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Title page 1

Contents 7

Foreword 4

Acknowledgements 6

Executive summary 10

1. Why engage in inter-municipal co-operation: drivers, benefits and challenges 12

1.1. Introduction 13

1.2. Policy options to address municipal capacity and scale challenges 13

1.3. Inter-municipal co-operation: a pragmatic and flexible option to respond to both shrinking and growing areas 21

1.4. Inter-municipal co-operation is a widespread tool in OECD countries, taking different forms according to countries' traditions and local needs 27

1.5. The benefits and challenges of inter-municipal co-operation 35

References 44

Notes 51

2. How to implement effective inter-municipal co-operation: setting the right policy frameworks 52

2.1. Introduction 53

2.2. Enabling conditions for inter-municipal co-operation 54

2.3. Setting an enabling legal framework 59

2.4. Setting the appropriate institutional framework 65

2.5. Setting a solid fiscal framework 82

References 97

3. Country Snapshots of inter-municipal co-operation frameworks in OECD countries and selected accession countries 102

Introduction 103

Australia 103

Austria 104

Belgium 105

Brazil 105

Bulgaria 106

Canada 107

Chile 108

Colombia 109

Costa Rica 110

Croatia 111

Czechia 112

Denmark 113

Estonia 114

Finland 115

France 116

Germany 117

Greece 118

Hungary 119

Iceland 120

Ireland 121

Israel 122

Italy 123

Japan 124

Korea 125

Latvia 126

Lithuania 127

Luxembourg 128

Mexico 128

Netherlands 130

New Zealand 131

Norway 131

Peru 133

Poland 133

Portugal 135

Romania 136

Slovak Republic 137

Slovenia 138

Spain 139

Sweden 140

Switzerland 141

Türkiye 142

United Kingdom 143

United States 145

References 146

Tables 9

Table 1.1. Areas in which inter-municipal co-operation is frequently used 34

Table 1.2. Main categories of benefits of inter-municipal co-operation 35

Table 1.3. Main categories of challenges in inter-municipal co-operation 41

Table 2.1. Examples of legislation on inter-municipal co-operation 62

Table 2.2. Mandatory and optional competences by category of inter-municipal structures (EPCI with own-source taxation) 68

Table 2.3. The main forms of inter-municipal contractual arrangements applied in Finland until 2023 70

Table 2.4. Selected examples of inter-municipal co-operation public law bodies in OECD and accession countries 73

Table 2.5. Possible cost-sharing models for shared-service provision 91

Table 2.6. Different types of revenue for inter-municipal co-operation bodies in Italy 94

Figures 8

Figure 1.1. Average and median municipal sizes in the OECD and EU, 2025 14

Figure 1.2. Municipalities by population class size in the OECD and EU, 2025 15

Figure 1.3. Municipal mergers in OECD countries (2005-25) 17

Figure 1.4. Three main types of asymmetric decentralisation 21

Figure 1.5. A wide diversity of inter-municipal co-operation arrangements in OECD countries from the softest to the strongest forms of integration 28

Figure 2.1. Core pillars of an effective inter-municipal co-operation policy framework 53

Figure 2.2. Number of associations of municipalities (mancomunidades) in Spain (2024) 76

Figure 2.3. Unions of municipalities (Unioni di Comuni) are very uneven across Italian regions 77

Figure 2.4. Financial incentives for inter-municipal co-operation 83

Figure 2.5. Incentives for inter-jurisdictional co-ordination 83

Figure 2.6. Main sources of funding and financing for inter-municipal co-operation 90

Boxes 9

Box 1.1. Municipal mergers in OECD countries 17

Box 1.2. Municipal amalgamations often face strong resistance 18

Box 1.3. Asymmetric decentralisation 20

Box 1.4. Demographic change and inter-municipal co-operation: Insights from recent OECD-EC policy initiatives 22

Box 1.5. Shared service centres: new pilots in Poland and Slovakia 23

Box 1.6. Inter-municipal co-operation as a pathway to effective metropolitan governance 24

Box 1.7. Recent urban and metropolitan governance reforms fostering inter-municipal co-operation 26

Box 1.8. Inter-municipal co-operation is mostly voluntary, but sometimes required 29

Box 1.9. The timeline of inter-municipal co-operation in France 31

Box 1.10. Intermunicipal co-operation in Spain combines national and regional arrangements 32

Box 1.11. Supporting inter-municipal co-operation for sustainability: Green Communities in Italy 33

Box 1.12. Rural Growth Agreements in Norway: piloting inter-municipal co-operation through multi-level governance 37

Box 1.13. Why inter-municipal co-operation matters for spatial planning 39

Box 2.1. Examples of tools to enhance transparency for citizens and democratic accountability in France 55

Box 2.2. The definition of functional and inter-municipal co-operation areas 56

Box 2.3. Municipal data on service costs and use in Nordic countries 58

Box 2.4. Piloting inter-municipal co-operation in Tauragė+ functional zone, Lithuania 64

Box 2.5. Delegated responsibilities to EPCIs in France 68

Box 2.6. Shared services arrangements: the Irish example 69

Box 2.7. Inter-municipal companies: balancing public purpose and market competition 72

Box 2.8. Recent reforms strengthening inter-municipal co-operation 74

Box 2.9. Uneven inter-municipal co-operation development reflects differing regional support and engagement 76

Box 2.10. Intergovernmental contracts to foster a co-operation culture in OECD countries 77

Box 2.11. Platform to support the new "Communities of Municipalities" in Czechia 78

Box 2.12. Government support and capacity-building for inter-municipal co-operation: Poland example 80

Box 2.13. Examples of financial incentives for inter-municipal co-operation 84

Box 2.14. Inter-municipal co-operation through place-based strategies in Italy: the National Strategy for Inner Areas (SNAI) 85

Box 2.15. EU instruments to foster municipal co-operation culture and practices 86

Box 2.16. Centrality and capital costs in urban areas: policy watch for Spain 88

Box 2.17. Intra-EPCI solidarity mechanisms in France 89

Box 2.18. France: a comprehensive grant system for EPCIs 93

Box 2.19. Borrowing and bond issuance by French EPCIs 95