Regulation of intercommunal financial flows with geostatistics and GIS

Concerning the characterisation or classification of municipalities a wide range of different approaches exists. Usually some historical, functional, and/or political indicators are used for such a classification. These indicators are usually structured simple, referring to inhabitant size, political importance, configuration of available infrastructure like hospitals and schools, places of work, or the like. However, an application field, where a quite specific, meaningful, and comprehensible classification for each municipality is of fundamental interest, is the local financial adjustment between communities on the same hierarchical administrative level. Which municipality delivers gladly more money than it is forced to do by law, or which community renounces voluntarily external support? Therefore, well elaborated indicators are needed to define the amount of money which has to be transferred, generally spoken, from rich communities to the poorer ones. However, it is obvious that a pure redistribution of revenues between financially strong and financially weak communities, which would lead in principle to a more or less equal financial configuration of the communities, is not sufficient for a fair system of financial adjustment. Such a redistribution system would not consider the different financial loads of the budgets of different types of communes. These varying financial loads for varying types of commues can be characterised by the following two concepts: 'costs of width' and 'costs of density'. The 'costs of width' are explained mainly by geographical reasons for peripheral and/or mountainous communities with low population density, which implies specific financial load for the particular community. By contrast, 'costs of density' are explained by disproportional high socio-demographic burdens and high costs of infrastructure in central and urban communities. Meaningful indicators for such a financially oriented classification of municipalities need detailed investigations, to be silent completely of that these indicators also need political acceptance, in the end. This paper presents a study carried out for the Canton of Zurich, Switzerland, which made part of the cantonal revision of the system of inter-communal financial adjustment. The aim was to provide means for a cantonal regulation on how the financial adjustment between the communities should be regulated. Therefore, socio-demographic and geographic indicators have been evaluated in order to find rules to reflect the financial load of the municipal budgets. The heuristically driven statistical modelling has been carried out using multiple regression. Besides the presentation of the technical approach, this paper discusses the analysed indicators in the perspective of regional policy and territorial justice.