Abstract
The efficiencyof local public goods provision and the functioning of local democracy crucially depend on the size and number of local jurisdictions. This article empirically analyzes voluntary municipal mergers in Finland. Our main focus is on aspects that have been somewhat neglected in prior empirical work: whether local democracy considerations, representation and voter preferences are involved in shaping the resulting municipal structure. The main results imply that some municipalities are forced to merge due to fiscal pressure and have to trade off political power to be accepted by their partners. The study also finds that the median voter's distance from services matters, while population size does not. The latter, somewhat surprising, observation is possibly explained by existing municipal co-operation, which already exhausts potential economies of scale.
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