One or Two Tiers of Local Government? – The Cost Effects of a Regional Experiment
Publication: VATT Working Papers 65
Date: 24.9.2015
Summary
This paper evaluates the cost effects of a Finnish regional self-government experiment. The experiment introduced a new intermediate tier of local administration that was given the responsibility to organize 60 per cent of public services. These services include e.g. basic health care, the majority of social services and secondary education, services that are typically provided by municipalities in Finland. Follow-up reports suggest that the experiment has resulted in massive cost-saving, especially in the social and health sectors. This paper puts previous findings under scrutiny by utilizing a synthetic control method for comparative case studies. Our findings cast serious doubts on the magnitude of the cost savings.
Main research themes: Local public finance and provision of public services
Terms:
health and social services
impact assessment of policy measures
impact evaluation
municipal finances
municipalities
public services
regional policy
social experiments
ISBN: 978-952-274-159-2
JEL: H7 R5