OVERCOMING DATA COMPARISON PROBLEMS AFTER ADMINISTRATIVE TERRITORIAL REFORM: CASE OF LATVIA

As the boarders of territories change, administrative territorial reform can cause problems in data comparison over longer time period. The goal of this paper is to offer methodology how to compare data about territories before and after administrative territorial reform. This paper includes both reviews of previous attempts of data comparisons as well as it proposes a couple of principles that could make such a comparison more reliable and easy to use.The proposed methodology tests on the data of Latvia (for the period from 2001 to 2011) because in 2009 Latvia experienced administrative territorial reform and the structure of municipalities changed significantly. Before there were more than 500 municipalities (called pagasts), later – 119 county municipalities (novads).To test the accuracy of this method of comparison, it is applied to enable budget expenditure comparison by using panel data fixed effects models. These models evaluate which factors (such as budget revenue, municipality and parliament elections etc.) influence municipality budget expenditures in different years. Calculations are made for full period as well as those periods before and after the reform in such a way analyzing variable influence changes and evaluating their strength and stability. Results prove that two main principles that describes previous data summarizing and proxy variable combinations are applicable and allow extending the period of data analysis.The main novelty of this research is elaborated simple, easy to use system for territory comparison specific in Latvia before and after administrative territorial reform, but it could be applied also to other countries with similar data problems