When towns team up to manage their water systems to save money, they actually end up with more leaky pipes over time.
April 1, 2026
Original Paper
Does cooperation pay off over time? Evidence from water and wastewater services
SSRN · 6506942
The Takeaway
Intermunicipal cooperation is often promoted as the ultimate efficiency fix. However, this study found a trade-off: while it helps towns manage their budgets better, the focus on financial coordination leads to a measurable decay in actual technical maintenance and service quality.
From the abstract
Local governments around the world adopt governance arrangements, including intermunicipal cooperation (IMC), as strategies to improve water and wastewater services (WWS). This study examines whether involvement in IMC is associated with improved performance of WWS providers. Performance in financial outcomes, water coverage, wastewater coverage, and service quality is considered. The empirical analysis employs panel data regression models, using fixed-effects specifications as the baseline and