Does Local Government Fragmentation Affect Local Spending?

This study uses multiple measures of fragmentation and decentralization to assess the effects of these conditions on total local spending in 126 metropolitan regions and 538 counties in the same regions in 2002. The measures are derived from a recognized scheme that distinguishes among total, horizontal, and vertical dimensions of these conditions, and the models control for other causes of total local spending, including sprawl and interlocal spending. The study finds support for the claim that total spending by local governments is higher in regions and counties with more single purpose governments (vertical fragmentation), but also jurisdictions where a greater percentage of spending is done by counties (centralization). Findings also vary by unit of analysis and type of special purpose government, which suggests that the effects of governing structure are not as straightforward as theory suggests.

Keywords: fragmentation, federalism, government size, competition

Suggested Citation: Suggested Citation

Hendrick, Rebecca and Jimenez, Benedict Salazar and Lal, Kamna, Does Local Government Fragmentation Affect Local Spending? (2011). Urban Affairs Review 47(4): 467-510, July 2011, Available at SSRN: https://ssrn.com/abstract=2337360