Diversity and Municipal Secession: Evidence from Referendums in Quebec

This paper studies how ethno-linguistic diversity affects voters' choice of borders for their local jurisdictions. It takes advantage of a large and unique dataset of results from referendums on municipal secessions from the Canadian province of Quebec in 2004. In contrast to most of the literature on municipal consolidations, this dataset allows a direct investigation of voter preferences. I find that voters more willingly accept sharing a jurisdiction with people of different incomes when they share a common cultural group, suggesting that group loyalty, and not only differences in preferences for the public goods, plays a significant role in border choice.