Spatial spillover effect of delivery forms on cost of public services in small and medium-sized Spanish municipalities

Abstract

The aim of this study is to determine whether the selection of a given form of local public service delivery produces a spatial spillover effect on the cost of providing the same service in a neighbouring municipality. To do so, we combine a series of theoretical arguments, regarding intermunicipal cooperation, privatisation, delivery forms, the mimetic isomorphism of new institutionalist theory and the spillover of local public goods, and thereby develop the new theoretical concept of Spatial Spillover of Delivery Forms (SSDF). An empirical study of this concept was conducted, using a spatial data panel for the waste collection services provided in small and medium-sized municipalities in Spain during the period 2002–2010. The results obtained confirm the existence of SSDF via public intermunicipal cooperation when the municipalities in question share a common geographical space, within a radius of 120 km. This influence produces cost savings in the neighbouring municipalities, whereas individual forms of public provision may provoke an increase in the respective costs.