Do Municipal Amalgamations Work? A Systematic Literature Review

Source abstract

Municipal amalgamation has become a key policy tool globally, drawing significant academic attention for its effects on local governance, efficiency, and equity. This study reviews international empirical literature on municipal amalgamations, incorporating new evidence from transitional economies and introducing a spatial-scale perspective to differentiate impacts at unit-wide and subunit levels. Key findings include: (1) Most literature focuses on overall postmerger unit, with limited attention to subordinate units. Studies on overall impacts emphasize efficiency, whereas those on subordinate units focus on resource allocation and political representation. (2) Amalgamation often fails to achieve economies of scale, with subunits engaging in fiscal free-riding, increasing financial burdens. Its effects on public services are limited, and political representation in smaller areas declines. (3) Emerging research in transitional economies indicates that amalgamation improve environmental governance but has mixed economic outcomes. This review provides insights for scholars and guidance for policymakers making informed decisions on municipal amalgamation.