In Japan, a formula‐based transfer system resulted in local benefits from municipal mergers differing substantially from national benefits. A change in this transfer policy and the mergers that resulted are analyzed using a structural model involving private consumption, public good quality, and geographic distance, along with an asymmetric information problem between the national and local levels of government. The merger process is modeled using a cooperative form coalition formation game. Parameter estimates are obtained using a moment inequalities approach that requires neither an equilibrium selection assumption nor the enumeration of all possible mergers. Estimates suggest that the actual merger incentives the national government offered were weak relative to the optimal incentives, and the post‐merger number of municipalities were large relative to the optimal number.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in August 2015Abstract Does the exercise of the right of self-determination lead to inefficiency? This paper considers a set of centrally planned municipal mergers during the Meiji period, with data from Gifu prefecture. The observed merger pattern can be explained as a social optimum based on a very simple individual utility function. If individual villages had been allowed to choose their merger partners, counterfactual simulations show that the core is always non-empty, but core partitions contain about 80% more (postmerger) municipalities than the social optimum. Simulations are possible because core partitions can be calculated using repeated application of a mixed integer program.Does exercise of the right to self-determination result in an efficient arrangement of political boundaries? There is substantial theoretical interest in this issue both inside and outside of economics, and recent world events, such as the Russian annexation of the (apparently consenting) Crimean peninsula, suggest policy relevance. 1Empirical results regarding the efficiency of jurisdiction formation, however, are very limited. This paper considers a historical set of municipal mergers in Gifu, Japan, that were decided by a central planner in the late 19th century. We show that the observed pattern of * Portions of this paper were originally presented as "An Errors-in-Variables Model for Graph Outcome Data" at the Econometric Society Far East meeting. In addition, some ideas were present in the job market paper version of Weese [2015], but were removed during the publication process. We thank seminar participants at various seminars. In addition, the paper has benefitted greatly from discussion with Steve Berry, Jeremy Fox, Hide Ichimura, Yuichi Kitamura, Tsunetoshi Mizoguchi, Kei Okunuki, and Larry Samuelson. Julien Clancy provided excellent research assistance with an earlier version of the model. Portions of this research were conducted at

Insurgency and guerrilla warfare impose enormous socio‐economic costs and often persist for decades. The opacity of such forms of conflict is an obstacle to effective international humanitarian intervention and development programs. To shed light on the internal organization of otherwise unknown insurgent groups, this paper proposes two methodologies for the detection of unobserved coalitions of militants in conflict areas. These approaches are based on daily geocoded incident‐level data on insurgent attacks. We provide applications to the Afghan conflict during the 2004–2009 period and to Pakistan during the 2008–2011 period, identifying systematically different coalition structures. Applications to global terrorism data and identification of new groups or shifting coalitions are discussed.

are owed a particular debt of gratitude for their support of this and related projects. All errors remain our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.