Administrative rescaling and expenditure inertia: Quasi-experimental evidence from Türkiye’s metropolitan municipality reform

This article examines whether the metropolitan municipality reform introduced under Law No. 6360 produced a fiscal effect on real per capita local government expenditures in the Aegean Region of Türkiye. The analysis uses a province-level panel for 2006–2024 and compares Aydın, Denizli, Manisa, and Muğla, which gained metropolitan status, with İzmir, Uşak, Afyonkarahisar, and Kütahya, whose status did not change. The empirical design combines a static Difference-in-Differences model, a TWFE event-study, Callaway and Sant'Anna Difference-in-Differences (CSDID) estimates, placebo tests, leave-one-province-out robustness checks, a 2014-exclusion sensitivity check, and wild cluster bootstrap inference. The results do not point to a persistent or statistically significant expenditure effect in the treated provinces relative to the control group. The negative estimate observed around 2014 in the CSDID results is interpreted cautiously as a transition-year disturbance linked to administrative adjustment, competence transfer, and expenditure classification, rather than as evidence of lasting fiscal restructuring. The article contributes to the literature by treating metropolitanization simultaneously as a territorial rescaling process and as an empirically testable fiscal intervention. The evidence suggests that a change in administrative status can reorganize territorial governance without altering local expenditure behavior when it does not come with fiscal autonomy, stronger own-source revenue capacity, and downward accountability.