This chapter examines how inter-municipal co-operation has become a key governance tool to address municipal fragmentation and limited local capacity across OECD and accession countries. Many municipalities, particularly smaller ones, face growing difficulties in delivering increasingly complex public services, maintaining infrastructure and planning long-term investments in a context of demographic change and fiscal pressures. The chapter first reviews the main policy options available to address these challenges – outsourcing, municipal mergers, asymmetric decentralisation and inter-municipal co-operation – highlighting their respective advantages and limitations. It then analyses why inter-municipal co-operation is increasingly seen as a pragmatic and flexible solution, enabling municipalities to pool resources, share expertise and act at the scale of functional territories while preserving local autonomy. The chapter further explores the wide diversity of inter-municipal co-operation arrangements across OECD countries, ranging from informal agreements to highly institutionalised entities, as well as their application across sectors. Finally, it assesses both the benefits and risks of inter-municipal co-operation, showing that its effectiveness depends heavily on governance design, fiscal arrangements, political commitment and alignment with local needs.
How to Make Inter‑Municipal Co‑operation Work
Abstract
Municipalities across OECD and accession countries face structural capacity constraints that limit effective service delivery, infrastructure provision and long-term planning. Many local governments operate with small populations and limited administrative resources, which reduces economies of scale, weakens the quality and efficiency of public services and infrastructure, and constrains their ability to engage in strategic, forward-looking planning. To address these challenges, countries have adopted a range of institutional responses, including outsourcing, municipal mergers, asymmetric decentralisation and inter-municipal co‑operation (OECD, 2017[1]; Germà et al., 2024[2]; OECD, 2019[3]). Among these, inter-municipal co‑operation is increasingly recognised as a pragmatic and flexible solution, enabling municipalities to pool resources, share expertise and act at a scale better aligned with functional realities.
This chapter explores why and how municipalities engage in inter-municipal co-operation, examining its key drivers, benefits and associated challenges. It is structured in four parts. First, it reviews the main policy options available to address municipal capacity and scale constraints, highlighting their respective trade-offs and the factors that drive the search for collaborative solutions. Second, it analyses inter-municipal co-operation as a particularly operational and adaptable governance tool, increasingly adopted to respond to these pressures. Third, it examines how inter-municipal co-operation has become a widespread feature of local governance across OECD countries, taking diverse institutional forms shaped by national traditions and local needs. Finally, it assesses both the benefits and the challenges associated with inter-municipal co-operation, emphasising the conditions under which it can effectively strengthen local governance and service delivery.
Across OECD and accession countries, municipalities face increasing pressure to deliver more complex services, plan investments, and respond to demographic, economic, and environmental changes, often with insufficient scale or administrative resources, as discussed in this section. To address these challenges, municipalities can pursue a range of policy options, including outsourcing, mergers, asymmetric decentralisation, and inter-municipal co-operation.
This section analyses how the first three options can help respond to these pressures, while also highlighting the trade-offs they entail. In doing so, it introduces the rationale for examining inter-municipal co-operation more closely as a particularly relevant and flexible response. It also emphasises that these approaches are not mutually exclusive and may be implemented in parallel.
Municipalities face challenges linked to small size and limited administrative capacity
Municipal fragmentation remains widespread across the OECD, with a large share of very small municipalities. The average municipality size is around 10 500 inhabitants across the OECD and 5 300 in the EU, but this masks significant cross-country variation, ranging from around 1 750 inhabitants in Czechia to more than 228 000 inhabitants in Korea as average municipal sizes (Figure 1.1). On average, around 25% of municipalities in the OECD and 29% in the EU have fewer than 2 000 residents, with this share exceeding 80% in countries such as Czechia, France and Slovakia. Countries like Canada, Hungary, Iceland and Spain also exhibit high levels of fragmentation, with many very small municipalities (Figure 1.2).
Source: OECD (2025), Subnational governments in OECD countries: Key data (brochure), OECD, Paris, https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/subnational-finance-and-investment/subnational-governments-infrastructure-finance-2025.pdf (OECD, 2025[4]); Dashboard: https://www.oecd.org/en/data/dashboards/oecd-dashboard-on-subnational-government-structure-and-finance.html.
Source: OECD (2025), Subnational governments in OECD countries: Key data (brochure), OECD, Paris, https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/subnational-finance-and-investment/subnational-governments-infrastructure-finance-2025.pdf (OECD, 2025[4]); Dashboard: https://www.oecd.org/en/data/dashboards/oecd-dashboard-on-subnational-government-structure-and-finance.html.
Limited administrative capacity further constrains municipal ability to fulfil their responsibilities. This challenge is particularly evident in small municipalities, which often lack the capacity to deliver services and infrastructure. It can be especially acute in decentralised contexts, where smaller municipalities must manage extensive responsibilities without adequate capacity, as in Sweden or Finland. However, limited administrative capacity is not solely linked to municipal size; it may also result from centralised systems that do not equip municipalities with adequate resources, even in countries with relatively large municipalities, such as Bulgaria, Chile and Latvia. (OECD, 2017[5]; OECD, 2024[6]; OECD, 2021[7]).
These dynamics highlight the close interlinkages between municipal size and administrative capacity, which can reinforce structural weaknesses over time. Smaller municipalities frequently face difficulties in recruiting, retaining and specialising staff, while limited administrative capacity further constrains their ability to manage complex services, plan investments and secure external funding. This interaction can generate a self-reinforcing cycle in which fragmentation and capacity constraints compound one another.
Demographic change is intensifying these structural challenges, particularly in shrinking and ageing regions. Ageing, outmigration and urban concentration are further reducing the size of many municipalities, increasing pressures on service provision, infrastructure maintenance, fiscal sustainability and administrative capacity (OECD, 2025[8]; OECD, 2021[9]). For example, in Sweden – despite a highly decentralised system and strong municipal autonomy – municipalities face growing challenges linked to population ageing and decline, including staff shortages, skills gaps and rising investment needs. In response, many municipalities are increasingly turning to inter-municipal co-operation to pool resources, strengthen capacity and access specialised expertise.
Rising policy complexity and resource constraints are affecting municipalities of all sizes, reinforcing the need for adequate responses. Across the OECD, municipalities face persistent staff shortages and budgetary pressures while being expected to address increasingly complex challenges such as digitalisation, the climate transition and territorial competitiveness. These issues often transcend administrative boundaries and require greater scale, expertise and co-ordination. Even larger municipalities can struggle to respond effectively, as the scope and interconnected nature of local responsibilities continue to expand in a globalised economy.
Policy options to address municipal capacity and scale constraint
Inter-municipal co-operation is a key option for addressing capacity and scale constraints at the municipal level. However, other approaches are also available, including outsourcing, municipal mergers and asymmetric decentralisation. These options are not mutually exclusive and can be combined - both with each other and with inter-municipal co-operation. The following section examines their respective advantages as well as their limitations, as they may not fully resolve all challenges and can, in some cases, introduce new concerns.
Outsourcing municipal services can be effective but has several limitations
Outsourcing municipal services to private providers is used to compensate for limited municipal capacity, but it has important limitations. Contracting services to private providers can help municipalities increase efficiency, reduce administrative burdens and access specialised expertise. However, this option is not always available and viable due to legal constraints, limited competition in private markets, and high transaction and monitoring costs associated with complex contracts (Wei and Chen, 2024[10]). Smaller and more remote municipalities – where economies of scale are most needed – often face a lack of suitable providers, making outsourcing impractical (Zhang and Gibson, 2016[11]). Even where markets exist, municipalities may lack the capacity to ensure quality, equity and accountability in long-term contracts.
Many municipalities are now reversing outsourcing and seeking to rebuild internal capacity and public control. Across OECD countries, a growing number of municipalities are reintegrating previously outsourced services, a trend referred to as “remunicipalisation”, “in-sourcing” or “de-privatisation”. This shift reflects concerns over rising costs, declining service quality and loss of strategic control, as well as the need to better align services with environmental, digital and social objectives (Public Futures, 2025[12]). For example, several French cities have brought water and waste services back in-house, while Hamburg in Germany and Valladolid in Spain have re-established public ownership in energy and water services (European Water Movement, n.d.[13]). These developments suggest that, while outsourcing remains relevant in certain contexts, many municipalities are prioritising the rebuilding of internal capacity and public oversight
Outsourcing and inter-municipal co-operation can also be combined. Importantly, outsourcing and inter-municipal co-operation are not mutually exclusive: municipalities can combine them, for instance by jointly procuring services or sharing expertise while still relying on external providers where appropriate.
Municipal mergers face a lot of resistance and may not bring the expected outcomes
Municipal mergers are widely used to address fragmentation and strengthen local capacity, but their results are mixed. Over the past two decades, many OECD countries – including Denmark, Estonia, Greece, Ireland and Latvia – have implemented large-scale or incentivised consolidation reforms to create municipalities better equipped to manage modern governance and service delivery challenges (Figure 1.3). Other countries, such as Belgium, Croatia, Italy and Luxembourg, continue to promote mergers through financial and regulatory incentives (Box 1.1). However, empirical evidence on the outcomes of municipal amalgamations remains inconclusive. Some studies identify reductions in administrative expenditure and gains in technical efficiency, particularly in smaller municipalities and capital-intensive services (Blom-Hansen et al., 2016[14]). Many others find limited or no overall savings in total expenditure, as larger jurisdictions may also generate new administrative and co-ordination costs (Tavares, 2024[15]; Zheng, Sun and de Witte, 2023[16]). Evidence regarding service quality and local democracy is equally mixed. Several studies point to risks of reduced political participation, weaker local identity and lower citizen trust following mergers, although outcomes vary significantly depending on the reform process, local context and governance arrangements (Allers et al., 2021[17]).
Source: (OECD, 2017[1]; OECD, 2025[4]).
Important mergers have taken place in OECD countries and OECD accession countries over the last 20 years. Some countries have implemented merger reforms, such as Denmark in 2007, Latvia in 2009 or Japan in several waves. In others, such as Finland, Luxembourg, the Netherlands and Switzerland, there has been an ongoing process over a long period. The global financial crisis of 2009 acted as a catalyst for the reactivation or introduction of municipal amalgamation policies in countries such as Austria (2015), Estonia (2017), Greece (2011), Ireland (2014) and Türkiye (2014), as well as in France and Italy. Some federal countries have also introduced mergers under the leadership of federated states, for example, Styria in Austria, Flanders and Wallonia in Belgium, Saxony-Anhalt and Thuringia in Germany, as well as in several Australian States (Dollery, 2021[18]).
More recently, significant municipal mergers have occurred in Belgium (2024), Iceland (2020-22), Latvia (2021) and Norway (2020). Türkiye and Portugal have also undertaken reforms to consolidate sub-municipal structures in 2012 (Freguesias in Portugal and Köy in Türkiye).
Countries continue to promote municipal mergers. In Italy, despite the prevalence of small municipalities, municipal mergers are rare. In 2024, the government strengthened the incentive framework established in Law No. 56/2014 ten years ago to promote further municipal mergers (OECD, 2025[19]). Since 2022, Croatia has also offered a one-time grant to repay the debt obligations of the city or municipal government whose territory is being merged into another, coverage of the financial costs of the merger, and capital and operational grants for a five-year period (OECD, 2024[20]).
In the United Kingdom, English local government reorganisation has been a continuous process since the 1990s, progressively replacing two-tier county–district systems with larger unitary authorities, including major reforms in 2009 and a new wave of mergers between 2019 and 2023. The 2024 English Devolution White Paper and the English Devolution and Community Empowerment Act represent a further step in this trajectory, promoting the creation of larger local authorities with a guiding principal of 500 000 inhabitants and expanded strategic governance structures (UK Government, 2024[21]).
Despite potential scale benefits, municipal mergers face significant political, democratic and practical challenges. Political resistance is common, as mergers may entail the loss of local identity, historical ties and governance autonomy (Box 1.2). Concerns also arise over the reorganisation of service provision, with risks of centralising services in core areas to the detriment of peripheral communities, potentially affecting access, quality and local economic dynamics. Municipal mergers may weaken citizen engagement and accountability, as decision making becomes more distant from residents. In larger, consolidated municipalities, people’s voices - expressed through public meetings, hearings, elections or direct contact with local officials - may be less effectively heard, raising concerns about democratic responsiveness (OECD, 2017[1]). Evidence from France, for example, shows that municipal mergers can reduce voter turnout by around 8 percentage points on average, particularly in rural and low-density areas, pointing to a decline in local political participation and perceived influence (Mille, 2026[23]). In the United Kingdom, evidence from stakeholder responses and policy analysis of the 2024 English Devolution White Paper points to a key trade-off: while consolidation into larger strategic authorities and unitary structures is intended to enhance administrative efficiency and service delivery in England (UK Government, 2024[21]), it may also weaken local democratic accountability and distance decision making from communities (UK Parliament, 2025[24]). This concern is particularly relevant given that UK local governments are already among the largest in the OECD.
