Public Good Provision in a Federalist Country: Tiebout Competition, Fiscal Equalization, and Incentives for Efficiency in Switzerland
AbstractThe purpose of this paper is twofold. First, it measures the efficiency in the provision of public goods by local jurisdictions applying Data Envelopment Analysis (DEA). Second, it relates ef- ficiency scores to a fiscal equalization scheme designed to mitigate the negative consequences of Tiebout competition. The data come from the 26 cantons of Switzerland (2000-2004), a country characterized by marked federalism. Results show the equalization scheme to indeed have a negative influence on performance, resulting in an efficiency-equity trade-off (Stiglitz, 1988). However, substitution of earmarked payments by lump-sum payments as part of the 2008 reform is likely to enhance cantonal performance.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Socioeconomic Institute - University of Zurich in its series SOI - Working Papers with number 0804.
Length: 27 pages
Date of creation: Apr 2008
Date of revision: Dec 2010
DEA; efficiency measurement; federalism; fiscal equalization; public finance; Switzerland; Tiebout competition;
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-29 (All new papers)
- NEP-HAP-2008-04-29 (Economics of Happiness)
- NEP-PBE-2008-04-29 (Public Economics)
- NEP-URE-2008-04-29 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antonio Afonso & Sonia Fernandes, 2006. "Measuring local government spending efficiency: Evidence for the Lisbon region," Regional Studies, Taylor & Francis Journals, vol. 40(1), pages 39-53.
- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
- Drake, Leigh & Simper, R., 2003. "The measurement of English and Welsh police force efficiency: A comparison of distance function models," European Journal of Operational Research, Elsevier, vol. 147(1), pages 165-186, May.
- Pommerehne, Werner W & Zweifel, Peter, 1991. " Success of a Tax Amnesty: At the Polls, for the FISC?," Public Choice, Springer, vol. 72(2-3), pages 131-65, December.
- Andrew Worthington, 2001. "An Empirical Survey of Frontier Efficiency Measurement Techniques in Education," Education Economics, Taylor & Francis Journals, vol. 9(3), pages 245-268.
- Kalyan Chakraborty & Basudeb Biswas & W. Cris Lewis, 2001. "Measurement of Technical Efficiency in Public Education: A Stochastic and Nonstochastic Production Function Approach," Southern Economic Journal, Southern Economic Association, vol. 67(4), pages 889-905, April.
- António Afonso & Ludger Schuknecht & Vito Tanzi, 2006.
"Public Sector Efficiency: Evidence for New EU Member States and Emerging Markets,"
Working Papers Department of Economics
2006/01, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
- Antonio Afonso & Ludger Schuknecht & Vito Tanzi, 2010. "Public sector efficiency: evidence for new EU member states and emerging markets," Applied Economics, Taylor & Francis Journals, vol. 42(17), pages 2147-2164.
- Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2006. "Public sector efficiency: evidence for new EU member states and emerging markets," Working Paper Series 0581, European Central Bank.
- Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
- Mehdi Farsi & Massimo Filippini, 2006. "An Analysis of Efficiency and Productivity in Swiss Hospitals," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 142(I), pages 1-37, March.
- O. B. Olesen & N. C. Petersen, 1995. "Chance Constrained Efficiency Evaluation," Management Science, INFORMS, vol. 41(3), pages 442-457, March.
- Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2003.
"Public sector efficiency: an international comparison,"
Working Paper Series
0242, European Central Bank.
- António Afonso & Ludger Schuknecht & Vito Tanzi, 2005. "Public sector efficiency: An international comparison," Public Choice, Springer, vol. 123(3), pages 321-347, June.
- Antonio Afonso & Carla Scaglioni, 2005. "Public Services Efficiency Provision in Italian Regions: a Non-Parametric Analysis," Working Papers Department of Economics 2005/02, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
- Grossman, Philip J. & Mavros, Panayiotis & Wassmer, Robert W., 1999. "Public Sector Technical Inefficiency in Large U.S. Cities," Journal of Urban Economics, Elsevier, vol. 46(2), pages 278-299, September.
- Roland Fischer & Tobias Bljean & Jan Fivaz, 2003. "Mehr Chancengleichheit und Eigenverantwortung: der neue Schweizer Finanzausgleich zwischen Bund und Kantonen," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 72(3), pages 407-422.
- Richmond, J, 1974. "Estimating the Efficiency of Production," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(2), pages 515-21, June.
- R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
- De Borger, Bruno & Kerstens, Kristiaan, 1996. "Cost efficiency of Belgian local governments: A comparative analysis of FDH, DEA, and econometric approaches," Regional Science and Urban Economics, Elsevier, vol. 26(2), pages 145-170, April.
- Feld, Lars P. & Matsusaka, John G., 2003. "Budget referendums and government spending: evidence from Swiss cantons," Journal of Public Economics, Elsevier, vol. 87(12), pages 2703-2724, December.
- Villani, Salvatore, 2010. "Per un giusto equilibrio tra efficacia ed efficienza nell’attuazione della legge delega sul federalismo fiscale: verso la definizione dei LEP e dei costi standard delle Regioni," MPRA Paper 29513, University Library of Munich, Germany.
- Villani, Salvatore, 2010.
"Elementi ai fini della definizione della nozione di costo standard: una rassegna della letteratura e delle principali esperienze estere
[Basic elements defining the standard cost concept. A survey ," MPRA Paper 29683, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marita Kieser).
If references are entirely missing, you can add them using this form.