Local authority size in theory and practice
In this paper we develop a model for local authority size that is based on the approach towards local government reform that was used by the UK governments in the 1970s and the 1990s. To do so, we examine the different aspects of costs for local services, the minimum cost size facility used to provide local services, and the minimum efficient size for a local authority. We then argue that, for a given level of service, the belief that a tendency for local authorities to become enablers rather than producers would reduce the minimum efficient size of authority may not be correct. Finally, the model is developed to determine simultaneously the optimum quantity of local services and the minimum efficient size. It shows that the solution depends on how preferences vary among different citizens, and argues that governments paid too little heed to these variations. Thus we conclude that it is very doubtful whether either the 1970s or the 1990s reforms produced the structure of local government that would have emerged if the approach adopted by the governments concerned had been used with more care.
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.:
- Bergstrom, Theodore C & Goodman, Robert P, 1973. "Private Demands for Public Goods," American Economic Review, American Economic Association, vol. 63(3), pages 280-296, June.
- Hochman, Oded, 1981. "Land rents, optimal taxation and local fiscal independence in an economy with local public goods," Journal of Public Economics, Elsevier, vol. 15(1), pages 59-85, February.
- Borcherding, Thomas E & Deacon, Robert T, 1972. "The Demand for the Services of Non-Federal Governments," American Economic Review, American Economic Association, vol. 62(5), pages 891-901, December.
- McGuire, Martin, 1974. "Group Segregation and Optimal Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 112-132, Jan.-Feb..
- Sonstelie, Jon, 1982. "The Welfare Cost of Free Public Schools," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 794-808, August.
- Hochman, Oded & Pines, David & Thisse, Jacques-Francois, 1995.
"On the Optimal Structure of Local Governments,"
American Economic Review,
American Economic Association, vol. 85(5), pages 1224-1240, December.
- Hochman, O. & Pines, D. & Thisse, J.-F., "undated". "On the optimal structure of local governments," CORE Discussion Papers RP 1185, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Hochman, Oded & Pines, David & Thisse, Jacques-François, 1994. "On the Optimal Structure of Local Governments," CEPR Discussion Papers 899, C.E.P.R. Discussion Papers.
- Gilbert, Guy & Picard, Pierre, 1996. "Incentives and optimal size of local jurisdictions," European Economic Review, Elsevier, vol. 40(1), pages 19-41, January.
- Glazer, Amihai & Niskanen, Esko & Scotchmer, Suzanne, 1997. "On the uses of club theory: Preface to the club theory symposium," Journal of Public Economics, Elsevier, vol. 65(1), pages 3-7, July.
- Li, Xiaoming & Ma, Yue, 1996. "Financial Reforms and Regional Investment Conflicts in China: A Game-Theoretic Analysis," Economic Change and Restructuring, Springer, vol. 29(2), pages 117-130. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pio:envirc:v:18:y:2000:i:3:p:255-270. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Neil Hammond)
If references are entirely missing, you can add them using this form.