Municipal amalgamations have long faced strong political and societal resistance, as illustrated by several OECD countries where repeated attempts to reduce municipal fragmentation have stalled or failed.
In Spain, municipal mergers remain a long-standing and unresolved issue, despite Law 27/2013, which aimed to streamline and ensure the sustainability of local government (David Ortega Guttierez, 2023[25]).
In Italy, for example, the political challenges surrounding municipal mergers remain substantial, suggesting that inter-municipal co-operation – such as unions of municipalities – can serve as an alternative or an intermediate step toward more comprehensive consolidation (OECD, 2025[19]).
In France, the strong attachment of local populations to the commune and the central role of mayors in local governance and service delivery contribute to the persistent reluctance to engage in municipal mergers. As a result, attempts to restructure the municipal tier through amalgamations have repeatedly encountered resistance, highlighting the relevance of inter-municipal co-operation as an alternative that preserves local identity while ensuring equitable benefits (OECD, 2017[1]).
In Czechia, political resistance to municipal mergers is partly rooted in the country’s recent history of centralisation (Bakoš et al., 2021[26]). The re-establishment of municipalities after the Velvet Revolution, reinforced by the 1993 Czech Constitution’s strong guarantees of local self-government, was widely perceived as a corrective to the previous centralised regime. As a result, amalgamating municipalities can be viewed as a setback in the efforts to rebuild local democracy (OECD, 2023[27]). A similar phenomenon has been observed in the Slovak Republic, where local autonomy remains strongly tied to post-1989 democratic identity.
While Portugal has maintained a consistent number of municipalities, the number of parishes (freguesias) increased from 3 091 to 3 258 due to a law allowing the reinstatement of previously merged parishes following the 2025 elections (Assembleia da República Portuguesa, 2025[22]).
Some countries have introduced innovative solutions to overcome municipal resistance to mergers. For example, France is promoting a hybrid option called the “commune nouvelle” formula, which enables municipalities to merge to form a “new municipality” while retaining their historical identities as 'municipal districts', each with its own mayor, town hall and delegated budget. Greece and Ireland have adopted a similar approach in their top-down merger process, as former municipalities have been retained as sub-municipal units to preserve a degree of local proximity.
The economic benefits of municipal mergers are also uncertain, reflecting differences in optimal service scales. Empirical evidence on cost savings of municipal mergers is mixed. Studies in Denmark and Finland find no consistent reduction in expenditures following consolidation (Blom-Hansen et al., 2016[14]). In Australia, a recent study using a six-year panel difference-in-difference regression for New South Wales (including two pre-merger years and four post-merger years) showed that average costs increased by 11.2% following amalgamation, while staff expenditures –- a major assumed source of savings – increased by 15.2% on average (Dollery, 2021[18]; McQuestin, Drew and Miyazaki, 2021[28]). This is partly because municipalities provide a wide range of services, each with different optimal production scales (OECD, forthcoming[29])1. While services such as waste management or public transport often benefit from larger-scale provision, others, such as primary education or local social services, are more efficient when managed at a closer, community level. As a result, mergers may generate economies of scale in some areas while creating inefficiencies or diseconomies in others (OECD, 2019[3]; OECD, 2017[1]).
Overall, the limits of municipal mergers highlight the need for more flexible approaches to addressing scale and capacity constraints. Mixed economic outcomes, potential risks to citizen engagement, and the diversity of service delivery needs suggest that mergers are not a one-size-fits-all solution. In this context, inter-municipal co-operation has gained prominence as an alternative, allowing municipalities to achieve scale benefits while preserving local autonomy and proximity to citizens.
However, amalgamation and co-operation should not be seen as mutually exclusive approaches. Municipal mergers remain one tool among others and can be appropriate in specific contexts, for example for very small municipalities or where strong functional interdependencies exist (e.g. in urban areas). In practice, many countries combine municipal mergers and inter-municipal co-operation as complementary tools, such as Denmark, Finland, France, Norway or Italy (OECD, 2017[30]).
Asymmetric decentralisation can help address capacity gaps but not economies of scale
Asymmetric decentralisation is increasingly used to align responsibilities with municipalities’ varying capacities. This approach enables differentiated political, administrative or fiscal powers across municipalities at the same level of government, recognising differences in size, capacity, economic base and functional role (Allain-Dupré, Chatry and Moisio, 2020[31]) (Box 1.3). By moving away from uniform governance arrangements, it seeks to avoid overburdening less capable municipalities while allowing stronger ones to assume broader functions.
By matching responsibilities more closely to local capacity, asymmetric decentralisation can enhance the effectiveness of governance. Larger or more capable jurisdictions, such as metropolitan areas, may be assigned wider competences in fields like transport, spatial planning or economic development. Conversely, smaller or less resourced municipalities may retain more limited roles, reducing the risk of administrative overstretch. Over recent decades, such arrangements have become more widespread in the OECD (OECD, 2019[32]). In Czechia, following decentralisation reforms, many responsibilities of former state districts were transferred to 205 “municipalities with extended powers”, which perform delegated state functions – such as child protection or passport issuance – on behalf of surrounding smaller municipalities, supported by additional funding. Smaller municipalities may also delegate further tasks to these entities when they lack the necessary capacity (OECD, 2017[30]). In Denmark, the “Free Municipality” initiative (2012–2019) granted selected municipalities exemptions from national regulations to experiment with new ways of delivering services, focusing on simplification, innovation and quality improvements (OECD, 2017[30]). In Colombia, explicit asymmetric decentralisation addresses local capacity disparities through differentiated governance, administrative and fiscal arrangements. Municipal classification systems and sector-specific certification mechanisms allocate responsibilities and grant greater autonomy only to municipalities with sufficient capacity, while others rely more on higher levels of government (OECD, 2019[33]).
Asymmetric decentralisation occurs if governments at the same subnational government level have different political, administrative or fiscal powers. Asymmetric decentralisation takes three main forms. Political asymmetry grants certain municipalities greater self-rule or decision making authority. Administrative asymmetry allows municipalities meeting specific capacity criteria to assume expanded responsibilities and implementation powers. Fiscal asymmetry introduces differentiated financial arrangements, including differential spending assignments, revenues autonomies, treatment in transfer system and differential fiscal rules, to reflect variations in fiscal capacity and service delivery roles (Figure 1.4). Asymmetric decentralisation is often applied at three different scales: regional (state/province), metropolitan and local levels. Whereas during the past decades the asymmetric arrangements occurred mostly at the regional level, the present trend seems to apply asymmetric decentralisation to large cities or for selected local governments.
Source: Adapted from (OECD, 2019[32]).
However, asymmetric decentralisation can introduce new co-ordination and equity challenges. While it helps address capacity gaps across municipalities, it does not resolve all structural issues and may generate new ones. In particular, it does not create economies of scale for services requiring cross-boundary co-ordination and can increase institutional complexity, as multiple governance arrangements coexist within the same system. Evidence from France shows that this complexity can become especially pronounced when different institutional, functional and fiscal regimes are layered within the municipal framework. In such cases, asymmetry may better reflect differences in municipal size and capacity, but can also lead to administrative burdens, overlapping arrangements and reduced institutional clarity (Gilbert, Madiès and Paty, 2026[34]). Moreover, these arrangements may reinforce territorial disparities if stronger municipalities benefit disproportionately from greater autonomy, while weaker ones remain reliant on central support (Beramendi and Rogers, 2026[35]).
Inter-municipal co-operation and asymmetric decentralisation can also be seen as complementary. Inter-municipal co-operation can provide the institutional framework through which such differentiation between municipalities can be implemented. In the French case, for example, the development of inter-municipal communities has been a central vehicle for introducing functional and fiscal asymmetries within the “municipal block”, as different types of inter-municipal co-operation bodies are endowed with distinct competences, resources and governance arrangements (Gilbert, Madiès and Paty, 2026[34]).
Inter-municipal co-operation has become a widely used solution in OECD countries seen as a pragmatic and flexible option to overcome scale and capacity limitations, especially in a context where municipalities need to better respond to challenges that extend beyond administrative boundaries. This section looks at how inter-municipal co-operation can help better respond to challenges such as demographic change, increasing demands for high-quality services and infrastructure, and the growing complexity of the climate and digital transitions, all occurring in a context of fiscal pressure and mismatches between administrative borders and functional realities. Inter-municipal co-operation is now deeply embedded in OECD local governance practice, benefiting rural, peri-urban and metropolitan areas alike and reinforcing urban-rural linkages (OECD, 2019[3]).
Inter-municipal co-operation can help municipalities cope with demographic decline
Demographic change is reshaping population size and age structures across OECD countries, with strong territorial and governance impacts. While the pace and scale vary, nearly one-fifth of OECD countries have experienced population decline between 2001 and 2024, and several more are projected to do so by 2060, in some cases by over 20% (e.g. Greece, Japan, Latvia, Lithuania). At the same time, populations are ageing rapidly: by 2050, the number of people aged over 65 is expected to increase by 49%, while the youth population will decline by 6%. These trends are highly uneven across regions. Combined with low fertility rates, ageing is expected to drive population shrinkage in most areas, a trend that migration alone is unlikely to offset. In Europe, for example, two-thirds of regions are projected to lose population by 2050, while the median age will increase in nine out of ten regions (OECD, 2025[36]).
Inter-municipal co-operation is a key tool to adapt service delivery and infrastructure in depopulating and low-density areas. Population decline reduces economies of scale, making it more difficult for municipalities to sustain efficient public services and infrastructure (OECD, 2021[37]). In this context, inter-municipal co-operation supports place-based policy objectives such as local adaptation, economic sustainability and territorial equity (OECD, 2025[38]). Evidence from the OECD programme Preparing Regions for Demographic Change shows that co-operation enables municipalities to pool resources, deliver shared services and better align infrastructure planning with evolving patterns of residence and mobility. Beyond managing decline, it also supports more proactive strategies, including reconfiguring service networks, rationalising infrastructure and improving access to services for ageing populations. This is particularly important as demographic dynamics operate at the level of functional territories – such as labour markets, commuting zones or service catchment areas – which rarely match administrative boundaries, making co-operation essential to organise service delivery at the appropriate scale (Box 1.4).
Horizontal co-ordination mechanisms such as intermunicipal co-operation and joint investment projects play a critical role in helping regions adapt to demographic change. OECD analysis under the project “Shrinking Smartly and Sustainably: Strategies for Action”. shows that demographic ageing, population decline and outmigration increasingly undermine municipalities’ capacity to deliver services, plan investments and maintain infrastructure at the appropriate scale. In this context, inter-municipal co‑operation emerges as a key governance response (OECD, 2025[36]). More broadly, one of the seven OECD guidelines on the multi-level governance of demographic change focuses on fostering inter-municipal co-operation. It highlights the importance of co‑ordination across levels of government and across functional areas to adapt public services and investment frameworks to evolving demographic realities (OECD, 2025[39]).
Inter-municipal co-operation also features prominently in the Talent Booster Mechanism (TBM), a European Commission initiative supporting EU regions facing workforce decline, low tertiary education attainment and youth outmigration. Under Pillar 2, OECD support has been provided to ten regions in two implementation waves: Nord-Vest (Romania), Castilla y León (Spain), Campania (Italy), Autonomous Region of Azores (Portugal) and Banská Bystrica (Slovakia) in Wave 1, followed by Norte (Portugal), Extremadura (Spain), Pohjois- ja Itä-Suomi (Finland), Centre–Val de Loire (France) and Thessalia (Greece) in Wave 2. Reports for the first-wave regions have been published, while those for the second wave are expected by end-2026.
Despite differing institutional and territorial contexts, OECD diagnostics and stakeholder consultations across the TBM Pillar 2 regions consistently identify inter-municipal co-operation as a relevant capacity-building and adaptation lever to address shared challenges related to fragmented municipal structures, rising service delivery costs, limited administrative capacity and mismatches between administrative boundaries and functional labour-market or service areas. In practice, inter-municipal co-operation supports the pooling of technical expertise, the joint provision of services, more coherent spatial planning and improved access to national and EU funding. While inter-municipal co-operation alone cannot reverse demographic decline, the TBM experience indicates that it can play a critical enabling role when embedded in broader place-based strategies and supported by appropriate legal frameworks, fiscal incentives and multi-level governance arrangements, contributing to longer-term territorial attractiveness and development.
