Will consolidation improve sub-national governments ?
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.
|Date of creation:||01 May 2006|
|Date of revision:|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andrews, Matthew & Duncombe, William & Yinger, John, 2002. "Revisiting economies of size in American education: are we any closer to a consensus?," Economics of Education Review, Elsevier, vol. 21(3), pages 245-262, June.
- Hayes, K & Wood, L L, 1995. "Utility Maximizing Bureaucrats: The Bureaucrat's Point of View," Public Choice, Springer, vol. 82(1-2), pages 69-83, January.
- Marlow, Michael L, 1991. "Privatization and Government Size," Public Choice, Springer, vol. 68(1-3), pages 273-76, January.
- Schwartz, Amy Ellen, 1993. "Individual production, community characteristics and the provision of local public services," Journal of Public Economics, Elsevier, vol. 50(2), pages 277-289, February.
- Liner, Gaines H, 1994. "Institutional Constraints, Annexation and Municipal Efficiency in the 1960s," Public Choice, Springer, vol. 79(3-4), pages 305-23, June.
- De Groot, Hans & Van der Sluis, Johan, 1987. "Bureaucracy Response to Budget Cuts: An Economic Model," Kyklos, Wiley Blackwell, vol. 40(1), pages 103-09.
- Borland, M V & Howsen, R M, 1996. "Competition, Expenditures and Student Performance in Mathematics: A Comment on Couch et al," Public Choice, Springer, vol. 87(3-4), pages 395-400, June.
- Hayes, Kathy J & Razzolini, Laura & Ross, Leola B, 1998.
"Bureaucratic Choice and Nonoptimal Provision of Public Goods: Theory and Evidence,"
Springer, vol. 94(1-2), pages 1-20, January.
- Kathy Hayes & Laura Razzolini & Leola Ross, 1998. "Bureaucratic choice and nonoptimal provision of public goods: Theory and evidence," Public Choice, Springer, vol. 94(1), pages 1-20, January.
- Grossman, Philip J & West, Edwin G, 1994.
"Federalism and the Growth of Government Revisited,"
Springer, vol. 79(1-2), pages 19-32, April.
- Joulfaian, David & Marlow, Michael L, 1991. "Public Sector Employment, Competition, and Government Size," Public Finance = Finances publiques, , vol. 46(2), pages 222-35.
- Philip J. Grossman, 1987.
"Federalism and the Size of Government,"
School of Economics Working Papers
1987-07, University of Adelaide, School of Economics.
- Ladd, Helen F., 1994. "Fiscal impacts of local population growth: A conceptual and empirical analysis," Regional Science and Urban Economics, Elsevier, vol. 24(6), pages 661-686, December.
- Diane Lim Rogers & John H. Rogers, 1995. "Political competition, causal relationships between taxes and spending, and their influence on government size: evidence from state-level data," International Finance Discussion Papers 500, Board of Governors of the Federal Reserve System (U.S.).
- Borland, Melvin V. & Howsen, Roy M, 1992. "Student academic achievement and the degree of market concentration in education," Economics of Education Review, Elsevier, vol. 11(1), pages 31-39, March.
- Michael Nelson, 1986. "An empirical analysis of state and local tax structure in the context of the Leviathan model of government," Public Choice, Springer, vol. 49(3), pages 283-294, January.
- Randall W. Eberts & Timothy J. Gronberg, 1988. "Can competition among local governments constrain government spending?," Economic Review, Federal Reserve Bank of Cleveland, issue Q I, pages 2-9.
- Amy Ellen Schwartz, 1997. "Public Characteristics and Expenditures on Public Services: an Empirical Analysis," Public Finance Review, , vol. 25(2), pages 163-181, March.
- P.J. Grossman, 1988.
"Fiscal Decentralization and Public Sector Size in Australia,"
Economics Discussion / Working Papers
88-12, The University of Western Australia, Department of Economics.
- Grossman, Philip J, 1992. "Fiscal Decentralization and Public Sector Size in Australia," The Economic Record, The Economic Society of Australia, vol. 68(202), pages 240-46, September.
- Lisa Barrow & Cecilia Elena Rouse, 2000.
"Using Market Valuation to Assess the Importance and Efficiency of Public School Spending,"
Econometric Society World Congress 2000 Contributed Papers
1446, Econometric Society.
- Lisa Barrow & Cecilia Elena Rouse, 2000. "Using market valuation to assess the importance and efficiency of public school spending," Working Paper Series WP-00-4, Federal Reserve Bank of Chicago.
- Nelson, Michael A, 1987. "Searching for Leviathan: Comment and Extension," American Economic Review, American Economic Association, vol. 77(1), pages 198-204, March.
- Borland, Melvin V. & Howsen, Roy M., 1993. "On the determination of the critical level of market concentration in education," Economics of Education Review, Elsevier, vol. 12(2), pages 165-169, June.
- Caroline M. Hoxby, 2000.
"Does Competition among Public Schools Benefit Students and Taxpayers?,"
American Economic Review,
American Economic Association, vol. 90(5), pages 1209-1238, December.
- Caroline Minter Hoxby, 1994. "Does Competition Among Public Schools Benefit Students and Taxpayers?," NBER Working Papers 4979, National Bureau of Economic Research, Inc.
- James B. Heil, 1991. "The Search for Leviathan Revisited," Public Finance Review, , vol. 19(3), pages 334-346, July.
- Davis, Michael L & Hayes, Kathy, 1993. "The Demand for Good Government," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 148-52, February.
- Roe, Emery M., 1995. "More than the politics of decentralization: Local government reform, district development and public administration in Zimbabwe," World Development, Elsevier, vol. 23(5), pages 833-843, May.
