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Explaining Differences In Efficiency: A Meta‐Study On Local Government Literature

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  • Francesco Aiello
  • Graziella Bonanno

Abstract

This paper reviews the literature on local government efficiency by meta‐reviewing 360 observations retrieved from 54 papers published from 1993 to 2016. The meta‐regression is based on a random‐effects model estimated with the two‐step random‐effects maximum likelihood (REML) technique proposed by Gallet and Doucouliagos. Results indicate that the study design matters when estimating a frontier in local government. We find that studies focusing on technical efficiency provide higher efficiency scores than works evaluating cost efficiency. The same applies when using panel data instead of cross‐section data. Interestingly, studies that use the Free Disposal Hull (FDH) approach yield, on average, higher efficiency scores than papers employing the data envelopment analysis (DEA) method, thereby suggesting that in this literature the convexity hypothesis of the production set is a matter. Finally, the efficiency of local government increases with the level of development of the analysed countries and is positively related to the national integrity of the legal system. The opposite holds when considering the corruption.

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  • Francesco Aiello & Graziella Bonanno, 2019. "Explaining Differences In Efficiency: A Meta‐Study On Local Government Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 33(3), pages 999-1027, July.
  • Handle: RePEc:bla:jecsur:v:33:y:2019:i:3:p:999-1027
    DOI: 10.1111/joes.12310
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    1. Teodor Hada & Iulia Iuga & Dorin Vainberg & Mihai Carut & Raluca-Andreea Pop (Damian), 2019. "Does the Number of Inhabitants Influence the Investments Financing in Territorial Administrative Units?," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(4), pages 109-116, December.
    2. Pacheco, Francisca & Sanchez, Rafael & Villena, Mauricio G., 2017. "Estimating Local Government Efficiency using a Panel Data Parametric Approach: The Case of Chilean Municipalities," MPRA Paper 102267, University Library of Munich, Germany, revised 27 Jan 2020.
    3. Isabel Narbón-Perpiñá & Maria Teresa Balaguer-Coll & Marko Petrović & Emili Tortosa-Ausina, 2020. "Which estimator to measure local governments’ cost efficiency? The case of Spanish municipalities," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 11(1), pages 51-82, March.
    4. Víctor Giménez & Claudio Thieme & Diego Prior & Emili Tortosa-Ausina, 2020. "Evaluation and determinants of pre-school effectiveness in Chile," Working Papers 2020/02, Economics Department, Universitat Jaume I, Castellón (Spain).
    5. lo Storto, Corrado, 2020. "Performance evaluation of social service provision in Italian major municipalities using Network Data Envelopment Analysis," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    6. Mª Teresa Balaguer-Coll & Isabel Narbón-Perpiñá & Jesús Peiró-Palomino & Emili Tortosa-Ausina, 2020. "Quality of government and economic growth at the municipal level: Evidence from Spain," Working Papers 2020/04, Economics Department, Universitat Jaume I, Castellón (Spain).

    More about this item

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy

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