Will consolidation improve sub-national governments ?
AbstractLocal government size varies dramatically around the world. In Sudan, Cote d'Ivoire, and the United Kingdom, municipalities average more than 125,000 people. Those in many European countries have less than 10,000 people. Countries often consider consolidation of local governments as a means to lower service delivery costs, improve service quality, enhance accountability, improve equity, or expand participation in government. The authors review a number of theoretical arguments and empirical findings concerning the size of sub-national governments. Countries should not presume that amalgamation will solve problems because benefits and costs are situation specific. Success depends on many factors, including getting incentives right for the various players and managing the transition properly. The effects on costs must be examined in terms of all changes occurring with consolidation, including geographic size. Size economies appear service specific and are most likely to result for infrastructure intensive services such as water and sewerage. Size economies are less likely for services such as education that are provided in numerous small production units near the population. Also, the potential for savings depends on other factors, such as willingness to eliminate redundant workers. Consolidation reduces the potential for local government competition, which appears to enhance service quality but not necessarily overall government size. There is some evidence that citizens are more willing to be involved in larger governments, but trust may fall with government size. Larger governments can improve regional planning by handling problems with a broader geographic perspective and giving the government more influence with national policymakers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3913.
Date of creation: 01 May 2006
Date of revision:
Urban Slums Upgrading; Municipal Financial Management; Public&Municipal Finance; Urban Economics; Education for the Knowledge Economy;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-05-13 (All new papers)
- NEP-DEV-2006-05-13 (Development)
- NEP-GEO-2006-05-13 (Economic Geography)
- NEP-URE-2006-05-13 (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.:
- Randall W. Eberts & Timothy J. Gronberg, 1989. "Structure, conduct, and performance in the local public sector," Working Paper 8910, Federal Reserve Bank of Cleveland.
- Duncombe, William & Miner, Jerry & Ruggiero, John, 1997. " Empirical Evaluation of Bureaucratic Models of Inefficiency," Public Choice, Springer, vol. 93(1-2), pages 1-18, October.
- Philip J. Grossman, 1989.
"Federalism and the Size of Government,"
Monash Economics Working Papers
archive-08, Monash University, Department of Economics.
- Bell, Christopher Ross, 1988. "The Assignment of Fiscal Responsibility in a Federal State: An Empirical Assessment," National Tax Journal, National Tax Association, vol. 41(2), pages 191-207, June Cita.
- Borland, M V & Howsen, R M, 1996. " Competition, Expenditures and Student Performance in Mathematics: A Comment on Couch et al," Public Choice, Springer, vol. 87(3-4), pages 395-400, June.
- Hayes, Kathy J & Razzolini, Laura & Ross, Leola B, 1998.
" Bureaucratic Choice and Nonoptimal Provision of Public Goods: Theory and Evidence,"
Springer, vol. 94(1-2), pages 1-20, January.
- Kathy Hayes & Laura Razzolini & Leola Ross, 1998. "Bureaucratic choice and nonoptimal provision of public goods: Theory and evidence," Public Choice, Springer, vol. 94(1), pages 1-20, January.
- Borland, Melvin V. & Howsen, Roy M, 1992. "Student academic achievement and the degree of market concentration in education," Economics of Education Review, Elsevier, vol. 11(1), pages 31-39, March.
- Borland, Melvin V. & Howsen, Roy M., 1993. "On the determination of the critical level of market concentration in education," Economics of Education Review, Elsevier, vol. 12(2), pages 165-169, June.
- Michael Marlow, 1988. "Fiscal decentralization and government size," Public Choice, Springer, vol. 56(3), pages 259-269, March.
- Ladd, Helen F., 1994. "Fiscal impacts of local population growth: A conceptual and empirical analysis," Regional Science and Urban Economics, Elsevier, vol. 24(6), pages 661-686, December.
- Deller, Steven C & Rudnicki, Edward, 1992. " Managerial Efficiency in Local Government: Implications on Jurisdictional Consolidation," Public Choice, Springer, vol. 74(2), pages 221-31, September.
- Kenny, Lawrence W & Schmidt, Amy B, 1994. " The Decline in the Number of School Districts in the U.S.: 1950-1980," Public Choice, Springer, vol. 79(1-2), pages 1-18, April.