Source: OECD, Demographic change in regions and cities, https://www.oecd.org/en/topics/demographic-change-in-regions.html (European Commission, 2025[40]) (OECD, 2025[36]; OECD, 2025[41]; OECD, 2025[42]; OECD, 2025[43]; OECD, 2025[19]; OECD, 2025[44]; OECD, 2025[39]).
Inter-municipal co-operation also enables both continuity of essential services and more proactive adaptation strategies. In Japan and Korea, two of the OECD countries with strongest population ageing and decline, inter-municipal co-operation has become indispensable for maintaining essential public services. Smaller municipalities increasingly rely on co-operation to sustain water supply, waste management, welfare services and transport systems as shrinking populations erode fiscal and administrative capacity (OECD, 2025[36]). A similar pattern is observed in other countries with large numbers of small municipalities, such as Czechia (OECD, 2023[27]), France and Slovakia (OECD, 2025[43]), where inter-municipal co-operation is often critical to guarantee service continuity and investment. Even in countries with comparatively large municipalities, including Bulgaria (OECD, 2021[7]), Estonia (OECD, 2022[45]), Lithuania (OECD, 2024[6]) or Portugal (OECD, 2020[46]; OECD, 2025[47]), co-operation across local governments has become an important tool to manage demographic pressures. For example, shared service arrangements are increasingly promoted to deliver services in depopulating areas, such as in Slovakia and Poland (Box 1.5) (OECD, 2025[43]).
In Poland, municipalities are collaborating through shared service centres to collectively deliver public services. Introduced through the Amendment to the Act on Municipal Self-Government of 25 June 2015 (Dz.U. 2015 poz. 1045, in force since 2016 (Government of Poland, 2015[48])), Shared service centres (CUW) allow municipalities to provide shared administrative, financial and organisational services to their subordinate units or partner municipalities. CUWs can operate under inter-municipal agreements or within inter-municipal unions, serving as shared back-office hubs for accounting, payroll, HR or procurement. They are particularly important for rural and small municipalities, where limited administrative capacity makes such pooling arrangements efficient and cost-saving (Łukaszczyk Z., 2018[49]; PAP Local Government Service, 2019[50]).
Slovakia is testing a new model of municipal co-operation based on Centres of Shared Services, created as pilot projects in the country’s least developed districts under the Recovery and Resilience Plan. Similar to Joint Municipal Offices (JMOs), these centres allow municipalities to participate on an ad hoc basis but go further by enabling co-operation on both original and delegated competences. In 2023, the Ministry of the Interior and the Association of Towns and Communities of Slovakia (ZMOS) began working together to allocate EUR 13 million to establish 22 Centres of Shared Services. This innovative model of one-stop service hub pools municipal human and technical resources in a single location, where specialised staff operate “under one roof.” By centralising expertise, the centres can significantly reduce administrative and personnel costs for participating municipalities. The first pilot centre, inaugurated in March 2025 in Tornala (BBSK), brings together 30 municipalities and provides services in construction, social services, environmental protection, education and road transport (OECD, 2025[43]; Pravda, 2025[51]).
Inter-municipal co-operation can also help growing areas manage expansion
Inter-municipal co-operation is also essential in growing urban and metropolitan areas facing fragmentation and cross-boundary challenges. Large and intermediate cities operate within functional territories where key policy issues – such as transport, land use, housing, waste management and environmental protection – extend beyond administrative borders. Co-operation enables municipalities to achieve efficiency gains by pooling resources, exploiting economies of scale and avoiding costly policy fragmentation, particularly for services with a strong regional dimension (Butt et al., 2020[52]).
Inter-municipal co-operation also helps address fiscal imbalances across metropolitan areas. Core cities often bear centrality costs linked to commuters, students, tourists and higher-order services, while the associated tax base is spread across the wider metropolitan region. Co-operation at the functional urban area level provides a flexible and cost-effective way to co-ordinate services and foster fiscal solidarity across municipalities, without necessarily creating a new tier of government (OECD, Forthcoming[53]; OECD, 2015[54]; OECD, 2017[1]; OECD, 2019[3]; OECD, 2019[55]).
Improving metropolitan governance has become a priority in many OECD countries. Driven by a broader efficiency agenda, governments have undertaken territorial reforms and promoted a wide range of collaborative arrangements to better manage urban and metropolitan areas (Box 1.6). Within the OECD typology, which identifies four models of metropolitan governance2, inter-municipal authorities typically correspond to the second model, in which municipalities jointly deliver single-purpose or multi-purpose services such as transport, infrastructure or land-use management. In many cases, such co-operation can evolve toward the third model, supra-municipal authorities, where municipalities establish a dedicated metropolitan body with its own budget, staff and area-wide responsibilities (OECD, 2015[54]).
Across the OECD, many metropolitan areas have established some form of co‑operative arrangement for metropolitan governance, though these vary significantly in their degree of institutional integration, and face issues regarding effective implementation:
In France, the 2014 MAPTAM law (Loi de modernisation de l’action publique territoriale et d’affirmation des métropoles) created differentiated structures for large urban areas over 400 000 inhabitants, granting greater competencies in particular in planning, economic development, and transport. Today, 21 metropolises exist (including 19 under common law and two with special status, Aix-Marseille-Provence and Greater Paris1), many of which evolved from inter-municipal co-operation structures, in particular “urban communities”. The experience of Aix-Marseille-Provence illustrates this reinforcement of metropolitan governance through the consolidation of fragmented local governance and efforts to improve strategic planning, service delivery and investment co‑ordination across the wider metropolitan area (OECD, 2013[56]; OECD, 2015[54]; OECD, 2021[57]; OECD, 2020[46]).
In Italy, the Law 56/2014 (also known as the Delrio reform) ended two decades of gridlock over metropolitan governance reform and created the legal structure for the introduction of differentiated governance in 14 major metro areas. The reform transformed the former provinces into metropolitan cities (Città metropolitane), effectively making them inter-municipal associations at the provincial level. These entities integrate municipal co-operation into a legally recognised metropolitan tier, with responsibilities for spatial planning, transport and strategic development. For example, as a key inter-municipal co-operation body, the Metropolitan City of Naples co‑ordinates 92 communes, seeking to harness agglomeration advantages while addressing infrastructure, housing, and accessibility challenges to enhance regional resilience and spatial balance (OECD, 2025[19]). For example, as a key inter-municipal co-operation body, the Metropolitan City of Naples co‑ordinates 92 communes, seeking to harness agglomeration advantages while addressing infrastructure, housing, and accessibility challenges to enhance regional resilience and spatial balance (OECD, 2025[19]).
Portugal defines its two metropolitan areas – Lisbon (18 municipalities) and Porto (17 municipalities) – as inter-municipal co-operative arrangements under national legislation (1991, 2003, 2008, 2013, the latter being updated in 2022-2023). Funded through municipal contributions and state transfers, they co‑ordinate key functions such as transport, spatial planning, regional development, and basic services. Governed by assemblies of municipal delegates, these metropolitan areas can “participate”, “promote” and “co‑ordinate” metropolitan-scale policies, but their authority remains limited and dependent on municipal and central government support (OECD, 2020[46]).
In Poland, a general framework for metropolitan co-operation was introduced through the Act on Metropolitan Unions in 2015. However, this act was never implemented nationally and was replaced by the Act on the Metropolitan Union in the Silesian Voivodeship (2017 establishing a single functioning metropolitan union - Górnośląsko-Zagłębiowska Metropolia. It covers 14 local governments in the Silesian region with strong functional linkages and at least two million inhabitants. To date, no similar legal framework exists for other Polish metropolitan areas (OECD, 2022[58]).
Colombia established Metropolitan Areas (Áreas Metropolitanas) under Law 1625 of 2013 as voluntary public territorial entities with political, administrative and fiscal autonomy. They are required to adopt both a Metropolitan Development Plan and a Metropolitan Land-Use Plan and are responsible for key supra-municipal functions, including integrated mobility and public transport, environmental regulation, air-quality management, strategic land-use co‑ordination and, more recently, cadastral management. Six Metropolitan Areas currently exist, with Valle de Aburrá (Medellín) being the most consolidated example, acting as both environmental authority and integrated transport manager (OECD, 2022[59]).
Note: 1The MAPTAM law created, under the name Lyon Metropolis, a territorial authority with a special status, endowed with the powers of both the former Urban Community of Lyon and the department covering this urban area. Despite the similarity in terminology, this metropolis is not an EPCI and has a status that differs significantly from that of other metropolitan entities.
Despite progress, improving metropolitan governance through inter-municipal co-operation remains challenging. Many OECD countries continue to prioritise such reforms, reflecting both their importance and the practical and political difficulties involved, as illustrated by recent experiences in countries such as Mexico, the Netherlands, Romania and the United Kingdom (Box 1.7).
In the Netherlands, the 2022 reform of the Wet gemeenschappelijke regelingen (WGR) enhanced the flexibility and transparency of inter-municipal co-operation, enabling municipalities to collaborate by policy domain and better align with regional and national strategies. Although applicable to all municipalities, it primarily benefited metropolitan areas such as MRDH (Rotterdam - The Hague), MRA (Amsterdam Metropolitan Area), Eindhoven Metropolitan Region, strengthening co‑ordinated governance for housing, mobility, and climate action.
In England, the United Kingdom has progressively strengthened the devolution of powers away from central government through the creation and expansion of Strategic Authorities (SAs), which include Combined Authorities (CAs), Combined County Authorities (CCAs), and the Greater London Authority (GLA). SAs are statutory bodies that bring together multiple neighbouring local councils, undertaking work across a range of high-level policy areas, such as transport, housing, skills and economic development. SAs sit across large geographies, providing strategic leadership, creating joined up delivery of public services, and driving economic growth at a regional level. Initially established under the Greater London Authority Act 1999 and the Local Democracy, Economic Development and Construction Act 2009, the Cities and Local Government Devolution Act 2016 and the Levelling-up and Regeneration Act 2023, successive governments have strengthened the role of SAs and their inter-municipal co-operation structures. The 2024 English Devolution White Paper and the English Devolution and Community Empowerment Act aim to achieve universal coverage of SAs across England, offering a statutory tiered devolution model with increasing powers and fiscal flexibility. These reforms strengthen co-ordination across both rural and urban territories, enabling SAs to align spatial planning and investment decisions more effectively.
In Romania, the Law no. 246/2022 on Metropolitan Areas consolidates and clarifies the legal status, governance and functions of metropolitan areas in Romania, aiming to provide a better institutional basis for co-operation between a core city (usually a county-seat) and surrounding municipalities. These entities are tasked with promoting integrated territorial planning, mobility and infrastructure development, and the joint delivery of metropolitan-scale services. While this law is an important step toward more coherent and investment-oriented metropolitan governance, the new Metropolitan Areas remain constrained by fragmented planning with a sectoral focus, limited financial incentives, capacity challenges and that not all localities in functional areas have joined a metropolitan area under the new legislation. Implementation remains uneven, with only a limited number of areas formally constituted under the new provisions (OECD, 2025[42]; Stoian C. Groza O. & Rusu A., 2024[60]).
Mexico has strengthened its metropolitan governance framework through the General Law on Human Settlements, Land-Use Planning and Urban Development (Government of Mexico, 2016[61]), which sets national standards and requires states to align their legislation. The law mandates the creation or reinforcement of metropolitan co‑ordination bodies to manage land use, mobility and infrastructure across metropolitan areas, though their powers still vary widely. An additional reform effort, the Preliminary Draft Metropolitan Constitutional Reform prepared by SEDATU (2022-23), proposes constitutional amendments to strengthen metropolitan governance and inter-municipal co-operation (OECD, 2023[62]). As of mid-2025, the initiative remains under review in Congress.
Beyond the functional urban area, inter-municipal co-operation also strengthens urban-rural linkages and supports more integrated territorial development. By enabling cities, towns and rural municipalities to plan jointly, pool resources and co-ordinate services, co-operation helps bridge administrative divides across shared territories. A wide range of institutional arrangements – such as France’s inter-municipal groupings (EPCIs) and Territorial and rural balanced poles (Pôles d’équilibre territorial et rural, PETR), Portugal’s Intermunicipal Councils, Switzerland’s regional conferences, US metropolitan planning organisations, Germany’s Zweckverbände, Japan’s wide-area unions, Korea’s co-operation zones and Poland’s inter-municipal unions – illustrate how co-operation supports integrated mobility, environmental management, local food systems and regional development (OECD, 2013[63]).
Inter-municipal co-operation has become a central feature of local governance across OECD countries. Over the past three decades, most OECD and accession countries have established policy and legal frameworks to support it. Among 32 respondents to the Survey on the implementation of the OECD Recommendation on Effective Public Investment, 23 have formal legal frameworks for municipal co-operation, and in five others such co-operation still occurs despite the absence of such frameworks (OECD, 2025[64]). Country snapshots (Chapter 3) further confirm that a large majority of OECD and accession countries have frameworks conducive to municipal co-operation.
