The Korea Local Administration Review

This study investigated how city-county consolidation had impacted theadministrative efficiency of relevant local governments since 1995, when 40consolidated cities were newly created. The 39 consolidated cities, exceptUlsan Metropolitan City, are used to analyze the effect of city-countyconsolidation on the administrative efficiency, especially downsizing and costreduction, comparing with 23 non-consolidated ones. To estimate theconsolidation effect, 5 dependent variables were selected representing cost andsize aspects. Those are public employees per 1,000 residents, the number oftown office, per capita operating cost, per capita labor cost, and per capita stuffcost. Independent variables influenced on administrative efficiency are theoccurrence of consolidation, urban size, and fiscal independence ratio. Thefindings of impact on downsizing and cost reduction are as follows:1) Public employees per 1,000 residents and the number of town office are notfound to be significantly influenced by both consolidation and population size.2) Consolidated cities are not found to experience significantly differentdecrease rates in per capita operating cost. But small cities are inclined toshow growth rates in operating costs.3) Per capita labor cost is found to be significantly influenced by theconsolidation: positively in the short term and negatively in the long term.
4) In the long term, per capita stuff cost is found to be negatively influencedby the consolidation.Based on the findings, it can be recommended that forthcoming consolidationreform should be implemented with regard to long term effect. And we shouldconsider that consolidation effect might be varied according to urban size.