Does the method adopted for distribution of services by amalgamating municipalities affect expenditure after amalgamation? Evidence from Japan

Katsuyoshi Nakazawa and Tomohisa Miyashita
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Tomohisa Miyashita: PHP research institute

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: Municipal boundary reform (municipal amalgamation) has been done in many countries in recent years as the result of a push to enlarge the size and coverage of local government units, which in turn is driven mainly by the prospect of economies of scale. However, in a notable body of previous literature, the enlargement of local government has not led to reduction of public expenditures. Decision-making before amalgamation might affect to public expenditure after amalgamation. This study uses Japanese municipal-level data and argues for a relation between the choice of public administration distribution method and expenditure after amalgamation. The results show that a plan for distributed or decentralized facility method is more likely to be adopted in a larger administrative jurisdiction and in one with large differences in finances or political structures between amalgamated sub-regions. In turn, a plan for distributed facilities has the effect of pushing up administrative expenditure.Length: 12 pages

Keywords: local government amalgamation; consensus-building; multinomial logistic regression; local government expenditure (search for similar items in EconPapers)
JEL-codes: D78 H72 H73 H77 R51 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cdm and nep-pbe
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