What determines citizens’ attitudes to municipal mergers?

ABSTRACT

To what extent can citizens’ attitudes to municipal mergers be explained by costs and benefits incurred by merging with a specific consortium of neighbouring units? To answer this question, we analyse data taken from a survey to citizens of 119 Norwegian local governments in the fall of 2019, merely a few months before the merger of their own unit with one or more neighbouring units was to be implemented as the result of a national local government reform decided over two years in advance. In line with previous studies, we find that citizens tend to prefer merging with wealthier neighbours rather than poorer ones. Moreover, we find that this preference is only observable among respondents in smaller units merging with one or more larger units. Furthermore, differentials in private wealth among the merging units appear to affect preferences more than public wealth. However, we did not find support for the theoretical assumption that citizens prefer mergers with units that are similar in terms of political and societal characteristics. Overall, our study suggests that concerns over local redistributive losses may impede support for mergers and, hence, increase the political costs of implementing comprehensive structural reforms.

KEYWORDS:

• Local government
• amalgamations
• municipal mergers
• local government reform
• territorial reform

Introduction

For several decades, governments worldwide have sought to consolidate the territorial structure of their local government systems through merger reforms (Baldersheim and Rose 2010; Dollery and Robotti 2008; Swianiewicz et al. 2022). However, a key challenge for successful reform implementation is widespread local resistance towards mergers and the ensuing risk of political fallout for the reforming government. For local actors, including citizens and politicians as well as municipal employees, the decision to merge with one or more neighbouring units can be a high-stakes gamble with much to gain or lose – particularly so if the prospective partners are larger and more populous. To a junior partner in a proposed merger, agreeing to a merger implies agreeing to dissolve one’s home jurisdiction to gain a certain greater prospective good, usually by reaping economies of scale in municipal service provision or by increasing the overall governance capacity of local institutions. To support a merger proposal, self-interested local actors would have to value these potential gains higher than the costs of losing various special qualities of their soon-to-be-extinct jurisdiction.

Several types of costs may come into play. A merger implies that the scope for determining political priorities in line with special local preferences is diluted, since policies in the new unified jurisdiction would come about as a compromise among the preferences of a larger number of heterogenous communities with potentially diverging interest (Oates 1972). Concurrently, the increased size of the jurisdiction could impede the responsiveness of the local representative system, thereby making it more difficult for members of the existing local community to communicate their preferences directly to their representatives (Dahl and Tufte 1973). Furthermore, because all assets owned by the existing jurisdiction would be transferred to the new enlarged unit, the benefit of owning any particularly valuable asset would be greatly depreciated, since that asset would be shared with a higher number of citizens (Filer and Kenny 1980). Similarly, unequal tax bases in the merging units imply citizens in the most well-off unit stand to subsidise services for their less well-off neighbours.

In several studies, cost–benefit assessments such as these have been found to profoundly impact local actors’ attitudes towards territorial mergers. The empirical basis for these studies include surveys of random samples of citizens (Blesse and Heinemann 2020; Eklund 2018; Kübler 2018; Strandberg and Lindell 2020; Strebel, Kübler, and Marcinkowski 2019), local representatives or top officials (Sørensen 2006), the outcomes of merger referendums (Brink 2004; Bruns, Freier, and Schumann 2015; Johnsen and Klausen 2006; Lapointe 2018; Strebel 2021a), formal letters of protests against enforced mergers during government-initiated reforms (Hanes, Wikström, and Wångmar 2012), as well as analyses of patterns of actual mergers based on structural data of the units involved (Austin 1999; Bhatti and Hansen 2011; Saarimaa and Tukiainen 2014). However, to the best of our knowledge, no study thus far has analysed how cost–benefit assessments may shape patterns of opposition and support for real-world mergers of the informants’ own municipalities, based on quantitative evidence regarding the actual allocation of costs and benefits between the merging units. Such analysis is interesting because it would elucidate rather precisely how much weight, if any, local actors actually assign to the wide spectrum of costs and benefits associated with mergers, as identified above.

As noted by the author of a survey-based analysis of attitudes towards metropolitan mergers, “to make a statement about mass public preferences for specific reform types (…) would require surveying citizens’ preferences at a moment when different reform options are discussed” (Strebel 2022, 1100). The main contribution of our study is to do exactly this by surveying citizens of 119 Norwegian local governments just a few months before the merger of their own unit with one or more neighbouring units, as the result of a national local government reform decided over two years in advance (Klausen, Askim, and Christensen 2021). The considerable interim period between the reform decision and implementation of mergers, as well as the high political salience of the reform, implies that these respondents would be highly knowledgeable regarding the upcoming merger and in a good position to assess the costs and benefits associated with merging. Thus, we ask the following questions: To what extent can citizens’ attitudes to municipal mergers be explained by their perceptions of actual costs and benefits incurred by merging with a specific consortium of neighbouring units?

