Exploiting the common pool or looking to the future? A study of free-riding leading up to the 2007 municipal amalgamations in Denmark

Sune Welling Hansen

Local Government Studies, 2019, vol. 45, issue 5, 676-696

Abstract: Municipal amalgamations can create incentives for opportunistic behaviour. Several fairly recent studies have examined this on amalgamations in Denmark and Sweden using the so-called law of 1 over n. However, they have yielded inconclusive results and I argue that one plausible explanation is a theoretical deficiency in the law, as it does not account for how future political representation can mitigate the incentive to free-ride. I examine this using large-scale amalgamations in Denmark in 2007. This case is quite unique as the amalgamations were implemented in such a manner that they constitute a quasi-experiment, and because an extra fiscal year was added to the election period where the composition of the new councils was known with certainty, while the municipalities retained some decision-making power. The study’s findings are consistent with the argument that the incentive to free-ride depends on the decision makers’ future political stake in the new, amalgamated municipality.

Date: 2019
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DOI: 10.1080/03003930.2019.1586673

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