Economies of Scale on the Municipal Level: Fact or Fiction in the Czech Republic?

Matějová Lenka, Nemec Juraj, Křápek Milan and Klimovský Daniel
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Matějová Lenka: Assistant, Department of Public Economics, Faculty of Economics and Administration, Masaryk University, Brno, Czech Republic.
Nemec Juraj: Professor, Department of Public Economics, Faculty of Economics and Administration, Masaryk University, Brno, Czech Republic.
Křápek Milan: Assistant Professor, Private College of Economic Studies, Czech Republic.
Klimovský Daniel: Associate Professor, Department of Political Science, Faculty of Arts, Comenius University, Bratislava, Slovakia.

NISPAcee Journal of Public Administration and Policy, 2017, vol. 10, issue 1, 39-59

Abstract: Many countries have carried out extensive amalgamation-related territorial reforms at the level of local self-government and created relatively large municipalities. The Czech Republic is one of the few remaining European countries with a fragmented territorial structure. There is a lot of discussion in the country about the need for amalgamation, but this discussion is mainly based on political arguments rather than on empirical evidence about the feasibility of amalgamation and its potential to improve local government performance. This paper analyses economies of scale on the local level as a factor that should be reflected in debates about the pros and cons of amalgamation in the Czech Republic. To add to the existing knowledge about the reality of economies of scale on the municipal level in the Czech Republic, we processed the municipal costs of three selected areas on a representative sample of municipalities in the South Moravian Region. The analysis showed that economies of scale can be identified for collecting local fees and for pre-school and elementary education, but not for local administration. Our results suggest that the existence of too small municipalities in the Czech Republic results in inefficiencies and should be addressed.

Keywords: economies of scale; territorial reform; public service; local self-government; local fees; education; local administration; Czech Republic (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:njopap:v:10:y:2017:i:1:p:39-59:n:2

DOI: 10.1515/nispa-2017-0002

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