Do merging local governments free ride on their counterparts when facing boundary reform?

• 成果类型: Article
• 署名作者: Hinnerich, Bjoern Tyrefors
• 署名单位: Aarhus University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2009.01.003
• 发表日期: 2009
• 页码: 721-728
• 关键词: Amalgamations; Annexations; Boundary reforms; Common pool; Difference-in-difference; fiscal policy; Free riding; Local governments

摘要

The Western world exhibited a significant trend towards larger local governments in the twentieth century, which was driven to a large extent by boundary reforms. Boundary reforms can provide economic benefits, but may also give rise to costs driven by Opportunistic political behavior. This study uses a Swedish compulsory reform to test for such behavior. The reform gives a local government the incentive to accumulate debt before a merger takes place, since the taxpayers in the new locality will share the cost. The strength of the incentive to free ride is determined by the population size of the initial locality relative to that of the new locality. I find an economically large and statistically significant free riding effect. (C) 2009 Elsevier B.V. All Fights reserved.