Inter-municipal co-operation takes diverse forms adapted to local needs and contexts
Inter-municipal co-operation encompasses a wide range of arrangements that vary according to countries’ institutional traditions, policy objectives and local needs. Across OECD countries, municipalities rely on different forms of co-operation depending on the scope of activities, the desired level of integration and the degree of commitment required. According to the 2025 Implementation Report of the OECD Recommendation on Effective Public Investment Across Levels of Government, 18 OECD countries have legal frameworks for joint entities, 18 for co-operative agreements, eight for shared services agreements, and three for supra-municipal authorities (OECD, 2025[64]).
Inter-municipal co-operation arrangements range from flexible, informal collaboration to more structured and integrated forms of joint governance, varying in terms of scope, governance arrangements and financial autonomy (Figure 1.5):
Informal “handshake” and ad hoc co-ordination, operating without a judicial or contractual framework and depending mainly on mutual trust.
Contract-based co-operation, under either private or public law, which constitutes a formal and legally binding arrangement. This enables municipalities to share specific services or resources, such as through shared service agreements, joint procurement or shared administrative functions. Contracts are, by definition, formal instruments that can support stable and long-term collaboration. However, they generally offer greater flexibility and reversibility than institutionalised public-law inter-municipal co-operation bodies, as they can be more easily amended, terminated or not renewed. As a result, they tend to involve a lower level of commitment, integration and shared governance, making them well-suited for targeted or temporary co-operation, but less adapted to sustained, multi-sectoral or highly integrated arrangements.
Institutionalised co-operation under the private-law model. It includes arrangements, such as municipal private-law associations or inter-municipal commercial companies.
Institutionalised co-operation under the public-law model. It includes two types of co‑operative forms: “specialised legal entities” (e.g. single or multi-purpose syndicates) and “territorial public entities” or “federative bodies”. The later are the most integrated form. Co-operation takes more of a form of “federation” than an “association”, meaning that responsibilities are transferred from the municipalities to the supra-municipal body and funded through dedicated recurrent resources and permanent staff (Sénat, 2025[65]). Under this approach, co-operation is extensively regulated by public legislation, which defines territorial area, delegated functions, contractual and financing arrangements, governance structures, and supervision and control mechanisms, making these bodies suitable for municipalities seeking a more permanent and integrated form of co-operation.
Source: OECD (2019[3]).
Inter-municipal co-operation can be voluntary or mandatory depending on the level of fragmentation and services
Inter-municipal co-operation can be organised on a voluntary or mandatory basis, with most OECD countries favouring voluntary approaches. Mandatory inter-municipal co-operation remains relatively rare and is typically limited to specific contexts, such as particular services (e.g. waste management, water or emergency services) or categories of municipalities, especially where minimum scale or capacity requirements cannot be met individually. France stands out as the only OECD country where all municipalities are required to belong to an inter-municipal entity, reflecting a strong policy choice to address fragmentation and ensure universal coverage of co-operation. In contrast, most countries rely primarily on voluntary arrangements, allowing municipalities to decide whether and how to co-operate based on local needs and incentives. While voluntary co-operation offers greater flexibility and local ownership, mandatory arrangements can help overcome collective action problems, ensure service continuity and achieve economies of scale in contexts where fragmentation or capacity constraints are particularly acute. In practice, many countries combine both approaches, using targeted mandates alongside incentives to encourage broader participation in inter-municipal co-operation (Box 1.8).
France is the only OECD country in which inter-municipal co-operation is mandatory for all municipalities (except for four islands (Yeu, Bréhat, Sein and Ouessant which benefit from derogations) since the two laws in 2010 and 2015 further streamlined and strengthened the inter-municipal co-operation entities (Etablissements Publics de Coopération Intercommunale or EPCI). They promoted their consolidation through mandatory coverage of all communes by an inter-municipal structure, simplified governance, and enhanced their fiscal and strategic co‑ordination powers (DGCL, 2025[66]).
In other countries, mandatory co-operation is restricted to some categories of municipalities or some specific services:
In Bulgaria, mandatory forms of inter-municipal co-operation exist in certain sectors, particularly in water supply, sewerage, and waste management, where joint service provision or membership in regional associations is required under the Water Act and the Waste Management Act (OECD, 2021[7]; CoE - Congress of Local and Regional Authorities, 2021[67]).
In Finland, while most joint municipal authorities are voluntary, some are compulsory: municipalities are required to form regional councils (maakuntaliitto) for regional development and spatial planning. Each of Finland’s 19 regional councils functions as a joint municipal authority. Until 2023, they were also responsible for health, social services and rescue operation but these responsibilities have been transferred to the 21 wellbeing services counties by the reform (OECD, 2024[6]).
In Greece, there is a mandatory inter-municipal co-operation for small municipalities. They are required to participate in “administrative support” co-operation, to enable them to perform newly devolved functions following the 2010 Kallikratis reform. This was required for functions such as town planning, technical services, and social welfare, and small municipalities received administrative and technical assistance from neighbouring municipalities or associations (CoE - Congress of Regional and Local Authorities, 2015[68]).
In the Netherlands, inter-municipal co-operation is done on a voluntary basis in general, but if one or more municipalities request it and if necessary for a compelling public interest, a provincial executive may oblige municipalities to co‑operate (Government of Netherlands, 1992[69]).
In Switzerland, some cantons have legally compelled municipalities to co‑operate in a specific field of competence (CoE Congress of Local and Region Authorities, 2007[70]). For example, according to the Loi sur les communes and sectoral cantonal legislation, municipalities of the Canton of Vaud are obliged to belong to inter-municipal associations for waste treatment, civil protection, and fire services (CoE - Congress of Local and Regional Authorities,, 2017[71]).
Some countries also impose co-operation for very small municipalities, but also for metropolitan areas.
In Italy, the provinces have been transformed into inter-municipal co-operation bodies by the Delrio Law in 2014. They also came “metropolitan cities” in each of the 14 metropolitan areas designated by the law. They are designed to handle strategic functions such as strategic planning for the entire metropolitan area, metropolitan-scale transport, land-use, infrastructure, economic development, environment, and sometimes higher education and innovation. They also manage services previously handled by the provinces (e.g. roads, schools, and environmental protection (OECD, 2025[19]). In addition, until the Decree-Law called “Milleproroghe 2025” in December 2024, which abolished this obligation, small municipalities of less than 5 000 inhabitants (but less than 3 000 inhabitants in mountain areas) were legally forced to participate in inter-municipal co-operation to provide “fundamental functions” jointly.
In Iceland, inter-municipal co-operation is voluntary but, in some cases, strongly recommended. For example, a 2010 state–municipal agreement introduced a minimum population threshold of 8 000 inhabitants for the provision of services for persons with disabilities, which further stimulated the formation of co-owned agencies (byggðasamlög), which are independent legal entities jointly owned by two or more municipalities, established to provide shared services in areas such as fire and rescue, waste management, social services, and education.
In Hungary, while the general rule is voluntary co-operation, the legal framework does allow the central government/Parliament to impose mandatory co-operation in certain defined cases. The article 85 Cardinal Act CLXXXIX of 2011 on Local Governments requires municipalities with fewer than 2 000 inhabitants to form joint municipal offices (közös önkormányzati hivatalok) to carry out administrative, financial and technical duties.
In Canada, inter-municipal co-operation is regulated by provincial and territorial governments. For example, the province of Quebec has created two statutory metropolitan bodies: the Communauté métropolitaine de Montréal (CMM) and the Communauté métropolitaine de Québec. Both are mandatory supra-municipal governance bodies created by provincial law with responsibilities for metropolitan land-use planning, economic development, mobility, environmental management and housing.
In Portugal, national legislation defines the framework for the Lisbon (18 municipalities) and Porto (17 municipalities) Metropolitan Areas, both organised as inter-municipal co-operative arrangements responsible for transport, spatial planning, regional development, waste management, and water and sanitation.
Inter-municipal co-operation forms vary widely across countries
Inter-municipal co-operation systems are diverse and multi-layered across countries, reflecting national traditions and local needs. These arrangements are not mutually exclusive, and most countries operate a mix of informal co-ordination, contractual agreements and more institutionalised structures in parallel. This diversity reflects differences in administrative traditions, the degree of municipal autonomy and policy objectives. Countries with long-standing co-operation practices – such as France, Finland, Italy, Spain and Switzerland – offer a broad continuum of options, from flexible service-based agreements to highly integrated entities with dedicated governance and resources, while others provide more limited but still functional frameworks.
The choice between private- and public-law arrangements often mirrors broader governance cultures. Systems rooted in strong public-law administrative cultures tend to favour inter-municipal co-operation bodies with clear legal personality and formal accountability, whereas more flexible governance systems may rely on private-law instruments to promote managerial efficiency.
Where a wide range of options exists, municipalities can tailor co-operation to their capacities and to the scale and complexity of the tasks involved, resulting in hybrid systems where multiple forms coexist and evolve over time. France provides a particularly advanced example, combining a wide diversity of arrangements with highly integrated inter-municipal entities endowed with taxing powers (EPCI), which now account for a significant share of local public expenditure (Box 1.9).
In France, inter-municipal co-operation has long been the preferred response to municipal fragmentation. Therefore, municipal co-operation (intercommunalité) has a long-standing history in France with a strong legal framework and continuous reforms. France has developed one of the most advanced systems of inter-municipal co-operation in the OECD, evolving from voluntary associations toward increasingly integrated governance structures (DGCL, 2025[66]).
The first municipal syndicates were created by a law in March 1890 and later evolved into urban communities in 1966 with the law 66-1069 related to urban communities, which marked a key shift from technical co-operation (as in syndicates) to integrated territorial governance, with the first four communautés urbaines created in Bordeaux, Lille, Lyon, and Strasbourg.
A major turning point was Law 92-125 of February 1992 (ATR law), which established public law entities for inter-municipal co-operation with taxation powers: the Établissements Publics de Coopération Intercommunale - EPCI - à fiscalité propre). They are public law entities, with legal and financial autonomy, that enable municipalities to collaborate on local services and for integrated territorial development. Later reforms in 1999 (Loi Chevènement), 2004 (law on local freedoms) and 2010 further streamlined and strengthened EPCI by promoting their consolidation through mandatory coverage of all communes by an inter-municipal structure, simplifying governance, and enhancing their fiscal and strategic co‑ordination powers.
Finally, the laws MAPTAM (2014-58) and NOTRe (2015) laws further consolidated this system. The MAPTAL law created the metropolis status for large urban areas while the 2015 NOTRe law simplified this complex system by raising the minimum population threshold for EPCI from 5 000 to 15 000 inhabitants. These successive reforms reduced the number of EPCI from 2 600 in 2008, to 2 456 in 2013 and 1 254 in 2025.
All municipalities must be part of an EPCI with taxing power, and a municipality can belong to only one such ECPI. Today, all French municipalities are part of an EPCI à fiscalité propre. There are four main forms of such structures, depending on their demographic size and urban or rural characteristics:
21 metropolises (over 400 000 inhabitants)
14 “urban communities” (communautés urbaines)
230 “agglomeration communities” (communautés d’agglomération)
and 987 “communities of municipalities” (communautés de communes), the latter mainly located in rural areas.
Each of these entities pools resources and responsibilities, managing a mix of mandatory and optional according to local priorities. Their financing combines municipal contributions, local taxes, state transfers, EU funds, and service revenues, with variations depending on the specific form of intermunicipal co-operation (see dedicated sections on competences and finance). EPCIs can also form or join inter-municipal public companies regulated by private law and enter into shared services agreements.
Source: (Intercommunalités de France, 2024[72]; DGCL, 2025[73]; DGCL, 2025[66]).
Inter-municipal co-operation forms vary largely across regions within countries
In federal and quasi-federal countries, inter-municipal co-operation frameworks often vary significantly across regions. This reflects the fact that municipal organisation and co-operation instruments are frequently regulated at the subnational level – by states, provinces or autonomous communities – resulting in diverse approaches within the same country. As a result, inter-municipal co-operation can take highly institutionalised forms with dedicated staff and budgets in some regions, while relying on more flexible, voluntary agreements or shared-service arrangements in others. The degree of compulsion, the scope of delegated functions and the availability of financial incentives may also differ considerably across regions, reflecting variations in administrative traditions, legal competences and policy priorities. In Germany, for example, each Land defines its own co-operation models – such as Zweckverbände in Bavaria or widespread service associations in Saxony – leading to substantial variation in institutionalisation and scope. In Spain, inter-municipal co-operation is shaped by a national framework combined with strong regional autonomy, further illustrating how governance arrangements adapt to territorial diversity (Box 1.10).