The remainder of this article is structured in the following manner. The next section discusses the theoretical basis for the analysis and presents five hypotheses. The “study context” section presents the Norwegian local government system and the local government reform, as well as the data and the operationalization of variables. The results section presents the analysis and results, and the last section presents the discussion.

The costs and benefits of mergers

Why would citizens want to support merger proposals? Governments justify reforms on the basis of a wide range of alleged benefits, including modernization, increased quality and capacity for welfare provision, improved conditions for local development, or the need to respond to the forces of Europeanization; however, the most frequently cited benefits relates one way or the other to increased efficiency (Baldersheim and Rose 2010, 244; Swianiewicz et al. 2022; Tavares 2018). The potential for reaping economies of scale is often emphasized, for example, by increased managerial efficiency or by spreading fixed costs over more residents.¹ Citizens may well look favourably on merger proposals if they believe that increased cost efficiency is a feasible outcome, as this could lead to lower local taxation or improved public service provision in the new entity.

Based on the literature on municipal mergers we assume that citizens weigh these potential benefits against two categories of potential costs: The risk of decreasing allocative efficiency and policy responsiveness due to increasing heterogeneity between groups or sub-districts in the merged unit, and the risk of redistributive losses as a result of merging with a less wealthy unit. The theoretical basis for developing assumptions based on heterogeneity and redistribution is discussed in the following account.

The risk of decreasing allocative efficiency

A key economic justification for delegating political powers to lower-tier jurisdictions is improved allocative efficiency – which implies that local and regional governments may align budgetary priorities more closely with citizens’ preferences than a central government would be able to do (Oates 1972). If citizens’ wants and needs vary significantly from one locality to another, a centralized decision-making process that would provide the same level of output of each individual task or service across all localities would result in a loss of welfare. This loss of welfare would equate to the sum of differences between local preferences and the unitary priority determined by municipal authorities. This economic case for delegation of authority to local political bodies is supported and augmented by long-standing ideas regarding local democracy and the values of political participation (Pateman 1977). Local political institutions offer citizens an opportunity to participate in politics in an accessible, unintimidating, and immediately relevant context (Geissel and Newton 2012), and such local political engagement can foster positive attitudes to politics both at the local and the national level (Vetter 2002). Citizens’ inputs can provide elected politicians with valuable knowledge about local wants and needs, thus improving the alignment of policy priorities with citizens’ preferences (Mansbridge 2003).

Research indicates that “preference heterogeneity” – variation in wants and needs among subgroups of the population – tends to increase with jurisdictional size (Gerring and Veenendaal 2020). The economic implication for municipal mergers is that territorial enlargement could lead to a loss of allocative efficiency, since a broader range of diverging preferences would be subsumed under the new jurisdiction’s consolidated set of priorities. Moreover, such enlargement could jeopardize the capacity of local democratic institutions to ascertain citizens’ preferences and translating these into decisions, for example, due to a reduced ratio of representatives per citizen or because local political institutions are rendered less accessible and less inviting to citizens (Denters et al. 2014). If these potential costs do not put citizens off from the idea of merging altogether, one would at least assume that citizens would prefer to merge with a similar unit in which members’ political preferences would probably not be too dissimilar to one’s own.

Although the theoretical assumption of a preference for merging with similar units has figured prominently in studies on public attitudes to jurisdictional mergers, empirical support thus far has been mixed. In a study of Sweden’s state-imposed reform in 1952, Hanes, Wikström, and Wångmar (2012, 2745) found that “differences between municipalities, with respect to political party, did not seem to affect the willingness to amalgamate”. Further, Saarimaa and Tukiainen (2014, 112) found that different language status between merging units did not appear to affect the wave of voluntary merger decisions that took place in Finland in the 2000s.² Studying Denmark’s largely top-down amalgamation reform in 2007, Bhatti and Hansen (2011) found no significant evidence that political homogeneity (mayor from same side of the political spectrum) or fiscal homogeneity (similar fiscal capacity) is significant for explaining the pattern of actual mergers. However, Bruns, Freier, and Schumann’s (2015) analysis of forced and voluntary mergers in the German federated state of Brandenburg in 1999–2004 found robust correlation between political congruence (similar vote share of dominant party in each of the potential merger partners) and the tendency to merge. Furthermore, Gordon and Knight (2009, 762) found that fiscal, spatial, and demographic heterogeneity (dissimilar levels of spending on education, adult education, and population density) “served as a repelling force” in merger decisions on school districts in Iowa, USA, in the 1990s.

The resistance against merging with dissimilar units may to a certain extent be countered by an opposing, size-related effect. Hanes, Wikström, and Wångmar (2012, 2739) noted that large municipalities are “likely to have a strong influence on public good provision after amalgamation”, which implies that citizen’s concerns over increased preference heterogeneity – and, hence, their reluctance to merge – may be inversely related to municipal size. In other words, it can be assumed that a merger with a much smaller partner would not have much of an impact on existing priorities. Logically, this size-related effect would likely increase not only with the size of one’s own municipality but also with the difference in size between own unit and the merging partners.

