Shared services in Brazilian local government: Urban development in small counties

Published date01 September 2019
AuthorHugo Consciência Silvestre,Brian Dollery,Rui Cunha Marques,Aldenisio Moraes Correia
Date01 September 2019
Shared services in Brazilian local government:
Urban development in small counties
Hugo Consciência Silvestre
| Rui Cunha Marques
| Brian Dollery
Aldenisio Moraes Correia
Department of Public Administration,
University for International Integration of the
Afro-Brazilian Lusophony, Brazil
IST (Faculty of Engineering, Science and
Technology), University of Lisbon, Lisbon,
School of Economics, University of New
England, Armidale, New South Wales,
Hugo Silvestre, Department of Public
Administration, Universidade da Integracao
Internacional da Lusofonia Afro-Brasileira,
Avenida da Abolição, 3 Centro, Redencao
62790-000, Brazil.
Funding information
Conselho Nacional de Desenvolvimento
Científico e Tecnológico, Grant/Award
Number: 426771/2018-4
In this article we break new ground by investigating cooperative
agreements in urban development services, which include urban
development, housing and sanitation for small local governments in
Brazil (i.e., those with fewer than 20,000 residents in 201315).
We find that public expenditure on urban development can be
explained by both horizontal (intermunicipal cooperation) and verti-
cal (publicpublic partnerships) cooperation. Regarding the impact
of public sector cooperation on public expenditure, our results
show that housing and sanitation services are less costly under
intermunicipal cooperation. By contrast, urban development ser-
vices are less costly when local authorities do not cooperate with
other public entities. For publicpublic partnerships (with the state
or federal government) cooperation leads to an increase in public
funding, which implies that cooperative agreements might not lead
to lower public expenditure. The findings in this article provide use-
ful empirical insights into the administrative reorganization of Bra-
zilian local government.
Initial enthusiasmfor private sector participationin public service provision (Pollitt1990; Pestoff et al. 2013) has given
way to scepticism over whether private firms generate the anticipated cost savings, given mixed empirical evidence
(Bel and Warner 2008;Bel et al. 2010). As a consequence, attentionhas focused on alternative arrangementsfor public
service delivery(Bel et al. 2018). In the realmof local government, cooperative relationshipsbetween public sector enti-
ties have come to prominence, including intermunicipal cooperation(IMC) and publicpublic partnerships(PuP), among
others (Hefetzet al. 2012; Agranoff 2014; Beland Gradus 2018; Bel et al. 2018; Silvestre et al. 2018).
The assumption underlying this approach is that public spending reductions can be achieved through shared ser-
vices between public entities, especially due to economies of scale (Marques and De Witte 2011; Da Cruz and Mar-
ques 2012). However, whether this assumption is valid is obviously an empirical question (Provan and Milward 2001,
p. 415). The existing studies are promising. For example, Bel et al. (2018) and Bel and Warner (2008) report cost sav-
ings for cooperative agreements involving small local counties through scale economies. Similarly, Zafra-Gómez et al.
(2013) found much the same in their analysis of small and medium-sized Spanish local governments. Ferraresi et al.
(2018) have established the same positive results for the Emilia Romagna Region in Italy. However, Frère et al.
Received: 13 August 2018 Revised: 26 December 2018 Accepted: 3 March 2019
DOI: 10.1111/padm.12593
686 © 2019 John Wiley & Sons Ltd Public Administration. 2019;97:686702.
(2014) could find no significant relationship between intermunicipal cooperation and public expenditure in French
local government. It is thus clear that further work is necessary (Bel and Warner 2015, 2016; Blåka 2017; Bel and
Gradus 2018). The current study attempts to address this need by analysing whether public entity cooperation is an
effective mechanism to lower public expenditure on service provision in Brazilian local government.
The majority of the studies on public sector cooperation have been carried out on developed countries. For
instance, in the United States numerous studies have considered the factors which motivate cooperation (see, for
example, Feiock 2007), a tradition that has been followed by Brazilian scholars, including Abrúcio et al. (2013) and
Abrúcio et al. (2010). Similarly, European studies have focused on the economic outcomes of cooperative agreements
(Ferro and Sorrentino 2010; Bel and Warner 2015, 2016), predominantly in terms of waste management. Little work
has been undertaken on other services apart from waste (Blåka 2017; Allers and De Greef 2018).
This article seeks to addresstwo gaps in the extant empirical literatureby (a) examining public cooperation in local
government in a developing country context (as opposed to the existing emphasis on developed countries) and
(b) breaking new ground by focusing on urban development services in Brazilian local government.
Studies on inter-
municipal cooperation in Brazil have hitherto focused largely on health services (Abrúci o and Sano 2013), while the pre-
sent studyincludes urban development, housingand sanitation services. In addition, little isknown about the interaction
between local government services and public funding. This will be addressed in this study since urban development,
housing andsanitation will be analysed concomitantly for the period2013 to 2015. Small local governments havebeen
selected as the primary unit ofanalysis since policy implementationis a major local governmentresponsibility (Agranoff
2014) andfew studies have examinedpublic cooperativeagreements and public funding(Blaeschke and Haug 2018).
The article is divided into six main parts. Section 2 briefly considers the corpus of scholarly work on public sector
networks in general and intermunicipal agreements in particular. Section 3 outlines the institutional background to
intermunicipal cooperation and publicpublic partnerships in Brazilian local government. The empirical strategy
employed in the article is described in section 4, while the results of the empirical analysis are considered in
section 5. The article ends with some brief concluding remarks in section 6.
In the latter part of the twentieth century, economic pressures led to extensive changes in public administration,
involving privatization, contracting-out and other market-orientated arrangements in order to tackle inefficient public
sector organizations (Osborne 2006, 2010). However, in many respects these changes did not accomplish their
intended aims (Bel et al. 2010). More recently, cooperation has emerged as an alternative solution to solving prob-
lems with public service provision.
Cooperation has been classified in several ways, including partnerships and alliances (Milward and Provan 2003),
to encompass the involvement of several actors to solve specific problems. Successful cooperation requires the shar-
ing of goals and trust between partners (Morse 2011), as well as risks and costs (Conteh 2013), characteristic of New
Public Governance (NPG) (Rhodes 2016). Provan and Milward (2001) have identified three major levels for network
analysis: the community, linking policy-making between principals and clients; the network, where principals and
agents negotiate the costs of the service; and the organization/participant level, involving agents and clients. Cooper-
ation often involves public partners as well as their private firm counterparts, sometimes termed joined-up gover-
nance since pubic bodies cooperate with different stakeholders (Pollitt 2003).
Intermunicipal cooperation and publicpublic partnerships for local service delivery represent a subset of this
genre of public service provision. From a local government perspective, Warner and Hefetz (2003) have identified
intermunicipal cooperation as a kind of horizontal partnership, whereas Silvestre et al. (2018) have classified local
Municipal law defines urban areas as those within the urban perimeter of a city or town, which can be classified as urbanized, non-
urbanized and/or isolated. Rural households are those to be found outside urban perimeters (IBGE 2010a).

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