Intermunicipal co-operation in Spain is governed by a well-defined legal framework that combines national principles with regional autonomy. Article 44 of the Basic Law on Local Government (LBRL 7/1985) grants municipalities the right to form voluntary associations - mancomunidades and comarcas - to jointly execute works and provide public services. These entities possess their own legal personality and internal statutes. Article 43 states that the Autonomous Communities, after consulting the State administration and the municipalities and provinces concerned, may by law create, modify or abolish metropolitan areas (áreas metropolitanas). The Law 27/2013 further encourages co-operation by offering financial incentives to municipalities that co‑ordinate or integrate services to reduce costs, reinforcing efficiency and fiscal sustainability.
Mancomunidades are voluntary inter-municipal co-operation entities that enable municipalities to pool resources and jointly manage services, infrastructure, or development projects. They are highly flexible - created by simple municipal agreement, not necessarily requiring contiguous territories, and adaptable to various functions such as waste management, urban planning, or social services. In contrast, comarcas are official territorial entities established by regional law as a permanent administrative tier with their own governing bodies and broader competences in planning and service co‑ordination (OECD, 2025[41]). Overall, mancomunidades and comarcas rely primarily on regional and municipal funding and serve as essential instruments for strengthening local governance, improving service delivery, and fostering territorial cohesion across Spain.
While the LBRL establishes the general foundation, the concrete forms, competencies, and organisation of these entities are defined by regional legislation in each Autonomous Community. For example, Castilla y León illustrates both the ambition and the current constraints of inter-municipal co-operation in depopulating regions. The region introduced Mancomunidades de Interés General (MIGs) under the regional Law 7/2013 (LOSERGO), intended to operate within Basic Territorial Organisation Units (UBOSTs) to promote more strategic, place-based co-operation. However, implementation remains incomplete, and over 90% of mancomunidades in the region continue to operate within single provinces, limiting inter-provincial and inter-regional co-ordination. OECD analysis suggests that full implementation of the UBOST framework could enable more strategic inter-municipal co-operation, better aligned with functional territories and long-term demographic challenges (OECD, 2025[41]).
Other regions have adopted similar models, such as Mancomunidades de Municipios de Interés Autonómico in Madrid and other communities, reflecting diverse territorial and administrative traditions. In regions like Aragón or Navarra, co-operation takes the form of comarcas or mancomunidades de planificación general, which integrate municipalities within functional areas (Toscano Gil Francisco, 2025[74]). In contrast, the Region of Valencia adopted a new law in May 2025 to abolish the figure of the “comarcal mancomunidades” (comarcal associations of municipalities), which had been introduced in 2018 alongside “ordinary mancomunidades” as the main vehicle for inter-municipal co-operation and service delivery, supported by additional funding and delegated powers. The principal motivation for this new reform is administrative simplification and improved efficiency, as the “comarcal mancomunidades” were found to duplicate the competencies of municipalities and provincial councils.
Inter-municipal co-operation is most commonly used in operational, capital-intensive and cross-boundary service areas
Inter-municipal co-operation is most frequently applied in sectors where economies of scale, technical complexity and cross-jurisdictional spillovers are strongest. Across OECD countries, inter-municipal co-operation is widely used for core administrative functions – such as accounting, procurement, civil registries, collection of local taxes and fees, IT, HR – as well as for general public services like electoral management or inspection functions, where standardisation and efficiency gains are significant. It is also particularly prevalent in capital-intensive and network-based services, including water supply, waste management, environmental protection and transport, which require substantial infrastructure, technical expertise and long-term investment. Similarly, municipalities commonly co-operate in areas such as spatial planning, economic development and tourism, where co-ordination across functional territories is essential (Table 1.1). In Italy, for instance, the “Green Communities” initiative aims to support groups of municipalities jointly managing natural resources and develop integrated projects in areas such as energy, forestry and sustainable tourism (Box 1.11).
Italy’s Green Communities (Comunità Verdi) initiative illustrates how inter-municipal co-operation can be leveraged to support environmental sustainability and local development. Introduced under the National Recovery and Resilience Plan (NRRP), the programme supports groups of municipalities – often located in mountain or rural areas – to collaborate on the sustainable management of natural resources.
Green Communities are based on formal co-operation between municipalities, which jointly develop and implement projects related to renewable energy, forest management, water resources, circular economy and sustainable tourism. The initiative aims to promote integrated territorial strategies that combine environmental protection with economic opportunities for local communities.
Funded through national recovery resources, the programme provides financial support for inter-municipal projects, encouraging municipalities to organise at an appropriate scale to address environmental challenges that transcend administrative boundaries. In doing so, it reinforces local capacity, fosters innovation and strengthens co-ordination across municipalities, particularly in areas with limited administrative and financial resources.
Beyond these functions, inter-municipal co-operation is also used in social sectors (e.g. education, health and social protection), as well as in cultural, recreational and community services, including sports facilities, libraries or public amenities. In these areas, co-operation helps expand service coverage, pool specialised staff and improve access, particularly in smaller or rural municipalities. Public safety services, such as fire protection and rescue operations, also frequently rely on inter-municipal arrangements due to their high fixed costs and the need for rapid, co-ordinated responses. Overall, the wide range of sectors involved highlights the versatility of shared services as a tool to improve efficiency, access and service quality across diverse policy areas.
Source: OECD elaboration
Inter-municipal co-operation offers important benefits but also faces implementation challenges and risks. When well designed, it can improve the efficiency, quality and strategic coherence of local public services by strengthening capacity, reducing duplication and enabling municipalities to address issues that extend beyond their boundaries. However, these benefits are not automatic. Inter-municipal co-operation can be complex to establish and sustain, and its uptake remains uneven across OECD countries.
Inter-municipal co-operation can provide strong benefits if well designed
Inter-municipal co-operation enhances efficiency, capacity and strategic effectiveness in local governance. By pooling resources and co-ordinating across administrative boundaries, municipalities can overcome scale limitations, reduce duplication and deliver higher-quality services more efficiently. At the same time, co-operation strengthens administrative and technical capacity, supports joint investment and long-term planning, promotes fiscal sustainability and territorial coherence, and enables municipalities to address complex challenges that no single jurisdiction can manage alone (Table 1.2).
Source: OECD elaboration.
Efficiency and service quality
A central advantage of inter-municipal co-operation is its ability to generate economies of scale and reduce service delivery costs, particularly in capital-intensive public services. Water supply, waste management, and energy systems, for example, require a certain scale to be financially and operationally viable. Small municipalities providing these services alone often face high per-unit costs, underused infrastructure, and limited technical expertise (Bel and Mur, 2009[77]). For example, a recent study using data from a ten-year period from municipalities in the South Moravian region in Czechia showed that municipalities participating in inter-municipal co-operation focused on waste management experienced annual cost savings of approximately 13.5% for the provision of this service throughout 2010‑19 when compared to municipalities that did not co‑operate (Struk and Bakos, 2021[78]).
Inter-municipal co-operation enhances the productivity of public spending and service delivery. Beyond cost savings, recent empirical evidence shows that inter-municipal co-operation can improve productive efficiency, understood as the ability of municipalities to generate higher economic outcomes (i.e. income levels and fiscal capacity) with a given level of public spending and labour inputs. Following the 2010 territorial reform in France, municipalities that were required to join inter-municipal groupings recorded efficiency gains of around 1-2%, with stronger effects for early adopters and for those exposed to co-operation over longer periods. This suggests that, even when immediate cost reductions are limited, co-operation can enhance the productivity of public spending and service delivery, particularly when supported by appropriate governance structures and sustained collaboration (Galli et al., 2026[79]).
Inter-municipal co-operation improves service quality and reliability. Through standardisation of processes, shared infrastructure and access to specialised equipment and expertise, municipalities can deliver more consistent, professional and higher-quality services. Empirical studies from Norway show that shared service units enable municipalities, especially smaller ones, to pool specialised staff, equipment and technical resources and access specialised technologies, equipment and expertise that would otherwise be unaffordable, resulting in higher-quality inputs and more professionalised service delivery (Arntsen, Torjesen and Karlsen, 2021[80]) (Blaka, Jacobsen and Morken, 2023[81]).
Administrative and technical capacity
Inter-municipal co-operation strengthens administrative and technical capacity. By sharing staff, expertise and operational functions – such as procurement, IT, accounting or regulatory services – municipalities can overcome capacity constraints and improve both back-office and front-line service management. Co-operation also enables municipalities to pool skilled personnel, create joint expert teams and invest collectively in capacity-building, helping to address shortages in specialised fields such as spatial planning, environmental management, digital governance or energy transition. This is particularly important for small and medium-sized municipalities, as well as for ageing or shrinking regions, where attracting and retaining qualified staff is especially challenging.
Inter-municipal co-operation fosters innovation, experimentation and peer learning. Joint working arrangements facilitate the exchange of best practices, encourage municipalities to pilot new service delivery models or technologies, and stimulate creative approaches to shared complex challenges such as digitalisation, decarbonisation or disaster risk management. In this way, inter-municipal co-operation not only enhances operational efficiency but also acts as a catalyst for innovation. Collective experimentation reduces risks for individual municipalities and speeds up the dissemination of successful solutions. In Norway, for instance, recent pilot initiatives combine inter-municipal co-operation with multi-level governance frameworks to test new approaches to local development (Box 1.12).
Norway’s Rural Growth Agreements (bygdevekstavtaler), launched in 2022, provide a recent example of how inter-municipal co-operation can be piloted and scaled through structured, place-based partnerships. The initiative targets rural areas facing demographic decline, service shortages and difficulties in attracting skilled labour, bringing together groups of municipalities within functional areas to jointly address shared development challenges.
These agreements operate as multi-level governance arrangements involving municipalities, county authorities and the national government, co-ordinated by the Ministry of Local Government and Regional Development. They formalise co-operation across levels of government while strengthening horizontal collaboration between municipalities. Initially covering around 35 municipalities across seven regions, the programme aims to improve service provision, support business development and enhance population retention in vulnerable rural territories.
A key feature of the Rural Growth Agreements is their role as pilot frameworks for experimentation and innovation. Municipalities jointly design integrated development strategies and test new solutions in areas such as housing, access to healthcare, education pathways and local service organisation. The agreements also facilitate better alignment and co-ordination of existing funding streams, helping municipalities access national programmes and leverage additional resources.
Early results highlight stronger co-ordination between municipalities and higher levels of government, improved dialogue with state authorities and increased local capacity to design and implement place-based policies. The initiative also contributes to building long-term institutional capacity by encouraging joint planning, strengthening inter-municipal networks and fostering a culture of collaboration.
Source: (European Union, 2022[82]).
Investment and economic development
Inter-municipal co-operation enables joint investment in strategic infrastructure and large-scale projects, directly contributing to regional economic development. By pooling financial and human resources, municipalities can overcome investment constraints and operate at the appropriate functional scale. This helps reduce fragmentation and duplication while internalising cross-jurisdictional spillovers/externalities – one of the core challenges highlighted in the first pillar of the OECD Recommendation on Effective Public Investment Across Levels of Government (OECD, 2014[83]). Joint investments can increase project preparation capacity, improve the quality and reach of public infrastructure, attract private capital, and support public-private partnerships (OECD, 2021[7]). In Germany, a study using data on municipalities in four West German states (Lower Saxony, Hesse, Rhineland Palatinate, and Bavaria) during the years 2008-15 shows that inter-municipal co-operation has a positive effect on local economic performance. Local business development resources are spent more productively in co‑operating municipalities (Wolfschuetz, 2020[84]).
Inter-municipal co-operation enables joint investment in strategic infrastructure and large-scale projects, directly contributing to regional economic development. Public investment decisions often extend beyond administrative borders, as the needs and challenges of local communities are not limited by municipal boundaries. Projects such as infrastructure, environmental initiatives, healthcare, and education frequently produce effects that reach neighbouring areas. Co-ordinating investment across jurisdictions is therefore essential to ensure fair access to resources, improve efficiency, strengthen policy synergies between municipalities, and effectively address the interconnected challenges faced by communities and territories (OECD, 2025[64]).
