| Chapter 2: | Government Consolidation |
The probit specification estimates the incremental effect of selected variables on the probability that the referendum will pass.
(2) Yi = 1 if a + 
Xi + ui > 0
(3) Yi = 0 if a +Xi + ui = 0
Xi + ui > 0
(3) Yi = 0 if a +
Xi + ui = 0
where a is an intercept term, Xi represents the vector of explanatory variables (described below), and ui is the error term.
The Quality Issue
Government spending is only one concern of residents and policymakers. A significant part of the analytical treatment of government consolidation/fragmentation revolves around the quality of services. Briffault (1996) studied local government efficiency in the context of local jurisdictional boundaries. He concluded,
Decentralization, which is intended to promote the political empowerment of individuals and communities, has produced the very structural constraints that serve to limit the ability of metropolitan area localities to respond to the needs of metropolitan area residents. Local boundaries are too narrow to permit effective self-governance for metropolitan area residents. They need to be supplemented by a regionally bounded metropolitan political structure endowed with the regulatory and fiscal capacity to tackle regional problems and the accountability that election by a metropolitan area electorate provides. (p. 223)
An extensive study of local government size and the perceived quality of services in more than 100 North Carolina communities reported,
Size of government is positively related to the perceived quality of public services. No significant relationship is found between the number of administrative units in a locality and citizens’ perceived quality of services. However, the number of administrative units per capita is significantly and negatively related to quality of services. The findings suggest the consequences that might occur when policy makers decide to reorganize or alter the size of