Italy has traditionally been a centralist state in which the central government rules strategic functions such as education and universities, research, defense, public security and policing, economic development, public works, foreign affairs, labour and employment, arts and culture, transportation and agriculture. In the 1970s, new regional institutions were created, and Italy now has 20 regional governments, in addition to the central government, whose competences and resources were widened in the 1990s. Today, Italy's regional governments have law-making powers in the domains of health and social services, land use planning, regional and urban transport, fairs, the manufacturing sector, housing, tourism and regional economic development.
In each region, there are another two levels of local government, namely provinces and municipalities. There are 110 provinces, which are in charge of functions such as local viability, public works, professional education, the environment and pollution, fishing and hunting. Further, 8,092 municipalities manage citizen-relevant functions such as registries, libraries, cemeteries, electricity, parks and recreation, urban policing, civil protection, Waste management, education, social and public works, City planning and traffic.
With the aim of reducing public expenditure, in Legislative Decree no. 95/2012 (LD hereafter), which has since been converted into Law no. 135/2012, the Italian government passed a 'spending review' for small municipalities. The LD covers all Italian municipalities below 5,000 inhabitants (3,000 people if they belong to mountain townships), managing nine relevant services and functions through unioni of municipalities or inter-local service agreements. The services and functions are clustered as follows:
Organisation, administration, accounting, finance and control;
City planning and public works, civil protection;
Social services and welfare;
Vital records and information services office, electoral Vital records and information services and services, demographic statistics.
The LD set the minimum period for the agreements to be three years. At least three services had to be joined by 1 January 2013 and the remaining by 1 January 2014. In November 2013, this deadline was put back to 31 December 2014. Against this background, this paper explores the state-of-the-art of the Italian administrative reform, which encourages all small municipalities to develop an inter-local service agreement or to join a unione of municipalities. In order to analyse this reform, we adopt an empirical approach by surveying 136 small municipalities.
PROBLEM STATEMENT AND RESEARCH QUESTION
As introduced above, Italy shows a typical centralised system of governance, but this is articulated in a great number of local governments, which often leads to the duplication of functions, inefficiency, Waste management and unnecessary bureaucracy. Of the 8,092 Italian municipalities, 70.2% are small municipalities (those that have fewer than 5,000 inhabitants), accounting for 10,358,869 inhabitants of the almost 60 million national population (Italian Institution of Statistics, 2012). Altogether, 1,948 municipalities have a population of fewer than 1,000 inhabitants; 2,131 municipalities have a population ranging from 1,001 to 2,500 inhabitants; 1,604 municipalities have a population ranging from 2,501 to 5,000 inhabitants; and 2,409 municipalities have more than 5,000 inhabitants. This fragmented situation contributes to the Italian public debt, which has recently exceeded 2,000 billion euros. It is thus clearly time for serious reflection on the equilibrium and sustainability of public expenditure.
This reflection involves rethinking the organisation of public administration by discussing new paradigms, promoting collaboration among small municipalities and strong economies of scale and scope in public expenditure, involving all citizens in a new partnership that respects the traditions, heritage and history of the population and complying with the prevailing fiscal and financial constraints (Feiock, 2002; Fleischmann, 2000; Goetz & Kayser, 1993; Gordon, 2007). To do this, the LD provides a possible solution for small municipalities through their inter-local service agreements, which are deals signed between two or more municipalities in order to share human, technical and financial resources to provide and manage services for their citizens that otherwise would not be supplied or would be unsustainable.
The unione of municipalities is a second-level local government covered by Legislative Decree no. 267/2000. It is established by two or more municipalities that devolve certain functions and services and relative resources to the unione, with the aim of developing economies of scale and scope. The unione has an autonomy statute, which implies that the ownership of the transferred functions and services is held by the unione and no longer by the municipality. This distinction is the main difference to inter-local agreements, where the ownership of the service remains with the municipality. In addition, while interlocal agreements do not imply any kinds of governance structures, the unione has a president and a council composed of councillors from the involved municipalities. However, successful collaboration can be developed only when competitive perceptions and motivations are overcome. Hence, our research addresses one main question; how are small municipalities facing the change imposed by the LD? How successful or effective is this reorganisation? To answer this relevant question, we survey a sample of 136 small municipalities.
Collaborative public management (Bingham, O'Leary, & Carlson, 2008; Osborne, 2010) is becoming a dominant framework of analysis for public administration (Morse, 2011). It encompasses extensive studies of networks, partnerships and third-party governments as well as democratic governance and citizen and stakeholder engagement (Stoker, 2006). In the context of such studies, inter-local cooperation through service-sharing agreements has increased in popularity during the past 10 years in response to changing environments and fiscal conditions (LeRoux & Carr, 2007). Coordination and cooperation in service delivery responsibilities among local government units can provide a solution to overcome these issues (McGinnis, 1999), thus developing economies of scale and internalising positive and negative externalities (Feiock, 2007).
According to Kwon and Feiock (2010), local government decisions to collaborate through intergovernmental service agreements can be realised through a two-stage process. In the first stage, the municipalities decide whether to cooperate with other parts of local government, searching for better services and efficiency gains that can result from service cooperation (Carr, Gerber, & Lupher, 2009; Collins, 2006). Empirical work suggests that potential gains from collaboration depend on a number of factors including population, population density, the...