European Regional Science Association
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European Regional Science Association
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The abstract for paper number 248:
Antti Moisio, Government Institute for Economic Research, Helsinki, Finland, Roope Uusitalo, Labour Institute for Economic Research, Helsinki, Finland
The impact of amalgamations on local public expenditures in Finland
Finnish local government is characterised by a large number of small municipalities. More than half of the municipalities have less than 6000 inhabitants, only eighteen municipalities have more than 40 000 inhabitants, and the largest, Helsinki, 560.000. Municipalities produce and deliver most of the social welfare, health care, educational and cultural services in Finland. Municipalities take care of health centres and district hospitals, care for the elderly, care of the handicapped and the mentally ill, and social work in general. Municipalities are also responsible for funding and operating elementary and secondary schools, high schools and vocational high schools. The discussion about municipalities’ financial situation and their service responsibilities is very intensive in Finland at the moment. It seems that a growing number of municipalities are being stretched to their limits when fulfilling their tasks. In some cases, the municipalities’ capability to deliver stable basic services has been seriously questioned. A traditional solution to utilise the scale effects in municipal services has been the intermunicipal co-operation. However, municipal amalgamations are becoming more popular solution to the increasing municipal problems. The state also encourages the municipalities to merge in order to reduce the number of municipalities and increase the average size of the municipalities. This study analyses the economic effects of municipal amalgamations performed in Finland during period 1970 - 2000. A matching estimator method is used to select a comparison group for the municipalities that have merged. Using the comparison group, the economic effects of amalgamations will be estimated.
Unfortunately full paper has not been submitted.