A study on merger referendums in Norway found that turnout varied dramatically and was strongly inversely related to size (Folkestad et al. 2021). The likely explanation for this is that mergers are of more imminent concern – in terms of potential costs as well as potential benefits – to citizens of smaller units than to those of larger ones (Borge et al. 2017, 5). The junior partner would often have more to gain from increasing scale efficiency than the larger partner would. Moreover, the risk of losing out in terms of reduced alignment between priorities and preferences would probably be greater in the smaller unit than in the larger one. These assumptions could explain why citizens in larger units would tend to be more indifferent towards merger proposals than citizens in smaller units, which is as suggested by the observed differences in referendum turnout.

Following this, we propose the following hypotheses in this paper:

H1: Citizens are more positive towards merging their local government with similar units than with dissimilar units.

H2: The relationship between similarity and support for merger is weaker among citizens in municipalities that will become the senior partners in the new merged municipalities.

The risk of redistributive losses

Local government mergers may entail significant redistribution among merging units. As concluded in a previous study, “consolidation is a vehicle for transferring wealth” (Filer and Kenny 1980).³ Because wealth tends to be unevenly distributed among local governments, a rather realistic scenario is that certain merging units will experience net welfare loss, even if a merger results in net welfare gains for the entire group of merging units taken together.

After a merger, the combined resources of the merging local government form a “common pool” (Hardin 1968; Ostrom 1990), which is used to fund a uniform basket of services to citizens in the newly merged entity. As a result of the merger, taxpayers in a high-income jurisdiction would inevitably subsidise their counterparts in a less prosperous jurisdiction by contributing more pro capita to this common pool. Furthermore, because the volume and quality of public services would be uniform across the merged units, taxes paid by citizens in the wealthier unit would be partially spent to fund services in the poorer unit post-merger. The fact that the need for certain public services, such as social services or even health services, tends to be higher among low-income groups tends to further increase redistribution (Gerdtham and Jönsson 2000). Moreover, variations in fiscal policies as well as in tax revenues and central government transfers tends to cause considerable variation in the fiscal robustness of local governments (Boadway and Shah 2009). Whereas certain local governments manage to accumulate a healthy budgetary surplus year by year, others may be heavily indebted and with few slack resources. A merger would equalize such fiscal differences, again causing redistribution. Lastly, and in the same manner, any valuable asset owned by one local government would, following a merger, fall into the common pool and no longer benefit solely the citizens of the local government that originally owned it.⁴

A number of studies have addressed the effects of wealth redistribution on municipal mergers and on the attitudes to mergers among local actors. Analysing data from local referendums on municipal mergers in Japan, Miyazaki (2014) found that local governments that receive large unconditional grants from the central government were unlikely to merge. Similarly, Yamada (2016) found that decreasing government grants (in combination with loss of decision-making powers) disincentivise Japanese villagers from merging with cities. Furthermore, analysing 55 merger referenda in USA for the period 1949–1976, Filer and Kenny (1980) fond that suburban local governments with high levels of personal income tended to oppose mergers with neighbouring cities. In an analysis of 1477 local merger referenda in Switzerland, Strebel (2021a) found that units with lower tax rates – an indicator of private wealth – voted against a merger to a greater extent than others. Further, a study of referenda on municipal secessions in Canada found that “richer towns (…) are also more likely to gather a plurality of votes in favour of secession” (Lapointe 2018, 235). Further, survey data from Norway indicates that politicians and top officials are less willing to merge if their municipality has a high level of exogenous revenues (Sørensen 2006). Another study found that wealthy local governments submitted objections to enforced mergers of Swedish municipalities in the 1950s to a greater extent than poorer ones (Hanes, Wikström, and Wångmar 2012).

Apart from wealth redistribution, a number of studies highlight non-fiscal redistributive effects of mergers. In a study of post-merger growth among merging municipalities in Japan, Suzuki and Sakuwa (2016) evidenced negative effects on population growth among municipalities that were not the largest in a merger consortium. The centralization of administrative capacities in the new city centre and concurrent downscaling or abolishment of functions in peripheral areas was cited as one probable explanation for this. In the same national context, Yamada (2018) found that voters in rural municipalities that merged with larger units experienced reduced levels of public services as compared to voters in non-merging rural municipalities. A likely explanation is that residents in the smaller unit lose political clout because they become a minority in the new larger unit after a merger. Harjunen, Saarimaa, and Tukiainen (2021) found a measurable decrease in local public sector jobs located in non-central parts of merged municipalities in Finland, likely due to unequal geographic political representation in post-merger municipal councils. Similarly, Egger, Koethenbuerger, and Loumeau (2022), using geo-coded night-light data, evidenced increased economic activity in German post-merger centre municipalities and corresponding decreased activity in “absorbed” (non-central) units.

