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Jurisdiction Size and Local Government Policy Expenditure: Assessing the Effect of Municipal Amalgamation

The American political science review, 2016-11, Vol.110 (4), p.812-831 [Peer Reviewed Journal]

Copyright © American Political Science Association 2016 ;American Political Science Association 2016 ;ISSN: 0003-0554 ;EISSN: 1537-5943 ;DOI: 10.1017/S0003055416000320 ;CODEN: APORBP

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  • Title:
    Jurisdiction Size and Local Government Policy Expenditure: Assessing the Effect of Municipal Amalgamation
  • Author: BLOM-HANSEN, JENS ; HOULBERG, KURT ; SERRITZLEW, SØREN ; TREISMAN, DANIEL
  • Subjects: Acquisitions & mergers ; Bias ; Cost control ; Economic reform ; Jurisdiction ; Local government ; Municipalities ; Policy making ; Public policy ; Public services ; Reforms ; Roads & highways ; School districts
  • Is Part Of: The American political science review, 2016-11, Vol.110 (4), p.812-831
  • 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.
  • Publisher: New York, USA: Cambridge University Press
  • Language: English
  • Identifier: ISSN: 0003-0554
    EISSN: 1537-5943
    DOI: 10.1017/S0003055416000320
    CODEN: APORBP
  • Source: ProQuest Central
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