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Politics in Coalition Formation of Local Governments

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  • Tuukka Saarimaa
  • Janne Tukiainen

Abstract

We 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 Info

Paper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0102.

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Date of creation: Mar 2012
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Handle: RePEc:cep:sercdp:0102

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Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp

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Keywords: Coalition formation; local politics; choice based sampling;

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Cited by:
  1. Janne Tukiainen & Tuukka Saarimaa & Hyytinen & Ari, 2013. "Seat competitiveness and redistricting: Evidence from voting on municipal mergers," Working Papers 38, Government Institute for Economic Research Finland (VATT).

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