Politics in Coalition Formation of Local Governments

Tuukka Saarimaa and Janne Tukiainen

SERC Discussion Papers from Centre for Economic Performance, LSE

Abstract: We analyze empirically the coalition formation of local governments using a novel reduced form econometric procedure that allows for multi-partner mergers. Using Finnish municipal merger data where mergers were decided independently at the local level, we find that merger decisions are largely in line with voter preferences. Most importantly, mergers are clearly less likely when the distance of the median voter to the coalition centre is large. However, councillors seem also to prefer mergers where post-merger political competition is lower which indicates a concern for re-election. Interestingly, municipalities do not seem to be seeking economies of scale through merging. This is possibly due to existing cooperation in service production which we find to be a strong predictor of merging.

Keywords: Coalition formation; local politics; choice based sampling (search for similar items in EconPapers)
JEL-codes: C35 H72 H77 (search for similar items in EconPapers)
Date: 2012-03
New Economics Papers: this item is included in nep-cdm, nep-pol and nep-ure
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Politics in coalition formation of local governments (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:sercdp:0102

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