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Does intermunicipal cooperation increase efficiency? A conditional metafrontier approach for the Hessian wastewater sector

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  • Frédéric Blaeschke
  • Peter Haug

Abstract

This paper analyses the relationship between intermunicipal cooperation and efficiency of public service provision. Organisational arrangements of public service production, including self-provision, joint provision or contracting, affect incentives and internal transaction costs. Hence, cooperation gains from scale effects need to be balanced against technical inefficiencies. We analyse relative efficiency of wastewater disposal for German municipalities. We employ a conditional analysis in conjunction with a metafrontier approach to calculate relative efficiency measures and technology gap ratios controlling for organisational arrangements and further environmental variables. Jointly providing municipalities and contractor municipalities exhibit lower technical efficiency than self-providing and contracting municipalities. As confirmed by previous research, scale effects from cooperation and contracting apply to small municipalities primarily.

Suggested Citation

  • 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.
  • Handle: RePEc:taf:flgsxx:v:44:y:2018:i:1:p:151-171
    DOI: 10.1080/03003930.2017.1395741
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    Cited by:

    1. Dollery, Brain & Piper, Donella, 2020. "Council cooperation in New South Wales: Why have some councils not joined joint organisations?," Economic Analysis and Policy, Elsevier, vol. 66(C), pages 125-136.
    2. Bart Voorn & Marieke van Genugten & Sandra Van Thiel, 2020. "Performance of municipally owned corporations: Determinants and mechanisms," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(2), pages 191-212, June.
    3. 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.
    4. Ivo Bischoff & Eva Wolfschuetz, 2017. "The Emergence of Inter-Municipal Cooperation – A Hazard Model Approach," MAGKS Papers on Economics 201744, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    5. Anna Francesca Pattaro & Marco Ranuzzini & Luca Bonacini, 2019. "Inter-municipal cooperation as a solution for public services delivery? The case of Unioni di Comuni in Emilia-Romagna Region," Department of Economics 0144, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".

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