Municipal Amalgamations and Common Pool Problems: The Danish Local Government Reform in 2007

Abstract

Amalgamating municipalities carries risks in terms of public expenditure control. The tax base of the new amalgamated municipality represents a common pool resource. The incentive is to exploit it -that is, to spend before closing time. This article investigates last-minute spending by Danish municipalities before the local government reform in 2007 in which 271 municipalities were reduced to 98. It shows that local councillors exploited this situation to finance local projects before closing time. The article thus demonstrates the occurrence of common pool problems in amalgamation situations. However, it also shows that it is the availability of a common pool that matters, not its size.

Do Municipal Mergers Reduce Costs? Evidence from a German Federal State

“…Opportunistic behavior has been previously documented for expenditures (Hansen, 2014), debt, and assets (Jordahl and Liang, 2010;Hinnerich, 2009;Saarimaa and Tukiainen, 2015), or budget overruns (Blom- Hansen, 2010). There is also evidence for common pool problems prior to municipal mergers for Japanese municipalities (Nakazawa, 2013 14 13 Germany has a complex federal structure of governance, but consists mainly of three governmental tiers.…”

“…8 A related literature studies how fiscal variables evolve before mergers, for example Jordahl and Liang (2010), Hinnerich (2009), Nakazawa (2013, Saarimaa and Tukiainen (2015), Hansen (2014) and Blom-Hansen (2010).…”

Do municipal mergers reduce costs? Evidence from a German federal state

“…Opportunistic behavior has been previously documented for expenditures (Hansen, 2014), debt, and assets (Jordahl and Liang, 2010;Hinnerich, 2009;Saarimaa and Tukiainen, 2015), or budget overruns (Blom-Hansen, 2010). There is also evidence for common pool problems prior to municipal mergers for Japanese municipalities (Nakazawa, 2013 In practice, municipalities in all states are responsible for the provision of a broad range of public goods and services.…”

Decentralisaties in het lokaal bestuur: bestuurlijke lessen uit Denemarken

“…Op 1 januari 2007 ging het nieuwe bestel van start. Elders is in meer detail beschreven wat de hervormingen precies behelsden (Mouritzen, 2007;Van Brunschot & Fraanje, 2007;Blom-Hansen, 2010;Christiansen & Klitgaard, 2010;Peters, 2012). 1 In dit artikel zet ik op een rijtje welke voor Nederland relevante inzichten aan de bestuurlijke hervormingen in Denemarken kunnen worden ontleend.…”