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Why do municipalities cooperate to provide local public services? An empirical analysis

  • Germà Bel

    ()

    (Faculty of Economics, University of Barcelona)

  • Xavier Fageda

    ()

    (Faculty of Economics, University of Barcelona)

  • Melania Mur

    ()

    (University of Zaragoza)

Intermunicipal cooperation is being increasingly adopted in various countries as a part of local service delivery reforms. This paper draws on survey data from Spain’s municipalities to examine the reasons underpinning the decisions of local governments to engage in intermunicipal cooperation and privatisation. Our empirical analysis indicates that small municipalities prefer to rely on cooperation for reducing costs, while their larger counterparts prefer to privatise the delivery of services. By cooperating, scale economies can be achieved with lower transaction costs and fewer concerns for competition than is the case via private production.

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File URL: http://www.ub.edu/irea/working_papers/2011/201118.pdf
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Paper provided by University of Barcelona, Research Institute of Applied Economics in its series IREA Working Papers with number 201118.

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Length: 29 pages
Date of creation: Oct 2011
Date of revision: Oct 2011
Handle: RePEc:ira:wpaper:201118
Contact details of provider: Postal: Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona
Web page: http://www.ub.edu/irea/
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