As with the risk of decreasing allocative efficiency due to heterogeneity, it can be surmised that the effects of relative wealth on attitudes towards a merger is affected by the size of one’s own jurisdiction compared to that of the merger partner. While a small, wealthy unit would lose greatly by its wealth being shared among a much larger group of residents in the new unit, a large unit would lose less by sharing with a poorer but much smaller unit. A previous study suggests that large municipalities are occasionally willing to trade wealth for political control by incorporating small and poor municipalities. In contrast, the latter are willing to trade political control for wealth (Strebel 2021a).

Based on the above discussion, we propose the following hypotheses:

H3: Citizens’ support for a merger is lower in municipalities in which the public income is higher than the public income of their merging partners.

H4: Citizens’ support for a merger is lower in municipalities in which the private income level is higher than the private income level of their merging partners.

H5: The relationship between public/private wealth and support for mergers is weaker among citizens in municipalities that will become the senior partner in the new merged municipalities.

Study context

Norway’s local government reform

Norway has a three-tier system of government, with 11 county governments and 356 local governments (2023). County and local governments are general purpose bodies with elected councils responsible for a wide range of tasks and services, including primary education, primary health, care services, and local roads and infrastructure. Established in 1837 as a system of 392 units, the Norwegian local government system became increasingly fragmented as a result of municipal splits (Hansen 1991). A major local government reform in the 1960s reduced the number of units from 744 in 1950 to 451 in 1970 (Hansen 2016). Mainly because of a more limited reform in the early 1990s, the number of municipalities was reduced to 428 at the beginning of the local government reform in 2014.

The local government reform was announced in May 2014, less than a year after the Solberg government (cons.) entered office (Klausen, Askim, and Christensen 2021). As a key part of the government’s modernization programme, municipal mergers were considered crucial to improving local government service provision. Although Norway’s parliament, Stortinget, is mandated by law to decide on the structure of the local government system, the government announced that mergers would be voluntary except in “a few [cases] where individual local governments must be prevented from blocking changes that are necessary in light of regional considerations” (Kommunal – og Moderniseringsdepartementet (KMD) 2014, 51). The government announced a two-year consultation period during which local governments were encouraged to submit merger applications based on local negotiations. At least 221 local consultative referendums were held, often with a negative outcome (Folkestad et al. 2021). While three early merger proposals involving seven local governments were fast-tracked and implemented in 2017, the majority of mergers were decided by parliament in May 2017 and implemented in January 2020. In total, 119 local governments were merged into 47 new units, thereby reducing the total number of units to 356.

Municipal finances

Local governments are funded by municipal income tax (40%), governmental framework grants (32%), earmarked grants (5%), and user fees/other sources (23%) (Kommunal- og Disriktsdepartementet (KDD) 2023, 46-53). The bulk of government grants are allocated on a pro capita basis. An expenditure equalization scheme compensates for involuntary cost disparities in the provision of key municipal services based on a set of statistical criteria. In addition, a few local governments receive regional cohesion grants and special grants for local contingencies. An income equalization scheme compensates units with low tax revenues for 60% of the difference between own tax revenue and the national average, by deducting a corresponding amount from units with above-average tax revenues. Additionally, units with tax revenues below 90% of the national average receives compensation for 35% of the difference between their own revenue and 90% of the national average. Certain municipalities generate substantial revenues from local natural resource exploitation – including aquaculture, hydropower, and wind power – either through fees and taxation or as owners or part-owners of power plants. These revenues are only equalized to a limited extent.

Data

To assess the relative impact of the risks of decreasing allocative efficiency and redistributive losses on attitudes towards merger, based on citizens’ perceptions of the actual consequences of a merger, we analyse responses from a sub-sample of the Norwegian Local Election Studies (Falnes-Dalheim and Bye 2021). This sub-sample consists of 1322 respondents residing in one of the 119 units that were to be merged 1/1-2020. The number of respondents per municipality varies between 1 and 141, with an average of 11. The results remain significant if the municipalities with only one respondent are excluded (see Table A3 in the appendix).

As noted in studies on voluntary mergers in Finland (Harjunen, Saarimaa, and Tukiainen 2021) and Japan (Yamada 2018), our sampling strategy complicates causal inference due to selection bias. Since most of the mergers in the local government reform were decided by municipal councils on a voluntary basis (Askim, Houlberg, and Klausen 2022) the sample is taken from 119 municipalities that constitute a non-random sample of the 428 pre-reform municipalities. If citizens of voluntarily merged units are more supportive of the merger than their counterparts in non-merging units, there is a risk of false negatives (type II-error) (Banerjee et al. 2009), thereby underestimating the explanatory power of key determinants in our model in the population.

