University / Organisation : Université de Lorraine

Paper or project ? paper

Title : Does inter-municipal cooperation increase prices? An analysis of the French drinking water sector

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Abstract : The provision of drinking water has become a central concern for public authorities due to climate change, prompting policymakers to reevaluate their approach to this semi-renewable resource. In this paper, we identify factors explaining intermunicipal cooperation and assess the impact of this organizational choice on performance. Using a comprehensive panel dataset comprising all French drinking water providers from 2008 to 2021, we identify the determinants of the price of drinking water as municipalities deliberate between autonomous management and collaborative endeavors within community frameworks. Our empirical findings reveal a selection bias in the estimation of price equations. Prices paid within the framework of intermunicipal cooperation exceed those under municipal management, and this difference in performance can be explained by preexisting strengths and weaknesses of the drinking water provider.