Optimal Local Jurisdictions' Size and Recent Reforms

Abstract

The thesis aims to analyze whether the efficiency of local public provision of services can be improved by amalgamating small municipalities to bigger units. Based on the literature review improved efficiency is considered as the main outcome expected from a decentralized system of public service provision. Decentralization is supposed to increase administrative efficiency, effectiveness and responsiveness in the provision of services. However, the optimal rate of decentralization is a key issue in this respect. The topic is current and important both in Italy and in Finland. Both countries need to cut their public expenditures and both are also committed to the amalgamation process, in order to escape from a variety of economic problems such as ineffective governance and inadequate economic growth.