Since our research design is based on quantitative data on actual, upcoming mergers, an inevitable consequence is that residents of non-merging municipalities must be excluded from the analysis. Hence, to a certain extent, our research design involves a trade-off between type I and type II errors, which is not an uncommon occurrence in social science research (Doan 2005). Although the implication is that the generalization of the results to the entire population must be made with caution, we argue that the potential of our design to minimise false positives (type I error) more than outweighs the costs in terms of increasing the risk of type II error (Neyman and Pearson 1967, 190–191). It must also be noted that attitudes towards mergers as well as determinants of heterogeneity and wealth distribution vary considerably in our data set (see Table 1). The fact that the majority of municipalities included in the sample decided to merge voluntarily clearly does not imply that attitudinal and structural inequalities are balanced out. Consequently, there remains ample empirical basis for testing theoretical assumptions regarding support and opposition.

Table 1. Descriptive statistics.

	Min	Max	Mean	SD
Attitude towards merger (Positive = 1)	0	1	0.54	0.50
Mayor heterogeneity	0	1	0.42	0.49
Settlement heterogeneity	0	81.25	35.92	22.52
Workforce heterogeneity industry	0	22.16	3.79	4.52
Workforce heterogeneity agriculture	0	20.85	4.90	5.80
Public income difference	−23.89	28.51	−3.35	8.65
Private income difference	−14.45	16.66	−0.06	4.49
Relative size difference	1	99	21.85	32.48
Senior partner (=1)	0	1	0.69	0.32
Age	18	95	48.24	16.90
Gender	0	1	0.51	0.50
Education	1	8	4.56	1.70
Vote for government coalition	0	1	0.30	0.46
Number of partners in consortium	2	5	2.7	0.78

The dependent variable “attitude towards merger” is measured through the following dichotomous survey question: “Your municipality is going to be merged with one or more neighbouring municipalities. Do you support this merger?” (yes/no) We perform a logistic regression analysis and calculate odds ratios for being positive towards the merger (yes) for individuals living in municipalities with different values on variables that measure heterogeneity and redistributive gains/losses.

Data on the independent variables are obtained from Statistics Norway and from the Local Government Dataset collected by Fiva, Halse, and Natvik (2020). The heterogeneity variables express the difference between the coalition partners in a merger. They are symmetrical in the sense that all partners get the same value. Further, three types of heterogeneity are measured. Political heterogeneity is measured by mayor heterogeneity, a dichotomous variable that takes the value 1 when all merging municipalities had a mayor from the same side of the political spectrum, either left or right, in the election period before the merger (2015–2019) and 0 when partners had mayors from different sides (left and right). Settlement heterogeneity measures the difference in percentage points (0–100) between the municipalities in the consortium with the smallest and largest shares of the population living in densely populated areas. The higher the difference, the greater the heterogeneity. Similarly, two variables measure workforce heterogeneity as the difference in percentage points (0–100) between the partners in a merger with the highest and lowest share of the population employed in industry (blue-collar workers) and the difference between the highest and lowest share of the population employed in agriculture.

Further, redistribution is measured by three variables, each of which expresses the relative economic difference between the coalition partners in a merger. Public income difference is a measure of the relative difference in free income per capita. The variable is calculated based on the difference between each partner’s free per capita income and the mean free per capita income of the consortium; it is expressed as a percentage of the consortium’s free per capita income (own free income – mean free income in the consortium/mean free income in the consortium × 100). The “difference in free income per capita” is used as a measure because it provides a comprehensive assessment of the local public’s economic room for manoeuvre (Borge et al. 2017) (see Table A2 in the Appendix for an analysis with an alternative variable). Municipalities that have a higher operating surplus than the consortium average have a positive value. Private income difference is measured as the relative difference in mean average household income per partner. The variable is calculated based on the difference between each partner’s average private household income and the consortium’s mean average household income, as a percentage of the average household income of the consortium (own average household income – average household income in the consortium/average household income × 100). Partners with a higher average private household income than the mean value of the consortium, will have a positive value. Relative size measures the share (percentage) of inhabitants in the new municipality for the respondent’s municipality prior to the merger.

Whether a municipality is a junior or senior partner in the new municipality is operationalized as the location of the city hall, which was determined at the time the survey was conducted. Obtaining the city hall and, hence, the centre of the new municipality would likely be considered by respondents in this municipality as a sign that one’s original municipality would retain a dominant position in the new municipality and, hence, be a senior partner. Correspondingly, respondents in the municipalities who would not be the loci of the new city hall would likely fear that their own municipality would be a junior partner.

Three control variables are included in the analysis: age, gender (women = 1), education (on an eight-step scale from primary education to PhD), and having voted for one of the parties in the government coalition that initiates the merger (1/0). The variables were included because previous studies have revealed that there is an increase in the positive attitudes towards a merger with age and education and are generally higher among men than women (Klausen, Rose, and Winsvold 2021). Voting for the government coalition implies voting for parties that are in favour of the merger and, therefore, it is to be expected that this is positively associated with the attitude towards a merger. Age, gender, and education are obtained from official registers. The party voted for in election is registered by the survey respondents. In addition, we include the number of partners per consortium as a control variable. Further, we assume that the number of partners can contribute to both weakening and strengthening the consortium and can, therefore, also influence attitudes towards mergers in both a negative and positive direction.

