Who benefits from cooperation (if any)? Asymmetrical distribution of costs and benefits in intermunicipal collaborations

Intermunicipal collaboration is commonly viewed as a way for small municipalities to obtain economies of scale. Empirical research, however, indicates that large municipalities participate in such arrangements just as often as small ones. This is puzzling, as large municipalities probably have exhausted existing scale benefits and may even incur extra costs associated with collaboration. Using a panel dataset on collaboration on child protection services in Norway covering 13 years (2003–2019), we study whether costs and benefits associated with intermunicipal collaboration are asymmetrically distributed among municipalities of different sizes. Results indicate that smaller municipalities increase their capacity through collaboration but also experience cost increases. The largest municipalities experience no significant change in costs, but as they share existing resources with member municipalities, they also dilute their capacity to deliver services to citizens in their own jurisdiction.