Empirical Essays in Public and Political Economics

Sammanfattning: Essay I: This paper proposes a novel approach to the issue of size, cost-efficiency and economies of scale by focusing on the break-up of municipalities. Municipal break-ups are an understudied phenomenon that nevertheless has been recurrent not only in parts of eastern Europe, but also in Spain and Sweden. Analyzing seven voluntary break-ups of Swedish municipalities, we estimate the effects of municipal splits on municipal total costs as well as administrative costs. To predict what would have happened had the splits not taken place, we apply the matrix completion method with nuclear norm minimization. Our results do not support the standard view, i.e. that smaller municipalities imply higher per capita costs. Instead, we find that costs increase in some municipalities, are unaffected in others and decrease elsewhere. The findings point to the complex nature of territorial reforms, the difficulty in drawing general conclusions of such, and hence, the perils of expecting them to have uniform outcomes.