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Will consolidation improve sub-national governments ?

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  • Fox, William F.
  • Gurley, Tami

Abstract

Local government size varies dramatically around the world. In Sudan, Cote d'Ivoire, and the United Kingdom, municipalities average more than 125,000 people. Those in many European countries have less than 10,000 people. Countries often consider consolidation of local governments as a means to lower service delivery costs, improve service quality, enhance accountability, improve equity, or expand participation in government. The authors review a number of theoretical arguments and empirical findings concerning the size of sub-national governments. Countries should not presume that amalgamation will solve problems because benefits and costs are situation specific. Success depends on many factors, including getting incentives right for the various players and managing the transition properly. The effects on costs must be examined in terms of all changes occurring with consolidation, including geographic size. Size economies appear service specific and are most likely to result for infrastructure intensive services such as water and sewerage. Size economies are less likely for services such as education that are provided in numerous small production units near the population. Also, the potential for savings depends on other factors, such as willingness to eliminate redundant workers. Consolidation reduces the potential for local government competition, which appears to enhance service quality but not necessarily overall government size. There is some evidence that citizens are more willing to be involved in larger governments, but trust may fall with government size. Larger governments can improve regional planning by handling problems with a broader geographic perspective and giving the government more influence with national policymakers.

Suggested Citation

  • Fox, William F. & Gurley, Tami, 2006. "Will consolidation improve sub-national governments ?," Policy Research Working Paper Series 3913, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3913
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    Cited by:

    1. Scorsone, Eric, 2007. "School District and Municipal Reorganization: Research Findings & Policy Proposals," Staff Papers 6543, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Roy Bahl, "undated". "Metropolitan city finances in Asia and the Pacific region: issues, problems and reform options," MPDD Working Paper Series WP/17/04, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    3. Slack, Enid, 2007. "Managing the coordination of service delivery in metropolitan cities : the role of metropolitan governance," Policy Research Working Paper Series 4317, The World Bank.
    4. Roy Bahl & Richard M. Bird, 2014. "Decentralization and Infrastructure: Principles and Practice," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1408, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. Sun Go & Peter H. Lindert, 2007. "The Curious Dawn of American Public Schools," NBER Working Papers 13335, National Bureau of Economic Research, Inc.
    6. 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.
    7. Enid Slack & Richard M. Bird, 2013. "Merging Municipalities: Is Bigger Better?," IMFG Papers 14, University of Toronto, Institute on Municipal Finance and Governance.
    8. Blesse, Sebastian & Baskaran, Thushyanthan, 2016. "Do municipal mergers reduce costs? Evidence from a German federal state," Regional Science and Urban Economics, Elsevier, vol. 59(C), pages 54-74.
    9. Reingewertz, Yaniv, 2012. "Do municipal amalgamations work? Evidence from municipalities in Israel," Journal of Urban Economics, Elsevier, vol. 72(2), pages 240-251.
    10. repec:bla:etrans:v:25:y:2017:i:3:p:439-469 is not listed on IDEAS
    11. Feld, Lars P. & Fritz, Benedikt, 2015. "The political economy of municipal amalgamation: Evidence of common pool effects and local public debt," Freiburg Discussion Papers on Constitutional Economics 15/10, Walter Eucken Institut e.V..
    12. World Bank, 2013. "Service Delivery with More Districts in Uganda : Fiscal Challenges and Opportunities for Reforms," World Bank Other Operational Studies 16012, The World Bank.
    13. Aleh Mazol, 2015. "Local self-governance in the Republic of Belarus," BEROC Policy Paper Series 22, Belarusian Economic Research and Outreach Center (BEROC).
    14. Libman, A., 2011. "Integration of the Regions: Economic and Economic-Political Effects," Journal of the New Economic Association, New Economic Association, issue 10, pages 155-158.

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    Keywords

    Urban Slums Upgrading; Municipal Financial Management; Public&Municipal Finance; Urban Economics; Education for the Knowledge Economy;

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