https://orcid.org/0000-0001-5333-2701
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ABSTRACT
The administrative boundaries of the central city almost universally cover a smaller area than its functional boundaries. Hence, central cities often supply public goods beyond their own residents. Mergers with neighbouring municipalities offer an opportunity for central cities to internalize more of these externalities. However, suburban municipalities have few incentives to support such mergers. The 2014–17 Norwegian voluntary municipal merger programme offers a rare opportunity for large-scale empirical evidence on the preferences of central cities and suburbs over mergers. The paper examines the merger decisions made by municipalities in all metropolitan areas in Norway. Central cities were much more interested in merging than suburban municipalities: while the central cities wanted to merge with a total of 75 suburban municipalities, only 15 suburbs accepted. Differences between central cities and suburbs in political preferences (such as support for anti-reform parties) or the quality of government cannot explain this. While low suburban population size and central city taxes have some impact, by far the main predictor of merger preferences is whether the municipality is a suburb or the central city. While central cities want to internalize the inter-jurisdictional spillovers from their public goods production, suburbs prefer to continue free riding.
ACKNOWLEDGEMENTS
This paper benefited from the helpful comments of Michael Storper, Klaus Mohn and three anonymous reviewers. Earlier versions of the paper were presented at the Norwegian Political Science Conference 2017 in Stavanger and at the Regional Studies Association Conference 2017 in Dublin. Silje Haus-Reve provided valuable research assistance.
DISCLOSURE STATEMENT
No potential conflict of interest was reported by the author.
Notes
1 For instance, two 2013 special issues in Public Finance and Management looked at such reforms in England and Wales, Finland, Estonia, South Korea, Canada, the United States, Australia and New Zealand (Dollery & Grant, Citation2013a, Citation2013b), while a 2010 edited volume examined 11 European countries (Baldersheim & Rose, Citation2010).
2 Restructuring local government boundaries in metropolitan areas was one of the explicit aims of the reform, as stated by the national government. The municipal proposition for 2015 highlights the ‘lack of coherence between administrative and functional divisions’ as one of the main explanations for the needs of reform, linking this in particular to urban areas. Accordingly, the reform aims for municipal boundaries that are ‘better adapted to natural housing and labour market regions’ (Ministry of Local Government and Regional Development, Citation2014).
3 Of course, many public services, especially publicly provided private goods such as schools, nurseries and welfare services, are limited to local residents. However, public or quasi-public goods are by definition non-excludable or imperfectly excludable and can thus be used by residents and non-residents alike. Many such goods are mainly consumed within a limited area and are provided by local governments (e.g., local roads). Some of these will mainly benefit local residents (e.g., noise barriers), while others potentially benefit the whole regional population (e.g., concert halls). There is a large literature on the ‘publicness’ of publicly provided goods that addresses this, for example discussing goods that are subject to congestion and therefore considered local public goods (Brueckner, Citation1981; Craig, Citation1987; Edwards, Citation1990).
4 These spillovers create problems for market-based solutions to metropolitan governance in the tradition of Tiebout (Citation1956), as pointed out by various authors (e.g., Bloch & Zenginobuz, Citation2006; Williams, Citation1966; Zodrow & Mieszkowski, Citation1986).
5 In the Norwegian case, nine of the large or medium-sized cities analyzed in this paper are in road toll zones and use the income to finance infrastructure development and public transport in the metropolitan area. These road toll zones are governed by agencies owned jointly by central city and suburban municipalities.
6 For instance, municipalities in metropolitan areas typically consist of several school catchment areas, which creates competition between different districts for funding and implies that taxpayers across the municipality contribute to paying for a service that only residents of a particular district can use.
7 This remains true in most metropolitan areas despite urbanization processes in suburbs and the rise of edge cities.
8 Swanstrom (Citation2001) discusses the argument that suburban municipalities would also benefit from metropolitan government due to its positive impact on the region's competitiveness in the global economy, concluding that there is limited evidence for the propositions that fragmented government harms competitiveness and that suburban municipalities depend on central cities for their economic well-being.
9 The background for this decision was that the national government was a minority government that had to rely on support from other parties to implement the reform. The Liberal Party provided this support on the condition that the reform was based on voluntary mergers between municipalities. More fundamentally, top-down structural reform was seen as a violation of the constitutionally enshrined principle of local self-government (Flo, Citation2015). Following the local decisions, the national government imposed mergers on 13 municipalities that had rejected them. In two cases, this involved mergers between suburban municipalities and central cities (Søgne with Kristiansand and Songdalen, and Haram with Ålesund and three suburbs).
10 This is the case for Fredrikstad, Skien, Sandefjord and Moss, which all have marginally higher outbound than inbound labour mobility. Other municipalities in these regions also have more outbound than inbound labour mobility, with the exception of Porsgrunn, near Skien.
11 This is the case for Stavanger and Sandnes, Kristiansand and Lillesand, Fredrikstad and Sarpsborg, Skien and Porsgrunn, Tønsberg and Horten, Sandefjord and Larvik, and Arendal and Grimstad.
12 The differences in votes for parties gaining more than 3% of the national vote is used, that is, Labour, Conservatives, Progress Party, Centre Party, Liberal Party, Christian People's Party, Greens and Socialist Left.
13 Ideally, we would also take into account the characteristics of other potential partners besides the central city, and perhaps compare their desirability with that of the central city. However, the difficulty of identifying precisely who the other potential partners were in each case makes this unfeasible.
14 Inhabitants in smaller municipalities also tend to be more satisfied with municipal services, although this is partly explained by their demographic composition and higher transfers from the central state (Monkerud & Sørensen, Citation2010).