By pooling financial and human resources, municipalities can overcome investment constraints and operate at the appropriate functional scale. This helps reduce fragmentation and duplication while internalising cross-jurisdictional spillovers/externalities – one of the core challenges highlighted in the first pillar of the OECD Recommendation on Effective Public Investment Across Levels of Government (OECD, 2014[83]). Horizontal co-ordination among municipalities helps reduce disparities and promote balanced development. Wealthier areas may benefit more from isolated investments, while poorer or rural municipalities risk being left behind. By collaborating, municipalities can allocate public investment more equitably and support areas in greater need, including through joint projects that ensure access to essential services like transportation, healthcare, and education (OECD, 2025[64]). Joint investments can increase project preparation capacity, improve the quality and reach of public infrastructure, attract private capital, and support public-private partnerships (OECD, 2021[7]). In Germany, a study using data on municipalities in four West German states (Lower Saxony, Hesse, Rhineland Palatinate, and Bavaria) during the years 2008-15 shows that inter-municipal co-operation has a positive effect on local economic performance. Local business development resources are spent more productively in co‑operating municipalities (Wolfschuetz, 2020[84]).
Inter-municipal co-operation enables more effective procurement and operational management. Joint procurement and co-ordinated tenders allow municipalities to benefit from bulk purchasing, negotiate better contracts and streamline administrative processes, generating measurable efficiency gains.
Fiscal sustainability and solidarity
Inter-municipal co-operation also plays an important role in strengthening financial capacity and promoting fiscal solidarity across municipalities. By pooling resources, municipalities can reduce disparities in fiscal effort and improve the financial sustainability of services that disproportionately burden central or core municipalities. In many functional areas, the central municipalities bear significant centrality costs (or centrality charges). They provide hospitals, schools, cultural and leisure amenities, public transport hubs and administrative services used by citizens of surrounding municipalities, without necessarily fair cost-sharing from neighbouring municipalities to reflect these costs. Inter-municipal co-operation helps rebalance these asymmetries by sharing the financing of services that generate benefits across municipal borders, ensuring a fairer distribution of costs and revenues. Joint budgeting, joint borrowing, shared investment funds and inter-municipal equalisation mechanisms allow municipalities to align financial contributions with the scale of service usage, reduce duplication of spending, and unlock larger and more stable funding for long-term projects. Inter-municipal co-operation is also seen as a key lever to access EU funds (Box 2.15). In Greece, for example, the pooling of resources through municipal associations is seen as a key lever for successful absorption of EU structural funds and achieving the necessary scale for service delivery (OECD, 2020[85]).
Strategic co-ordination and territorial coherence
Inter-municipal co-operation reinforces strategic co‑ordination and territorial coherence. Inter-municipal co-operation is particularly valuable in land-use and spatial planning, where functional settlement patterns, mobility flows and environmental systems extend well beyond municipal borders and require co‑ordinated, cross-jurisdictional approaches (Box 1.13).
Inter-municipal co-operation strengthens coherence and effectiveness in regional development policies. By aligning local strategies across areas such as mobility, land use, tourism, climate resilience and economic development, it supports more integrated and long-term planning across functional territories. Co-ordination helps avoid fragmented approaches and inefficient competition for funding, which often arise when municipalities act independently despite shared challenges. By internalising cross-boundary spillovers and co-ordinating investments, inter-municipal co-operation fosters more balanced and cohesive territorial development, in line with the OECD Recommendation on Regional Development Policy (OECD, 2023[86]).
Land-use and spatial planning is one of the policy areas where inter-municipal co-operation delivers the strongest benefits. Municipal boundaries rarely align with the geography of daily life – commuting patterns, housing markets, environmental systems, service catchment areas and economic interactions all span across jurisdictions. Without co-ordination, individual municipal decisions on zoning, infrastructure or land development can undermine one another, create inefficiencies, undesirable spill-overs and generate long-term spatial imbalances.
Inter-municipal co-operation helps align spatial policies with functional realities. By planning jointly, municipalities can better manage urban expansion, reduce land-use conflicts, and avoid duplication of infrastructure. It also supports more coherent investment decisions, strengthens environmental protection, and ensures that housing, transport, and service planning reinforce rather than contradict each other.
Many OECD countries have developed strong inter-municipal mechanisms for spatial planning. In France, for example, Public Establishment for Inter-Municipal Co-operation (EPCI, Établissement public de coopération intercommunale) prepare local inter-municipal urban plans (PLUi), enabling municipalities to harmonise zoning, housing strategies and infrastructure planning at the scale of functional areas. In Australia, councils are encouraged to form Regional Planning Partnerships, legally recognised under state law to co‑ordinate infrastructure, land-use, and economic strategies at a metropolitan or regional scale. In Switzerland, regional conferences and public-law associations develop regional structure plans that integrate land-use, transport and landscape policies, ensuring coherence across diverse municipalities. In Japan, wide-area unions and designated metropolitan planning bodies co‑ordinate land-use and infrastructure planning across large functional areas, facilitating integrated transport-land-use strategies. In Finland, inter-municipal co-operation is mandatory for regional planning.
OECD work on five regional case studies, carried out in the framework of its Programme Preparing regions to Demographic Changes, has shown that fragmented local planning undermines efficient land use, service accessibility and the capacity of regions to respond to demographic and economic change. Strengthening inter-municipal co-operation in spatial and land-use planning is therefore a common recommendation. By co‑ordinating across municipal boundaries, local governments can better align land-use, housing, infrastructure and service investments, internalise cross-jurisdictional spillovers and support functional territories rather than arbitrarily sized jurisdictions. Jointly managed spatial plans, shared settlement strategies and inter-municipal development platforms are key enablers of regional attractiveness, service cost-efficiency and territorial resilience.
Source: (OECD, 2025[36]; OECD, 2025[41]; OECD, 2025[42]; OECD, 2025[43]; OECD, 2025[19]; OECD, 2025[44]; OECD, 2025[39]).
Governance flexibility and integration
Inter-municipal co-operation offers a flexible and adaptable form of governance. It offers municipalities a flexible and evolutive way to collaborate without requiring full-scale administrative integration. Local governments can participate in several co-operation arrangements at once – each tailored to a specific service – while preserving their autonomy, political identity and institutional traditions. This flexibility is particularly important in countries where municipal self-government is strongly valued and large structural reforms (such as amalgamations) face political resistance (Bird and Slack, 2007[87]).
Inter-municipal co-operation enables gradual and trust-based integration. It allows for adjusting co-operation over time – expanding, reducing, or ending partnerships as needs change. This agility is particularly valuable in adapting to demographic and economic changes. Many arrangements start with limited shared services, such as waste management or public transport, and gradually extend to more strategic functions like spatial planning or economic development. This incremental approach minimises disruption, builds trust among partners and strengthens administrative capacity, enabling co-operation to adapt progressively to local circumstances.
Finally, inter-municipal co-operation can serve as a pathway to deeper institutional or territorial integration such as mergers. Municipalities that successfully co‑operate in one service area (such as road maintenance or emergency services) often find it easier to expand into others, including education, healthcare, or economic development. In some cases, long-standing inter-municipal co-operation has even paved the way for voluntary municipal mergers by building trust and demonstrating the advantages of joint service provision (OECD, 2019[3]). In other cases, inter-municipal co-operation has advanced regionalisation reforms. In Slovenia, for instance, inter-municipal co-operation has been considered as an intermediate step towards regionalisation. In Latvia, the regional councils are made up of municipal representatives, acting as “inter-municipal co-operation” bodies created for the purpose of co-ordinating spatial planning, economic development, public transport, and managing investment programmes (including EU funds) (OECD, 2022[88]).
Inter-municipal co-operation can also have challenges and risks if not properly designed
Despite its potentially substantial benefits and growing use, inter-municipal co-operation is rarely frictionless. As a result, it remains unevenly developed across OECD countries and is often underutilised, even where formal arrangements exist. Inter-municipal co-operation entails significant challenges that must be carefully managed. These stem from increased administrative complexity, governance and institutional constraints, political and autonomy concerns, financial risks, and the context-dependent nature of outcomes (Table 1.3). Adherents to the OECD Recommendation on Effective Public Investment Across levels of Government recurrently identify inter-municipal co-operation as one of the major multilevel governance challenges. Indeed, co-ordination across neighbouring local governments implies important administrative, financial and political costs that may discourage such co-ordination to happen (OECD, 2025[64]). A clear understanding of these limitations is essential to strengthening inter-municipal co-operation and ensuring that co-operative arrangements are both sustainable and effective. This, in turn, requires appropriate incentives, robust governance frameworks, and supportive policy environments.
Source: OECD elaboration
Administrative complexity
Inter-municipal co-operation can increase administrative complexity and co-ordination costs. The creation of joint bodies, additional governance layers and dedicated staff may lead to higher bureaucracy, duplication of tasks and slower decision making if roles and procedures are not clearly defined. When roles and procedures are unclear, they may duplicate tasks, slow decision making and raise co-ordination costs, becoming “administrative overlays” that require additional meetings and reporting without necessarily improving efficiency (Bird and Slack, 2007[87]). Transaction costs can be especially high where many small municipalities are involved. In Czechia, for example, inter-municipal co-operation has been constrained by significant co-ordination and negotiation costs, with evidence suggesting that larger municipalities do not always consider it cost-effective (Bakoš et al., 2021[26]). Similar concerns have been observed in France, another highly fragmented country (Tricaud, 2021[89]). Political, social and geographic factors may further complicate co-operation: large distances, low population density, or strong cultural, political and organisational differences can make co-ordination more costly, particularly in mountainous or sparsely populated areas. Recent reforms in Wales illustrate these challenges. The creation of Corporate Joint Committees (CJCs) as permanent regional bodies has strengthened strategic co-ordination, but has also raised concerns about increased administrative complexity and the risk of a one-size-fits-all governance model that may not fully reflect regional differences (OECD, 2024[90]). This has led the Welsh Government to commission a review of governance arrangements. This is referenced publicly in a position statement on CJCs last month (Corporate Joint Committees: position statement for regional collaboration.
Governance and institutional design
Unclear allocation of competences can reduce efficiency and create institutional overlap. Ambiguities in the delegation of responsibilities between municipalities and inter-municipal entities may lead to duplication of services, gaps in provision and increased operating costs. In some cases, municipalities continue to deliver services alongside joint structures due to legal constraints or institutional inertia, undermining efficiency gains and creating opaque governance arrangements. In France, for instance, while inter-municipal co-operation has contributed to strengthening and professionalising certain services (such as legal services, public procurement, accounting, finance and human resources), improving their quality and accessibility to citizens (Cours des comptes, 2022[91]), overlapping mandates and the limited reallocation of staff between municipalities and EPCIs have sometimes increased operating costs rather than reducing them (OECD, 2017[1]). Strong institutional arrangements, such as clear delegation, stable governance structures, and effective oversight, are associated with better cost outcomes and are thus key to cost-effective inter-municipal co-operation (Bel and Sebo, 2018[92]).
Institutional overlap and competition with regional authorities can hinder the development of inter-municipal co-operation. When the roles and scales of inter-municipal bodies and regional governance structures – such as regional governments, municipal associations or development agencies – are not clearly defined, tensions may arise and limit co-operation. In such contexts, limited support or resistance from higher levels of government can constrain the expansion of inter-municipal arrangements. These tensions have been observed notably between metropolitan bodies and regional governments. In Italy, for example, prior to the provincial reform, some regional governments opposed efforts to strengthen metropolitan authorities, as they perceived these developments as weakening their own position (Conti and and G. Vetritto, 2018[93]). In Canada, some provinces have similarly chosen to assume responsibility for transportation and land-use planning in metropolitan areas, rather than leaving these functions to municipalities or co-operative bodies (Slack and Bird, 2010[94]; OECD, 2022[88]).
Mismatch between institutional and functional scales can reduce efficiency. Inter-municipal co-operation structures may be too small to capture economies of scale or too large and distant to reflect local needs. Ensuring the appropriate scale for each function remains a key design challenge (OECD, forthcoming[29]). In France, for instance, Poles of Territorial and Rural Balances (Pôles d’équilibre territorial et rural, PETR), which have been created with the MAPTAM law (2014), are voluntary groupings of several EPCIs at the scale of a functional area, focusing on strategic planning, co-ordination and project development.
Autonomy, asymmetries and accountability
Inter-municipal co-operation may be perceived as reducing municipal autonomy and local control. This concern is particularly strong in countries where local self-government is constitutionally protected. Even when co-operation is voluntary, municipalities may need to compromise on policy choices, service standards and resource allocation, which can trigger political resistance (OECD, 2024[20]). Empirical evidence confirms that this perceived loss of autonomy is a key source of resistance to inter-municipal co-operation. A quasi-experimental study based on a 2010 reform in France – where around 1 800 municipalities were required to join inter-municipal structures – shows that, although municipalities benefit from improved services, increased fiscal resources and better access to infrastructure, they may also face significant local costs linked to reduced control over policy choices. In particular, municipalities forced to co-operate experienced changes such as increased housing development in high-demand urban areas and a reduction or reorganisation of local services in rural areas. These effects tend to be unevenly distributed, with smaller municipalities – often having weaker bargaining power within inter-municipal bodies – bearing a higher share of the costs (Tricaud, 2021[95]). In Norway, one of the motivations behind the 2018 Local Government reform was to address governance and democratic concerns. In this context, the reform abolished the “samkommune” model (joint municipal body) introduced under the 1992 Act. While this model enabled deeper integration between municipalities, it was associated with challenges related to institutional complexity and accountability.
