Metropolitan amalgamation
Local authorities\' amalgamation is intended as a solution for economy of scale problem.
The amalgamation of local authorities is intended to solve small local authorities’ problem of economy of scale. These municipalities face high fixed costs which they can't afford and for which they must charge their residents at the expense of improving local services. It is logical to expect that creating a larger local authority by merging smaller local municipalities can offer an efficient solution to this problem.[1]
Metropolitan amalgamation, however, presents a different kind of possible modification. It creates a large unit that can take advantage of economies of scale and synchronization of activities having regional implications beyond any single small local authority, all the while preserving the independence of the individual local units. In this model, the metropolis represents another layer of governance added between the national government and the local authority.
Rather than asking whether metropolises are a required layer, the question that needs to be asked is whether having a metropolis as a mega authority is the preferred course of action with the most valuable advantages. On one hand, some studies show that "if metropolises are truly the drivers of a country’s economy, only few are driving in the fast lane."[2] According to these studies, in developed countries, there isn’t necessarily an advantage for a metropolis in economic activity. Metropolitan cities tend to be more polarized then regular cities, and their heterogeneity is not necessarily translated into a united urban tissue; instead, it divides population groups through separate defined areas in the metropolis. [3]
Nonetheless, it is important to bear in mind that when a country seeks to apportion power to the local authorities, decentralization of authority to many small local authorities may present a challenging process that might prove too big of a burden on small local authorities. Therefore, another layer of governance could be an effective solution for perceiving those governmental authorities.
Where are the developed countries headed in this area? It appears that they are leaning towards reducing the number of local authorities (amalgamation) and strengthening the metropolises, including establishing some of them as international metropolises. Such reforms have taken place in the Canadian provinces of Quebec and Ontario, in West Australia, one of Australia’s eight states, in England, with London becoming an international metropolis and in other countries, such as Ireland and Wales. In some respects, the largest reform in the field of amalgamation in a western country in the last decade took place in Denmark in 2007.
Denmark, which prior to the reform was already considered one of the leading countries in decentralizing power, carried out a reform intended to enhance the efficiency of the public sector at the local authority level and increase the degree of delegation of authority in the country. Creating another effective layer of governance and enlarging the number of citizens per local authority is meant to realize the advantage of economy of scale.[4] Israel ranks the lowest among OECD countries with respect to decentralizing power. [5]
In Israel, the central government holds most of the power and leaves to the local authorities mainly the option of executing actions that were determined by the central government's policies, with little to no room for independent policy planning. This situation obligates the central government to ensure that it carries out a prudent decentralization process which prevents unfair competition between local authorities. [6] Creating a metropolis from a few local authorities can serve as a useful model for achieving some decentralization to official authority.
[1] The basic model for optimal local authority size claims that the efficiency of a local authority is maximized at between 10,000─25,0000 inhabitants. Few scholars claim that there is an economy of scale for communities with over 25,000 inhabitants.
[2] Dijksra (2009).
[3] Kantor et al. (2012).
[4] Blöchliger & Vammalle (2012).
[5] Ivanyna & Shah (2012).
[6] Oded Steklov and Yaniv Reingwertz (2015)
