Do municipal mergers reduce costs? Evidence from a German federal state

Sebastian Blesse and Thushyanthan Baskaran

No 16-041, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We study the fiscal consequences of municipal mergers by making use of a largescale merger reform in the German federal state of Brandenburg. This reform, which was implemented from 2001 to 2003, led to a substantial reduction in the number of municipalities. Individual mergers were heterogeneous across a number of dimensions, which allows us to contribute to the literature by exploring the consequences of different types of mergers within the same institutional setting. Focusing in particular on the distinction between compulsory and (semi-) voluntary mergers, we implement a difference-in-difference design with panel data from 1995-2010 at the level of post-merger municipalities. We find significant reductions in (administrative) expenditures after compulsory mergers. Voluntary mergers, on the other hand, have no effect on expenditures. We also show that the effects of voluntary and compulsory mergers vary according to further (secondary) characteristics of a merger.

Keywords: municipal mergers; economies of scale; voluntary and compulsory mergers (search for similar items in EconPapers)
JEL-codes: H11 H72 H77 R53 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-eur and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (65)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/140901/1/859457389.pdf (application/pdf)

Related works:
Journal Article: Do municipal mergers reduce costs? Evidence from a German federal state (2016)
Working Paper: Do municipal mergers reduce costs? Evidence from a German federal state (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:16041

Access Statistics for this paper

More papers in ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics (econstor@zbw-workspace.eu).