Power asymmetries and political tensions can affect decision making and fairness. Larger municipalities often have greater negotiating power and can steer decisions in their favour. Such asymmetries are typical when a major city co‑operates with surrounding smaller municipalities (OECD, 2017[1]). Some municipalities also fear that co-operation could dilute their capacity to tailor services to local preferences, potentially leading to resident dissatisfaction. Political differences can exacerbate these tensions, particularly where long-term goals diverge.
Inter-municipal co-operation can face challenges related to institutional stability and long-term commitment. Flexible arrangements may lead to frequent entry and exit of municipalities, undermining continuity and long-term planning. Political turnover can also prompt changes in local priorities, placing co-operation arrangements under pressure. Without clearly defined legal provisions for withdrawal and renegotiation, partnerships may dissolve abruptly or force municipalities to remain in arrangements that no longer meet their needs.
Inter-municipal co-operation can create a democratic deficit and weaken accountability. Decision making is often transferred to bodies whose members are indirectly appointed rather than directly elected, reducing transparency and citizen influence. This indirect representation can reduce transparency and weaken accountability, as residents have less direct influence over decisions affecting service delivery than under municipal governance. The challenge is particularly significant when inter-municipal entities manage essential public services – such as water, waste, or public transport-that directly affect daily life. In France, for example, concerns have been raised about the ability of inter-municipal structures to levy taxes without being directly elected, reducing political accountability (OECD, 2017[1]). Tensions may also arise when co-operation arrangements bring together municipalities with differing political priorities, creating disputes over representation, decision making authority and responsiveness to local needs (Allers and van Ommeren, 2016[96]).
Fiscal risks
Inter-municipal co-operation can create financial risks and governance challenges. The lack of funding and the difficulty to access external financing for inter-municipal co-operation bodies may result in unfunded mandates. Financial risks also arise when inter-municipal co-operation creates common-pool problems, in which some municipalities benefit from shared services without contributing adequately to costs. Freeriding risks can undermine financial sustainability and increase burdens on more proactive municipalities. Finally, the creation of a new public entity with its own budget and hiring authority also raises questions about fiscal oversight and control by participating municipalities, supervisory bodies and citizens.
Mixed empirical results
Empirical evidence on the effectiveness of inter-municipal co-operation is mixed and highly context dependent. While some studies report positive effects – such as improved efficiency and lower costs in Spanish waste collection, where co-operation reduces unit costs by exploiting economies of scale (Bel and Mur, 2009[77]), or in the Netherlands, where joint provision improves cost efficiency particularly in smaller municipalities (Dijkgraaf and Gradus, 2013[97]), and broader reviews confirming efficiency gains in capital-intensive services (Bel and Warner, 2015[98]) – others find no measurable impact on overall municipal spending. For example, evidence from France shows that inter-municipal co-operation does not significantly reduce total expenditures, partly due to persistent duplication and limited reorganisation of services (Frère, Leprince and Paty, 2014[99]).
More recent studies confirm this ambiguity and highlight important trade-offs. Sandberg (2024[100]), analysing inter-municipal co-operation in the education sector in Sweden, finds that while co-operation can reduce administrative and operational costs, it may also lead to declines in service quality, reflecting co‑ordination challenges and reduced local responsiveness. Similarly, Notsu (2024[101]), examining co-operation in administrative and digital functions, show that efficiency gains are often modest and difficult to isolate due to transition costs, institutional heterogeneity and differences in implementation across municipalities.
Outcomes vary significantly across services and institutional contexts. Aldag, Warner and Bel (2020[102]) show that results depend strongly on the type of service (with clearer gains in technical services than in social services), governance design and transaction costs. Other research finds that cost savings are more likely in smaller municipalities, where co-operation helps reach minimum efficient scale, while larger municipalities often experience limited or no gains (Bel and Sebo, 2018[92]). Recent causal analyses in France and Italy also point to heterogeneous effects, with efficiency gains concentrated in specific sectors or types of municipalities, rather than being system wide. (Luca and Modrego, 2021[103]; Jaaidane, Larribeau and Leprince, 2023[104]). Overall, these findings indicate that the effectiveness of inter-municipal co-operation depends on multiple factors, including service characteristics, scale, number of participating municipalities, governance arrangements and political commitment.
References
[102] Aldag, A., M. Warner and G. & Bel (2020), “It depends on what you share: the elusive cost savings from service sharing”, Journal of Public Administration Research & Theory, https://doi.org/10.1093/jopart/muz023.
[31] Allain-Dupré, D., I. Chatry and A. Moisio (2020), “Asymmetric decentralisation: Trends, challenges and policy Implications”, OECD Regional Development Papers, No. 10, OECD Publishing, Paris, https://doi.org/10.1787/0898887a-en.
[17] Allers, M. et al. (2021), “Is small beautiful? Transitional and structural effects of municipal amalgamation on voter turnout in local and national elections”, Electoral Studies, Vol. 70, p. 102284, https://doi.org/10.1016/j.electstud.2021.102284.
[96] Allers, M. and B. van Ommeren (2016), “Intermunicipal cooperation, municipal amalgamation and the price of credit”, Local Government Studies, Vol. 42/5, pp. 717-738, https://doi.org/10.1080/03003930.2016.1171754.
[94] Antti, M. (ed.) (2010), Merging municipalities: Is bigger better?, Government Institute for Economic Research/Finnish Prime Minister’s Office,, http://www.doria.fi/handle.
[80] Arntsen, B., D. Torjesen and T. Karlsen (2021), “Asymmetry in inter-municipal cooperation in health services – How does it affect service quality and autonomy?”, Social Science & Medicine, Vol. 273, https://doi.org/10.1016/j.socscimed.2021.113744.
[22] Assembleia da República Portuguesa (2025), Lei n.º 25-A/2025, de 13 de março.
[26] Bakoš, E. et al. (2021), “The perception of inter-municipal cooperation by local officials and managers”, Central European Journal of Public Policy, Vol. 15/1, pp. 1-14, https://doi.org/10.2478/cejpp-2021-0002.
[77] Bel, G. and M. Mur (2009), “Intermunicipal cooperation, privatization and waste management costs: Evidence from rural municipalities”, Waste Management, Vol. 29/10, pp. 2772-2778, https://doi.org/10.1016/j.wasman.2009.06.002.
[92] Bel, G. and M. Sebo (2018), “Does inter-municipal co-operation really reduce delivery costs? An empirical evaluation of the role of scale economies, transaction costs, and governance arrangements”, https://www.ub.edu/irea/working_p.
[98] Bel, G. and M. Warner (2015), Inter-municipal cooperation and costs: Expectations and evidence.
[35] Beramendi, P. and M. Rogers (2026), Asymmetric Decentralization and Inequality, https://econpapers.repec.org/paper/aysispwps/paper2610.htm.
[87] Bird, R. and E. Slack (2007), “An approach to metropolitan governance and finance”, Environment and Planning C: Government and Policy, Vol. 25/5, pp. 729-755, https://doi.org/10.1068/c0623.
[81] Blaka, S., D. Jacobsen and T. Morken (2023), “Service quality and the optimum number ofmembers in intermunicipal cooperation: The caseof emergency primary care services in Norway”, Public administration, https://doi.org/10.1111/padm.12785.
[14] Blom-Hansen, J. et al. (2016), “Jurisdiction size and local government policy expenditure: Assessing the effect of municipal amalgamation”, American Political Science Review, https://doi.org/10.1017/S0003055416000320.
[52] Butt, K. et al. (2020), Local government co-ordination: metropolitan governance in twenty-first century Australia,, AHURI Final Report No. 352, Australian Housing and Urban Research Institute Limited, Melbourne,, https://www.ah.
[67] CoE - Congress of Local and Regional Authorities (2021), Monitoring of the application of the European Charter of Local SelfGovernment in Bulgaria, https://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent?documentId=0900001680a28bb8.
[71] CoE - Congress of Local and Regional Authorities, (2017), Local and regional democracy in Switzerland, https://search.coe.int/congress#{%22CoEIdentifier%22:[%220900001680750d61%22],%22sort%22:[%22CoEValidationDate%20Descending%22]}.
[68] CoE - Congress of Regional and Local Authorities (2015), Local and regional democracy in Greece, https://search.coe.int/congress#{%22CoEIdentifier%22:[%22090000168071980e%22],%22sort%22:[%22CoEValidationDate%20Descending%22]}.
[70] CoE Congress of Local and Region Authorities (2007), The Institutional Framework of Inter-Municipal Co-operation, https://rm.coe.int/the-institutional-framework-of-inter-municipal-co-operation/1680719b6a.
[93] Conti, A. and and G. Vetritto (2018), The case of Italy: No urban or territorial policies in the nation that gave birth to local government”, Spruk R.
[91] Cours des comptes (2022), Finances publiques locales.
[25] David Ortega Guttierez (2023), Fusión obligatoria de municipios en España: una asignatura pendiente en la gobernanza local., INAP Newsletter, https://laadministracionaldia.inap.es/noticia.asp?id=1513756.
[73] DGCL (2025), Bilan statistique des EPCI à fiscalité propre au 1er janvier 2025, https://www.collectivites-locales.gouv.fr/files/Accueil/DESL/2025/Bilan-statistique-2025%20-%20diffusion.pdf.
[66] DGCL (2025), Guide de l’intercommunalité, https://www.collectivites-locales.gouv.fr/files/Institution/2.%20Structures%20territoriales/EPCI/guide%20interco%202025/guide%20interco%202025%20vf.pdf.
[97] Dijkgraaf, E. and R. Gradus (2013), “Cost advantage cooperations larger than private waste collectors”, Applied Economics Letters, Vol. 20/7, pp. 702-705, https://doi.org/10.1080/13504851.2012.732682.
[18] Dollery, B. (2021), “A critical appraisal of the Western Australian local government review panel’s recommendations”, Economic Analysis and Policy, Vol. 71, pp. 434-438, https://doi.org/10.1016/j.eap.2021.06.010.
[40] European Commission (2025), Talent Booster Mechanism, https://ec.europa.eu/regional_policy/policy/communities-and-networks/harnessing-talent-platform/talent-booster-mechanism_en.
[82] European Union (2022), Rural Growth Agreements support multi-level governance and local innovation in Norway.
[13] European Water Movement (n.d.), Remunicipalisation of water services, https://europeanwater.org/.
[99] Frère, Q., M. Leprince and S. Paty (2014), “The Impact of Intermunicipal Cooperation on Local Public Spending”, Urban Studies, Vol. 51/8, pp. 1741-1760, https://doi.org/10.1177/0042098013499080.
[79] Galli, F. et al. (2026), Is compulsory inter-municipal cooperation an efficiency.
[2] Germà, B. et al. (2024), “Local government reform beyond privatization and amalgamation: advances in the analysis of inter-municipal cooperation”, Journal of Economic Policy Reform, Taylor & Francis Journals,, Vol. vol. 27(2), April., pp. pages 125-139, https://doi.org/10.1080/17487870.2024.2341657.
[34] Gilbert, G., T. Madiès and S. Paty (2026), Asymmetric Decentralization in France: A Municipal-Centered Exception, https://repec.ideagov.eu/RePEc/ida/wpaper/WP2610.pdf.
[61] Government of Mexico (2016), General Law on Human Settlements, Territorial Planning and Urban Development, https://www.diputados.gob.mx/LeyesBiblio/pdf/LGAHOTDU.pdf.
[69] Government of Netherlands (1992), Municipal Act, https://www.government.nl/documents/regulations/2014/09/25/municipalities-act.
[48] Government of Poland (2015), Act of 25 June 2015 amending the act on local government and certain other acts , Journal of Laws 2015, item 1045, ISAP, https://isap.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=WDU20150001045.
[75] Government of Spain (1985), Basic Law on Local Government, https://www.boe.es/buscar/act.php?id=BOE-A-1985-5392.
[72] Intercommunalités de France (2024), Comprendre l’intercommunalité: carte et données, https://www.intercommunalites.fr/app/uploads/2024/10/INTERCO-Atlas-A4-planche-WEB.pdf.
