Could a municipal reform lead to cost savings? An essay on the relationship between population size and municipal costs
Abstract: The essay estimates the relation between population size and municipal costs. Whether the efficiency in service provision in municipalities is depending on population size is discussed in Sweden as well as other countries. The relation is measured using two measures for total costs and two measures for “fixed costs” associated with having an additional decision level. The result give some support for a negative relation between costs and population size, but is sensitive to the cost measure and model specification. Whether the municipality is located in a rural or urban region is of importance for the results, which highlights the need of looking beyond population size in the discussion on municipal amalgamations
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