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Inter-municipal cooperation in France involved more than 80% of municipalities and inhabitants in 2006. There is a wide choice of legal and financial options for cooperation but their impact on municipal spending behavior is controversial, hence this study. We provide two results. First, the theoretical properties of the demand function in municipal services conditional on inter-municipal services differ significantly according to the financial options. Second, the estimation of the municipal-spending model in 2001 suggests that spending behavior is heterogeneous but also,contrary to expectations,that reductions in municipal spending are much smaller than increases in inter-municipal spending. As a result, cooperation has raised total public spending by local government in France.