Is council co-operation cost efficient? An empirical analysis of waste collection in Spanish local government

ABSTRACT

Although there is an extensive literature examining the fiscal outcomes of municipal mergers and privatization, much less research has focused on council co-operation. This paper compares the relative cost of waste services under inter-municipal co-operation and stand-alone production by local councils in Spain from 2009 to 2015. Co-operation produced significant cost savings and the factors affecting municipal waste collection costs differed between these two modes of production.

IMPACT

Municipal service production is a key element in local government. The most efficient municipal management arrangement is affected by numerous factors, especially economic factors. This study compares stand-alone and co-operative provision in municipal waste collection in order to evaluate which approach generates the greatest cost savings. The authors’ results show that co-operation is more cost efficient than direct public production. Inter-municipal co-operation thus represents a sound policy option for municipal functions that benefit from a multi-production service approach and exhibit scale economies.

KEYWORDS:

• Cost
• council co-operation
• inter-municipal
• local government
• public provision
• Spain
• waste collection

Acknowledgements

The research for this paper was carried out during Professor Pérez-López’s stay at UNE Business School. She would like to thank staff for making her welcome, especially Professor George Battese and Professor Rene Villano.

Disclosure statement

No potential conflict of interest was reported by the author(s).