Estimating the Costs and Benefits of Local Government Reorganization : Focused on a Case of Korea
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Abstract
This paper intends to bridge the gap between current levels of analysis and what is required for an accurate appraisal to be made of local government reorganisation. In it, we introduce the result of a research project conducted in relation to a local authority reorganisation plan implemented in Korea. The initiative seeks to create a unitary local authority replacing one first-tier and four second-tier local authorities within the first tier, in the hope of reducing thecost of providing services and also of making local authorities more competitive. First, we outline the local government reorganisation process in Jeju Province in Korea. Second, we describe the research strategy employed to estimate the costs and benefits associated with local government reorganisation, and then we introduce the results of the analysis. The research process described here gives us information about what should be included in the categories of costs and benefits, and what methodologies canbe applied in estimating these. The analysis shows that the benefits resulting from reorganisation are much greater than the costs in the longer term. It also emphasises that the methodologies by which non-market goods, such as satisfaction with area-wide problem solution and loss of regional identity, can be valued should also be employed to estimate non-market benefits and costs arising from local government reorganisation.
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