- Zanzig, Blair R., 1997. "Measuring the impact of competition in local government education markets on the cognitive achievement of students," Economics of Education Review, Elsevier, vol. 16(4), pages 431-441, October.
- Forbes, Kevin F & Zampelli, Ernest M, 1989. "Is Leviathan a Mythical Beast?," American Economic Review, American Economic Association, vol. 79(3), pages 568-77, June.
- Grosskopf, Shawna & Hayes, Kathy J. & Taylor, Lori L. & Weber, William L., 2001. "On the Determinants of School District Efficiency: Competition and Monitoring," Journal of Urban Economics, Elsevier, vol. 49(3), pages 453-478, May.
- Schwartz, Amy Ellen, 1993. "Individual production, community characteristics and the provision of local public services," Journal of Public Economics, Elsevier, vol. 50(2), pages 277-289, February.
- William Baber & Pradyot Sen, 1986. "The political process and the use of debt financing by state governments," Public Choice, Springer, vol. 48(3), pages 201-215, January.
- Couch, Jim F & Shughart, William F, II & Williams, Al L, 1993. " Private School Enrollment and Public School Performance," Public Choice, Springer, vol. 76(4), pages 301-12, August.
- Diane Lim Rogers & John H. Rogers, 1995. "Political competition, causal relationships between taxes and spending, and their influence on government size: evidence from state-level data," International Finance Discussion Papers 500, Board of Governors of the Federal Reserve System (U.S.).
- Duncombe, William & Miner, Jerry & Ruggiero, John, 1995. "Potential cost savings from school district consolidation: A case study of New York," Economics of Education Review, Elsevier, vol. 14(3), pages 265-284, September.
- Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
- Downes, Thomas A. & Pogue, Thomas F., 1994. "Adjusting School Aid Formulas for the Higher Cost of Educating Disadvantaged Students," National Tax Journal, National Tax Association, vol. 47(1), pages 89-110, March Cit.
- Boisvert, Richard N. & Schmit, Todd M., 1997. "Tradeoff Between Economies Of Size In Treatment And Diseconomies Of Distribution For Rural Water Systems," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 26(2), October.
- Roe, Emery M., 1995. "More than the politics of decentralization: Local government reform, district development and public administration in Zimbabwe," World Development, Elsevier, vol. 23(5), pages 833-843, May.
- Lisa Barrow & Cecilia Elena Rouse, 2000.
"Using market valuation to assess the importance and efficiency of public school spending,"
Working Paper Series
WP-00-4, Federal Reserve Bank of Chicago.
- Lisa Barrow & Cecilia Elena Rouse, 2000. "Using Market Valuation to Assess the Importance and Efficiency of Public School Spending," Econometric Society World Congress 2000 Contributed Papers 1446, Econometric Society.
- Lisa Barrow & Cecilia Rouse, 2000. "Using Market Valuation to Assess the Importance and Efficiency of Public School Spending," Working Papers 817, Princeton University, Department of Economics, Industrial Relations Section..
- Grossman, Philip J. & Mavros, Panayiotis & Wassmer, Robert W., 1999. "Public Sector Technical Inefficiency in Large U.S. Cities," Journal of Urban Economics, Elsevier, vol. 46(2), pages 278-299, September.
- Andrews, Matthew & Duncombe, William & Yinger, John, 2002. "Revisiting economies of size in American education: are we any closer to a consensus?," Economics of Education Review, Elsevier, vol. 21(3), pages 245-262, June.
- Kenny, Lawrence W., 1982. "Economies of scale in schooling," Economics of Education Review, Elsevier, vol. 2(1), pages 1-24, February.
- Hayes, K & Wood, L L, 1995. " Utility Maximizing Bureaucrats: The Bureaucrat's Point of View," Public Choice, Springer, vol. 82(1-2), pages 69-83, January.
- Mark Schneider, 1989. "Intercity competition and the size of the local public work force," Public Choice, Springer, vol. 63(3), pages 253-265, December.
- Michael Nelson, 1986. "An empirical analysis of state and local tax structure in the context of the Leviathan model of government," Public Choice, Springer, vol. 49(3), pages 283-294, January.
- Hanushek, Eric A. & Luque, Javier A., 2003.
"Efficiency and equity in schools around the world,"
Economics of Education Review,
Elsevier, vol. 22(5), pages 481-502, October.
