|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?|
The legal forms of IMC in Western Europe vary greatly. Six broad categories of legal forms, in varying degrees depending on specific national circumstances and legislation, can be identified in Western Europe (Figure 1), to which must be added informal cooperation through a “handshake”. The less formalized form is the non-institutional form through a private law contract or public law agreement. The more formalized IMC takes place through the establishment of IMC institutions.
The legal form that IMC takes depends partly on the municipal functions performed. The joint performance of simple tasks with limited financial and legal implications (such as the joint organization of round tables or cultural events) requires very weakly formalized arrangements. Such cooperation in practice often takes the form of handshake agreements. Contractual forms under private or public law are often used for the joint management of functions (e.g. tax collection), including the delegation of a function to one of the local governments involved (e.g. maintenance of cadastre), and the buying and selling of services among local governments (e.g. internal audit).
The performance of more technical municipal functions such as the joint production of public utility services often involves institutionalized cooperation through the establishment of private law commercial companies or public law associations. Strategic functions such as joint planning and development as well as joint funding are often carried out through private law or public law associations. The most institutionalized form of IMC is the territorial public law entity combining a large number of technical and strategic functions, including joint planning and development, joint funding, joint administration and public service delivery. As indicated earlier, one of the advantages of IMC is that it is very flexible. As local governments become accustomed to working and interacting with one another and trust is built between them, the complexity of their joint task can increase and the forms of cooperation can evolve from informal or weakly formalized cooperation to highly formalized institutional cooperation.
Chart 1: Appropriate Legal forms of IMC
In general, two IMC models can be distinguished: the public law model and the private law model. Under the public law model the contractual and the institutionalized forms of IMC are regulated in some detail by public law. Public law regulates agreements for the joint management of functions or the delegation of functions by one municipality to another (e.g. esercizio associato di funzioni, or conventions, in Italy). Public law also regulates the institutionalized forms of IMC and generally envisages mandatory functions in certain areas and strong state supervision in both financial and legal matters.
Under the public law model, the responsibilities exercised by municipalities are clearly exclusive. The transfer of a responsibility to another municipality or to an IMC body automatically removes this responsibility from the transferring municipality. Box 4 shows the institutions regulated by public law in France. The private law model is based on the freedom of local authorities to pragmatically opt for the areas and forms of IMC based on the modalities and entities envisaged by this law, such as contracts, associations and commercial enterprises.
Box 4: The French public law IMC institutions
The law of 1890 authorized the creation of single-purpose municipal associations for the management of public utility services, called the syndicat intercommunal. In 1959, the law authorized multi-purpose associations. Currently, there are nearly 15,700 single- and multi-purpose associations in France.
Territorial public law entities were introduced by laws promulgated in 1968 and 1992, and widely expanded in 1999; 93 percent of the 36,682 French municipalities belong to a communauté (87.3 percent of the total population).
The French communautés have their own tax system. The CUs and the CAs have the exclusive benefit of the local business tax; the CCs can opt to either have exclusivity over the business tax or cumulate the business tax and the municipal tax.
In practice, both models co-exist in Western Europe. The public law model is favoured for its greater democratic legitimacy and is more common in countries such as France, Spain and Portugal where community-based forms of local government prevail. The private law model dominates in Norway or Sweden where there is greater focus on efficient public service delivery than direct accountability to the municipal council.
In countries where there is no specific legislative framework for IMC, municipalities have no choice but to establish it under private law. For instance, in Albania, the law allows IMC but does not regulate it. IMC for the production of public utility services therefore tends to take place through commercial companies. In Romania, many IMC activities formerly took place under the private law association legal form. The IMC legislation introduced in 2006 created public law Inter-Community Development Associations. As a result, many IMC private law associations changed their status to public law associations.
In many Western European countries, the traditional form of IMC is that of public law associations specifically focused on – but not only, depending on the country – the delivery of technical public utility services (water treatment and distribution or waste management) with the aim of reaping economies of scale. However, with the growth of urbanization and the appearance of city-regions, the need gradually emerged for different, more integrated and strategic forms of IMC concerned also with a wide variety of urban development issues such as economic development planning, spatial planning, housing policy, public transport and urban infrastructure development.
The French communautés are typical federative forms of IMC that closely resemble a new tier of local self-government. They have mandatory functions and the power to raise taxes, and decisions are taken by the majority of the IMC council rather than unanimity, as in the more traditional IMC associative forms. The equivalent institutions in the Netherlands, at least as far as the communautés urbaines are concerned, are the metropolitan regional corporations, which have a mix of mandatory and voluntary functions, and receive central government grants in a series of policy sectors.