Efficiencies of Scale in Local Government

There is a very interesting post in The American Scene today about a proposal in New Jersey to mandate the consolidation of smaller towns. You can find additional commentary in The Atlantic. Please review the first graph, which shows significantly higher per-capita costs in the smallest towns, which then quickly level out as the cities get just a little bigger. I have found a very similar curve in comparisons of the spending levels in third-class Missouri counties, but that info has to wait until the release of my paper next month. (That is what is known in the biz as a "tease.")

I would never support manadatory consolidations, but there is no doubt that at the very smallest population levels, economies of scale can be achieved quickly as counties or cities grow somewhat, and also little doubt that those same economies of scale are quickly leveled off. It’s neat to see the graphs of New Jersey towns and Missouri counties look almost the same. As H.I. McDonough’s boss says to him in Raising Arizona, "It’s a crazy world."