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The Political Economy of Municipal Amalgamation - Evidence of Common Pool Effects and Local Public Debt

Author

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  • Benedikt Fritz
  • Lars P. Feld

Abstract

This paper investigates the political economy of after merger effects of the large scale municipal amalgamations in the German state of Baden-Württemberg in the early 1970s. By exploiting the huge variance in the amalgamation process in terms of number of participating municipalities, municipality size or amalgamation strategy we identify considerable common pool effects. Amalgamations can create a common pool, as the former independent municipalities have now access to more resources. Common pool exploitation is stronger the more municipalities participate and when municipalities amalgamate by annexation. Additionally, voter involvement is lower in amalgamated municipalities.

Suggested Citation

  • Benedikt Fritz & Lars P. Feld, 2015. "The Political Economy of Municipal Amalgamation - Evidence of Common Pool Effects and Local Public Debt," CESifo Working Paper Series 5676, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5676
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    References listed on IDEAS

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    1. Saarimaa, Tuukka & Tukiainen, Janne, 2015. "Common pool problems in voluntary municipal mergers," European Journal of Political Economy, Elsevier, vol. 38(C), pages 140-152.
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    Cited by:

    1. repec:ces:ifodre:v:24:y:2016:i:04:p:45-49 is not listed on IDEAS
    2. Feld, Lars P., 2018. "The quest for fiscal rules," Freiburg Discussion Papers on Constitutional Economics 18/09, Walter Eucken Institut e.V..
    3. Nobuo Akai & Tsuyoshi Goto, 2018. "Strategic Intertemporal Budget Allocation of Local Governments in the Model with Spillovers and Mergers," OSIPP Discussion Paper 18E011, Osaka School of International Public Policy, Osaka University.
    4. Roesel, Felix, 2017. "Do mergers of large local governments reduce expenditures? – Evidence from Germany using the synthetic control method," European Journal of Political Economy, Elsevier, vol. 50(C), pages 22-36.
    5. repec:eee:regeco:v:66:y:2017:i:c:p:132-149 is not listed on IDEAS
    6. Tsuyoshi Goto & Genki Yamamoto, 2018. "Creative Accounting and Municipal Mergers -A Theoretical and Empirical Approach-," OSIPP Discussion Paper 18E012, Osaka School of International Public Policy, Osaka University.
    7. Felix Rösel, 2016. "Gibt es Einspareffekte durch Kreisgebietsreformen? – Evidenz aus Ostdeutschland," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 69(22), pages 26-33, November.
    8. Massimiliano Ferraresi & Giuseppe Migali & Leonzio Rizzo, 2017. "Does Inter-municipal Cooperation promote efficiency gains? Evidence from Italian Municipal," Working papers 59, Società Italiana di Economia Pubblica.
    9. Blesse Sebastian & Rösel Felix, 2017. "Was bringen kommunale Gebietsreformen?: Kausale Evidenz zu Hoffnungen, Risiken und alternativen Instrumenten," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 18(4), pages 307-324, November.
    10. Felix Rösel & Julia Sonnenburg, 2016. "Politisch abgehängt? Kreisgebietsreform und AfD Wahlergebnis in Mecklenburg-Vorpommern," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 23(06), pages 06-13, December.
    11. Hirota, Haruaki & Yunoue, Hideo, 2017. "Evaluation of the fiscal effect on municipal mergers: Quasi-experimental evidence from Japanese municipal data," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 132-149.
    12. Felix Rösel, 2016. "Sparen Gebietsreformen Geld? – Ein Überblick über aktuelle Studien," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 23(04), pages 45-49, August.

    More about this item

    Keywords

    municipal amalgamation; public debt; common pool; difference in difference;

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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