United we stand, divided we fall? Unpacking inter-municipal cooperation in Italy

Over the past 30 years, Inter-municipal cooperation (IMC) has increased and addressed certain regional governance vacuums, especially in areas characterised by high municipal fragmentation. Subsequently, the global financial crisis (GFC) worsened the fiscal conditions of municipalities, pushing them to adopt new cost reduction strategies. IMC policies prescribe coordinated actions that may lead to more efficient use of resources due to economies of scale and scope and thanks to coherent territorial action, particularly capable of tackling scale-related service delivery weaknesses. This thesis will focus on IMC in Italy, more specifically on the case of Municipal Unions (MUs), which constitute the most institutionalized form of cooperation among municipalities available in the country. The thesis is structured as a collection of three self-contained but interconnected papers. The general introduction (Chapter 1) describes the concept of IMC, the roles and influences of public policies in tackling municipal fragmentation, as well as the main reforms that have affected local governments in Italy over the past 30 years. Chapter 2 frames the topic within the multi-level governance framework and explores the phenomenon by merging different data sources, in order to provide an overall picture of the implementation of MUs in the country. The results reveal a fragmentation in regional terms and heterogeneity of MUs across the country, on the basis of which I will propose a research agenda. By adopting a financial perspective, Chapter 3 analyses the fiscal balances of the MUs, which became available for the first time in 2017, and provides a typology of MUs according to their financial activity and evidence of the importance of municipal financial health and functional integration for the financial sustainability of IMC. This chapter sheds light on the functional prerequisite that impacts the financial sustainability of supra-municipal entities that live of derived finance, which existing literature on IMC has not yet considered. Next, Chapter 4 adopts a sociological perspective based on the concept of mechanism, in order to study – through a multiple-case analysis of MUs – the IMC in a specific area of the Piedmont region (namely the Asti and Cuneo provinces). Despite the different implementation outcomes, patterns emerged from the interviews and collected data, which allowed me to extrapolate five horizontal coordinating mechanisms present in the interactions between the municipalities involved in the joint effort. The chapter concludes by saying that, although traces of all five mechanisms are present in IMC, coordination can only be enhanced if the interactions between mechanisms are accurately balanced out over time. Finally, Chapter 5 addresses the main challenges for the research presented in this thesis and the main challenges for IMC in Italy, summarizes the findings, links them together, addresses any limitations and proposes future directions of investigation. The novelty of this thesis lies in various elements: it explores an understudied phenomenon in Italy; it is the first study to consider the financial activity of MUs in the entire national context; it contributes to the debate on IMC by addressing a key functional prerequisite, namely the sustainability of a new tier of government that lives of derived finance and offers indications to measure the financial activity of supra-municipal entities. Furthermore, it considers the viewpoint of the main actors in the daily activity of IMC (the involved mayors) in an attempt to identify the coordinating mechanisms that favour coordination among municipalities and shed light on their interactions.