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Municipal Consolidation and Local Government Behavior: Evidence from Japanese Voting Data on Merger Referenda

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  • Miyazaki, Takeshi
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    Abstract

    The empirical literature investigating the role of key features of local governments regarding decisions on consolidation tends to use a dummy that takes 1 if adjacent local governments decide to merge. Under the estimation method, it is difficult to identify which governments have no incentive to merge. The current study presents an empirical test of decision on consolidation using voting data from Japanese local referenda that distinctively identify the preferences of specific individual municipalities. I find evidence that municipalities that could enjoy large economies of scale from a merger prefer consolidation, and large and small municipalities are likely to merge.

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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/25675/1/DP588.pdf
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    Bibliographic Info

    Paper provided by Institute of Economic Research, Hitotsubashi University in its series Discussion Paper Series with number 588.

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    Length: 32, [12] p.
    Date of creation: May 2013
    Date of revision:
    Handle: RePEc:hit:hituec:588

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    Keywords: Boundary reform; economics of scale; local referenda; median voter model; municipal consolidation;

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    1. Tyrefors Hinnerich, Björn, 2009. "Do merging local governments free ride on their counterparts when facing boundary reform?," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 721-728, June.
    2. Gordon, Nora & Knight, Brian, 2009. "A spatial merger estimator with an application to school district consolidation," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 752-765, June.
    3. Poirier, Dale J., 1980. "Partial observability in bivariate probit models," Journal of Econometrics, Elsevier, vol. 12(2), pages 209-217, February.
    4. Bolton, Patrick & Roland, Gerard, 1997. "The Breakup of Nations: A Political Economy Analysis," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1057-90, November.
    5. Lockwood, Ben, 2002. "Distributive Politics and the Costs of Centralization," Review of Economic Studies, Wiley Blackwell, vol. 69(2), pages 313-37, April.
    6. Anna Brink, 2004. "The break-up of municipalities: Voting behavior in local referenda," Economics of Governance, Springer, vol. 5(2), pages 119-135, 07.
    7. Johansson, Eva, 1999. "Intergovernmental Grants as a Tactical Instrument: Some Empirical Evidence from Swedish Municipalities," Working Paper Series 1999:10, Uppsala University, Department of Economics.
    8. Ellingsen, Tore, 1998. "Externalities vs internalities: a model of political integration," Journal of Public Economics, Elsevier, vol. 68(2), pages 251-268, May.
    9. Brasington, David M., 1999. "Joint provision of public goods: the consolidation of school districts," Journal of Public Economics, Elsevier, vol. 73(3), pages 373-393, September.
    10. Bolton, Patrick & Roland, Gerard, 1996. "Distributional Conflicts, Factor Mobility, and Political Integration," American Economic Review, American Economic Association, vol. 86(2), pages 99-104, May.
    11. Dur, Robert & Staal, Klaas, 2008. "Local public good provision, municipal consolidation, and national transfers," Regional Science and Urban Economics, Elsevier, vol. 38(2), pages 160-173, March.
    12. Austin, D. Andrew, 1999. "Politics vs Economics: Evidence from Municipal Annexation," Journal of Urban Economics, Elsevier, vol. 45(3), pages 501-532, May.
    13. Rune Sørensen, 2006. "Local government consolidations: The impact of political transaction costs," Public Choice, Springer, vol. 127(1), pages 75-95, April.
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