Intermunicipal Cooperation in Metropolitan Regions in Brazil and Mexico: Does Federalism Matter?

By Oliver D. Meza (CIDE), Eduardo José Grin (Getulio Vargas Foundation), Antônio Sérgio Fernandes (Federal University of Bahia), and Fernando Luiz Abrucio (Fundação Getúlio Vargas)

Metropolises, not states, are the ones capable of saving the world from its most pernicious problems. This common theme is frequently present in the rhetoric of multi-national organizations echoed in newspapers’ headlines. Clearly, cities and metropolitan regions have advantages over other levels of governments in terms of their proximity and policy tools to face problems such as water shortage, waste management, human security, housing, urban mobility, among others. For most countries, especially in the developing world, these topics present formidable challenges into reaching sustainable models of livelihood due to the lack of intermunicipal cooperation. The real question is whether metropolitan regions are actually capable of cooperating to address these and other problems independent to the surrounding institutional context. Metropolitan regions are embodied in a political and administrative context, largely shaped by supra-local levels of government.

In our recent paper in Urban Affairs Review we explore how federalist arrangements can affect the way metropolitan regions succeed to address common public problems. A comparison between two federalist systems, Mexican and the Brazilian, yields an interesting setting as to understand how intermunicipal cooperation could be affected within metropolitan regions. While both countries share nominally the same political system, we uncover nuances in the way these two systems were historically developed and consolidated, now presenting key differences that explain why in Brazil, for instance, metropolitan intermunicipal cooperation flourishes more with respect to its Mexican counterparts. Uncovering why this happens, is something especially important if we are placing our hopes in metropolitan regions to save the world.

In our study we found that classic theoretical insights that have explained intermunicipal cooperation elsewhere, were relatively more efficient to explain Mexico’s intermunicipal level of cooperation than Brazil’s. However, Brazilian metropolitan municipalities account for far more cooperation than the levels seen in Mexico. While in Brazil, virtually all metropolitan municipalities participate in some cooperation agreement, but only 12% of Mexico’s metropolitan municipalities engage in these kinds of schemes. How can this be explained? This somewhat paradox is what we sought to uncover.

We found five distinctions across the two countries’ federalist systems, which might provide some explanation. First, Brazil is a unique case of three-tier federalism, in that, differently from other federalist countries (e.g. the two-tier federalism of Mexico), municipalities constitutionally enjoy greater political, legal, administrative, and budgetary autonomy. In contrast, Mexican municipalities require state level legislatures to issue their own fiscal appropriation laws. Second, since 2000, Brazilian mayors are allowed to seek reelection for a second four-year term of office, unlike their Mexican counterparts where, at the time period analyzed, reelection was not possible. Third, the policy decentralization process has clearly shaped Brazil’s municipal agenda since the new Federal Constitution was adopted in 1988. The charter established common competences for central government, states, and municipalities; more importantly, it established sources of revenue, thus halting federal discretion in policy-making. As for the Mexican case, the Federal Constitution provides for a municipal policy agenda, but the decentralization process was highly affected as the federalist agenda informally shaped and controlled local policy agendas throughout federal fiscal transfers, partisan interests, and state legislative reforms. Fourth, clear constitutional and legal basis to protect intermunicipal cooperation exist in Brazil, different to what is seen in Mexico. Finally, Brazil has a constitutional framework that provides for the establishment of metropolitan regions delegating to the state governments the mandate to implement them. The Brazilian functional decentralization expanded rapidly in an attempt to overcome the federal concentration of power carried out by the military regime in 1985. In Mexico, a number of state laws regulate metropolitan regions, mostly enacted after the natural formation of metropolitan cities as a result of conurbation and interdependence between neighboring cities.

Evidence suggests that context matters, and in the case of metropolitan regions’ intermunicipal cooperation, federalist nuances explain why the phenomena in Mexico is far weaker than in Brazil. Metropolitan cooperation in Mexico greatly rests on municipalities’ characteristics. Inter-municipal cooperation affected by inter-local heterogeneity imposes higher transaction cost when dealing with other municipalities to cooperate. Also, party alternation in Mexico increases difficulties to engage in cooperation as it may diminish the incentives to incur in costly longer-term agreements. Finally, local bureaucracy’s capacity affects too the chances in reaching intermunicipal cooperation within metropolitan regions.

In stark contrast, Brazilian metropolitan cooperation is supported by other federalist institutions that Mexico is currently lacking. These other institutions help localities to maintain low transaction costs when making cooperation agreements. Not only because a well-defined legal regime exists in Brazil to support intermunicipal cooperation, and because the metropolitan regime is a state-level attribution, but also because policy attributions are clearly established between levels of government which reduces the burden and resource-drainage seen in bargaining-policy-making-style depicted in vertical intergovernmental relations (between municipality, states and federal government).

In sum, if the literature suggests that stronger local governments are a necessary condition to improve metropolitan governance, the evidence reported in this paper highlights the importance of constitutional level variables. These among other factors are discussed in the paper, however it opens a wider research agenda on the topic that scholars have just recently begun to explore. If metropolitan regions are called out to save the world, we shall account for all these other supra-local factors affecting the performance of intra-metropolitan cooperation schemes.

Read the UAR article here.

Photo by Bhargava Marripati on Unsplash

Author Biographies

Oliver D. Meza is a research-professor in the public administration division at the Center for Teaching and Research in Economics (CIDE) in Mexico. His research interests include local government’s policy agendas, implementation of local policies, and institutional arrangements of local policy-making.

Eduardo José Grin is professor and researcher at the Getulio Vargas Foundation in Brazil. His main lines of research revolves around structure and transformation of the state, local power studies, federalism and intergovernmental relations, government policy and planning, and public policy.

Antônio Sérgio Fernandes is an associate professor and researcher at the Post-Graduation Program in Administration at the School of Administration of the Federal University of Bahia (NPGA/EA-UFBA). His area of work in research is public administration, with a theoretical-methodological focus in institutional analysis and comparative studies, metropolitan management, social capital, citizenship, local power, and municipal management.

Fernando Luiz Abrucio is a professor and head of department of public administration of Fundação Getúlio Vargas. His research topics are in the areas of political science, public administration, public policy, and comparative politics, with emphasis on issues related to education, intergovernmental relations, and federalism, as well as on state reform and public management.

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