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

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.     

Territorial upscaling of local governments: a variable-oriented approach to explaining variance among Western European countries

Local government systems change at varying speeds. While some countries have dramatically reduced the number of local governments during a short period of time, other countries have seen only incremental change or relative inertia. A number of explanations for structural change have been put forward in the comparative local government literature, but these explanations have to a small extent been tested empirically. This article uses statistical indicators to analyse changes in the local government systems in 17 Western European countries between 2004 and 2014. Some often-cited explanations for what drives structural change receive little support. Still, the article demonstrates that changes tend to occur in situations marked by different combinations of decentralisation, urbanisation, fiscal stress and a recent history of territorial upscaling.     

Crossing Boundaries: Action Networks,Amalgamation and Inter-Community Trust in a Small Rural Shire

Local government reforms introduced throughout the mid-1990s radically altered the face, institutional form and structure of local government in the state of Victoria, Australia. In rural areas, where shire boundaries often reflected deeply ingrained notions of communal interest and identity, the forced merger of previously independent and fiercely parochial councils into larger unified political and administrative units was particularly contentious. Drawing on a survey of 649 residents from the rural Shire of Buloke, this paper examines attitudes towards local government amalgamation, levels of inter-community trust and reciprocity, and how these vary across different parts of the municipality. Social network analysis is then used to explore the relationship between these attitudes and trust levels and the structure and orientation of respondents’ inter-community networks. The paper finds that despite the passage of more than a decade, significant residual resentment surrounding the impact of the forced amalgamations remains evident across most communities in Buloke Shire. There is a widespread perception that the reforms have undermined rather than improved the operation of local government across the municipality, and that post-amalgamation political structures have largely failed to effectively reconcile the diverse and sometimes disparate interests of Buloke's constituent towns and communities. The network analysis also suggests that much work remains to be done to develop a meaningful sense of community based on the new administrative boundaries, with very little evidence of cross-community cooperation, coalition building or issue-based interaction detected.     

Political participation and municipal population size: A meta-study

Do municipal amalgamations enforce or do they weaken (local) political participation? This is an important question considering a worldwide tendency for municipalities to merge. This question will be answered using a mixed-method approach based on a literature overview (meta-study) in general and additional quantitative (turnout figures, election studies) and qualitative (interviews) data regarding the situation in The Netherlands in particular. Political participation is consistently measured using indicators that measure behaviour (especially turnout figures) instead of perceptions and opinions such as trust or internal and external political efficacy. Local political participation seems to decrease with an increase in municipal population size.     

Chalk and Cheese: A Comparative Analysis of Local Government Reform Processes in New South Wales and Victoria

A substantial empirical literature exists on the consequences of local government reform programs. However, much less effort has been directed at examining how reform processes affect the outcomes of reform programs and little work has been invested in the comparative analysis of local government reform processes. To address this neglect in the literature, this article provides a comparative analysis of the contemporary municipal reform initiatives in the New South Wales and Victorian state local government systems. It is argued that the much more deliberative and inclusive Victorian approach represents a superior approach to the hurried “top-down” New South Wales method.     

Municipality size,political efficacy and political participation: a systematic review

ABSTRACT

It is an old adage that local government is a training ground for democracy. Its human scale means that political amateurs can contribute effectively and meaningfully to the politics of a state. But in a political climate seemingly driven to consolidate local government into ever larger units, can a not so local local government still elicit an efficacious and participatory citizenry? This paper explores the effect of municipality population size on two important aspects of democratic culture: political efficacy and political participation. Via a two-part systematic review, the paper examines how extant empirical literature bears on the relationship between size and both of these aspects, hypothesising that political efficacy plays a mediating role between size and participation. The findings are unequivocal: citizens of smaller municipalities feel a greater sense of political efficacy and participate to a greater degree in local politics.     

Arab Local Government in Israel: Partial Modernisation as an Explanatory Variable for Shortages in Management

About one-third of all local and regional councils in Israel are Arab. Ever since their establishment, and especially during the last decade, the Arab authorities have suffered from financial crises and from administrative and organisational deficiencies that jeopardize their functioning. Arab local politics is characterised by the increased strength of traditional clan-affiliated forces, at the expense of modern representative groups. The present article has tried to explain the problems that beset the management of Arab local government in Israel. We believe that the explanation is rooted in the fact that ‘partial modernisation’ is the dominant explanatory variable for Arab local government shortages.     