- Randall W. Eberts & Timothy J. Gronberg, 1988. "Can competition among local governments constrain government spending?," Economic Review, Federal Reserve Bank of Cleveland, issue Q I, pages 2-9.
- De Groot, Hans & Van der Sluis, Johan, 1987. "Bureaucracy Response to Budget Cuts: An Economic Model," Kyklos, Wiley Blackwell, vol. 40(1), pages 103-09.
- Dee, Thomas S., 1998. "Competition and the quality of public schools," Economics of Education Review, Elsevier, vol. 17(4), pages 419-427, October.
- Caroline Minter Hoxby, 1994.
"Does Competition Among Public Schools Benefit Students and Taxpayers?,"
NBER Working Papers
4979, National Bureau of Economic Research, Inc.
- Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, vol. 90(5), pages 1209-1238, December.
- Stephen P. A. Brown & Jason L. Saving, 1999. "Autocracy, democracy, bureaucracy, or monopoly: can you judge a government by its size?," Working Papers 9908, Federal Reserve Bank of Dallas.
- Eberts, Randall W. & Gronberg, Timothy J., 1990. "Structure, Conduct, and Performance in the Local Public Sector," National Tax Journal, National Tax Association, vol. 43(2), pages 165-73, June Cita.
- John Anderson & Hendrik van den Berg, 1998. "Fiscal Decentralization and Government Size: An International Test for Leviathan Accounting for Unmeasured Economic Activity," International Tax and Public Finance, Springer, vol. 5(2), pages 171-186, May.
- Caroline Minter Hoxby, 1994. "Do Private Schools Provide Competition for Public Schools?," NBER Working Papers 4978, National Bureau of Economic Research, Inc.
- Liner, Gaines H, 1994. " Institutional Constraints, Annexation and Municipal Efficiency in the 1960s," Public Choice, Springer, vol. 79(3-4), pages 305-23, June.
- Nelson, Michael A, 1987. "Searching for Leviathan: Comment and Extension," American Economic Review, American Economic Association, vol. 77(1), pages 198-204, March.
- Grossman, Philip J & West, Edwin G, 1994. " Federalism and the Growth of Government Revisited," Public Choice, Springer, vol. 79(1-2), pages 19-32, April.
- Grossman, Philip J, 1992. "Fiscal Decentralization and Public Sector Size in Australia," The Economic Record, The Economic Society of Australia, vol. 68(202), pages 240-46, September.
- Marlow, Michael L, 1991. " Privatization and Government Size," Public Choice, Springer, vol. 68(1-3), pages 273-76, January.
- Joulfaian, David & Marlow, Michael L, 1991. "Public Sector Employment, Competition, and Government Size," Public Finance = Finances publiques, , vol. 46(2), pages 222-35.
- Davis, Michael L & Hayes, Kathy, 1993. "The Demand for Good Government," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 148-52, February.
- Oates, Wallace E, 1985. "Searching for Leviathan: An Empirical Study," American Economic Review, American Economic Association, vol. 75(4), pages 748-57, September.
- Serge Garcia & Alban Thomas, 2001. "The Structure of Municipal Water Supply Costs: Application to a Panel of French Local Communities," Journal of Productivity Analysis, Springer, vol. 16(1), pages 5-29, July.
- Scorsone, Eric, 2007. "School District and Municipal Reorganization: Research Findings & Policy Proposals," Staff Papers 6543, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Slack, Enid, 2007. "Managing the coordination of service delivery in metropolitan cities : the role of metropolitan governance," Policy Research Working Paper Series 4317, The World Bank.
- Libman, A., 2011. "Integration of the Regions: Economic and Economic-Political Effects," Journal of the New Economic Association, New Economic Association, issue 10, pages 155-158.
- Sun Go & Peter H. Lindert, 2007. "The Curious Dawn of American Public Schools," NBER Working Papers 13335, National Bureau of Economic Research, Inc.
- Reingewertz, Yaniv, 2012. "Do municipal amalgamations work? Evidence from municipalities in Israel," Journal of Urban Economics, Elsevier, vol. 72(2), pages 240-251.
- World Bank, 2013. "Service Delivery with More Districts in Uganda : Fiscal Challenges and Opportunities for Reforms," World Bank Other Operational Studies 16012, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.