The impact of inter-municipal cooperation on local public spending
AbstractThe purpose of this paper is to assess the effects of inter-municipal fiscal cooperation on municipal public spending, based on the French experience. We estimate a model of municipal spending choice using panel data and spatial econometrics for municipalities over the period 1994-2003. We provide two main results. First, inter-municipal cooperation has no significant impact on the level of municipal public spending, which suggests that cooperation does not achieve its goal of reducing municipal spending by the sharing of local responsibilities. Second, there are no spending interactions between municipalities belonging to the same inter-municipal community. This is in line with the goal assigned to cooperation in terms of internalization of spatial externalities. However, our results show that benefit spillovers remain highly significant outside inter-municipal communities, suggesting that inter-municipal communities remain too small.
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Date of creation: 11 Sep 2012
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public spending ; local governments ; inter-municipal cooperation ; panel data;
Other versions of this item:
- Quentin Frère & Matthieu Leprince & Sonia Paty, 2012. "The impact of inter-municipal cooperation on local public spending?," Working Papers 1225, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H4 - Public Economics - - Publicly Provided Goods
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-30 (All new papers)
- NEP-GEO-2012-09-30 (Economic Geography)
- NEP-PUB-2012-09-30 (Public Finance)
- NEP-URE-2012-09-30 (Urban & Real Estate Economics)
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