Project

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Fiscal effects of inter-municipal cooperation and mergers

English title Fiscal effects of inter-municipal cooperation and mergers
Applicant Köthenbürger Marko
Number 176389
Funding scheme Project funding (Div. I-III)
Research institution D-MTEC ETH (Swiss Federal Institute of Technology)
Institution of higher education ETH Zurich - ETHZ
Main discipline Economics
Start/End 01.04.2018 - 31.03.2022
Approved amount 284'564.00
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Keywords (3)

Mergers ; Inter-municipal cooperation; Local public finance

Lay Summary (French)

Lead
Dans de nombreux états fédéraux, l'importante fragmentation des juridictions locales (communes) ainsi que leur faible taille moyenne en terme de population rend la fourniture décentralisée de biens et services publics locaux de plus en plus problématique. Dans ce contexte, les gouvernements locaux ont essentiellement adopté deux stratégies afin de surmonter le désavantge de leur petite taille : les collobarations intercommunales et les fusions.
Lay summary

Les collaborations entre communes et les fusions sont souvent motivées par la nécessité de réduire les dépenses ou d'en contraindre l'évolution. Néanmoins, les effets budgétaires et fiscaux des collaborations et des fusions de communes restent une question ouverte à laquelle ce projet de recherche entend répondre.

Notamment, les conséquences budgétaires des collaborations et fusions ne seront pas uniquement observables au niveau des dépenses globales, où des économies en termes de coûts devraient intervenir, mais également au niveau d'autre éléments budgétaires. Une analyse uniquement au niveau des dépenses globales pourrait masquer les ajustements entre postes de dépenses. Analyser dans quelle mesure les collaborations et les fusions affectent ces ajustements budgétaires est crucial dans l'optique de comprendre les effets globaux de ces différents dispositifs institutionnels.

Répondre à ces questions devrait non seulement permettre de quantifier les effets budgétaires des collaborations et fusions mais cela doit également permettre de mesurer les effets des fusions entre des communes ayant déjà collaborer auparavant. En effet, tout porte à penser que les effets d'une fusion entre des communes collaborant déjà de manière intensive seront plus faible que dans le cas d'une fusion entre des communes qui ne collaborent pas. La prise en compte de l'historique de collaboration entre communes doit nous permettre de comprendre comment les collaborations intercommunales influence les effets des fusions.
Direct link to Lay Summary Last update: 11.04.2018

Responsible applicant and co-applicants

Employees

Abstract

Over time, the significant fragmentation of local jurisdictions in many federations and their on average small population has become increasingly problematic with respect to the decen-tralized provision of public goods. Against this background, local governments have adopted two predominant strategies to overcome the shortcomings of being too small: inter-municipal cooperations and mergers. The aim of the current study is to analyze the fiscal effects of in-ter-municipal cooperation and mergers. From an empirical perspective, the issue of how mu-nicipal mergers and cooperation affect fiscal decisions and public finances at the local level is not well researched, as we explain in the next sectionResearch questionsCooperations among municipalities and municipal mergers are frequently motivated by ex-penditure saving arguments. However, the fiscal effects of and the interaction between the fiscal effects of municipal mergers and cooperation are still an open question which we seek to answer in this project. The fiscal consequences of cooperations and mergers will not only be observable in the changes on the expenditure side, where cost savings are to be expected, but also in other budgetary items. Looking solely at total expenditures might suppress the effect of expenditure savings due to adjustments on the expenditure side of the budget. Exploring the differences (in terms of budgetary adjustments) in fiscal effects between cooperations and mergers is crucial for gaining an empirical understanding of the overall fiscal effects of these two institu-tional arrangements.Shedding light on these questions not only quantifies the overall fiscal merits of cooperations and mergers, but also the effects of mergers of municipalities that have previously cooperat-ed. Mergers with prior cooperation might have smaller expenditure-side effects compared to mergers among previously non-cooperating municipalities. Accounting for the history of cooperation thus allows us to obtain conditional estimates of the effects of mergers Different refinements of the basic questions of the fiscal effects of cooperations and mergers are conceivable. First, we will also analyze the potential heterogeneity in budgetary responses and their determinants such as political institutions or cantonal laws. Second, the fiscal effects described above might be referred to as reduced-form estimates since they might be the consequence of budgetary adjustments that either are due to the expenditure savings or may in fact accrue to other behavioral responses (such as migration responses). Finding evidence that is consistent with these behavioral responses and, thereby, disentangling the total fiscal effect is one goal of this project.
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