Intermunicipal cooperation, privatization and waste management costs: Evidence from rural municipalities

The aim of this paper is to analyze the effects of intermunicipal cooperation and privatization on the delivery costs of urban solid waste services in rural environments. The results of our empirical analysis, which we conducted among a sample of very small municipalities, indicate that small towns that cooperate incur lower costs for their waste collection service. Cooperation also raises collection frequency and improves the quality of the service in small towns. By contrast, the form of production, whether it is public or private, does not result in systematic differences in costs. Interestingly, the degree of population dispersion, that is, the number of population units within the municipal jurisdiction, has a significant positive relation with service costs. No evidence of scale economies is found because small municipalities have likely exploited them by means of intermunicipal cooperation.