Intermunicipal cooperation,municipal amalgamation and the price of credit

In many countries, local government size is increasingly thought to be insufficient to operate efficiently. Two possible solutions to this problem are amalgamation and intermunicipal cooperation. This paper applies a novel methodology to shed light on the efficiency implications of this choice. Using a unique and rich micro-level dataset, we find that intermunicipal organisations (IOs) in the Netherlands consistently pay higher interest rates than municipalities, while there is no economic reason to do so. We interpret this as a form of inefficiency. Municipal amalgamation, on the other hand, does not result in higher interest rates. Our analysis eliminates one possible explanation, dispersed ownership of IOs, as the number of partners cooperating in an IO does not affect interest rates (no ‘law of 1/n’). This leaves the introduction of extra hierarchical layers as a result of cooperation, and the ensuing reduction in monitoring, as the most probable explanation.     

If territorial fragmentation is a problem,is amalgamation a solution? – Ten years later

ABSTRACT

Over the last decade, municipal territorial amalgamation has occurred in 15 European countries. The same period has seen spectacular progress in research on the relationship between municipal size and the functioning of local governments, as well as the impacts of territorial reforms on economic performance and local democracy. Quasi-experimental designs treating territorial reforms as specific “research laboratories” have constituted an important part of that trend. However, there are still important gaps in the knowledge and the study results are often inconclusive. These observations call for a research agenda for the future.     

Municipal Amalgamations in the Low Countries: Same Problems,Different Solutions

Municipal amalgamations in Belgium took place some time ago and the local council elections of 8 October 2006 marked the thirtieth anniversary of this thorough overhaul of the local administrative landscape. The municipal amalgamations of 1976 were undoubtedly the biggest reform the local level in Belgium has ever faced. The Netherlands also underwent municipal amalgamations, but there the amalgamation process followed a different pattern, taking longer, with discussions conducted in a different way. This article examines the principal similarities and differences between these two countries with regard to municipal amalgamations. The first part of the article looks at the different scales of local government in several European countries; in the sections following, the Belgian and Dutch experience with municipal amalgamations is discussed in greater detail. In the last section an attempt is made to answer the question of why the processes in the two countries were so different.     

How learning aggregates: a social network analysis of learning between Swedish municipalities

Using a unique data set of learning among all 290 Swedish municipalities, we use social network analysis to analyse how learning networks aggregate nationally. To facilitate this analysis, we describe five ideal-typical patterns of aggregation: core-periphery, small world, top-down regionalism, bottom-up regionalism and urban hierarchy. Each of these ideal-types has important implications for how ideas, information and innovation will circulate among municipalities. Social network analysis allows us to both isolate these patterns and to appreciate composite patterns. The analysis indicates that Swedish municipalities are a small-world network with regional and hierarchical elements. County seats serve an important role as network hubs.     

From public to mixed ownership in local public services provision: an empirical analysis

There is a long tradition of companies that provide local public services, such as energy distribution or solid waste collection, being strategically important for the promotion of the development of areas where they are present and having a great influence on citizens’ quality of life. This article examines the determinants of the choice of ownership structure for Italian companies that provide local public services, and the effects that this choice has on their performance. Economic and financial data at company level was merged with economic, political, financial and territorial data on the municipality with the majority of shares in it. A two-stage multinomial selection model was employed, in order to carry out the analysis with more than two alternative ownership structures and to control for endogeneity. The empirical evidence indicates that the municipality’s political and budgetary conditions matter in the choice of ownership structure. Although the computed Average Treatment Effects seem to indicate that mixed ownership increases operating efficiency, the profitability indicators provide evidence to the contrary.     

Variants of transparency: an analysis of the English Local Government Transparency Code 2015

Transparency policies and initiatives at the local level have expanded around the world but our academic understanding is still limited. Few studies have systematically analysed transparency practices at the local government level. This paper develops an analytical framework to examine local government transparency practices based on the literature. The framework is used to analyse the English Local Government Transparency Code 2015. The study shows that the Code delivers openness to a partial extent but has not yet met all criteria for transparent practices. The findings could contribute to the development and improvement of transparency practices at local governments.     

