Categories
Working Papers & Ongoing

Does It Take More Than One Village? The Effect of Inter-Municipal Cooperation on Waste Separation

Joint with Germà Bel, IREA working paper.

Municipalities increasingly cooperate with one another to improve their public services. In this study, we estimate the causal effect of Inter-Municipal Cooperation (IMC) on the environmental performance of waste collection in Catalonia. Using a difference-in-differences framework, we find that municipalities moving into IMC decrease non-separated waste per capita and increase the share of waste separation. However, when taking into account potential selection into treatment, a causal effect is present only in a sub-period after a strong hike in the landfill tax, and particularly for municipalities switching after this tax hike. This points to IMC’s potential to use technical capability and economies of scale for a more pronounced and rapid reaction, enhancing the effectiveness of higher-level policy. In contrast, absent the landfill tax, IMC seems to have offered limited improvement in environmental performance, suggesting at most a secondary role for internalization of local environmental spillovers.

Find the complete working paper here.