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Merging Municipalities: Is Bigger Better?

Author

Listed:
  • Enid Slack
  • Richard M. Bird

    (University of Toronto)

Abstract

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.

Suggested Citation

  • Enid Slack & Richard M. Bird, 2013. "Merging Municipalities: Is Bigger Better?," IMFG Papers 14, University of Toronto, Institute on Municipal Finance and Governance.
    • Handle: RePEc:mfg:wpaper:14
    as

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    File URL: https://tspace.library.utoronto.ca/bitstream/1807/81253/1/imfg_paper_14_slack_bird_Feb_27_2013.pdf
    File Function: First version, 2013
    Download Restriction: no
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    References listed on IDEAS

    as
    1. Bernard Dafflon, 2012. "Voluntary amalgamation of local governments: the Swiss debate in the European context," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1204, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Enid Slack & Juan R. Cuadrado-Roura & José Miguel Fernández Güell & Eduardo Rojas & Richard Bird & Jeroen Klink & Christian Lefévre & Joan Subirats & Quim Brugué & Andrés Monzón & Alberto Etchegaray, 2005. "Governing the Metropolis: Principles and Cases," IDB Publications (Books), Inter-American Development Bank, number 79939 edited by Juan R. Cuadrado-Roura & José Miguel Fernández Güell & Eduardo Rojas, February.
    3. Sylvie Charlot & Sonia Paty & Virginie Piguet, 2015. "Does Fiscal Cooperation Increase Local Tax Rates in Urban Areas?," Regional Studies, Taylor & Francis Journals, vol. 49(10), pages 1706-1721, October.
    4. Faguet, Jean-Paul, 2004. "Does decentralization increase government responsiveness to local needs?: Evidence from Bolivia," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 867-893, March.
    5. Frey, Bruno S. & Eichenberger, Reiner, 1996. "FOCJ: Competitive governments for Europe," International Review of Law and Economics, Elsevier, vol. 16(3), pages 315-327, September.
    6. Fox, William F. & Gurley, Tami, 2006. "Will consolidation improve sub-national governments ?," Policy Research Working Paper Series 3913, The World Bank.
    7. Kitchen, H., 1993. "Efficient Delivery of Local Government Services," Papers 93-15, Queen's at Kingston - School of Policy Studies.
    8. Michael Smart, 1998. "Taxation and Deadweight Loss in a System of Intergovernmental Transfers," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 189-206, February.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Blesse, Sebastian & Roesel, Felix, 2019. "Merging county administrations – cross-national evidence of fiscal and political effects," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 45(5), pages 611-631.
    2. Roesel, Felix, 2017. "Do mergers of large local governments reduce expenditures? – Evidence from Germany using the synthetic control method," European Journal of Political Economy, Elsevier, vol. 50(C), pages 22-36.
    3. Michael Fenn & André Côté, 2014. "Provincial-Municipal Relations in Ontario: Approaching an Inflection Point," IMFG Papers 17, University of Toronto, Institute on Municipal Finance and Governance.
    4. Daniel Henstra & Jason Thistlethwaite, 2017. "Climate Change, Floods, and Municipal Risk Sharing in Canada," IMFG Papers 30, University of Toronto, Institute on Municipal Finance and Governance.
    5. Bob Baldwin, 2015. "Municipal Employee Pension Plans in Canada: An Overview," IMFG Papers 23, University of Toronto, Institute on Municipal Finance and Governance.
    6. Enid Slack & Richard M. Bird, 2013. "Does Municipal Amalgamation Strengthen the Financial Viability of Local Government? A Canadian Example," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1305, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    7. Zack Taylor & Alec Dobson, 2020. "Power and Purpose:Canadian Municipal Law in Transition," IMFG Papers 47, University of Toronto, Institute on Municipal Finance and Governance.
    8. P. V. Stroyev & M. N. Rawaiev, 2016. "Urban Agglomeration as an Element of Regional Policy (Canada example)," Russian Journal of Industrial Economics, MISIS, issue 2.
    9. Zachary Spicer, 2015. "Cooperation and Capacity: Inter-Municipal Agreements in Canada," IMFG Papers 19, University of Toronto, Institute on Municipal Finance and Governance.
    10. Klien, Michael & Michaud, David, 2019. "Water utility consolidation: Are economies of scale realized?," Utilities Policy, Elsevier, vol. 61(C).
    11. Zachary Spicer, 2022. "Organizing Canadian Local Government," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 1(Future of), May.

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    More about this item

    Keywords

    municipalities; amalgamation; infrastructure; large cities;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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