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Merging county administrations: Cross-national evidence of fiscal and political effects

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  • Blesse, Sebastian
  • Roesel, Felix

Abstract

While many central governments amalgamate municipalities, mergers of larger county administrations are rare and hardly explored. In this paper, we assess both fiscal and political effects of county mergers in two different institutional settings: counties act autonomously as upperlevel local governments (Germany), or counties being decentralised branches of the state government (Austria). We apply difference-in-differences estimations to county merger reforms in each country. In both cases, some counties were amalgamated while others remain untouched. Austrian counties (Bezirke) and German counties (Landkreise) widely differ in terms of autonomy and institutions, but our results are strikingly similar. In both cases, we neither find evidence for cost savings nor for staff reductions. Instead, voter turnout consistently decreases in merged counties, and right-wing populists seem to gain additional support. We conclude that political costs clearly outweigh fiscal null benefits of county merger reforms - independent of the underlying institutional setting.

Suggested Citation

  • Blesse, Sebastian & Roesel, Felix, 2018. "Merging county administrations: Cross-national evidence of fiscal and political effects," ZEW Discussion Papers 18-031, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:18031
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    1. 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.
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    6. Lapointe, Simon & Saarimaa, Tuukka & Tukiainen, Janne, 2018. "Effects of Municipal Mergers on Voter Turnout," Working Papers 106, VATT Institute for Economic Research.
    7. Blesse Sebastian & Rösel Felix, 2017. "Was bringen kommunale Gebietsreformen?: Kausale Evidenz zu Hoffnungen, Risiken und alternativen Instrumenten," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 18(4), pages 307-324, November.
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    13. Harjunen, Oskari & Saarimaa, Tuukka & Tukiainen, Janne, 2017. "Political Representation and Effects of Municipal Mergers," Working Papers 98, VATT Institute for Economic Research.
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    1. repec:ces:ifodre:v:25:y:2018:i:04:p:34-36 is not listed on IDEAS

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    Keywords

    County mergers; Local government; Expenditures; Local elections; Voter turnout;

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