Municipal Amalgamations as a Threat to Democracy and the Principles of Local Self-Government: Small Municipalities’ Resistance to the “Big is Beautiful” Paradigm

Since the early 2000s, local governments worldwide have faced intensifying fiscal constraints, demographic change, and growing service demands. Municipal amalgamation reforms have been promoted as technocratic solutions, on the assumption that larger jurisdictions deliver superior economies of scale, efficiency, and administrative capacity. We conceptualize this as the invisible hand fallacy – the belief that structural adjustments are natural, efficiency-driven adaptations rather than contested political choices with distributive and democratic consequences. This efficiency paradigm systematically marginalizes core values of local self-government: citizen participation, sensitivity to local preferences, territorial identity, and community autonomy. International evidence shows amalgamations rarely deliver promised gains, while democratic costs – reduced citizen influence, weakened engagement, and center-periphery tensions – are substantial and enduring. This paper examines these dynamics in Sweden, one of the world’s most decentralized welfare states. Drawing on an original survey of political and administrative elites in 45 small municipalities (fewer than 13,300 inhabitants), we analyze how local actors frame amalgamation debates. Our findings reveal overwhelming skepticism: local elites consistently prioritize democratic proximity and community identity over efficiency arguments. Instead, they advocate enhanced intermunicipal cooperation and asymmetric task distribution as more resilient responses to fiscal and demographic pressures. By bridging liberal-democratic theory with economic assumptions of scale efficiency, our study advances interdisciplinary understanding of local government reform. The Swedish case demonstrates how centralizing reforms, justified fiscally, risk undermining democratic self-determination. These insights contribute to broader debates on centralization versus local democracy and illuminate the politics and economics of local government in times of uncertainty.