An international comparison of arguments and practices of local government consolidation

This paper asks how the benefits of municipal amalgamations compare to the costs thereof. It answers this research question by comparing the postwar experiences with such consolidation in a variety of OECD countries. First, this paper argues that nowadays upscaling local and regional government is popular. Many Western countries have plans to upscale local government or have already implemented such plans. Various developments, such as the development in the welfare state, decentralization processes, and urbanization have pushed the possibilities for professional service delivery of small local systems to their limits. Hence, there are good reasons for upscaling. Second, this paper argued that processes towards public sector consolidation are mainly political processes. Vested interests, ideological framing, intergovernmental war, institutional and interpersonal conflicts and power play are central. Although these political processes can result in a variety of outcomes, all are indicative for some form of upscaling. It seems inevitable, either by way of municipal mergers or by creating additional governmental layers taking over the service delivery of local governments, or by inter-municipal cooperation. Such upscaling does affect the professionalism of service delivery and the quality of local democracy, although previous research is divided about the answer to the question to which extent and in which direction the effects go. That research is based on the well-known Dahl-Tufte dilemma, mooted in 1973, in which better service delivery is balanced against the loss of citizen effectiveness. This paper argues that two other dilemmas might be as important. First, there might be a neutralizing effect of public sector upscaling annulling the merits of decentralization. Secondly, there is the serious consideration of long-term effects against temporary, transition costs. The transition costs result in the recommendation that if one wants to upscale, it is preferred to do it in one-go and not through repeated incremental processes. Without additional knowledge about the optimal size, upscaling can only be seen as gambling.