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Structural Design

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Local Public Finance and Economics

Abstract

This chapter discusses size, structure, and responsibilities of local governments and local government jurisdictional options. This includes municipal consolidations, amalgamations, and reliance on voluntary arrangements including intermunicipal agreements and/or service boards to improve the overall efficiency of the municipal sector. Municipal amalgamations, consolidations, and restructuring generally occur in response to the rapid increase in urbanization, a need to provide additional services passed down from senior levels of government, the desire of senior levels of government to deal with fewer municipalities, and the necessity of getting access to a local tax base that encompasses a wide geographical area.

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Notes

  1. 1.

    Data and information were collected from websites for each country and from the OECD.

  2. 2.

    In London, the upper tier is called the Greater London Authority (instead of a county) and the lower tiers are referred to as boroughs (instead of districts) except for the City of London which is called a city.

  3. 3.

    Overall, the number of German municipalities has decreased by one-third since 1990.

  4. 4.

    County government has been eliminated in Rhode Island, Connecticut, and parts of Massachusetts. In addition, a number of independent cities and consolidated city-counties operate under municipal governments that serve the functions of both city and county.

  5. 5.

    For a more detailed discussion especially as they exist in Metropolitan areas, see Slack and Bird 2013; Bahl and Linn 2014; Slack and Chattopadhyay 2013; and Steylter 2009.

  6. 6.

    These advantages also extend to the upper-tier responsibility in a clearly defined two-tier system of local government.

  7. 7.

    Professionals may be more technically efficient in delivering services but not more economically efficient in making decisions. Economic efficiency is more than technical efficiency—the latter is a necessary but not sufficient condition for economic efficiency. Technical efficiency exists when a producing unit (firm, government, agency) operates in a way such that it is not possible to secure any additional output given the available inputs (labor, material, and capital) and level of technology. Economic or allocative efficiency is achieved when society gets the greatest net benefits from the allocation of its scarce resources.

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Kitchen, H., McMillan, M., Shah, A. (2019). Structural Design. In: Local Public Finance and Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-21986-4_4

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  • DOI: https://doi.org/10.1007/978-3-030-21986-4_4

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