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What are the benefits of IMC?

From Municipal Cooperation

Understanding IMC
When is IMC relevant?
What are the different areas of IMC?
What are the benefits of IMC?
How many municipal functions can be performed under IMC?
How many municipalities can be involved in IMC?
What are the different possible legislative contexts for IMC?
What are the most common legal forms of IMC in Western Europe?
How is IMC financed?
What are the potential negative side effects of IMC?

IMC is not an end in itself: it aims at achieving a more efficient and effective performance of municipal functions through cooperation. The main benefits of IMC include:

  • sharing administrative overheads for the performance of administrative tasks and services;
  • reducing unit costs and improving public service quality through the achievement of economies of scale and access to more advanced technology;
  • achieving minimum economic size that justifies the production of a service;
  • providing the same level of quality of services across several municipalities;
  • addressing situations when citizens live in a municipality where they pay their taxes but benefit from the services provided by another (spill-over effects or externalities);
  • enhancing economic, social and environmental protection performance through coordinated planning;
  • attracting investment funds from public, private or donor sources reserved for – or economically justifiable for – projects of a specified minimum size (Box 1).



Box 1: Attracting EU funds in Eastern Europe

An important benefit of IMC that is particularly relevant to the countries of Eastern Europe is that it can help municipalities access EU funding for projects in the area of infrastructure or public utilities such as water supply and waste management. The EU Instrument for Pre-accession Assistance (IPA) Funds for the candidate/potential candidate countries and the EU Structural Funds for the EU member states often require either a minimum project size, which cannot be achieved individually by a small municipality, or explicitly seek to stimulate joint projects between groups of municipalities. Also, EU funding often requires co-financing from the beneficiaries. By formulating a joint project and pooling their resources and capacities, municipalities can meet the above criteria.

IMC also has several potential positive side effects:

  • IMC encourages consultation, compromise, evaluation of performance, and generally promotes a culture of organizational cooperation and the building of trust.
  • IMC optimizes the use of knowledge and know-how of the partnering municipalities.
  • IMC encourages a focus on real problems beyond political divides.
  • IMC may positively influence the management practices of the partners who may replicate the more sophisticated procedures of the IMC institution.
  • IMC may create space for greater interactions with civil society actors such as NGOs, business associations and a variety of civic associations.

The benefits of IMC are interrelated, and in practice, there is rarely only one reason to engage in cooperation. The benefits derived from IMC can take several forms depending on the category of municipal functions. Table 1 gives specific examples of the benefits of IMC for different municipal functions.


Table 1: The benefits of IMC for different municipal functions

Municipal function Benefits of IMC
Municipal administration
Human resource management Sharing staff costs for issuing payrolls which is a routine municipal task
Electronic data processing Reduction of the costs of hardware, software and skilled personnel
Procurement of equipment Better prices obtained for equipment, furniture or services through joint procurement
Tax collection Savings on staff and equipment costs

Hiring of more qualified and expensive employees Increase in tax revenue

Socio-economic development
Development planning Complementarities and synergies, and more effective results achieved through joint planning and coordinated actions
Urban planning Coherent urban planning

(which sometimes leads to the establishment of a joint urban planning office)

Business development (establishment of a business support centre for instance) A minimum population size that makes the establishment of a business support centre worthwhile

Joint financing of the establishment of the centre The joint organization of business training courses Shared overhead costs of the centre

Environment protection Coordination of actions related to addressing issues concerning the pollution of a river that crosses several municipalities
Infrastructure and public services
Waste collection and disposal Joint organization of garbage collection to enable full use of equipment (trucks)

Shared cost of garbage collection trucks Joint landfill or garbage treatment plant established in order to save on investment costs, land and overhead management costs

Water distribution and sewage Joint funding of investment

Reduced unit cost of water distribution and sewage by optimizing service catchment areas Grants obtained from the government, donors Private investment attracted by reaching a minimum economic size

Provision of public transport Rationalization and cost-effectiveness of the public transport system

(larger public transport systems can attract private contractor interest more easily and offer scope for more modern management and operational structures.)

Health, education and culture
Hospital Shared costs, which can make higher levels of professional skills and better technologies (medical equipment) more affordable
Kindergartens and schools Reduction in the per capita expenses of building and running a kindergarten

Affordability of a higher level of education for rural municipalities Prevented closure of classes due to a lack of pupils A better contract for the school bus service

Sport infrastructure and activities Savings on joint building and maintenance of a swimming pool or a stadium
Infrastructure
Road construction and maintenance The socio-economic region used as basis for road planning and construction

Shared costs of equipment and staff for road maintenance

Public order and civil protection
Fire brigade and rescue services Shared costs of expensive modern equipment

Shared staff costs Improved service quality through the use of modern technology

Regulation
Traffic Harmonization of traffic regulations

(which sometimes leads to the establishment of a joint police force)