Swedish local governments participate in different forms of intermunicipal cooperation in particular policy fields to achieve benefits of scale. This is often thought to improve efficiency and/or facilitate recruitment of experts and other competent personnel, aspects which are considered deficient in many municipalities as a consequence of demographical changes. Intermunicipal cooperation has become a widely used measure to face these challenges.However, there is little empirical evidence supporting that benefits of scale are realized – and the many forms of cooperation municipalities participate in is considered to affect local governments’ democratic anchorage negatively due to the principal-agent problem that arises. In this essay the effects of intermunicipal cooperation have been studied in an explorative way, with both quantitative and qualitative methods. Firstly, the effects on efficiency and need of additional personnel are examined with descriptive statistics from local government environmental inspection (food safety). Secondly, interviews have been conducted with local politicians and local government head officials exploring how the democratic deficit arising from intermunicipal cooperation is perceived from a transaction cost perspective. The interviewees represent a total of four municipalities (medium or small sized), two of which engage in a joint committee in local government environmental authority (which includes food control), the other two engage in a joint administration in the same policy field.The findings from the descriptive statistical analysis does not give solid evidence of improved efficiency or improved organizational competencies. However, the interviewees percieve these aspects as improved by intermunicipal cooperation. The findings from the qualitative approach is that the democratic deficit is perceived as problematic by the local politicians, but that several circumstances influence how problematic it really is. If the municipality needs cooperation to function, and the cooperation delivers satisfactory service, the principal-agent problem is more likely to be tolerated by the principal i.e. the citizens. Other factors seem to matter as well, factors such as: which policy field the cooperation is conducted, if the service is kept in the municipality’s vicinity, and if there is trust between the cooperating municipalities.