We always hear that annexation is good for the city because it’s “capturing” the growth just outside municipal borders. But there’s another hypothesis out there as to why municipal employees might be so gung-ho for more annexation — higher wages.

In an article originally published in 1987 for the journal “Public Choice,” Rodolfo A. Gonzalez (Department of Economics, University of California, Davis) and Stephen L. Mehay (Department of Administrative Science, Naval Postgraduate School, Monterey) concluded the following (emphasis mine):

We hypothesized that extending municipal boundaries will have a positive effect on discretionary outlays and on expenditures per capita. The evidence presented supports these hypotheses. Furthermore, municipal wages appear to be significantly increased in cities experiencing annexation growth. Therefore, we would expect to find that municipal employees are more inclined to favor annexation than the rest of the electorate. From a policy standpoint, this study suggests that significant perverse effects on fiscal efficiency may follow adoption of legal reforms that facilitate the ability of municipalities to extend their borders, or that restrict the formation of new municipalities.

The name of the article is “Municipal annexation and local monopoly power,” and if I had $30 to spare, I’d download and read the whole thing just so I could see how they came to such conclusions. But I found the abstract alone to be thought-provoking. One wonders whether there truly is a correlation here, or if these findings are simply raw cynicism.