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|
|Date of revision:|
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- Alberto Alesina & Enrico Spolaore, 1997.
"On the Number and Size of Nations,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 112(4), pages 1027-1056.
- 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).
- Anna Bogomolnaia & Michel Breton & Alexei Savvateev & Shlomo Weber, 2008. "Stability of jurisdiction structures under the equal share and median rules," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 34(3), pages 525-543, March.
- 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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