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Local Government Cooperation for Joint Provision: The Experiences of Brazil and Spain with Inter-Municipal Consortia

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Author Info

  • Luiz de Mello

    (OECD Economics Department)

  • Santiago Lago-Peñas

    (REDE. IEB, and University of Vigo)

Abstract

Local governments often set up inter-municipal consortia to provide public services jointly, rather than individually. The main benefits of joint provision include the potential for improved cost-effectiveness arising from gains from economies of scale and the internalisation of costs and/or benefits of provision, which could otherwise spill over inter-municipal borders and discourage provision. To shed further light on this issue, this paper tests for the presence of scale and spillover effects in local government provision and estimates the determinants of the probability of local government participation in inter-municipal consortia in Brazil and Spain. Empirical evidence suggests that in some cases smaller jurisdictions operate at sub-optimal scale and are indeed more likely than their larger counterparts to participate in inter-municipal consortia. In the case of Brazil, governance arrangements between the municipalities and the state governments and/or private-sector providers, but not the federal government, are also associated with a higher probability of participation in inter-municipal consortia, suggesting the presence of “participation spillovers” among governance arrangements.

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File URL: http://icepp.gsu.edu/sites/default/files/documents/icepp/wp/ispwp1218.pdf
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Bibliographic Info

Paper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper1218.

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Length: 26 pages
Date of creation: 23 Mar 2012
Date of revision:
Handle: RePEc:ays:ispwps:paper1218

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Web page: http://aysps.gsu.edu/isp/index.html

Related research

Keywords: inter-municipal cooperation; local public finance; Brazil; Spain; federalism; probit;

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Cited by:
  1. Luiz de Mello & Douglas Sutherland, 2014. "Financing Infrastructure," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1409, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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