County Mergers Do Not Lead to Greater Savings or Staff Reductions, but to Lower Election Turnout

County mergers, in which two or more county administrations are combined into a single entity, do not have a notable effect on cost savings or staff reductions in local administrations. Instead, they decrease election turnout in amalgamated counties. At the same time, the share of the vote won by right-wing populist parties has increased considerably in merged counties. This is the main finding of a study carried out by the Centre for European Economic Research (ZEW), Mannheim.

For their analysis, the researchers assessed cases of county mergers in Germany and Austria. Out of all OECD countries, Germany has carried out by far the most merger reforms at the county level. By international comparison, the federal states in East Germany in particular have played a significant role when it comes to the reorganisation of local government affairs, as no such territorial reforms have been observed in any other region of the OECD. Austria has also been experiencing similar developments, however, only in recent years.

While the number of German counties halved between 1950 and 2013, Austria first experienced slight increases in the number of counties in the 1950s, 1960s and 1980s, and has only started to implement county mergers fairly recently. For Germany, the study investigates the 2007 county merger reform in the East German state Saxony-Anhalt, which was the first merger of its kind to be implemented since the early 1990s and has so far not been evaluated. For Austria, the researchers assessed county amalgamations carried out in the state of Styria in 2012 and 2013, which were the first reforms of this kind since the end of the Second World War.

Merged counties lose proximity to their citizens

“Regardless of the legal organisational structure, we found that the political costs of merger reforms far outweigh the fiscal and personnel benefits in both cases,” explains Sebastian Blesse, researcher in the ZEW Research Department “Corporate Taxation and Public Finance” and co-author of the study. “In both Germany and Austria, the county merger reforms aimed to improve the efficiency of administrations and reduce costs and staff through scale effects,” says Blesse, “however, we have been unable to observe either of those effects.” Instead, merged counties lose proximity to their citizens and have made the decision-making process much more complex, which has resulted in lower election turnout in the affected counties as a direct consequence of the reform.

In local elections in Saxony-Anhalt, voter participation has decreased by 4.3 percentage points since the reform compared to counties that have not undergone such mergers. At the same time, the vote share of right-ring populist parties has seen a rise of 1.7 percentage points. “As a result of county merger reforms, voter participation has decreased, while right-wing parties have benefited from the negative sentiment toward the reform,” concludes Sebastian Blesse.

In Austria, county reforms have led to similar results in terms of election turnout, the difference being that populist parties have not experienced significant increases in their vote shares in merged counties.

For further information please contact:

Sebastian Blesse, Phone +49 (0)621/1235-394, E-mail sebastian.blesse@zew.de