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The purpose of this paper is to assess the effects of intermunicipal fiscal cooperation on municipal public spending, based on the French experience. A model of municipal spending choice is estimated using panel data and spatial econometrics for municipalities over the period 1994–2003. Two main results are provided. First, intermunicipal cooperation has no significant impact on the level of municipal public spending, which suggests that cooperation does not achieve its goal of reducing municipal spending by the sharing of local responsibilities. Second, there are no spending interactions between municipalities belonging to the same intermunicipal community. This is in line with the goal assigned to cooperation in terms of internalisation of spatial externalities. However, the results show that benefit spillovers remain highly significant outside intermunicipal communities. [ABSTRACT FROM PUBLISHER]

Abstract: Economic base (or export‐base) theory (EBT) is often presented as a Keynesian‐inspired theory that only accounts for demand‐side factors. However, the recent integration of supply‐side factors into economic base models (EBMs) can contribute to renewing applications of this type of model in regional economics. This paper proposes a literature review focused on new EBMs that explicitly take into account supply effects and includes both North American and European studies. It first explains why integrating supply‐side factors is relevant for EBMs. Second, the paper shows how to integrate these supply‐side factors into the various types of models, focusing on two production factors: land and its amenities and labor. Third, the paper discusses the conditions for integrating such supply‐side factors into EBMs. [ABSTRACT FROM AUTHOR]