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Municipality Size and Local Public Services: Do Economies of Scale Exist ?

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  • Soukopová Jana
  • Nemec Juraj
  • Matějová Lenka
  • Struk Michal

Abstract

Economies of scale are a standard topic in economic theory, frequently applied, for example, in the analysis of monopolies. They exist when a firm optimising its production costs while facing some fixed costs enjoys lower per-unit production costs as the production increases. Similarly to other production units municipalities have to be large enough to minimise average costs. We analysed the local public services in 205 municipalities with extended powers in the Czech Republic for the first time in this context, using regression analysis, a correlation diagram of local public services and statistical analysis. The paper examines this issue using data from 2008 to 2012. Our analysis showed that economies of scale cannot be clearly identified for local services in municipalities with extended powers in the Czech Republic and that the size of a municipality is not a key factor influencing the provision of local services.

Suggested Citation

  • Soukopová Jana & Nemec Juraj & Matějová Lenka & Struk Michal, 2014. "Municipality Size and Local Public Services: Do Economies of Scale Exist ?," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 7(2), pages 151-171, December.
    • Handle: RePEc:vrs:njopap:v:7:y:2014:i:2:p:151-171:n:5
    DOI: 10.2478/nispa-2014-0007
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    References listed on IDEAS

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    2. Meričková Beáta Mikušová & Muthová Nikoleta Jakuš, 2019. "Bounded Rationality of Individual Action in the Consumption of Public Goods," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 12(2), pages 157-194, December.
    3. Gerard Turley & John McDonagh & Stephen McNena & Arkadiusz Grzedzinski, 2018. "Optimum Territorial Reforms in Local Government: An Empirical Analysis of Scale Economies in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 49(4), pages 463-488.
    4. Matějová Lenka & Nemec Juraj & Křápek Milan & Klimovský Daniel, 2017. "Economies of Scale on the Municipal Level: Fact or Fiction in the Czech Republic?," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 10(1), pages 39-59, June.
    5. Soukopová Jana & Klimovský Daniel, 2016. "Local Governments and Local Waste Management in the Czech Republic: Producers or Providers?," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 9(2), pages 217-237, December.
    6. Agiamoh Rosaline Georgevna, 2021. "Inter-Regional Cooperation in Waste Management: New Trends in Moscow and the Moscow Region," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 14(2), pages 9-39, December.

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