On the determinants of local government performance: A two-stage nonparametric approach
AbstractThis article analyzes the efficiency of Comunitat Valenciana (Spain) local governments and their main explanatory variables. The analysis is performed in two stages. Firstly, efficiency is measured via (nonparametric) activity analysis techniques. The measurement techniques also enable the sources of inefficiency to be identified, i.e., whether inefficiencies are primarily overall cost, technical, or allocative. The second stage identifies some critical determinants of efficiency, focusing both on political and fiscal policy variables. In contrast to previous two-stage research studies, our approach performs the latter attempt via nonparametric smoothing techniques, rather that econometric methods ?such as OLS or Tobit related. Results show that inefficiencies are largely attributable to allocative factors, resulting in a notable gap between cost and technical efficiency. Inefficiencies are also larger for small municipalities. However, they are not exclusively attributable to poor management, as second-stage analysis reveals both fiscal and policy variables, either within or outside local governments control, to be explicably related to municipalities? performance. Este trabajo analiza la eficiencia de las corporaciones locales de la ComunidadValenciana y sus factores determinantes. El anÃ¡lisis se lleva a cabo en dos etapas. Enprimer lugar, la eficiencia es medida a travÃ©s de tÃ©cnicas (no paramÃ©tricas) de anÃ¡lisisde la actividad. El empleo de este tipo de tÃ©cnicas permite tambiÃ©n identificar lasfuentes de ineficiencia, esto es, si esta es bÃ¡sicamente en costes, tÃ©cnica o de carÃ¡cterasignativo. La segunda etapa identifica algunos determinantes clave de la eficiencia,centrÃ¡ndose tanto en variables polÃticas, asÃ como de polÃtica fiscal. Frente a estudiosprevios en dos etapas, nuestro enfoque lleva a cabo este Ãºltimo objetivo a travÃ©s detÃ©cnicas no paramÃ©tricas de suavizado, en lugar de mÃ©todos economÃ©tricos (tales comoMCO o modelos Tobit). Los res
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Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 51 (2007)
Issue (Month): 2 (February)
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Web page: http://www.elsevier.com/locate/eer
Other versions of this item:
- Emili Tortosa Ausina & Diego Prior & María Teresa Balaguer-Coll, 2004. "On The Determinants Of Local Government Performance: A Two-Stage Nonparametric Approach," Working Papers. Serie EC 2004-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D60 - Microeconomics - - Welfare Economics - - - General
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
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