Descriptive statistics for all variables included in the analysis are provided in Table 1.

Results

To assess the relationship between attitude towards merger and characteristics of the consortium, we perform a logistic regression analysis, first for all municipalities and then separately for junior and senior partners. The correlation between the explanatory variables is low (see VIF statistics in the Appendix). The results are presented in Table 2.

Table 2. Logistic regression and odds ratios.

	All municipalities	Junior partners	Senior partners
Mayor heterogeneity	1.26	1.00	1.31
Settlement heterogeneity	0.99	0.99	0.99
Workforce heterogeneity industry	1.00	1.00	1.01
Workforce heterogeneity agriculture	1.02	1.04	1.01
Public income difference	0.98*	0.96*	0.97
Private income difference	0.98	0.97	1.00
Share of population in new municipality	1.00	0.96**	1.00
Age	1.01**	1.01	1.01**
Gender	0.86	0.78	0.89
Education	1.11**	1.05	1.13**
Vote for government coalition	2.06**	2.84**	1.93**
Number of partners in consortium	0.75**	0.55**	0.83
Constant	0.97	8.112*	0.91
Pseudo R^2	0.0469	0.0827	0.0382
N	1237	376	897

Contrary to expectations, none of the heterogeneity indicators are associated with attitudes towards amalgamation. Therefore, our first hypothesis (H1) that proposes that citizens are more positive towards merging their local government with similar rather than with dissimilar units is not supported. Our second hypothesis (H2) that proposes that the positive relationship between similarity and support for merger is weaker among citizens in senior partner municipalities is also not supported.

With regard to the variables that measure differences in public and private income, a high value indicates that income is higher than the average for the consortium. Thus, the relatively poorer municipalities would have a low value, while the richer municipalities would have a high value. For both these variables, the odds ratio is below 1, but the effect is statistically significant only for public income differences. This implies that citizens in the poorer municipalities of a consortium (in terms of public wealth) are more likely to have a positive attitude towards the merger, while citizens from the richer municipalities of a consortium are more likely to have a negative attitude towards the merger. This is in keeping with expectations and supports our third and fourth hypotheses (H3 and H4).

We also expected that the relationship between public and private wealth and support for merger would be weaker among citizens in the senior partner municipalities (H5). There is some support for this hypothesis. When the sample is divided into two, the effect of differences in public wealth is only significant for junior partners. Thus, citizens from junior partner municipalities with lower public income than the average in their consortium are more likely to be positive regarding the merger, but the same is not true for senior partners with low public wealth.

Furthermore, when analysing junior and senior partners separately, the relative proportion of residents in the new municipality is negatively related to support for the merger in junior partner municipalities, but not in senior partner municipalities. This implies that junior partners with a relatively large share of the consortium’s population have more negative attitudes towards the merger than junior partners with a small share of the consortium’s population.

With regard to the controls, the respondents’ age is positively related to merger support, whereas gender appears overall unrelated to their attitudes towards merger. Higher levels of education are associated with increasing support for a merger, but only among senior partner citizens. Further, support for the national government’s political parties is positively associated with merger support in citizens in both junior and senior municipalities. Finally, negative attitudes towards merger increase with an increasing number of partners in the consortium. When dividing the sample into two, the number of partners is revealed to be negatively associated with merger attitude only in the junior partner municipalities (see Appendix A4 for robustness check).

Discussion

Is citizens’ support for (or resistance towards) municipal mergers shaped by how they perceive the balance between costs and benefits for their own pre-merger jurisdiction, as measured by the quantitative indicators of this balance? While several previous studies have provided support for this general assumption, our study is unique in that citizen’s attitudes are analysed with reference to precise data regarding material differences between the respondents’ pre-merger jurisdiction and that of its soon-to-be-merged partners. Moreover, since the respondents were most likely aware of the upcoming merger in over two years, they had ample time and opportunity to assess those material differences, thereby adding to the robustness of our findings.

