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I Don't Care to Belong to Any Club That Will Have Me as a Member: Empirical Analysis of Municipal Mergers*

Published online by Cambridge University Press:  14 October 2013

Tuukka Saarimaa  and
Janne Tukiainen
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Abstract

The efficiency of local public goods provision and the functioning of local democracy crucially depend on the size and number of local jurisdictions. This article empirically analyzes voluntary municipal mergers in Finland. Our main focus is on aspects that have been somewhat neglected in prior empirical work: whether local democracy considerations, representation and voter preferences are involved in shaping the resulting municipal structure. The main results imply that some municipalities are forced to merge due to fiscal pressure and have to trade off political power to be accepted by their partners. The study also finds that the median voter's distance from services matters, while population size does not. The latter, somewhat surprising, observation is possibly explained by existing municipal co-operation, which already exhausts potential economies of scale.

Type
Original Articles
Information
Political Science Research and Methods , Volume 2 , Issue 1 , April 2014 , pp. 97 - 117
Copyright
Copyright © The European Political Science Association 2013 

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Footnotes

*Tuukka Saarimaa is Senior Researcher, Government Institute for Economic Research VATT, Arkadiankatu 7, P.O. Box 1279, FI-00101 Helsinki, Finland ([email protected]) and Janne Tukiainen is Senior Researcher, Government Institute for Economic Research VATT, Arkadiankatu 7, P.O. Box 1279, FI-00101 Helsinki, Finland ([email protected]) and Research Fellow, Helsinki Center of Economic Research (HECER). The authors would like to thank Essi Eerola, Elias Einiö, Olle Folke, Ronny Freier, Ari Hyytinen, Aki Kangasharju, Kaisa Kotakorpi, Jani-Petri Laamanen, Teemu Lyytikäinen, Antti Moisio, Henry Overman, Gerard Padró i Miquel, Rohini Pande, Jaakko Pehkonen, Torsten Persson, Heikki Pursiainen, Matti Sarvimäki, Otto Toivanen, Eric Weese, anonymous referees and seminar and conference participants at EPCS 2010, FEAAM-Tampere 2010, HECER, Jyväskylä, LSE, Manchester, Oxford and VATT for useful comments and discussions. Oskari Harjunen and Niklas Jahnsson provided excellent research assistance. Janne Tukiainen is grateful to the Emil Aaltonen Foundation, Jenny and Antti Wihuri Foundation, and the Yrjö Jahnsson Foundation for financial support and STICERD at the London School of Economics and Political Science for hospitality. Tuukka Saarimaa is grateful to the Finnish Cultural Foundation for financial support and SERC at the London School of Economics and Political Science for hospitality. We also thank the Finnish Innovation Fund Sitra for funding.

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