Merging Municipalities: Is Bigger Better?

This paper describes the challenges of governing metropolitan regions in different parts of the world and the range of restructuring options that are considered to address them, including two-tier models, voluntary cooperation, special purpose districts and amalgamations. The authors conclude that, based on the international evidence, two-tier structures may be more effective in allowing metropolitan regions to reap the benefits that come with large size, while retaining the responsiveness typical of smaller municipalities. It also includes a case study of the amalgamation in Toronto that provides new empirical research about its effects on expenditures on municipal services and tax revenues, and the implications for governance and citizen participation. While Toronto’s amalgamation has resulted in higher expenditures and has not solved any of the regional issues, it may have had some benefits: a fairer sharing of the tax base among rich and poor municipalities and the ability to equalize local service levels across the larger city.