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Does the method adopted for distribution of services by amalgamating municipalities affect expenditure after amalgamation? Evidence from Japan

Author

Listed:
  • Katsuyoshi Nakazawa

    () (University of Toyo)

  • Tomohisa Miyashita

    (PHP research institute)

Abstract

Municipal boundary reform (municipal amalgamation) has been done in many countries in recent years as the result of a push to enlarge the size and coverage of local government units, which in turn is driven mainly by the prospect of economies of scale. However, in a notable body of previous literature, the enlargement of local government has not led to reduction of public expenditures. Decision-making before amalgamation might affect to public expenditure after amalgamation. This study uses Japanese municipal-level data and argues for a relation between the choice of public administration distribution method and expenditure after amalgamation. The results show that a plan for distributed or decentralized facility method is more likely to be adopted in a larger administrative jurisdiction and in one with large differences in finances or political structures between amalgamated sub-regions. In turn, a plan for distributed facilities has the effect of pushing up administrative expenditure.Length: 12 pages

Suggested Citation

  • Katsuyoshi Nakazawa & Tomohisa Miyashita, 2013. "Does the method adopted for distribution of services by amalgamating municipalities affect expenditure after amalgamation? Evidence from Japan," MAGKS Papers on Economics 201315, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:201315
    as

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    File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/15-2013_nakazawa.pdf
    File Function: First 201315
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    References listed on IDEAS

    as
    1. Reingewertz, Yaniv, 2012. "Do municipal amalgamations work? Evidence from municipalities in Israel," Journal of Urban Economics, Elsevier, vol. 72(2), pages 240-251.
    2. Henrik Jordahl & Che-Yuan Liang, 2010. "Merged municipalities, higher debt: on free-riding and the common pool problem in politics," Public Choice, Springer, vol. 143(1), pages 157-172, April.
    3. Liner, Gaines H, 1994. "Institutional Constraints, Annexation and Municipal Efficiency in the 1960s," Public Choice, Springer, vol. 79(3-4), pages 305-323, June.
    4. Duncombe, William & Yinger, John, 1993. "An analysis of returns to scale in public production, with an application to fire protection," Journal of Public Economics, Elsevier, vol. 52(1), pages 49-72, August.
    5. Tyrefors Hinnerich, Björn, 2009. "Do merging local governments free ride on their counterparts when facing boundary reform?," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 721-728, June.
    6. Brueckner, Jan K., 1981. "Congested public goods: The case of fire protection," Journal of Public Economics, Elsevier, vol. 15(1), pages 45-58, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    local government amalgamation; consensus-building; multinomial logistic regression; local government expenditure;

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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