Long-Term Benefits of Intermunicipal Cooperation for Small Municipalities in Waste Management Provision

Intermunicipal cooperation offers an interesting alternative in cases when municipalities are too small to individually provide public services at an efficient cost level but are reluctant to form a municipal amalgamation in order to benefit from economies of scale. Forming a body consisting of multiple municipalities with a specific focus provides a way to reduce costs on service provision while maintaining municipal sovereignty in other areas. In our paper, we quantify the cost benefits of utilizing intermunicipal cooperation in the field of municipal solid waste management. We examine this using data from a 10-year period from municipalities in the South Moravian Region in the Czech Republic, where high municipal fragmentation results in many dominantly small municipalities that often are not able to provide public services at reasonable costs. This analysis contributes to the literature by conducting a long-term study of the effects of intermunicipal cooperation on public service provision costs. Our results suggest that municipalities participating in intermunicipal cooperation focused on waste management experienced annual cost savings of approximately 13.5% for provision of this service throughout the examined period of 2010-2019 when compared to municipalities that did not cooperate. These long-term results show how beneficial intermunicipal cooperation can be in reducing service costs. In addition to the direct financial benefits, municipal representatives stated that intermunicipal cooperation often brings other qualitative and non-financial benefits such as better service quality, the possibility to share infrastructure, and relief from administrative and managerial burdens through the utilization of professional management, which was especially appreciated by the smallest municipalities with limited administrative staff.