Is cooperation cost reducing? An analysis of public-public partnerships and inter-municipal cooperation in Brazilian local government

Abstract

In local government systems worldwide, financial pressures have obliged local authorities to focus on cost-efficient methods for providing local services, including inter-municipal agreements and public-public partnerships. However, in comparison with municipal mergers, privatisation and other approaches to the problem, the cost impact of the cooperative provision has not yet been thoroughly examined empirically. Moreover, available empirical research has largely concentrated on waste disposal in developed countries. The present paper seeks to contribute to the empirical literature on inter-municipal agreements and public-public partnerships by comparing their impact on costs with 'stand-alone' provision in a range of non-waste local services. In contrast to the bulk of existing studies, our analysis takes place in a developing country context by examining Brazilian local government over the period 2013/15. We found that - on the whole - cooperative provision is less expensive than the 'stand-alone' provision for the services studied. Our results can be explained by the size and composition of the population, together with the politics for cooperation.