Does decentralisation theorem shape intermunicipal cooperation?

Abstract

ABSTRACT This paper proposes a theoretical model of voluntary intermunicipal cooperation and empirically tests its assertions through the French municipalities’ choices of transferring their competences to the intermunicipal level. Using an original threshold models inference procedure, a probit model is estimated on shared competences. Two main results arise. Contrary to the decentralisation theorem prediction, citizens’ preference heterogeneity does not hinder local cooperation, but fiscal potential heterogeneity does. Moreover, a zoo effect is at stake for some competences, for which a significant threshold effect in their transfer probability is identified.