Too Many Municipalities?
Does 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.
|Date of creation:||Feb 2009|
|Contact details of provider:|| Postal: 8-14 HM Tory, Edmonton, Alberta, T6G 2H4|
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- 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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- 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.
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"On the Number and Size of Nations,"
NBER Working Papers
5050, National Bureau of Economic Research, Inc.
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