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Voluntary amalgamation of local governments: the Swiss debate in the European context

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Abstract
The debate about the amalgamation of local government units stems from the fact that their political borders (the institutional territory) do no longer coincide with the functional territory required for an efficient provision of most local public services. And both do not correspond with the relational territory which arises out of the private and professional activities of LGUs' residents as they commute daily or periodically for work, shopping and leisure. The core question of this paper is how to reform the institutional and functional territories in such a way that public services are delivered efficiently, according to local preferences and in a way that responds to the needs expressed in the larger relational territory. The paper is divided in six sections. Section one summarizes the debate about LGUs' amalgamation in the Swiss context. Section two tackles the fundamental problem: if too many LGUs are too small, when is small too small and why? Horizontal cooperation is one possible solution, but it creates serious problems in terms of principal-agent, democracy, information asymmetry and moral hazard, explained in Section 3. Section 4 presents the core concept of “noyaux durs” which is one of the effective approaches to LGUs amalgamation. Section 5 details the cantonal financial incentives that are needed to encourage voluntary amalgamation, besides a cantonal planning strategy and technical help in the process of amalgamation. Section 6 concludes with some notes on the performance of the system.

Suggested Citation

  • Dafflon, Bernard, 2012. "Voluntary amalgamation of local governments: the Swiss debate in the European context," FSES Working Papers 426, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    • Handle: RePEc:fri:fribow:fribow00426
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    File URL: http://doc.rero.ch/record/29148/files/WP_SES_426.pdf
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    1. Olson, Mancur, Jr, 1969. "The Principle of "Fiscal Equivalence": The Division of Responsibilities among Different Levels of Government," American Economic Review, American Economic Association, vol. 59(2), pages 479-487, May.
    2. Dafflon, Bernard, 2010. "Local Fiscal Equalization: a New Proposal and an Experiment," FSES Working Papers 418, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    3. Brian E. Dollery & Lorenzo Robotti (ed.), 2008. "The Theory and Practice of Local Government Reform," Books, Edward Elgar Publishing, number 12719.
    4. Brian E. Dollery & Joseph Garcea & Edward C. LeSage Jr (ed.), 2008. "Local Government Reform," Books, Edward Elgar Publishing, number 12592.
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    1. FUSIÓN DE MUNICIPIOS YA
      by Santiago Lago Peñas in Res Publica on 2012-09-09 19:54:23

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    5. Blaeschke, Frédéric & Haug, Peter, 2014. "Does Intermunicipal Cooperation Increase Efficiency? Evidence from the Hessian Wastewater Sector," IWH Discussion Papers 11/2014, Halle Institute for Economic Research (IWH).
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    7. Adekunle, Wasiu & Bekoe, William & Badmus, Sheriff & Anagun, Michael & Alimi, Wasiu, 2021. "Nexus Between Fiscal Discipline And The Budget Process In Africa: Evidence From Nigeria," MPRA Paper 110061, University Library of Munich, Germany.
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    9. Christian Bergholz & Ivo Bischoff, 2018. "Local council members’ view on intermunicipal cooperation: does office-related self-interest matter?," Regional Studies, Taylor & Francis Journals, vol. 52(12), pages 1624-1635, December.
    10. Enid Slack & Richard M. Bird, 2013. "Merging Municipalities: Is Bigger Better?," IMFG Papers 14, University of Toronto, Institute on Municipal Finance and Governance.
    11. Christian Bergholz & Ivo Bischoff, 2015. "Citizens‘ preferences for inter-municipal cooperation in rural areas: evidence from a survey in three Hessian counties," MAGKS Papers on Economics 201523, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    12. Lothar Grall & Juergen Meckl, 2016. "Ice Age Climate, Somatic Capital, and the Timing of the Neolithic Transition," MAGKS Papers on Economics 201644, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    13. Arthur Chisanga & Steven Daka & Tinkler Saul Simbeye & Wezi Kachinda & Emmanuel Chirwa & Edward Chisanga, 2023. "Examining the Impact of Equalization Funds on Service Delivery by Local Authorities: A Case Study of Chongwe District Council in Zambia," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(10), pages 878-897, October.
    14. Tuula Heiskanen & Esa Jokinen, 2014. "Stability and Change of the Quality of Working Life in Restructuring Municipalities," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(2), pages 579-599, September.

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    More about this item

    Keywords

    amalgamation of communes; local government; merger; noyaux fort; participative democracy; principal-agent; size of communes; territorial organization; voluntary versus compulsory amalgamation of communes;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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