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Finding your right (or left) partner to merge

Author

Listed:
  • Benjamin Bruns

    (Humboldt-Universitaet zu Berlin, DIW)

  • Ronny Freier

    (Freie Universitaet Berlin, DIW)

  • Abel Schumann

    (Stockholm School of Economics)

Abstract

We study political determinants of municipality amalgamations during a boundary reform in the German state of Brandenburg, which reduced the number of municipalities from 1,489 to 421. The analysis is conducted using data on the political decision makers as well as fiscal and socio-economic variables for the municipalities. We ask whether party representation in the town council influences the merger decision. To identify the effect, we follow a dual approach and make use of different stages in the reform process. First, municipalities were initially free to choose partners. In a later phase of the reform the state legislature forced municipalities to amalgamate. We can, thus, compare voluntary to forced units. Second, we simulate potential mergers from the map of municipalities and compare voluntary mergers to those simulated units. Both approaches show that political representation matters significantly during the voluntary stage of the merger reform. Creation Date: 2015-04-10

Suggested Citation

  • Benjamin Bruns & Ronny Freier & Abel Schumann, "undated". "Finding your right (or left) partner to merge," BDPEMS Working Papers 2015009, Berlin School of Economics.
    • Handle: RePEc:bdp:wpaper:2015009
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    File URL: https://repec.berlinschoolofeconomics.de/bdp/wpaper/pdf/WP_2015-09.pdf
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    References listed on IDEAS

    as
    1. Saarimaa, Tuukka & Tukiainen, Janne, 2015. "Common pool problems in voluntary municipal mergers," European Journal of Political Economy, Elsevier, vol. 38(C), pages 140-152.
    2. Ellingsen, Tore, 1998. "Externalities vs internalities: a model of political integration," Journal of Public Economics, Elsevier, vol. 68(2), pages 251-268, May.
    3. repec:hrv:faseco:4553034 is not listed on IDEAS
    4. Alberto Alesina & Reza Baqir & Caroline Hoxby, 2004. "Political Jurisdictions in Heterogeneous Communities," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 348-396, April.
    5. Henrik Jordahl & Che-Yuan Liang, 2010. "Merged municipalities, higher debt: on free-riding and the common pool problem in politics," Public Choice, Springer, vol. 143(1), pages 157-172, April.
    6. Reingewertz, Yaniv, 2012. "Do municipal amalgamations work? Evidence from municipalities in Israel," Journal of Urban Economics, Elsevier, vol. 72(2), pages 240-251.
    7. Wallace E. Oates, 1968. "The Theory of Public Finance in a Federal System," Canadian Journal of Economics, Canadian Economics Association, vol. 1(1), pages 37-54, February.
    8. Gordon, Nora & Knight, Brian, 2009. "A spatial merger estimator with an application to school district consolidation," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 752-765, June.
    9. Tukiainen, Janne & Saarimaa, Tuukka & Hyytinen, Ari, 2013. "Seat competitiveness and redistricting: Evidence from voting on municipal mergers," Working Papers 38, VATT Institute for Economic Research.
    10. Blesse, Sebastian & Baskaran, Thushyanthan, 2013. "Do municipal mergers result in scale economies? Evidence from a German federal state," University of Göttingen Working Papers in Economics 176, University of Goettingen, Department of Economics.
    11. Saarimaa, Tuukka & Tukiainen, Janne, 2014. "I Don't Care to Belong to Any Club That Will Have Me as a Member: Empirical Analysis of Municipal Mergers," Political Science Research and Methods, Cambridge University Press, vol. 2(1), pages 97-117, April.
    12. Tyrefors Hinnerich, Björn, 2009. "Do merging local governments free ride on their counterparts when facing boundary reform?," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 721-728, June.
    13. repec:bla:econom:v:70:y:2003:i:280:p:673-690 is not listed on IDEAS
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    Cited by:

    1. Saarimaa, Tuukka & Tukiainen, Janne, 2016. "Local representation and strategic voting: Evidence from electoral boundary reforms," European Journal of Political Economy, Elsevier, vol. 41(C), pages 31-45.
    2. Simon Lapointe & Tuukka Saarimaa & Janne Tukiainen, 2018. "Effects of municipal mergers on voter turnout," Local Government Studies, Taylor & Francis Journals, vol. 44(4), pages 512-530, July.
    3. Harjunen, Oskari & Saarimaa, Tuukka & Tukiainen, Janne, 2021. "Political representation and effects of municipal mergers," Political Science Research and Methods, Cambridge University Press, vol. 9(1), pages 72-88, January.
    4. Blesse, Sebastian & Heinemann, Friedrich, 2020. "Citizens’ trade-offs in state merger decisions: Evidence from a randomized survey experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 438-471.
    5. Blesse, Sebastian & Baskaran, Thushyanthan, 2016. "Do municipal mergers reduce costs? Evidence from a German federal state," Regional Science and Urban Economics, Elsevier, vol. 59(C), pages 54-74.
    6. Viladecans-Marsal, Elisabet & Magontier, Pierre & Solé-Ollé, Albert, 2021. "The political economy of coastal development," CEPR Discussion Papers 15780, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    municipality mergers; political decision makers; probit analysis; geospatial analysis;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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