The Challenge of Local Government Size

The Challenge of Local Government Size

Theoretical Perspectives, International Experience and Policy Reform

Studies in Fiscal Federalism and State–local Finance series

Edited by Santiago Lago-Peñas and Jorge Martinez-Vazquez

Expert contributors in economics and political science offer a comprehensive breakdown of the issue of local jurisdiction fragmentation and provide recommendations for successful policy reform. Topics discussed include economies of scale, the costs and benefits of voluntary and forced amalgamation programs, the correlation between government size and corruption, privatization, and inter-municipal cooperation. A combination of theory and empirical evidence provides depth and makes this book an invaluable addition to the literature.

Chapter 10: Options for rationalizing local government structure: a policy agenda

Brian Dollery, Michael Kortt and Bligh Grant

Subjects: economics and finance, public sector economics, politics and public policy, public policy


In comparison with higher tiers of government, the range of services provided by local government across different national jurisdictions is characterized by substantial heterogeneity. While in some countries, such as Australia and New Zealand, local authorities deliver a comparatively narrow array of services, focused mostly on ‘services to property’, in other national contexts, like the United Kingdom, the local government sector offers a much broader assortment of services, including numerous ‘services to people’ (Dollery et al., 2008). A further complicating factor resides in the fact that in many local government systems, the composition and quality of service provision is largely prescribed by central and state governments rather than decided by local authorities themselves. This complexity deepens when we consider the wide variety of methods employed to deliver these services. Throughout the developed world, local government adopts an intricate mix of approaches encompassing not only traditional ‘in-house’ delivery, but also alternative delivery modes, including for-profit, non-profit, inter-municipal cooperation, franchises, subsidies, and through volunteers (Andrews and Entwistle, 2010). Moreover, reliance on these different methods is evolving through time in accordance with both prevailing managerial doctrine and learned experience (Warner and Hefetz, 2008).

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