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Assessing and Explaining the Relative Efficiency of Local Government: Evidence for Portuguese Municipalities

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  • António Afonso
  • Sónia Fernandes

Abstract

In this paper we measure the relative efficiency of Portuguese local municipalities in a non-parametric framework approach using Data Envelopment Analysis. As an output measure we compute a composite local government output indicator of municipal performance. This allows assessing the extent of municipal spending that seems to be “wasted” relative to the “best-practice” frontier. Our results suggest that most municipalities could achieve, on average, the same level of output using fewer resources, improving performance without necessarily increasing municipal spending. Inefficiency scores are afterwards explained by means of a Tobit analysis with a set of relevant explanatory variables playing the role of non-discretionary inputs..

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Bibliographic Info

Paper provided by ISEG - School of Economics and Management, Department of Economics, University of Lisbon in its series Working Papers Department of Economics with number 2005/19.

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Date of creation: 2005
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Handle: RePEc:ise:isegwp:wp192005

Contact details of provider:
Postal: Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: https://aquila1.iseg.ulisboa.pt/aquila/departamentos/EC

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Keywords: local government; expenditure efficiency; technical efficiency; DEA; Tobit models.;

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  27. repec:fth:prinin:379 is not listed on IDEAS
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Cited by:
  1. Jana Soukopova & Eduard Bakoš, 2013. "Environmental protection expenditure: Ex-post evaluation," Working Papers 08, Masaryk University, Faculty of Economics and Administration, Department of Public Economics, revised Apr 2013.
  2. Rosa María Armenta Vergara & Carlos Alberto Barreto Nieto & William Orlando Prieto Bustos, 2012. "Medición de la eficiencia del uso de las regalías petroleras: una aplicación del análisis envolvente de datos," DOCUMENTOS DE TRABAJO 009819, UNIVERSIDAD CATOLICA DE COLOMBIA.

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