IDEAS home Printed from
   My bibliography  Save this article

Estimating the minimal efficient scale and the effect of intermunicipal cooperation on service provision areas for waste treatment in Japan


  • Hiroki Baba

    () (The University of Tokyo)

  • Yasushi Asami

    (The University of Tokyo)


We explore the difference in cost structure when municipalities participate in intermunicipal cooperation (IMC) and estimate the minimal efficient scale, which minimizes the per capita service provision cost. The unit of analysis is designated as waste treatment provision area. We specify a cost function based on the Cobb–Douglas form that considers local environment variables, and illustrate the disparity between the current population and minimal efficient scale of the public service provision area. There are several key findings. First, being in an IMC affects the cost function by generating transaction costs, such as monitoring the quality of service provision, but the costs are discounted by population size. Second, the cost function is not linear to population, a downward convex function. Third, approximately 90% of the service provision areas in Japan have the opportunity to take advantage of economies of scale. However, geographical constraints render waste treatment with the framework of IMC more difficult, since such areas are separated by natural elements such as mountains. Nevertheless, the model in this study implies the possibility that municipalities can efficiently reduce public spending by participating in IMC authorities.

Suggested Citation

  • Hiroki Baba & Yasushi Asami, 2020. "Estimating the minimal efficient scale and the effect of intermunicipal cooperation on service provision areas for waste treatment in Japan," Asia-Pacific Journal of Regional Science, Springer, vol. 4(1), pages 139-158, February.
  • Handle: RePEc:spr:apjors:v:4:y:2020:i:1:d:10.1007_s41685-019-00119-6
    DOI: 10.1007/s41685-019-00119-6

    Download full text from publisher

    File URL:
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    2. Eric Weese, 2015. "Political mergers as coalition formation: An analysis of the Heisei municipal amalgamations," Quantitative Economics, Econometric Society, vol. 6(2), pages 257-307, July.
    3. 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.
    4. Yu Noda, 2017. "Forms and effects of shared services: an assessment of local government arrangements in Japan," Asia Pacific Journal of Public Administration, Taylor & Francis Journals, vol. 39(1), pages 39-50, January.
    5. Florin-Marius PAVELESCU, 2011. "Some aspects of the translog production function estimation," Romanian Journal of Economics, Institute of National Economy, vol. 32(1(41)), pages 131-150, June.
    6. 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.
    7. Gyimah-Brempong, Kwabena, 1987. "Economies of Scale in Municipal Police Departments: The Case of Florida," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 352-356, May.
    8. S. C. Littlechild & G. Owen, 1973. "A Simple Expression for the Shapley Value in a Special Case," Management Science, INFORMS, vol. 20(3), pages 370-372, November.
    9. Stevens, Barbara J, 1978. "Scale, Market Structure, and the Cost of Refuse Collection," The Review of Economics and Statistics, MIT Press, vol. 60(3), pages 438-448, August.
    10. Thomas Niaounakis & Jos Blank, 2017. "Inter-municipal cooperation, economies of scale and cost efficiency: an application of stochastic frontier analysis to Dutch municipal tax departments," Local Government Studies, Taylor & Francis Journals, vol. 43(4), pages 533-554, July.
    11. Jana Soukopová & Gabriela Vaceková, 2018. "Internal factors of intermunicipal cooperation: what matters most and why?," Local Government Studies, Taylor & Francis Journals, vol. 44(1), pages 105-126, January.
    12. Joseph Drew & Michael A. Kortt & Brian Dollery, 2016. "Did the Big Stick Work? An Empirical Assessment of Scale Economies and the Queensland Forced Amalgamation Program," Local Government Studies, Taylor & Francis Journals, vol. 42(1), pages 1-14, January.
    13. Frédéric Blaeschke & Peter Haug, 2018. "Does intermunicipal cooperation increase efficiency? A conditional metafrontier approach for the Hessian wastewater sector," Local Government Studies, Taylor & Francis Journals, vol. 44(1), pages 151-171, January.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Intermunicipal cooperation; Public service; Economies of scale; Waste treatment; Minimal efficient scale;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies


    Access and download statistics


    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:spr:apjors:v:4:y:2020:i:1:d:10.1007_s41685-019-00119-6. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Springer Nature Abstracting and Indexing). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.