IDEAS home Printed from https://ideas.repec.org/a/bla/jregsc/v61y2021i1p261-293.html
   My bibliography  Save this article

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

Author

Listed:
  • Davide Luca
  • Felix Modrego

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

  • 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.
    • Handle: RePEc:bla:jregsc:v:61:y:2021:i:1:p:261-293
    DOI: 10.1111/jors.12509
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jors.12509
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jors.12509?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    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. Léopold Simar & Paul Wilson, 2011. "Inference by the m out of n bootstrap in nonparametric frontier models," Journal of Productivity Analysis, Springer, vol. 36(1), pages 33-53, August.
    3. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
    4. Dominique Deprins & Léopold Simar & Henry Tulkens, 2006. "Measuring Labor-Efficiency in Post Offices," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 285-309, Springer.
    5. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    6. Sebastian Calonico & Matias D. Cattaneo & Rocio Titiunik, 2014. "Robust data-driven inference in the regression-discontinuity design," Stata Journal, StataCorp LP, vol. 14(4), pages 909-946, December.
    7. 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.
    8. 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.
    9. Sebastian Calonico & Matias D. Cattaneo & Rocio Titiunik, 2014. "Robust Nonparametric Confidence Intervals for Regression‐Discontinuity Designs," Econometrica, Econometric Society, vol. 82, pages 2295-2326, November.
    10. Harjunen, Oskari & Saarimaa, Tuukka & Tukiainen, Janne, 2021. "Political representation and effects of municipal mergers," Political Science Research and Methods, Cambridge University Press, vol. 9(1), pages 72-88, January.
    11. Reingewertz, Yaniv, 2012. "Do municipal amalgamations work? Evidence from municipalities in Israel," Journal of Urban Economics, Elsevier, vol. 72(2), pages 240-251.
    12. Sebastian Calonico & Matias D. Cattaneo & Max H. Farrell & Roc ́ıo Titiunik, 2017. "rdrobust: Software for regression-discontinuity designs," Stata Journal, StataCorp LP, vol. 17(2), pages 372-404, June.
    13. Simar, Leopold & Wilson, Paul W., 2002. "Non-parametric tests of returns to scale," European Journal of Operational Research, Elsevier, vol. 139(1), pages 115-132, May.
    14. David M. Drukker, 2016. "A generalized regression-adjustment estimator for average treatment effects from panel data," Stata Journal, StataCorp LP, vol. 16(4), pages 826-836, December.
    15. Epple, Dennis & Romer, Thomas, 1989. "On the flexibility of municipal boundaries," Journal of Urban Economics, Elsevier, vol. 26(3), pages 307-319, November.
    16. Marie-Laure Breuille & Pascale Duran-Vigneron & Anne-Laure Samson, 2018. "Inter-municipal cooperation and local taxation," Post-Print hal-02943321, HAL.
    17. Victor Podinovski & Emmanuel Thanassoulis, 2007. "Improving discrimination in data envelopment analysis: some practical suggestions," Journal of Productivity Analysis, Springer, vol. 28(1), pages 117-126, October.
    18. Breuillé, Marie-Laure & Duran-Vigneron, Pascale & Samson, Anne-Laure, 2018. "Inter-municipal cooperation and local taxation," Journal of Urban Economics, Elsevier, vol. 107(C), pages 47-64.
    19. 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.
    20. Hirota, Haruaki & Yunoue, Hideo, 2017. "Evaluation of the fiscal effect on municipal mergers: Quasi-experimental evidence from Japanese municipal data," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 132-149.
    21. 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.
    22. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    23. Ricardo Carvalho de Andrade Lima & Raul da Mota Silveira Neto, 2018. "Secession of municipalities and economies of scale: Evidence from Brazil," Journal of Regional Science, Wiley Blackwell, vol. 58(1), pages 159-180, January.
    24. Maarten A. Allers & J. Bieuwe Geertsema, 2016. "The Effects Of Local Government Amalgamation On Public Spending, Taxation, And Service Levels: Evidence From 15 Years Of Municipal Consolidation," Journal of Regional Science, Wiley Blackwell, vol. 56(4), pages 659-682, September.
    25. 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.
    26. 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.
    27. 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.
    28. Rudiger Ahrend & Emily Farchy & Ioannis Kaplanis & Alexander C. Lembcke, 2017. "What Makes Cities More Productive? Evidence From Five Oecd Countries On The Role Of Urban Governance," Journal of Regional Science, Wiley Blackwell, vol. 57(3), pages 385-410, June.
    29. Ruggiero, John, 2000. "Measuring technical efficiency," European Journal of Operational Research, Elsevier, vol. 121(1), pages 138-150, February.
    30. Davide Luca, 2017. "Boon or bane for development? Turkey’s central state bureaucracy and the management of public investment," Environment and Planning C, , vol. 35(6), pages 939-957, September.
    31. David Bartolini & Fabio Fiorillo, 2011. "Cooperation among Local Councils for the Provision of Public Goods," Rivista italiana degli economisti, Società editrice il Mulino, issue 1, pages 85-108.
    32. Maarten A. Allers & Bernard van Ommeren, 2016. "Intermunicipal cooperation, municipal amalgamation and the price of credit," Local Government Studies, Taylor & Francis Journals, vol. 42(5), pages 717-738, September.
    33. Djankov, Simeon & McLiesh, Caralee & Ramalho, Rita Maria, 2006. "Regulation and growth," Economics Letters, Elsevier, vol. 92(3), pages 395-401, September.
    34. 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.
    35. Weingast, Barry R & Shepsle, Kenneth A & Johnsen, Christopher, 1981. "The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 642-664, August.
    36. 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.
    37. Massimiliano Ferraresi & Giuseppe Migali & Leonzio Rizzo, "undated". "Does inter-municipal cooperation promote efficiency gains?," Working Papers 176267113, Lancaster University Management School, Economics Department.
    38. Crescenzi, Riccardo & Luca, Davide & Milio, Simona, 2016. "The geography of the economic crisis in Europe: national macroeconomic conditions, regional structural factors and short-term economic performance," LSE Research Online Documents on Economics 64061, London School of Economics and Political Science, LSE Library.
    39. Pascale Duran-Vigneron, 2013. "Disparités fiscales et redistribution territoriale : de la coordination subie à la coordination choisie," Post-Print hal-01913010, HAL.
    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. Clémence Tricaud, 2021. "Better Alone? Evidence on the Costs of Intermunicipal Cooperation," Working Papers hal-03380333, HAL.
    2. Ning Jia & Huiyong Zhong, 2022. "The Causes and Consequences of China's Municipal Amalgamations: Evidence from Population Redistribution," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(4), pages 174-200, July.
    3. Germà Bel & Thomas Elston, 2022. ""When the Time is Right: Testing for Dynamic Effects in Collaborative Performance"," IREA Working Papers 202212, University of Barcelona, Research Institute of Applied Economics, revised Jul 2022.
    4. Banaszewska, Monika & Bischoff, Ivo & Bode, Eva & Chodakowska, Aneta, 2022. "Does inter-municipal cooperation help improve local economic performance? – Evidence from Poland," Regional Science and Urban Economics, Elsevier, vol. 92(C).
    5. Giuseppe Liddo & Michele G. Giuranno, 2020. "The political economy of municipal consortia and municipal mergers," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(1), pages 105-135, April.
    6. Giampaolo Arachi & Debora Assisi & Berardino Cesi & Michele G. Giuranno & Felice Russo, 2022. "Inter-municipal Cooperation in Public Procurement," CEIS Research Paper 548, Tor Vergata University, CEIS, revised 19 Dec 2022.
    7. repec:hal:journl:hal-03380333 is not listed on IDEAS
    8. Sonia Paty & Morgan Ubeda, 2021. "Inter-municipal cooperation and the provision of local public goods," Working Papers 2121, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.

