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The economic impact of city–county consolidations: a synthetic control approach

Joshua Hall, Josh Matti and Yang Zhou ()
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Yang Zhou: West Virginia University

Public Choice, 2020, vol. 184, issue 1, No 2, 43-77

Abstract: Abstract Although more rapid development is a primary motivation behind city–county consolidations, few empirical studies explore the impact of consolidation on economic development. No studies look at government consolidation in the United States using modern causal inference methods. We use the synthetic control method to examine the long-term impact of city–county consolidations on per capita income, population, and employment. The results from the three cases explored indicate that consolidation does not guarantee development and actually can have negative effects. Additionally, consolidation can deepen the urban-rural divide by accelerating the decline of rural populations relative to those of urban areas. The effects vary based upon the county, time horizon and development measure. The results are robust to placebo test simulations and counterfactuals constructed only from counties with earlier failed consolidation attempts. Our results highlight how public choice considerations surrounding the implementation of governmental consolidations are crucial to outcomes and can help inform any subsequent city–county consolidation attempts.

Keywords: Local governments; City–county consolidation; Development; Synthetic control method (search for similar items in EconPapers)
JEL-codes: H11 H70 R11 R58 (search for similar items in EconPapers)
Date: 2020
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Working Paper: The Economic Impact of City-County Consolidations: A Synthetic Control Approach (2017) Downloads
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DOI: 10.1007/s11127-019-00699-z

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