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.     

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.     

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.     

Identifying and Coping with Fiscal Emergencies in Ohio Local Governments

Abstract

This study examines the reasons fiscal emergencies occur in Ohio local governments and the strategies that local governments use to recover. In Ohio, fiscal emergencies have regularly occurred predominantly at the local level. This study aims to reveal the internal process that both bring on and ameliorates fiscal emergencies. Previous studies failed to differentiate between fiscal stress and fiscal emergencies and did not include the role of the Ohio Fiscal Emergency Law in assisting local governments in restoring long term fiscal health. This study finds fiscal emergencies in Ohio were caused by: (1) the increased costs associated with unfunded state-mandated programs and, (2) major economical downturns brought on by local plant closings. Local governments were found to have responded in the short run by strategies such as targeted expenditure cuts and in the long run by increased the use of economic development.     

Death by a Thousand Grants? The Challenge of Grant Funding Reliance for Local Government Councils in the Northern Territory of Australia

In July 2008, the local government sector in the Northern Territory of Australia underwent wide-sweeping reforms whereby 53 councils, most of which were located in remote Indigenous communities, were amalgamated into eight regional shires. The dominant justifications for these reforms focused on internal ‘deficit’ views about the community council sector, including lack of competent and ethical staff, managerial workforce instability, inefficient use of resources, and poor oversight as the primary causes of chronic underperformance and dysfunction. This paper identifies and discusses the under-scrutinised role of grants revenue dependency and volatility in the demise of remote small councils in the Northern Territory. We analyse financial data to demonstrate the extreme volatility in year-on-year grants funding. With their high dependency on grants revenue, such volatility and unpredictability resulted in councils being hamstrung in their ability to strategically plan and ensure stability in service delivery, infrastructure management and employment provision. We argue that these fiscal dynamics, fuelled by hierarchical intergovernmental relations, contributed significantly to dysfunction in the sector, as well as mutually reinforcing pre-existing structural and endogenous weaknesses. This argument runs against the common conceptualisation of the sector as requiring of externally imposed structural reform. We conclude by suggesting that there are factors additional to scale that need to be incorporated into analysis of the effects of amalgamation policies on remote councils.     

Auckland,New Zealand – fair game for central party politics

This paper explores the influence of central party politics in Auckland local government, in New Zealand’s largest city, following the 2010 amalgamation. Political parties have been an accepted and dominant presence in European representative democratic local government, throughout the 20^th century. Not so, however, in New Zealand and Australia, where citizens have ‘flocked to the banner “Keep Politics out of Local Government”. Our analysis of the self-declared party accreditation status of candidates and elected members demonstrates that political affiliation, at least in the main centre Auckland, is on the rise, counter to assumptions that New Zealand local government is largely removed from central politics.     

Did the Big Stick Work? An Empirical Assessment of Scale Economies and the Queensland Forced Amalgamation Program

In 2007, the Queensland Government imposed forced amalgamation with the number of local authorities falling from 157 to just 73 councils. Amalgamation was based inter alia on the assumption that increased economies of scale would generate savings. This paper empirically examines pre- and post-amalgamation (2006/07 and 2009/10) for scale economies. For the 2006/07 data, evidence of economies of scale was found for councils with populations up to 98,000, and thereafter diseconomies of scale. Eight percent of councils in 2006/07 (ten councils) – representing 64% of the state’s population – exhibited diseconomies of scale. For the 2009/10 data, the average cost curve remained almost stationary at 99,000 residents per council, but almost 25% of all councils (thirteen councils) were now found to exhibit diseconomies of scale. The compulsory merger program thus increased the proportion of Queensland residents in councils operating with diseconomies of scale to 84%.     

What’s in a Name? Assessing the Performance of Local Government Classification Systems

Local government classification systems are employed in many countries for regulation, grant transfers and other public policy purposes. Given the pivotal role these classification systems play in public policy, their accuracy is a matter of some importance. Classification systems take several forms typically consisting of groupings of municipalities based on factors such as degree of urbanisation, population size and the like. However, to date none of these classification systems have been tested for homogeneity with respect to environmental constraints or validated against external data. This paper employs the classification system for New South Wales (NSW) local authorities as a representative case study to demonstrate that a wider range of external constraints should be considered for the robust classification of local councils.