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Politics in coalition formation of local governments

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  • Saarimaa, Tuukka
  • Tukiainen, Janne
Abstract
We analyze empirically the coalition formation of local governments using a novel reduced form econometric procedure that allows for multi-partner mergers. Using Finnish municipal merger data where mergers were decided independently at the local level, we find that merger decisions are largely in line with voter preferences. Most importantly, mergers are clearly less likely when the distance of the median voter to the coalition centre is large. However, councillors seem also to prefer mergers where post-merger political competition is lower which indicates a concern for re-election. Interestingly, municipalities do not seem to be seeking economies of scale through merging. This is possibly due to existing cooperation in service production which we find to be a strong predictor of merging.

Suggested Citation

  • Saarimaa, Tuukka & Tukiainen, Janne, 2012. "Politics in coalition formation of local governments," LSE Research Online Documents on Economics 58528, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:58528
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    Cited by:

    1. Tukiainen, Janne & Saarimaa, Tuukka & Hyytinen, Ari, 2013. "Seat competitiveness and redistricting: Evidence from voting on municipal mergers," Working Papers 38, VATT Institute for Economic Research.

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    More about this item

    Keywords

    coalition formation; local politics; choice based sampling;
    All these keywords.

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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