A technical approach to local government amalgamation

The paper deals with an empirical attempt to apply a variant of King’s model of optimal local government size. The debate on local government amalgamation has been particularly intensified by the economic crisis from 2008 that imposed dramatic pressures towards reduction of government expenditures. Despite the fact that the focal point of ongoing and future reforms are fiscal savings, there is a lack of methodology that would enable construction of a tool for better decision-making with regards to the process of local government amalgamations. In this paper, we apply a genetic algorithm as an iterative and flexible optimization procedure that enables calculating a territorial amalgamation of local governments that would save cost. This does not only allow for determination of a cost saving amalgamation scenario, but also can serve as a benchmark of tolerable costs of local government provision of local goods and services.