The clearest finding of our study is that differences in wealth between the merger partners significantly correlates with the respondent’s attitudes towards the upcoming merger. Citizens of wealthier units are overall less happy regarding the upcoming merger than their compatriots in less well-off units, both in terms of public and private wealth. While this finding is in line with previous studies (Filer and Kenny 1980; Hanes, Wikström, and Wångmar 2012; Lapointe 2018; Miyazaki 2014; Sørensen 2006; Strebel 2021a), our study contributes to current knowledge by taking into account that the perceived salience of differences in wealth may differ depending on the status of one’s own unit in the merger consortium. By dividing the survey sample between respondents in municipalities that were junior and senior partners of the consortium, respectively, we found that wealth differentials only correlated with attitudes among respondents in junior partner units. This finding supports the notion that the prospect of becoming the centre of the merged unit tends to cancel out any fears of redistributive losses from merging with a less prosperous unit. A reasonable assumption is that the centre function carries with it numerous potential benefits and that citizens place more emphasis on these benefits than on potential losses in wealth. The centre function may be perceived as providing material gains, such as employment and activity, in addition to more immaterial gains such as pride of place and local identity – factors that fall beyond the scope of the present analysis. Added to this is the fact that the fiscal consequences of merging with a poorer partner would depend on the relative size of each partner. At least in nominal figures, a junior partner with a smaller budget and tax base would be more adversely affected by merging with a poorer partner than would be a larger unit.

Even so, it is noteworthy that the attitudes of citizens in junior partner units only correlate with public wealth and not significantly with private wealth. Apparently, the risk of redistributive loss due to merging with a less fiscally solid municipal government is an important determinant for attitudes than the risk of merging with a municipality with a more limited tax base. One reason for this finding may be that, as mentioned in the section on municipal finances, the various equalization schemes equalize municipal revenues only to a certain extent. Hence, citizens are not wrong in assuming a risk of redistributive loss on account of merging with units in which citizens are less well-off.

Whereas the designation of “senior” and “junior” partners is based on the location of the city hall in the new, merged unit, our analysis also included the share of population in the new municipality as a separate determinant for attitudes. Note that the share of population is inversely correlated with support for the upcoming merger, but only for junior partners. This finding adds further weight to the assumption that the prospect of becoming a junior partner significantly turns people off the idea of a merger. Furthermore, this effect is most strongly felt among relatively large junior partners: The more populous the municipality is, the harder it is to lose the municipal centre and see city hall close down.

Further, the results of our study do not support the hypothesis that citizens are more positive towards merging their local government with similar units than with dissimilar units (H1). Although our model included determinants of both political-, settlement – and workforce-related differences between the merging partners, there were no significant patterns of support and resistance. Having a mayor from the opposite side of the political spectrum does not appear to affect attitudes, neither do variations in the share of population living in densely populated areas or variations in the share of the workforce employed in industry or agriculture. Hence, the null findings in our study align with the results of several previous studies (Bhatti and Hansen 2011; Hanes, Wikström, and Wångmar 2012; Saarimaa and Tukiainen 2014). Although the theoretical basis for assuming that citizens prefer to merge with similar units is long-standing and prominent in the literature, the fact that an increasing body of research that utilizes varying methodologies has failed to find empirical support suggests that the theory needs to be revised or abandoned.

Although empirical support for the assumed link between homogeneity and municipal mergers is limited, it is noteworthy that several previous studies have evidenced a link between homogeneity and the composition of inter-municipal cooperation (IMC) consortia in the field of internal administration in German municipalities (Bischoff and Wolfschütz 2017), in “collaborative public management” among English councils (Dixon and Elston 2020), and “inter-municipal associations” in Portugal (Camões, Tavares, and Teles 2021). IMCs are often considered an alternative or a precursor to municipal mergers, since both IMCs and mergers enable economies of scale and increased administrative capacities due to enlarged catchment areas for municipal services (Hulst and Montford 2007; Teles and Swianiewicz 2018). However, a key difference is that IMC tends to be less politically contentious and more administration-driven than mergers. Hence, the preference for homogenous IMC consortia can likely be partially explained by a managerial desire to minimise transaction costs by cooperating with similar partners (Feiock 2009).

In the present study, our analytical ambition has been to investigate how the risks of decreasing allocative efficiency and redistributive losses, respectively, may affect variations in citizens’ attitudes toward municipal mergers. By delimiting our analytical model to determinants that operationalize these two risks, we provide only partial explanations for the overall attitudinal variance. Previous studies suggest several determinants that might be included in a less constricted analytical model. These include non-material factors such as “resistance identity” – activism against structural reforms that are deemed as marginalizing local actors and threatening local democracy (Zimmerbauer and Paasi 2013, 33) as well as conceptions of mergers as threats to local, place-based identities (Dente 1988; Stoffelen et al. 2023), including the “identification loss” incurred by losing the name of one’s municipality (Soguel and Silberstein 2015, 978). Other studies suggest that determinants of political representation can also provide explanatory leverage. Evidence from the Czech Republic indicates that citizens in smaller peripheral municipalities run the risk of diminished representation in new councils dominated by urban centres (Voda and Svačinová 2020). This finding runs contrary to evidence from Denmark; however, a recent study found that peripheral municipalities were overrepresented in new councils (Jakobsen and Kjaer 2016). Overall, our study sheds light on a key dilemma for governments looking to reform their local government systems by means of mergers. Although fewer and larger units may prove beneficial for the system as a whole, redistribution effects from economic differentials between individual local governments implies that the net balance of costs and benefits may not be seen as positive for all units. If would-be reforming governments are not in a position to implement reforms top-down – either due to a lack of legal-constitutional mandate for imposed mergers or out of fear from the political fallout from unpopular reforms – successful reform implementation would probably require strong compensatory instruments to equalize local differences in the outcome of mergers. Previous studies suggest measures to achieve such equalization. Based on evidence from municipal mergers in Canada, Dur and Staal (2008) assumed that size-based heterogeneity in the merger consortium disincentivise villagers against merging with neigbouring cities, since the more numerous urbanites will likely exploit the villagers by increasing taxation to pay for improved services in the city (see Di Liddo and Giuranno (2020) for a formal demostration of spillover-effects on wealth distribution due to size variations). Dur and Staal’s analysis suggests that this disincentive against mergers can be counteracted by earmarked or conditional governmental grants. Further, in Switzerland, post-merger municipalities were consistently found to level the quality and quantity of services upwards, using the best performing previous unit as a benchmark (Steiner 2003, 562), thereby eliminating a merger disincentive based on fears of reduced public services.

