Does the method adopted for distribution of services by amalgamating municipalities affect expenditure after amalgamation? : evidence from Japan

Municipal boundary reform (municipal amalgamation) has been done in many countries in recent years as the result of a push to enlarge the size and coverage of local government units, which in turn is driven mainly by the prospect of economies of scale. However, in a notable body of previous literature, the enlargement of local government has not led to reduction of public expenditures. Decision-making before amalgamation might affect to public expenditure after amalgamation. This study uses Japanese municipal-level data and argues for a relation between the choice of public administration distribution method and expenditure after amalgamation. The results show that a plan for distributed or decentralized facility method is more likely to be adopted in a larger administrative jurisdiction and in one with large differences in finances or political structures between amalgamated sub-regions. In turn, a plan for distributed facilities has the effect of pushing up administrative expenditure. -- local government amalgamation ; consensus-building ; multinomial logistic regression ; local government expenditure