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Leviathan vs. Lilliputian: A Data Envelopment Analysis of Government Efficiency

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  • Patricia A. Nold Hughes
  • Mary E. Edwards

Abstract

In this paper we present a new approach to measuring government efficiency, based on the theory that communities that allocate resources efficiently in the local public sector maximize property values. We use Data Envelopment Analysis (DEA) to identify the counties in Minnesota that are characterized by property‐value maximization and hence an efficient public sector. The results indicate that the dominant source of public sector inefficiency is an inappropriate scale of operations. It appears that some county jurisdictions are too large to service the population efficiently. The size and concentration of government power are also responsible in part for observed inefficiencies.

Suggested Citation

  • Patricia A. Nold Hughes & Mary E. Edwards, 2000. "Leviathan vs. Lilliputian: A Data Envelopment Analysis of Government Efficiency," Journal of Regional Science, Wiley Blackwell, vol. 40(4), pages 649-669, November.
    • Handle: RePEc:bla:jregsc:v:40:y:2000:i:4:p:649-669
    DOI: 10.1111/0022-4146.00192
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    Cited by:

    1. Mandy Kriese, 2008. "Effizienzanalyse der sächsischen Gemeinden," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(05), pages 3-13, October.
    2. Alexander Ebertz & Mandy Kriese & Marcel Thum & Helke Seitz, 2008. "Bewertung von lokalen Standortfaktoren für Haushalte und Unternehmen in Sachsen: Entwicklung von Indikatoren zur Überprüfung der Demographietauglichkeit von Förderprojekten der Sächsischen Aufbaubank:," ifo Dresden Studien, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 46, July.
    3. Zon-Yau Lee & Mei-Tai Chu & Yu-Ting Wang & Kuan-Ju Chen, 2020. "Industry Performance Appraisal Using Improved MCDM for Next Generation of Taiwan," Sustainability, MDPI, vol. 12(13), pages 1-18, June.
    4. Mandy Kriese, 2008. "Effizienzanalyse der sächsischen Gemeinden," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(05), pages .3-13, October.
    5. Halkos, George & Tzeremes, Nickolaos, 2005. "A DEA approach to regional development," MPRA Paper 3992, University Library of Munich, Germany.
    6. Tumaniants, Karen A. (Туманянц, Карэн) & Sesina, Julia E. (Сесина, Юлия), 2017. "Social Expenditures of Russian Regions in Terms of “Input-Output” [Расходы На Социальную Политику Российских Регионов В Координатах «Затраты — Результат»]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 128-149, October.
    7. Jongmin Shon, 2022. "Does Competition Tame the Leviathan? A Case of Earmarked Spending for Transportation," Hacienda Pública Española / Review of Public Economics, IEF, vol. 241(2), pages 59-78, June.
    8. Isabel Narbón-Perpiñá & Kristof De Witte, 2016. "Local governments’ efficiency: A systematic literature review – Part II," Working Papers 2016/21, Economics Department, Universitat Jaume I, Castellón (Spain).
    9. George Emmanuel Halkos & Nickolaos Tzeremes, 2010. "Measuring regional economic efficiency: the case of Greek prefectures," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(3), pages 603-632, December.
    10. Magnus Söderberg, 2009. "A Broad Performance Benchmark Based On Citizens’ Preferences: The Case Of Swedish Public Transportation," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 80(4), pages 579-603, December.
    11. Emili Tortosa Ausina & Diego Prior & María Teresa Balaguer-Coll, 2006. "Decentralization And Effiency In Spanish Local Goverment," Working Papers. Serie EC 2006-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    12. Chiu, Yung-ho & Huang, Chin-wei & Ma, Chun-Mei, 2011. "Assessment of China transit and economic efficiencies in a modified value-chains DEA model," European Journal of Operational Research, Elsevier, vol. 209(2), pages 95-103, March.
    13. Maria Balaguer-Coll & Diego Prior & Emili Tortosa-Ausina, 2010. "Decentralization and efficiency of local government," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(3), pages 571-601, December.
    14. Shoko Haneda & Akihiro Hashimoto & Takao Tsuneyoshi, 2012. "Evaluating Administrative Efficiency Change in the Post-Merger Period," International Regional Science Review, , vol. 35(2), pages 237-262, April.

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