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Political representation and effects of municipal mergers

  • Oskari Harjunen (a1), Tuukka Saarimaa (a2) and Janne Tukiainen (a3)

We study the effects of municipal mergers using novel geocoded data on local public sector jobs and local politicians' place of residence. We find that the mergers had no effects on municipal expenditures overall after eight years. However, the mergers led to highly unequal geographic political representation in the post-merger councils among the merged municipalities. Small and politically marginalized municipalities experienced a substantial reduction in local public jobs in administration and health and social care services relative to the municipalities with stronger representation. Development of house prices suggests that the quality of the service-tax bundle deteriorated in these politically marginalized municipalities.

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We thank Manuel Bagues, Essi Eerola, Dominik Hangartner, Marko Köthenbürger, Mika Kortelainen, Simon Lapointe, Rune Sørensen, Natalia Zinovyeva and seminar participants at BI Oslo, VATT Helsinki, FEA 2017 meeting in Jyväskylä, UEA 2017 meeting in Copenhagen, IIPF 2017 meeting in Tokyo, LSE and HECER for helpful comments. We are also grateful to two anonymous reviewers and the editor, Rocío Titiunik, for their thoughtful comments on the manuscript. Financial support from the Emil Aaltonen Foundation (Finland) is gratefully acknowledged.

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Political Science Research and Methods
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