Debates on the impact of size of subnational jurisdiction on the costs of public-service delivery have a very long tradition, but results are still far from conclusive. This article applies a quasi-experimental scheme of the synthetic control method for Polish municipal fragmentation to analyze the impact of territorial reform on administrative spending as well as on the operating surplus of the budget. Earlier studies using similar methods focused on amalgamation reforms, so the study of territorial fragmentation is an important new contribution to knowledge on scale effects. The analysis clearly confirms the existence of economy of scale in administrative services. The result for the operating surplus is less clear and more ambiguous. Results of the study are to a large extent a mirror of earlier analysis of territorial amalgamation consequences, which confirms the importance of scale for administrative costs, but not necessarily for costs of other local services.
The concept of tax competition has been successfully applied in an analysis conducted in several European countries, but so far it has not been systematically tested either in Poland or in other countries of Central and Eastern Europe. There are two types of competition discussed in the article: classic competition for mobile tax base and ‘yardstick competition’, in which local politicians compete for political capital being related to the comparison of tax rates with neighbouring municipalities. It is expected that in Poland the ‘yardstick competition’ is more important from the classic competition for the mobile tax base.
Recent years have revitalized debates about territorial amalgamation reforms in many European countries. Proponents of the reforms usually expect significant savings due to economy of scale and increased capacity for service delivery due to better human resources. But opponents claim that amalgamation deteriorates local democracy and some academic analysis suggest that predicted gains of territorial consolidation are exaggerated. Convincing, methodologically sound, empirical evidences are relatively scare. We use observations of actual territorial reforms as an opportunity for "semilaboratory experiment" allowing to assess the impact of change, through the Synthetic Control methodology. So far similar approach (using difference-indifference method) has been applied to some territorial consolidation reforms in Europe (e.g. Denmark, Sweden). The paper studies Polish case. Paper analysis cases of 6 splits of county governments in 2002. The methodology is based on comparing trends of selected variables before and after the split. The "case counties" are compared with the control groups (or control unit), consisting of "the most similar cases" selected on the basis of multiple criteria. The dependent variables are spending on administration and operating surplus. Paper is based on results of the "Impact of Size on Efficiency of Local Governments" project financed by the grant from National Science Centre (grant number 236388, UMO-2013/11/B/HS4/01695).
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