This study discusses the amalgamation of local governments as a method of creating larger and more effective local governments that place fewer burdens on central government budgets.Beyond 'economies of scale', our findings from a case study of Israel's 2003 amalgamation plan support the "democracy" claim. This study reveals that amalgamation reduces local democracy in terms of voter turnout and representation. The likelihood of having a greater level of local democracy increases in smaller local governments, in terms of population. The new "efficiency and democracy" approach suggests that a new amalgamated local government must be sufficiently small to maximize local democracy. While at the same time, new amalgamated local governments need to be sufficiently large to maximize economies of scale. This study uses field research with in-depth interviews to enhance the findings of the empirical analysis.

This article examines the relative impact of internal and external factors on the financial decline of local Arab municipalities in Israel. We employ a unique case study to demonstrate that the negative relationship between local management policies and local financial crises is stronger than any other relationship; in addition, this relationship is expected to hold for other local authorities in Israel and for local authorities in Western countries. The new theoretical approach developed in this study indicates that, with respect to local authorities, the "local management approach" more often explains a financial crisis than other approaches. Keywords financial crises, local governments, Israel, Arab, local management approach, socioeconomic decline approach The financial sustainability of governmental and/or non-governmental organizations during financial crises is an important topic of scientific debate.

This study extends our understanding about the interrelationship between taxation policy, democracy and financial performance in local governments. Every government, particularly local ones, would like to make their residents more willing to pay taxes. Based on the

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