Goldilocks and Governmental Size
One of the concerns that I had when I entered this contest is that some of the smaller school districts in Idaho seem to be top heavy with administration for the number of students that they have. There is clearly a point where it is more efficient to merge several small school districts into one, with a single superintendent, and a common staff for administration and purchasing, instead of having four or five districts each doing its job independently. I was focused on efficiency--but that's not the only problem with small governmental agencies.
I spent a bit of time listening to a tale of governmental corruption from one of the voters in my district--and I was able to confirm with others that this isn't paranoia. I won't go into all the details, except to say that it is a small governmental entity where a very small number of closely related voters are able to use their power to enrich the patriarch of the clan at the expense of the taxpayers of Idaho.
There was a time when I would have scratched my head about this, but there is plenty of precedent. The city of Cotati in California into the 1980s had a very curious situation that was somewhat similar. At the time that this situation developed, there were only about 2000 people living there [correction: 3475 at the 1980 census], and one extended family with many dozens of members exercised so much political power that the criminal justice system was corrupted.
I first became aware of this because my mother-in-law worked as a telemarketer at a company in Cotati. One night, some drunken yahoos were throwing rocks at the windows, and they called the police. The police came out, calmed the drunken yahoos down, and explained that members of this extended family were privileged from arrest for misdemeanors because of the political power that the family exercised. I have since read about this remarkable situation in mainstream publications. In the 1980s, the population of Cotati grew substantially, and the political power of this family collapsed because of that population growth. By the time we moved out of the area in 2001, the family privilege from arrest for misdemeanors no longer existed.
It is apparent if you live in a large city that corruption is a fundamental part of how things work. You may recall in the 1980s 60 Minutes did a hidden camera thing in Chicago where they caught large numbers of restaurant inspectors openly demanding bribes to pass restaurants--it was just a fringe benefit of the job.
A friend of mine built a house in the Los Angeles some years ago--and was having a heck of a time getting final approvals from the building inspectors. There wasn't anything actually wrong with the house, and it was apparent that the reasons for rejection were excuses. He finally figured out that there was someone that needed a bribe--but because he wasn't part of the building community there, he didn't know whose palm needed greasing--and it isn't like he could call up the Building Department and ask who was in charge of accepting bribes.
We all know that bigness can mean corruption--but pretty clearly, smallness can also mean corruption. If the number of voters in a political entity gets small enough, and especially if there is a mechanism by which that entity can suck money out of other governmental bodies, the temptation to do so seems to be irresistible.
I suspect that someone, somewhere, has a done a doctoral dissertation with a ponderous title like Optimal Polity Size For Efficiency and Public Sector Integrity that has determined how small an entity can get before inefficiency and corruption take over, and similarly, how large an entity can get before corruption takes over on the other end of the scale.