    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. 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.
    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. 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.
    4. Geschwind, Stephan & Roesel, Felix, 2022. "Taxation under direct democracy," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 536-554.
    5. 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.
    6. 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.
    7. Clémence Tricaud, 2021. "Better Alone? Evidence on the Costs of Intermunicipal Cooperation," Working Papers hal-03380333, HAL.
    8. repec:hal:journl:hal-03380333 is not listed on IDEAS
    9. Emrouznejad, Ali & De Witte, Kristof, 2010. "COOPER-framework: A unified process for non-parametric projects," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1573-1586, December.
    10. 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.
    11. Ohene-Asare, Kwaku & Turkson, Charles & Afful-Dadzie, Anthony, 2017. "Multinational operation, ownership and efficiency differences in the international oil industry," Energy Economics, Elsevier, vol. 68(C), pages 303-312.
    12. 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.
    13. Agrawal, David R., 2016. "Local fiscal competition: An application to sales taxation with multiple federations," Journal of Urban Economics, Elsevier, vol. 91(C), pages 122-138.
    14. H Fukuyama & W L Weber, 2009. "Estimating indirect allocative inefficiency and productivity change," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(11), pages 1594-1608, November.
    15. Mellace, Giovanni & Ventura, Marco, 2019. "Intended and unintended effects of public incentives for innovation. Quasi-experimental evidence from Italy," Discussion Papers on Economics 9/2019, University of Southern Denmark, Department of Economics.
    16. 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..
    17. Halkos, George & Tzeremes, Nickolaos, 2008. "Measuring regional public health provision," MPRA Paper 23762, University Library of Munich, Germany.
    18. 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.
    19. Saarimaa, Tuukka & Tukiainen, Janne, 2015. "Common pool problems in voluntary municipal mergers," European Journal of Political Economy, Elsevier, vol. 38(C), pages 140-152.
    20. Tsuyoshi Goto & Sandra Sekgetle & Takashi Kuramoto, 2019. "Municipal Merger and Debt Issuance in South African Municipality," OSIPP Discussion Paper 19E001, Osaka School of International Public Policy, Osaka University.
    21. Halkos, George & Tzeremes, Nickolaos, 2009. "Exploring the effect of countries’ economic prosperity on their biodiversity performance," MPRA Paper 32102, University Library of Munich, Germany.

    More about this item

    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:bla:jregsc:v:61:y:2021:i:1:p:261-293. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-4146 .

    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.