Ethics approval

Research carried out in this study has been assessed and approved by Sikt – Norwegian Agency for Shared Services in Education and Research; approval number: 849562.

Acknowledgements

A previous version of this article was presented at the ECPR General Conference in Innsbruck, 23/8-26/8-2022. We would like to thank the panel participants and the reviewers for their valuable comments.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the Research Council of Norway [grant number 294597].

Notes on contributors

Jan Erling Klausen

Jan Erling Klausen is an associate Professor at the Department of Political Science at the University of Oslo. His key academic interests relate mainly to local democracy and political participation, comparative local government reform, comparative local government studies and multi-level governance.

Marte Winsvold

Marte Winsvold is a Senior Research Fellow at the Institute for Social Research in Oslo. Her research interests centres on political participation and the interface between civil society and formal government structures.

Notes

1 Evidence of actual savings due to mergers is scant (Blom-Hansen et al. 2016; Tavares 2018), but the findings from these studies may well be unknown to the population at large.

2 Finland has a Swedish-speaking minority and has two official languages.

3 In the context of metropolitan governance, Tiebout (1956, 423) noted that

On the usual economic welfare grounds, municipal integration is justified only if more of any service is forthcoming at the same total cost and without reduction of any other service (…) If one of the communities were to receive less police protection after integration than it received before, integration could be objected to as a violation of consumers’ choice.

4 An example of such assets taken from the Norwegian context is that local and county governments in Norway own approximately half of the country’s rather substantial hydropower production. Accordingly, certain local governments profit greatly from hydropower productions and become much wealthier than others.

Appendix

Table A1. Test for multicollinearity (VIF statistics; VIF should be below five).

Variable	VIF
Workforce heterogeneity agriculture	3.61
Settlement heterogeneity	3.50
Share of population in new municipality	2.27
Public income difference	2.00
Number of partners in consortium	1.92
Workforce heterogeneity industry	1.78
Mayor heterogeneity	1.20
Private income difference	1.14
Education	1.05
Gender	1.03
Age	1.02
Vote for government coalition	1.02
Mean VIF	1.80

Table A2. Model including “difference in net operating per capita surplus” as a variable for public income differences (logistic regression and odds ratio).

	Odds ratio
Mayor heterogeneity	1.21
Settlement heterogeneity	0.99
Workforce heterogeneity industry	1.00
Workforce heterogeneity agriculture	1.02
Free per capita income difference	0.98*
Net operating surplus per capita difference	1.00
Private income difference	0.98*
Share of population in new municipality	1.00
Number of partners in coalition	0.74**
Age	1.01**
Gender	0.85
Education	1.10**
Vote for government coalition	2.06**
Constant	1.06
Pseudo R^2	0.0478
N	1373

Table A3. Model in which municipalities with only one respondent is omitted (logistic regression and odds ratio).

	Odds ratio
Mayor heterogeneity	1.27
Settlement heterogeneity	0.99
Workforce heterogeneity industry	1.01
Workforce heterogeneity agriculture	1.02
Public income difference	0.98*
Private income difference	0.98
Share of population in new municipality	1.00
Number of partners in coalition	0.75**
Age	1.01**
Gender	0.87
Education	1.11**
Vote for government coalition	2.07**
Constant	0.94
Pseudo R^2	0.0469
N	1268

Table A4. Probit for robustness check.

	Coefficient
Mayor heterogeneity	0.14
Settlement heterogeneity	−000
Workforce heterogeneity industry	0.01
Workforce heterogeneity agriculture	0.01
Public income difference	0.01*
Private income difference	0.01
Share of population in new municipality	−0.00
Number of partners in coalition	−0.18**
Age	0.01**
Gender	−0.10
Education	0.06**
Vote for government coalition	0.44**
Constant	−0.02
Pseudo R^2	0.0466
N	1273