Reputation reform strategies in local government: investigating Denmark and Norway

This article investigates reputation reform in Norwegian and Danish local government and whether they have the same strategy content depending on the degree of administrative involvement and municipality size. Political and administrative actors are likely to cultivate different types of reputation strategies (place or organisational reputation), which explicitly embrace the potentially diverging interests cultivated by the two types of actors. We use a comparative design and quantitative method with an empirical ambition to explore local government reputation strategies in two national contexts. We find that local government responses to reputation reform depend on the size of the municipality and the type of actors involved; the larger the municipality, the more the administration is involved. And the more that administrative actors are involved, the more the strategies target organisational reputation. The country-specific factors do not appear to be the most important determinants for reputation reform strategies.     

More than a Friendly Visit: A New Strategy for Improving Local Governing Capacity

This article argues that in order to take into account changes in the governance era, performance assessment at the local level may well have to be refocused. Researchers will have to reconsider their strategies. They should consider the governance character of public administration and pay attention to co-operative settings and democratic aspects. In addition, researchers should think not just about gathering facts about the performance of local government, they should also try to contribute to a learning process. This paper presents a new strategy for assessing the capacity that local governments have to get things done. This strategy acknowledges the governance context of local authorities and casts a keen eye on the way local governments fulfil their functions and aim to involve various stakeholders. The evaluation of this assessment strategy shows its relevance, although minor improvements could be made.     

The Flypaper Effect Revisited: Intergovernmental Grants and Local Governance

Abstract

Local governance arrangements shape the incentives of local actors, which may in turn influence fiscal choices. By emphasizing the role of local government institutions in local fiscal choices, we seek to bridge between median voter and Leviathan models prevalent in the literature. We then offer some preliminary evidence to support this explanation by empirically testing several propositions regarding the flypaper effect in intergovernmental grants. One limitation of the median voter model is that the model does not consider political institutions and their influences on government expenditures. In this study, we attempt to capture the influence of political dynamics in determining public expenditures by considering institutional variables. Test results show that the political institutional variables could be one of the explanation variables for the flypaper effect.     

Territorial reforms in Europe: effects on administrative performance and democratic participation

Territorial reform is the most radical and contested reorganisation of local government. A sound evaluation of the outcome of such reforms is hence an important step to ensure the legitimation of any decision on the subject. However, in our view the discourse on the subject appears to be one sided, focusing primarily on overall fiscal effects scrutinised by economists. The contribution of this paper is hence threefold: Firstly, we provide an overview off territorial reforms in Europe, with a special focus on Eastern Germany as a promising case for cross-country comparisons. Secondly, we provide an overview of the analytical classifications of these reforms and context factors to be considered in their evaluation. And thirdly, we analyse the literature on qualitative performance effects of these reforms. The results show that territorial reforms have a significant positive impact on functional performance, while the effects on participation and integration are indeed ambivalent. In doing so, we provide substantial arguments for a broader, more inclusive discussion on the success of territorial reforms.     

Multi-Agency Protocols as a Mechanism to Improve Partnerships in Public Services

This paper discusses and tries to explain the paradoxical observation that a local government reform aimed at reducing or even removing bureaucracy actually leads to more formalisation, not less. During the last 10–15 years more than 40 per cent of Norwegian municipalities have adopted an organisational model that makes the administration more disaggregated, decentralised and flat. The reform has been promoted by strong post- or even anti-bureaucratic rhetoric, arguing for increased managerial autonomy at the operational level. The basic idea is that greater autonomy will create better performance. The paradox of increased formalisation is discussed on the basis of rhetoric, unintended consequences, diagnostic problems and linguistic problems. The paper concludes by pointing out the need for a more nuanced conception of bureaucracy than the dichotomous approach of post-bureaucracy can offer. It also outlines a couple of supplementing explanations for increased formalisation.     

Leading the way: the integral role of local government within a multisector partnership delivering a large infrastructure project in an Australian growth region

Multisectoral partnerships with local government have emerged as a strategy for solving ‘wicked’ problems in communities, although research about these types of public–private partnerships is limited. Available evidence suggests that differentials in power and status, value bases and perspectives on priorities have been problematic in partnership building with community. This paper examines the role of local government as the funded, lead organisation, in a public–private partnership for planning, designing and constructing a business accelerator in one of Australia’s growth regions. Partnership scope, role and outcomes were measured against a conceptual framework mapping success indicators. Findings show core principles for successful partnership were achieved and supported by the role, capacity and commitment of local government to forming strong working relationships with consortium partners. Relationship building and commitment to collective project outcomes were pivotal to success. Further research is needed to assess whether emerging trends hold and consolidate over time.