[104] Jaaidane, T., S. Larribeau and M. Leprince (2023), “Inter-municipal cooperation and public employment: evidence from French municipalities”, The Annals of Regional Science, Vol. 72/3, pp. 987-1014, https://doi.org/10.1007/s00168-023-01232-3.
[103] Luca, D. and F. Modrego (2021), Stronger together? Assessing the causal effect of inter‐municipal cooperation on the efficiency of small Italian municipalities.
[49] Łukaszczyk Z. (2018), “Shared services center – an opportunity for cost optimization and process standardization in local government units”, Scientific Journals of Organization and Management, https://yadda.icm.edu.pl/baztech/element/bwmeta1.element.baztech-f8ec22e6-fb27-43c6-86f9-295dd0cc38cf/c/ZNOiZ_2018_z.121_Lukaszczyk.pdf.
[28] McQuestin, D., J. Drew and M. Miyazaki (2021), “Do amalgamations make a difference? what we can learn from evaluating the policy success of a large scale forced amalgamation”, Public administration quaterly, Vol. Vol. 45, No. 3 (2021),, pp. pp. 278-298, https://www.jstor.org/stable/10.2307/27204199.
[23] Mille, P. (2026), Do Municipal Mergers Undermine Democratic Participation?.
[101] Notsu, N. (2024), “Inter-municipal cooperation cloud and tax administrative costs”, Regional Science and Urban Economics, Vol. 105, p. 103991, https://doi.org/10.1016/j.regsciurbeco.2024.103991.
[39] OECD (2025), OECD guidelines on the multi-level governance of demographic change, OECD Regional Development Papers, No. 164, OECD Publishing, Paris, https://doi.org/10.1787/f66426ea-en.
[38] OECD (2025), Place-Based Policies for the Future, OECD Regional Development Studies, OECD Publishing, Paris, https://doi.org/10.1787/e5ff6716-en.
[19] OECD (2025), Preparing for Demographic Change in Campania, Italy, OECD Publishing, Paris, https://doi.org/10.1787/071b9897-en.
[41] OECD (2025), Preparing for Demographic Change in Castilla y León, Spain, OECD Regional Development Studies, OECD Publishing, Paris, https://doi.org/10.1787/207044f7-en.
[42] OECD (2025), Preparing for Demographic Change in Nord-Vest, Romania,, OECD Regional Development Studies, OECD Publishing, Paris, https://doi.org/10.1787/21b50ace-en.
[44] OECD (2025), Preparing for Demographic Change in the Azores, Portugal, OECD Regional Development Studies, OECD Publishing, Paris, https://doi.org/10.1787/bf170c57-en.
[43] OECD (2025), Preparing for Demographic Change in the Banská Bystrica Region, Slovak Republic, OECD Regional Development Studies, OECD Publishing, Paris, https://doi.org/10.1787/62ab1acb-en.
[64] OECD (2025), Report on the implementation of the OECD Recommendation on Effective Public Investment Across Levels of Government.
[47] OECD (2025), Shrinking smartly and sustainably in Portugal: Small and medium-sized cities in demographic transition, OECD Regional Development Papers, No. 167, OECD Publishing, Paris, https://doi.org/10.1787/666c29c4-en.
[8] OECD (2025), Shrinking Smartly and Sustainably: Strategies for Action, OECD Publishing, Paris,, https://doi.org/10.1787/f91693e3-en.
[36] OECD (2025), Shrinking Smartly and Sustainably: Strategies for Action, OECD Rural Studies, OECD Publishing, Paris, https://doi.org/10.1787/f91693e3-en.
[4] OECD (2025), Subnational governments in OECD countries: Key data (brochure), https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/subnational-finance-and-investment/subnational-governments-infrastructure-finance-2025.pdf.
[6] OECD (2024), Enabling Inter-Municipal Shared Service Provision in Lithuania: Proposed Legal and Institutional Framework and Piloting Approach in Tauragė+ Functional Zone, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/f8ad6859-en.
[90] OECD (2024), Regional Governance and Public Investment in Wales, United Kingdom: Moving Forward Together, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/e143e94d-en.
[20] OECD (2024), Towards Balanced Regional Development in Croatia: From Strategy Design to Implementation, OECD Multi-level Governance Studies, Paris, https://doi.org/10.1787/3c0779cf-en.
[62] OECD (2023), OECD Regional Outlook 2023: Mexico, OECD, https://www.oecd.org/en/publications/oecd-regional-outlook-2023-country-notes_be47635c-en/mexico_f74a2d50-en.html.
[27] OECD (2023), Public governance review of Czechia - Towards a More Modern and Effective Public Administration - Chapter on regional and local governance, OECD Publishing, Paris, https://doi.org/10.1787/41fd9e5c-en.
[86] OECD (2023), Recommendations of the Council on Regional Development Policy, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0492.
[59] OECD (2022), National Urban Policy Review of Colombia, OECD Urban Studies, OECD Publishing, Paris,, https://doi.org/10.1787/9ca1caae-en.
[88] OECD (2022), Regional Governance in OECD Countries: Trends, Typology and Tools, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/4d7c6483-en.
[45] OECD (2022), Shrinking Smartly in Estonia: Preparing Regions for Demographic Change, OECD Rural Studies, OECD Publishing, Paris, https://doi.org/10.1787/77cfe25e-en.
[58] OECD (2022), Urban-Rural Linkages in Poland, OECD Regional Development Studies, OECD Publishing, Paris, https://doi.org/10.1787/94b5c782-en.
[7] OECD (2021), Decentralisation and Regionalisation in Bulgaria: Towards Balanced Regional Development, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/b5ab8109-en.
[9] OECD (2021), Delivering Quality Education and Health Care to All: Preparing Regions for Demographic Change, OECD Rural Studies, OECD Publishing, Paris, https://doi.org/10.1787/83025c02-en.
[37] OECD (2021), Delivering Quality Education and Health Care to All: Preparing Regions for Demographic Change, OECD Rural Studies, OECD Publishing, Paris, https://doi.org/10.1787/83025c02-en.
[57] OECD (2021), Pour la relance post-COVID-19 et la résilience de la Métropole Aix-Marseille, Provence, France, https://deliberations.ampmetropole.fr/documents/metropole/deliberations/2021/06/04/RAPPORTDELACOMMISSION/C0EY1.pdf.
[46] OECD (2020), Decentralisation and Regionalisation in Portugal, https://doi.org/10.1787/fea62108-en.
[85] OECD (2020), Regional Policy for Greece Post-2020, OECD Territorial Reviews, OECD Territorial Reviews, OECD Publishing, Paris,, https://doi.org/10.1787/cedf09a5-en.
[33] OECD (2019), Asymmetric decentralisation: policy implications in Colombia.
[3] OECD (2019), Making Decentralisation Work: A Handbook for Policy-Makers, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/g2g9faa7-en.
[32] OECD (2019), Making Decentralisation Work: A Handbook for Policy-Makers, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/g2g9faa7-en.
[55] OECD (2019), OECD Principles on Urban Policy, https://www.oecd.org/content/dam/oecd/en/about/programmes/cfe/oecd-principles-on-urban-policy/OECD-Principles-on-Urban-Policy.pdf.
[5] OECD (2017), Making Decentralisation Work in Chile: Towards Stronger Municipalities, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/9789264279049-en.
[1] OECD (2017), Multi-level Governance Reforms: Overview of OECD Country Experiences, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/9789264272866-en.
[30] OECD (2017), Multi-level Governance Reforms: Overview of OECD Country Experiences, OECD Multi-level Governance Studies, OECD Publishing, Paris, https://doi.org/10.1787/9789264272866-en.
[54] OECD (2015), Governing the City, OECD Publishing, Paris, https://doi.org/10.1787/9789264226500-en.
[83] OECD (2014), OECD Recommendation on Effective Public Investment Across Levels of Government,, https://www.oecd.org/cfe/regionaldevelopment/recommendation-effective-public-investment-across-levels-of-government.htm.
[63] OECD (2013), Rural-Urban Partnerships: An Integrated Approach to Economic Development, OECD Rural Policy Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264204812-en.
[56] OECD (2013), Vers une croissance plus inclusive de la métropole Aix-Marseille: Une perspective internationale,.
[29] OECD (forthcoming), Optimal service networks for competitive regions, https://www.oecd.org/en/about/projects/optimal-service-networks-for-competitive-regions.html.
[53] OECD (Forthcoming), Unlocking the potential of intermediary cities for regional development, OECD.
[50] PAP Local Government Service (2019), Shared Service Centers – How They Work. Local Government Shared Service Centers – Two Years of Operation, https://samorzad.pap.pl/kategoria/archiwum/cuw-jak-dzialaja-samorzadowe-centra-uslug-wspolnych-dwa-lata-funkcjonowania.
[51] Pravda (2025), V Tornali oficiálne otvorili prvé centrum zdieľaných služieb na Slovensku. Slúži, https://spravy.pravda.sk/regiony/clanok/745351-v-tornali-oficialne-otvorili-prve-centrum-zdielanych-sluzieb-na-slovensku-sluzi-pre-30-samosprav-dalsia-by-mala-pribudnut/.
[12] Public Futures (2025), Knowledge resource to collect and research remunicipalisation processes., https://publicservices.international/resources/videos/public-futures?lang=en&id=13815.
[100] Sandberg, K. (2024), The more the merrier? Examining the effects of inter-municipal cooperation on costs and service quality in upper secondary education.
[65] Sénat (2025), Pour une intercommunalité de la confiance, au service des territoires, https://www.senat.fr/rap/r24-900/r24-9001.pdf.
[60] Stoian C. Groza O. & Rusu A. (2024), “Assessing the viability of Romania’s newly established metropolitan areas”, Journal of Urban and Regional Analysis, pp. 16(1), 59-83, https://doi.org/10.37043/JURA.2024.16.1.3.
[78] Struk, M. and E. Bakos (2021), “Long-Term Benefits of Intermunicipal Cooperation for Small Municipalities in Waste Management Provision”, International Journal of Environmental Research and Public Health (IJERPH), https://doi.org/10.3390/ijerph18041449.
[15] Tavares, A. (2024), Evaluation of Amalgamations Reforms, https://link.springer.com/chapter/10.1007/978-3-031-54736-2_2.
[74] Toscano Gil Francisco (2025), “Las mancomunidades de municipios de interés autonómico”, Anuario de Derecho Municipal, https://revistasmarcialpons.es/anuarioderechomunicipal/article/view/toscano-las-mancomunidades-de-municipios-de-interes-autonomico/3500.
[89] Tricaud, C. (2021), Better Alone? Evidence on the Costs of Intermunicipal Cooperation, https://sciencespo.hal.science/hal-03380333.
[95] Tricaud, C. (2021), Better Alone? Evidence on the Costs of Intermunicipal Cooperation.
[21] UK Government (2024), English Devolution White Paper, https://www.gov.uk/government/publications/english-devolution-white-paper-power-and-partnership-foundations-for-growth/english-devolution-white-paper.
[24] UK Parliament (2025), Community engagement with English devolution, https://post.parliament.uk/community-engagement-with-english-devolution-2/.
[10] Wei, W. and X. Chen (2024), “Service Outsourcing and Government Fiscal Conditions: Do Market Competition, Bureaucrat Support, and Management Capacity Matter?”, The American Review of Public Administration, Vol. 54/6, pp. 568-589, https://doi.org/10.1177/02750740241232678.
[84] Wolfschuetz, E. (2020), “The Effect of Inter-municipal Cooperation on Local Business Development in German Municipalities”, MAGKS Papers on Economics 202005, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Econ.
[11] Zhang, Z. and B. Gibson (2016), “Determinants of Outsourcing in U.S. Municipalities: Evidence from a Municipal Spatial Network Analysis”, Applied Spatial Analysis and Policy, Vol. 10/2, pp. 253-269, https://doi.org/10.1007/s12061-016-9182-6.
[16] Zheng, T., B. Sun and K. de Witte (2023), A systematic literature review on the effect of municipal.
[76] Zhu, Y., G. Salvalai and P. Zangheri (2025), “Italian renewable energy communities: status and prospect development analysis”, Energy and Buildings, Vol. 348, p. 116404, https://doi.org/10.1016/j.enbuild.2025.116404.
← 1. https://www.oecd.org/en/about/projects/optimal-service-networks-for-competitive-regions.html
← 2. The OECD identifies four main types of metropolitan governance arrangements: (i) informal or soft co-ordination platforms focused on dialogue and information sharing; (ii) inter-municipal authorities that enable municipalities to jointly deliver specific services or policies; (iii) supra-municipal authorities representing a more integrated tier with broader strategic responsibilities; and (iv) metropolitan cities with a special legal status and extended competences similar to higher levels of government (OECD, 2014[83]).