Is it better to remain independent? An analysis of the costs associated with inter-municipal cooperation

Whilst governments in many countries encourage inter-municipal cooperation in order to achieve economies of scale, local authorities are often reluctant to join forces. This study analyses the local consequences of inter-municipal consolidation, with a view to conducting an évaluation of these consequences. The study focuses on the 2010 French reform, which made inter-municipal cooperation compulsory and thus forced around 1,800 municipalities to join a public establishment for inter-municipal cooperation (EPCI). Firstly, it is observed that municipalities compelled to join an EPCI experienced a sharp increase in construction following their integration. This rise in construction is taking place mainly in urban municipalities where demand for housing is high and where residents are likely to oppose new developments in order to preserve their quality of life. The study then reveals that rural municipalities have faced a loss of local public services, increasing the distance between where residents live and the public services they use. Only those municipalities forced to join have suffered such consequences; municipalities that voluntarily joined an EPCI prior to the 2010 Act did not incur these costs. However, the municipalities that were compelled to join benefited from the same advantages associated with amalgamation as the voluntary municipalities: better access to public transport and an increase in tax revenue. Thus, the municipalities that resisted did not oppose integration because they anticipated fewer benefits, but rather to avoid an increase in construction in the case of urban municipalities and the loss of public services for rural municipalities.