- Stephen P. A. Brown & Jason L. Saving, 1999. "Autocracy, democracy, bureaucracy, or monopoly: can you judge a government by its size?," Working Papers 9908, Federal Reserve Bank of Dallas.
- William Baber & Pradyot Sen, 1986. "The political process and the use of debt financing by state governments," Public Choice, Springer, vol. 48(3), pages 201-215, January.
- Caroline Minter Hoxby, 1994. "Do Private Schools Provide Competition for Public Schools?," NBER Working Papers 4978, National Bureau of Economic Research, Inc.
- Randall W. Eberts & Timothy J. Gronberg, 1989.
"Structure, conduct, and performance in the local public sector,"
8910, Federal Reserve Bank of Cleveland.
- Eberts, Randall W. & Gronberg, Timothy J., 1990. "Structure, Conduct, and Performance in the Local Public Sector," National Tax Journal, National Tax Association, vol. 43(2), pages 165-73, June.
- Forbes, Kevin F & Zampelli, Ernest M, 1989. "Is Leviathan a Mythical Beast?," American Economic Review, American Economic Association, vol. 79(3), pages 568-77, June.
- Bruce R. Domazlicky, 1996. "Government Size And Regional Economic Growth:Another Look," The Review of Regional Studies, Southern Regional Science Association, vol. 26(1), pages 89-97, Summer.
- Duncombe, William & Miner, Jerry & Ruggiero, John, 1995. "Potential cost savings from school district consolidation: A case study of New York," Economics of Education Review, Elsevier, vol. 14(3), pages 265-284, September.
- Grosskopf, Shawna & Hayes, Kathy J. & Taylor, Lori L. & Weber, William L., 2001. "On the Determinants of School District Efficiency: Competition and Monitoring," Journal of Urban Economics, Elsevier, vol. 49(3), pages 453-478, May.
- Serge Garcia & Alban Thomas, 2001. "The Structure of Municipal Water Supply Costs: Application to a Panel of French Local Communities," Journal of Productivity Analysis, Springer, vol. 16(1), pages 5-29, July.
- John Anderson & Hendrik van den Berg, 1998. "Fiscal Decentralization and Government Size: An International Test for Leviathan Accounting for Unmeasured Economic Activity," International Tax and Public Finance, Springer, vol. 5(2), pages 171-186, May.
- Hanushek, Eric A. & Luque, Javier A., 2003.
"Efficiency and equity in schools around the world,"
Economics of Education Review,
Elsevier, vol. 22(5), pages 481-502, October.
- Zanzig, Blair R., 1997. "Measuring the impact of competition in local government education markets on the cognitive achievement of students," Economics of Education Review, Elsevier, vol. 16(4), pages 431-441, October.
- Grossman, Philip J. & Mavros, Panayiotis & Wassmer, Robert W., 1999. "Public Sector Technical Inefficiency in Large U.S. Cities," Journal of Urban Economics, Elsevier, vol. 46(2), pages 278-299, September.
- Boisvert, Richard N. & Schmit, Todd M., 1997. "Tradeoff Between Economies Of Size In Treatment And Diseconomies Of Distribution For Rural Water Systems," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 26(2), October.
- Michael Marlow, 1988. "Fiscal decentralization and government size," Public Choice, Springer, vol. 56(3), pages 259-269, March.
- Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
- Deller, Steven C & Rudnicki, Edward, 1992. "Managerial Efficiency in Local Government: Implications on Jurisdictional Consolidation," Public Choice, Springer, vol. 74(2), pages 221-31, September.
- Dee, Thomas S., 1998. "Competition and the quality of public schools," Economics of Education Review, Elsevier, vol. 17(4), pages 419-427, October.
- Bell, Christopher Ross, 1988. "The Assignment of Fiscal Responsibility in a Federal State: An Empirical Assessment," National Tax Journal, National Tax Association, vol. 41(2), pages 191-207, June.
- Mark Schneider, 1989. "Intercity competition and the size of the local public work force," Public Choice, Springer, vol. 63(3), pages 253-265, December.
- Downes, Thomas A. & Pogue, Thomas F., 1994. "Adjusting School Aid Formulas for the Higher Cost of Educating Disadvantaged Students," National Tax Journal, National Tax Association, vol. 47(1), pages 89-110, March.
- Kenny, Lawrence W & Schmidt, Amy B, 1994. "The Decline in the Number of School Districts in the U.S.: 1950-1980," Public Choice, Springer, vol. 79(1-2), pages 1-18, April.
- Oates, Wallace E, 1985. "Searching for Leviathan: An Empirical Study," American Economic Review, American Economic Association, vol. 75(4), pages 748-57, September.
- Rexford E. Santerre, 1991. "Leviathan or Median-Voter: Who Runs City Hall?," Eastern Economic Journal, Eastern Economic Association, vol. 17(1), pages 5-14, Jan-Mar.
- Keith Dowding & Peter John & Stephen Biggs, 1994. "Tiebout : A Survey of the Empirical Literature," Urban Studies, Urban Studies Journal Limited, vol. 31(4-5), pages 767-797, May.
- Duncombe, William & Miner, Jerry & Ruggiero, John, 1997. "Empirical Evaluation of Bureaucratic Models of Inefficiency," Public Choice, Springer, vol. 93(1-2), pages 1-18, October.
- Kenny, Lawrence W., 1982. "Economies of scale in schooling," Economics of Education Review, Elsevier, vol. 2(1), pages 1-24, February.
- Couch, Jim F & Shughart, William F, II & Williams, Al L, 1993. "Private School Enrollment and Public School Performance," Public Choice, Springer, vol. 76(4), pages 301-12, August.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:3913. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.