Expenditure Implications of Metropolitan Growth and Consolidation

Abstract

M ETROPOLITAN areas are growing fast and so are their problems. To make this growth smoother and fiscal problems less burdensome, the consolidation of metropolitan area governments is widely advocated on the premise that it will reduce per capita expenditures of local government services. It is argued that, just as there are economies of scale in manufacturing, average municipal costs and expenditures likewise decline as the size of the local government unit increases. This paper will attempt to develop a theoretical framework for analyzing the question What are the likely expenditure effects of metropolitan growth and consolidation? The deductive answers will then be tested by an empirical analysis of I49 government units in the St. Louis metropolitan area and some Massachusetts cities.

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