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Exploring sources of local government technical inefficiency: evidence from Flemish municipalities

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  • Geys, Benny
  • Moesen, Wim

Abstract

The present paper explores sources of technical (in)efficiency of Flemish municipalities in their production of local public goods (in the year 2000). In assessing inefficiency derivation, we focus on socio-economic and political characteristics of the municipalities as potential source. Our main findings indicate that while the socio-economic make-up of the population (i.c. income, income inequality, education and unemployment) appears to bear little relation to local (in)efficiency, the reverse holds for the municipal financial situation (i.c. grants, historical debt and fiscal surplus) as well as population size and density. Also, different types of communities – i.e. agricultural, residential, industrial, touristic or urbanised – are generally found to achieve comparable performance levels in providing ‘core’ public services. While indicative, the limitations of our dataset imply that further work is vital before definitive conclusions (as well as causal inferences) can be made. -- Im vorliegenden Papier untersuchen wir anhand flämischer Gemeindeverwaltungen im Jahr 2002 die Ursachen von technischer Effizienz bzw. Ineffizienz in der Bereitstellung von lokalen öffentlichen Gütern. Als mögliche Quellen von Ineffizienz fokussieren wir in unserer Analyse auf sozioökonomische und politische Charakteristika der jeweiligen Gemeinden. Unsere Ergebnisse zeigen, dass die finanzielle Situation und die Einwohnerzahl und -dichte der Gemeinden (d.h. Subventionen, Altschuldenlasten, Haushaltsüberschüsse etc.) im Zusammenhang mit kommunaler (In)Effizienz stehen, während hingegen die Struktur der Bevölkerung in Hinblick auf sozioökonomische Charakteristika (z.B. Einkommen und deren Verteilung, Bildung und Arbeitslosigkeit) kaum einen Einfluss hat. Ebenso zeigen verschiedene Gemeindetypen (wir unterscheiden hier z.B. nach landwirtschaftlichen Gemeinden, Wohngegenden, Industriegebieten, touristisch erschlossenen und urbanisierten Gemeinden) ein vergleichbares Niveau in der Bereitstellung der wichtigsten öffentlichen Güter. Die Begrenztheit unserer Daten impliziert aber die Notwendigkeit weiterer Analysen bevor eindeutige Kausalitäten und Ergebnisse bestimmt werden können. Die vorliegende Arbeit bietet hierfür ein Beispiel und zeigt, wie eine solche Untersuchung gestaltet werden kann.

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Bibliographic Info

Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Market Processes and Governance with number SP II 2008-18.

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Date of creation: 2008
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Handle: RePEc:zbw:wzbmpg:spii200818

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Related research

Keywords: Technical efficiency; government performance; Socio-economic typology; Flemish municipalities;

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References

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  1. Ana Faria & Paul Fenn & Alistair Bruce, 2005. "Production technologies and technical efficiency: evidence from Portuguese manufacturing industry," Applied Economics, Taylor & Francis Journals, vol. 37(9), pages 1037-1046.
  2. Revelli, Federico & Tovmo, Per, 2007. "Revealed yardstick competition: Local government efficiency patterns in Norway," Journal of Urban Economics, Elsevier, vol. 62(1), pages 121-134, July.
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  7. 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.
  8. Laure Latruffe & Kelvin Balcombe & Sophia Davidova & Katarzyna Zawalinska, 2004. "Determinants of technical efficiency of crop and livestock farms in Poland," Applied Economics, Taylor & Francis Journals, vol. 36(12), pages 1255-1263.
  9. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 1993. "The Measurement of Productive Efficiency: Techniques and Applications," OUP Catalogue, Oxford University Press, number 9780195072181.
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  13. Reback, Randall, 2005. "House prices and the provision of local public services: capitalization under school choice programs," Journal of Urban Economics, Elsevier, vol. 57(2), pages 275-301, March.
  14. Philip Stevens, 2004. "Accounting for Background Variables in Stochastic Frontier Analysis," NIESR Discussion Papers 239, National Institute of Economic and Social Research.
  15. Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2009. "Voter involvement, fiscal autonomy and public sector efficiency: evidence from German municipalities," Discussion Papers, Research Unit: Market Processes and Governance SP II 2009-02, Social Science Research Center Berlin (WZB).
  16. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
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Citations

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Cited by:
  1. Peter Bönisch & Peter Haug & A. Illy & L. Schreier, 2011. "Municipality Size and Efficiency of Local Public Services: Does Size Matter?," IWH Discussion Papers 18, Halle Institute for Economic Research.
  2. Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2008. "Voter Involvement, Fiscal Autonomy and Public Sector Efficiency: Evidence from German Municipalities," ZEW Discussion Papers 08-024, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Alexander Kalb, 2010. "The Impact of Intergovernmental Grants on Cost Efficiency: Theory and Evidence from German Municipalities," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 40(1), pages 21-63, March.
  4. Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2007. "Local Governments in the Wake of Demographic Change: Efficiency and Economies of Scale in German Municipalities," ZEW Discussion Papers 07-036, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. Geys, Benny & Konrad, Kai A., 2010. "Federalism and optimal allocation across levels of governance," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2010-09, Social Science Research Center Berlin (WZB).

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