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Jurisdiction size and local government policy expenditure: Assessing the effect of municipal amalgamation

American Political Science Review, ISSN: 1537-5943, Vol: 110, Issue: 4, Page: 812-831
2016
  • 181
    Citations
  • 0
    Usage
  • 127
    Captures
  • 0
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    181
    • Citation Indexes
      147
    • Policy Citations
      34
      • 34
  • Captures
    127

Article Description

Across the developed world, the last 50 years have seen a dramatic wave of municipal mergers, often motivated by a quest for economies of scale. Re-examining the theoretical arguments invoked to justify these reforms, we find that, in fact, there is no compelling reason to expect them to yield net gains. Potential savings in, for example, administrative costs are likely to be offset by opposite effects for other domains. Past attempts at empirical assessment have been bedeviled by endogeneity - which municipalities amalgamate is typically nonrandom - creating a danger of bias. We exploit the particular characteristics of a recent Danish reform to provide more credible difference-in-differences estimates of the effect of mergers. The result turns out to be null: cost savings in some areas were offset by deterioration in others, while for most public services jurisdiction size did not matter at all. Given significant transition costs, the finding raises questions about the rationale behind a global movement that has already restructured local government on almost all continents.

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