi, 2017. "Local government cooperation at work: a control function approach," Journal of Economic Geography, Oxford University Press, vol. 17(2), pages 435-463.
    2. Reingewertz, Yaniv, 2012. "Do municipal amalgamations work? Evidence from municipalities in Israel," Journal of Urban Economics, Elsevier, vol. 72(2), pages 240-251.
    3. Henrik Jordahl & Che-Yuan Liang, 2010. "Merged municipalities, higher debt: on free-riding and the common pool problem in politics," Public Choice, Springer, vol. 143(1), pages 157-172, April.
    4. Quentin Frère & Matthieu Leprince & Sonia Paty, 2014. "The Impact of Intermunicipal Cooperation on Local Public Spending," Urban Studies, Urban Studies Journal Limited, vol. 51(8), pages 1741-1760, June.
    5. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    6. Veronica Grembi & Tommaso Nannicini & Ugo Troiano, 2016. "Do Fiscal Rules Matter?," American Economic Journal: Applied Economics, American Economic Association, vol. 8(3), pages 1-30, July.
    7. 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.
    8. Djankov, Simeon & McLiesh, Caralee & Ramalho, Rita Maria, 2006. "Regulation and growth," Economics Letters, Elsevier, vol. 92(3), pages 395-401, September.
    9. Tyrefors Hinnerich, Björn, 2009. "Do merging local governments free ride on their counterparts when facing boundary reform?," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 721-728, June.
    10. Stefano Gagliarducci & Tommaso Nannicini, 2013. "Do Better Paid Politicians Perform Better? Disentangling Incentives From Selection," Journal of the European Economic Association, European Economic Association, vol. 11(2), pages 369-398, April.
    11. Richard A. Nielsen & Michael G. Findley & Zachary S. Davis & Tara Candland & Daniel L. Nielson, 2011. "Foreign Aid Shocks as a Cause of Violent Armed Conflict," American Journal of Political Science, John Wiley & Sons, vol. 55(2), pages 219-232, April.
    12. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    13. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    14. Blesse, Sebastian & Baskaran, Thushyanthan, 2016. "Do municipal mergers reduce costs? Evidence from a German federal state," Regional Science and Urban Economics, Elsevier, vol. 59(C), pages 54-74.
    15. Andrew C. Eggers & Ronny Freier & Veronica Grembi & Tommaso Nannicini, 2018. "Regression Discontinuity Designs Based on Population Thresholds: Pitfalls and Solutions," American Journal of Political Science, John Wiley & Sons, vol. 62(1), pages 210-229, January.
    16. Dyson, R. G. & Allen, R. & Camanho, A. S. & Podinovski, V. V. & Sarrico, C. S. & Shale, E. A., 2001. "Pitfalls and protocols in DEA," European Journal of Operational Research, Elsevier, vol. 132(2), pages 245-259, July.
    17. Ruggiero, John, 2000. "Measuring technical efficiency," European Journal of Operational Research, Elsevier, vol. 121(1), pages 138-150, February.
    18. Matias D. Cattaneo & Michael Jansson & Xinwei Ma, 2018. "Manipulation testing based on density discontinuity," Stata Journal, StataCorp LP, vol. 18(1), pages 234-261, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jaaidane, Touria & Larribeau, Sophie, 2023. "The effects of inter-municipal cooperation and central grant allocation on the size of the French local public sector," European Journal of Political Economy, Elsevier, vol. 76(C).
    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Blesse Sebastian & Rösel Felix, 2017. "Was bringen kommunale Gebietsreformen?: Kausale Evidenz zu Hoffnungen, Risiken und alternativen Instrumenten," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 18(4), pages 307-324, November.
    3. Köppl–Turyna, Monika & Pitlik, Hans, 2018. "Do equalization payments affect subnational borrowing? Evidence from regression discontinuity," European Journal of Political Economy, Elsevier, vol. 53(C), pages 84-108.
    4. Tavares Antonio F., 2018. "Municipal amalgamations and their effects: a literature review," Miscellanea Geographica. Regional Studies on Development, Sciendo, vol. 22(1), pages 5-15, March.
    5. Feld, Lars P. & Fritz, Benedikt, 2015. "The political economy of municipal amalgamation: Evidence of common pool effects and local public debt," Freiburg Discussion Papers on Constitutional Economics 15/10, Walter Eucken Institut e.V..
    6. Roesel, Felix, 2017. "Do mergers of large local governments reduce expenditures? – Evidence from Germany using the synthetic control method," European Journal of Political Economy, Elsevier, vol. 50(C), pages 22-36.
    7. Hirota, Haruaki & Yunoue, Hideo, 2020. "Public investment and the fiscal common pool problem on municipal mergers in Japan," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 124-135.
    8. Mauricio Villamizar‐Villegas & Freddy A. Pinzon‐Puerto & Maria Alejandra Ruiz‐Sanchez, 2022. "A comprehensive history of regression discontinuity designs: An empirical survey of the last 60 years," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1130-1178, September.
    9. Saarimaa, Tuukka & Tukiainen, Janne, 2015. "Common pool problems in voluntary municipal mergers," European Journal of Political Economy, Elsevier, vol. 38(C), pages 140-152.
    10. 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.
    11. Picchio, Matteo & Santolini, Raffaella, 2020. "Fiscal rules and budget forecast errors of Italian municipalities," European Journal of Political Economy, Elsevier, vol. 64(C).
    12. 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.
    13. repec:hal:journl:hal-03380333 is not listed on IDEAS
    14. Luigi Marattin & Tommaso Nannicini & Francesco Porcelli, 2022. "Revenue vs expenditure based fiscal consolidation: the pass-through from federal cuts to local taxes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(4), pages 834-872, August.
    15. Benedikt Fritz & Lars P. Feld, 2020. "Common pool effects and local public debt in amalgamated municipalities," Public Choice, Springer, vol. 183(1), pages 69-99, April.
    16. Hitoshi Saito & Haruaki Hirota & Hideo Yunoue & Miki Miyaki, 2023. "Do municipal mergers internalise spatial spillover effects? empirical evidence from Japanese municipalities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 70(2), pages 379-406, April.
    17. Masayoshi Hayashi & Takafumi Suzuki, 2018. "Municipal Mergers and Capitalization: Evaluating the Heisei Territorial Reform in Japan," CIRJE F-Series CIRJE-F-1105, CIRJE, Faculty of Economics, University of Tokyo.
    18. Marco Fregoni & Marco Leonardi & Sauro Mocetti, 2020. "The real effects of land use regulation: quasi-experimental evidence from a discontinuous policy variation," Temi di discussione (Economic working papers) 1261, Bank of Italy, Economic Research and International Relations Area.
    19. Allers, Maarten & Geertsema, Bieuwe, 2014. "The effects of local government amalgamation on public spending and service levels," Research Report 14019-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    20. Caria, Andrea & Cerina, Fabio & Nieddu, Marco, 2023. "Choosing not to lead: Monetary incentives and political selection in local parliamentary systems," European Journal of Political Economy, Elsevier, vol. 79(C).
    21. Kantorowicz, Jarosław, 2017. "Electoral systems and fiscal policy outcomes: Evidence from Poland," European Journal of Political Economy, Elsevier, vol. 47(C), pages 36-60.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:108193. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.