In Switzerland, the ongoing reforms of fiscal federalism put municipalities under increased fiscal stress. A majority of the municipalities had responded by increasing the cooperation with neighbouring municipalities over the last few years. Simultaneously, many discuss or are directly involved in a possible amalgamation project. Accordingly, the paper aimed at describing how cooperation has presently developed between Swiss municipalities, in order to illustrate the existing trend towards amalgamation. Current surveys helped us estimate the growing importance of inter-municipal arrangements together with the surge of amalgamations. A further goal was to investigate if cantonal financial incentives to municipal amalgamation essentially benefit the cantonal community, following the fiscal equivalence principle, or if they rather benefit amalgamating municipalities. In reality, equivalence does not exist. However, this may possibly be the
condition to reduce inequality among amalgamating municipalities.