IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Cooperation among local governments to deliver public services : a "structural" bivariate response model with fixed effects and endogenous covariate

  • Edoardo Di Porto

    (EQUIPPE - Economie Quantitative, Intégration, Politiques Publiques et Econométrie - PRES Université Lille Nord de France - Université de Lille, Sciences Humaines et Sociales - Université de Lille, Sciences et Technologies - Université de Lille, Droit et Santé)

  • Vincent Merlin

    (CREM - Centre de Recherche en Economie et Management - UR1 - Université de Rennes 1 - Université de Caen Basse-Normandie - CNRS - Centre National de la Recherche Scientifique)

  • Sonia Paty

    ()

    (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - UCBL - Université Claude Bernard Lyon 1 - UL2 - Université Lumière - Lyon 2 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - ENS Lyon - École normale supérieure - Lyon)

Cooperation among local governments has been encouraged to enable the aggregation of resources and improved public sector efficiency. However, if cooperation through the joint delivery of local public services is likely to be welfare enhancing for the agglomeration, but will lead to losses for one of the parties, it is unlikely that the losing municipality will cooperate. Using a unique panel dataset of 30,000 French municipalities for 1995-2003, we estimate the relationship between cooperation decision and the fiscal revenues raised to provide local public goods. We employ a new econometric strategy based on Lee (1978), developing a non linear method controlling for fixed effect, endogenous covariates and cluster standard error. We find evidence that a positive difference between the expected fiscal revenues of a cooperating locality and the actual revenues realized by an isolated locality significantly increases the probability of joining an inter-municipal community.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: https://halshs.archives-ouvertes.fr/halshs-00787600/document
Download Restriction: no

Paper provided by HAL in its series Working Papers with number halshs-00787600.

as
in new window

Length:
Date of creation: 12 Feb 2013
Date of revision:
Handle: RePEc:hal:wpaper:halshs-00787600
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00787600
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Quentin Frère & Matthieu Leprince & Sonia Paty, 2012. "The impact of inter-municipal cooperation on local public spending," Working Papers halshs-00730555, HAL.
  2. Miceli Thomas J., 1993. "The Decision to Regionalize in the Provision of Education: An Application of the Tiebout Model," Journal of Urban Economics, Elsevier, vol. 33(3), pages 344-360, May.
  3. Rudie Hulst & André Montfort & Arto Haveri & Jenni Airaksinen & Josephine Kelly, 2009. "Institutional Shifts In Inter-Municipal Service Delivery," Public Organization Review, Springer, vol. 9(3), pages 263-285, September.
  4. Sylvie Charlot & Sonia Paty & Virginie Piguet, 2012. "Does fiscal cooperation increase local tax rates in urban areas," Post-Print halshs-00752342, HAL.
  5. Brasington, David M., 1999. "Joint provision of public goods: the consolidation of school districts," Journal of Public Economics, Elsevier, vol. 73(3), pages 373-393, September.
  6. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
  7. Papke, Leslie E., 2005. "The effects of spending on test pass rates: evidence from Michigan," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 821-839, June.
  8. Hoyt, William H., 1991. "Property taxation, Nash equilibrium, and market power," Journal of Urban Economics, Elsevier, vol. 30(1), pages 123-131, July.
  9. Spolaore, Enrico, 2004. "Is small really so ugly?," World Trade Review, Cambridge University Press, vol. 3(03), pages 447-452, November.
  10. Wildasin, David E., 1988. "Nash equilibria in models of fiscal competition," Journal of Public Economics, Elsevier, vol. 35(2), pages 229-240, March.
  11. Rosenthal Stuart S. & Helsley Robert W., 1994. "Redevelopment and the Urban Land Price Gradient," Journal of Urban Economics, Elsevier, vol. 35(2), pages 182-200, March.
  12. Rune Sørensen, 2006. "Local government consolidations: The impact of political transaction costs," Public Choice, Springer, vol. 127(1), pages 75-95, April.
  13. Cassette, Aurélie & Di Porto, Edoardo & Foremny, Dirk, 2012. "Strategic fiscal interaction across borders: Evidence from French and German local governments along the Rhine Valley," Journal of Urban Economics, Elsevier, vol. 72(1), pages 17-30.
  14. Hart, Sergiu & Kurz, Mordecai, 1983. "Endogenous Formation of Coalitions," Econometrica, Econometric Society, vol. 51(4), pages 1047-64, July.
  15. Besley, Timothy & Case, Anne, 1995. "Incumbent Behavior: Vote-Seeking, Tax-Setting, and Yardstick Competition," American Economic Review, American Economic Association, vol. 85(1), pages 25-45, March.
  16. Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-33, June.
  17. Janne Tukiainen & Tuukka Saarimaa, 2010. "Coalition formation and political decision making: Evidence from Finnish municipal mergers," Working Papers 19, Government Institute for Economic Research Finland (VATT).
  18. Gordon, Nora & Knight, Brian, 2009. "A spatial merger estimator with an application to school district consolidation," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 752-765, June.
  19. Lorenz Blume & Tillmann Blume, 2007. "The economic effects of local authority mergers: empirical evidence for German city regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 41(3), pages 689-713, September.
  20. Edoardo Di Porto & Federico Revelli, 2013. "Tax‐Limited Reaction Functions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(5), pages 823-839, 08.
  21. Wooldridge, Jeffrey M., 1995. "Selection corrections for panel data models under conditional mean independence assumptions," Journal of Econometrics, Elsevier, vol. 68(1), pages 115-132, July.
  22. SALMON, Pierre, 1987. "Decentralization as an incentive scheme," Institut des Mathématiques Economiques – Document de travail de l’I.M.E. (1974-1993) 98, Institut des Mathématiques Economiques. LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS, Université de Bourgogne.
  23. Reingewertz, Yaniv, 2012. "Do municipal amalgamations work? Evidence from municipalities in Israel," Journal of Urban Economics, Elsevier, vol. 72(2), pages 240-251.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:halshs-00787600. 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: (CCSD)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.