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Too Many Municipalities?

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Author Info
Dahlby, Bev () (University of Alberta, Department of Economics)

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Abstract

Does democracy lead to the creation of too many municipalities? We analyze this issue within the context of the Alesina and Spolare (1996) model where the quality of municipal services deteriorates with the distance from the center of a municipality. Individuals can vote in a referendum to split an existing municipality. We show that social welfare will decline when municipalities are split if the level of the public service, as chosen by the median voter, is lower in the new smaller municipalities. In general, the model indicates that there may be a democratic bias in favour of creating too many municipalities.

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File URL: http://www.uofaweb.ualberta.ca/economics2/pdfs/WP2009-18-Dahlby.pdf
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Publisher Info
Paper provided by University of Alberta, Department of Economics in its series Working Papers with number 2009-18.

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Length: 20 pages
Date of creation: Feb 2009
Date of revision:
Handle: RePEc:ris:albaec:2009_018

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Related research
Keywords: median voter model; fiscal federalism; succession; municipal boundaries;

Find related papers by JEL classification:
H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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This page was last updated on 2009-11-26.

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