Too Many Municipalities?
AbstractDoes 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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Bibliographic InfoPaper provided by University of Alberta, Department of Economics in its series Working Papers with number 2009-18.
Length: 20 pages
Date of creation: Feb 2009
Date of revision:
median voter model; fiscal federalism; succession; municipal boundaries;
Other versions of this item:
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-04-05 (All new papers)
- NEP-PBE-2009-04-05 (Public Economics)
- NEP-POL-2009-04-05 (Positive Political Economics)
- NEP-URE-2009-04-05 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bogomolnaia, Anna & Le Breton, Michel & Savvateev, Alexei & Weber, Shlomo, 2005.
"Stability of Jurisdiction Structures under the Equal Share and Median Rule,"
IDEI Working Papers
362, Institut d'Économie Industrielle (IDEI), Toulouse.
- Anna Bogomolnaia & Michel Breton & Alexei Savvateev & Shlomo Weber, 2008. "Stability of jurisdiction structures under the equal share and median rules," Economic Theory, Springer, vol. 34(3), pages 525-543, March.
- BOGOMOLNAIA, Anna & LE BRETON, Michel & SAVVATEEV, Alexei & WEBER, Shlomo, 2005. "Stability of jurisdiction structures under the equal share and median rules," CORE Discussion Papers 2005032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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