Local Government Consolidation in the United States By Dagney Fa ...

Measuring government quality in aggregate for service provision has thus far defied analysts’ ability beyond observing the patterns of Tiebout sorting of individuals. That is, communities with relatively poor public services (especially in relation to their costs) are most likely to see out-migration, whereas high-quality public service areas will see in-migration.

The quality of services matters, but data on the quality of individual services can be derived only from survey responses or proxies (such as crime rates per capita for policing or home insurance rates for fire protection). These proxies suffer significant weaknesses for two reasons. First, many factors beyond the quality of public services may affect them. Second, there is a significant problem with the direction of causation. For example, high per capita reported crime rates could be due to a very effective police department with good reporting of crime.

Data and Explanatory Variables

We used data on cities and counties that have voted on consolidation referenda since 1970 in the United States to examine the determinants of consolidation.⁸ Table 2.1 shows the definitions and sources for the variables that we used in the model.⁹ Descriptive statistics are shown in table 2.2. Of the 107 referenda since 1970 for which we have complete data, 15.9% eventually approved consolidation. Almost 52% of the county population lived in the city that was considering consolidation. Per capita income was about two percentage points lower in the city than the county. The average number of consolidation attempts was 1.4. More than half of the attempts were in metropolitan areas. Typically, local government employment, expenditures, and payroll per capita in county areas that were considering consolidation referenda were 10 to 12 percentage points higher than the same measures in all local governments within the state as a whole. During the 10-year period before the