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

Author

Listed:
  • 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.)

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.

Suggested Citation

  • Matějová Lenka & Nemec Juraj & Křápek Milan & Klimovský Daniel, 2017. "Economies of Scale on the Municipal Level: Fact or Fiction in the Czech Republic?," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 10(1), pages 39-59, June.
    • Handle: RePEc:vrs:njopap:v:10:y:2017:i:1:p:39-59:n:2
    DOI: 10.1515/nispa-2017-0002
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    References listed on IDEAS

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    1. Soukopová Jana & Nemec Juraj & Matějová Lenka & Struk Michal, 2014. "Municipality Size and Local Public Services: Do Economies of Scale Exist ?," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 7(2), pages 151-171, December.
    2. Faulk, Dagney Gail & Hicks, Michael J. & Cebula, Richard J., 2011. "Book Review: Local Government Consolidation in the United States," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 41(1), pages 1-1.
    3. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    4. Fox, William F. & Gurley, Tami, 2006. "Will consolidation improve sub-national governments ?," Policy Research Working Paper Series 3913, The World Bank.
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