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

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  • 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.

Suggested Citation

  • Luiz de Mello & Santiago Lago-Peñas, 2012. "Local Government Cooperation for Joint Provision: The Experiences of Brazil and Spain with Inter-Municipal Consortia," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1218, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  • Handle: RePEc:ays:ispwps:paper1218
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    References listed on IDEAS

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    1. Martínez-Vázquez, Jorge & Gómez Reino, Juan Luis, 2008. "El tamaño importa: la estructura vertical de gobierno y la gestión del gasto público local," Research Department working papers 249, CAF Development Bank Of Latinamerica.
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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.
    2. Germà Bel & Mildred E. Warner, 2016. "Factors explaining inter-municipal cooperation in service delivery: a meta-regression analysis," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 19(2), pages 91-115, April.

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    Keywords

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