Abstract
Local governments may seek efficient public service delivery through scaling up production, and the quest for the optimal local government size has attracted extensive attention of scholars and policy makers. Indeed, if scale matters for local government efficiency, increasing size may be a key factor in achieving more value for money for citizens. As such, getting scale right may contribute significantly to achieving the Sustainable Development Goals (SDGs) as set out in the 2030 Agenda. Nonetheless, there is considerable uncertainty with regard to how scale shapes the average cost of local government service delivery. These uncertainties may have contributed to policy makers and public organizations disregarding the often inconclusive and sometimes contradictory empirical evidence in stimulating and allowing mergers and consolidation in many Western countries. This Special Issue is concerned with economies of scale in local government. Interesting issues to be addressed relate to the existence of general and service specific economies of scale and the implications of both for local government policy regarding various types of scaling (amalgamation, cooperation, and outsourcing). Based on a brief literature review, we inventory a number of issues which warrant further research. One of the conclusions is that the relationship between scale and sustainability is a complex issue with many aspects. Examples include the relation between economies of scale and outsourcing and cooperation, issues concerned with multi-level aspects of scale, and the trade-off that may exist between achieving economies of scale and cost efficiency (e.g., transition cost of mergers). Another conclusion is that no such thing as “one size fits all” exists. Different perspectives may play a role and should be born in mind when suggesting solutions and providing recommendations to achieve sustainable goals.
Highlights
Faculty of Technology, Policy and Management, Delft University of Technology, P.O
One of the presumed key drivers of productivity growth that has significantly impacted public policy is the notion of economies of scale, the idea that public organizations, as is the case with firms and factories, can reduce the cost of public service delivery through size
There is an extensive literature on economies of scale in local government, the literature has been described as inconclusive
Summary
One of the presumed key drivers of productivity growth that has significantly impacted public policy is the notion of economies of scale, the idea that public organizations, as is the case with firms and factories, can reduce the cost of public service delivery through size. Sustainability 2021, 13, 13262 public service production has come under increased scrutiny, with many questioning if, and to what extent, the promise of “big is beautiful” has held up This Special Issue is concerned with economies of scale in local government and seeks to contribute to the large and long-standing literature in this area. Attention will be given to how various mechanisms through which local governments seek economies of scale—e.g., amalgamation, cooperation, and outsourcing—are effective for cost reduction and financial sustainability in the long-term Key to this Special Issue is the recognition of “scale” as a multi-level concept. This implies that the effect of organizational consolidation between local governments on cost varies across services and size In this Special Issue, we focus on financial sustainability, but it should be stressed that it is about the money.
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