Driven by a quest for efficiency, many Western countries have witnessed merger waves across the entire breadth of their public sectors. The underlying assumption is that economies of scale exist in public service delivery; the idea that the average cost of public services decreases as the size of public organizations increases. The analysis of economies of scale in public service delivery and the related quest for the optimal size of public organizations has attracted a great deal of attention from researchers across disciplines. Nonetheless, despite its size, the literature on economies of scale in public service delivery has been characterized as inconclusive and inconsistent in many areas. As a result, it has proven difficult for researchers to provide policy makers and public managers with consistent recommendations regarding the optimal scale of public organizations and, more generally, the extent to which public services can expect to benefit from economies of scale. The analysis of economies of scale is subject to several methodological challenges. This dissertation focuses on one specific methodological concern: it departs from the observation that a troublesome factor in the analysis of economies of scale is the conceptual complexity of ’scale’. In essence, complexity here refers to the notion that there is more to the scale of public service delivery than simply the administrative size of the organizations that deliver those services. Typically, economies of scale are investigated by comparing the (average) cost of homogeneous organizations - such as hospitals, local governments or schools - to measures of size, in which the administrative, overall organization is the unit under investigation. However, large organizations may be organised into many smaller units and vice versa, or some services such as ICT may be subject to more economies of scale than others.

Fall prevention programs hold great promise to improve quality of life among older adults and to decrease healthcare expenditures. However, there are substantial barriers for entrepreneurs working in the elderly care to set up fall prevention programs, due to the size of the investments required, the uncertainty of the parties about the potential benefits from the reduction in healthcare expenditures and the divergence of interests within our fragmented healthcare system. Hence, a method to assess the effect of fall prevention programs is needed, and, if these programs indeed appear to have a positive effect on the healthcare costs, there might be possibilities to use an innovative financing structure, such as a Health Impact Bond (HIB), to encourage the implementation. A HIB is a performance-based instrument by which the financial risk shifts from local implementers to investors. During this research, a python tool was developed to determine the effect of fall prevention programs using hospital data. By doing a case study in Dordrecht, the economic feasibility of a HIB for fall prevention programs was assessed. A Difference-in-Differences design was used to determine the effect of the fall prevention programs on both the number of injurious fall incidents and healthcare costs. Other barriers for setting up these programs using a HIB regarding governance and law were identified.