Does inter-municipal cooperation affect spending vs output? Evidence from Italy

We test the impact of inter municipal cooperation on per capita expenditure and physical output in a short-term period. We find that for services managed through a cooperation per capita expenditure decreases and in the same municipality it increases for those services managed on its own, leaving in both cases output unchanged. However, the magnitude of the first effect is stronger than that of the second one. When we concentrate the analysis on small municipalities, cooperation also leads to an increase in output for those services jointly managed.