Politics in Coalition Formation of Local Governments
AbstractWe analyze empirically the coalition formation of local governments using a novel reduced form econometric procedure that allows for multi-partner mergers. Using Finnish municipal merger data where mergers were decided independently at the local level, we find that merger decisions are largely in line with voter preferences. Most importantly, mergers are clearly less likely when the distance of the median voter to the coalition centre is large. However, councillors seem also to prefer mergers where post-merger political competition is lower which indicates a concern for re-election. Interestingly, municipalities do not seem to be seeking economies of scale through merging. This is possibly due to existing cooperation in service production which we find to be a strong predictor of merging.
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Bibliographic InfoPaper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0102.
Date of creation: Mar 2012
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Coalition formation; local politics; choice based sampling;
Find related papers by JEL classification:
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-14 (All new papers)
- NEP-CDM-2012-03-14 (Collective Decision-Making)
- NEP-POL-2012-03-14 (Positive Political Economics)
- NEP-URE-2012-03-14 (Urban & Real Estate Economics)
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