Tax multipliers serve here as a proxy for per capita costs to analyse whether the completed mergers have led to economies of scale
and, consequently, a reduction in municipal tax rates. To estimate the effects of mergers, the framework proposed by Callaway & Sant’Anna
(2021) is applied, as it allows for an accurate measurement of average treatment effects in the presence of multiple periods and variation in
treatment timing. The overall effect shows an average reduction in tax multipliers of 0.95 points, corresponding to a 5.4% decrease for merged
municipalities. The decline is most pronounced in the first year following consolidation, with an average reduction of 0.12 multiplier points,
equivalent to a 7% decrease. Furthermore, the results indicate that municipalities with a higher tax base and a smaller pre-merger population, which were dissolved after the merger, experienced a significant reduction in tax rates. Conversely, no significant reduction was found in municipalities with a below-average tax level and a larger population before the merger, which were not dissolved after the completed consolidation. However, it should be noted that tax levels are an integral part of merger negotiations, meaning that the observed effects may not be entirely causal, particularly as the affected municipal population must approve the merger. This thesis demonstrates that municipalities
with certain characteristics can sustainably lower their tax multipliers following a merger. However, it also underscores the need for further
research on costs, debt levels, and service provision to gain a more comprehensive understanding of the financial and operational consequences
of municipal mergers. Nonetheless, the findings on tax levels offer some valuable insights for policymakers considering mergers to enhance municipal efficiency and service delivery.