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Long- and Short-Term Cost Efficiency Frontier Evaluation: Evidence from Spanish Local Governments

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  • Victor M. Giménez
  • Diego Prior

Abstract

This paper analyses the efficiency of Spanish local governments using non-convex frontier methods. More specifically, it analyses the total cost inefficiency and proposes its decomposition into three additive components: short-term variable cost inefficiency; capacity utilisation of fixed inputs; and scale inefficiency. The second and third components correspond to the long-term cost efficiency notion. The proposition is applied to a sample of Spanish municipal councils (municipalities with over 2,000 inhabitants located in Catalonia, the Spanish north-eastern region). The results confirm the existence of significant cost inefficiency coefficients related to both the long and short term. Copyright 2007 Institute for Fiscal Studies.

Suggested Citation

  • Victor M. Giménez & Diego Prior, 2007. "Long- and Short-Term Cost Efficiency Frontier Evaluation: Evidence from Spanish Local Governments," Fiscal Studies, Institute for Fiscal Studies, vol. 28(1), pages 121-139, March.
  • Handle: RePEc:ifs:fistud:v:28:y:2007:i:1:p:121-139
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    Cited by:

    1. Maria Teresa Balaguer-Coll & Diego Prior & Emili Tortosa-Ausina, 2010. "Devolution Dynamics of Spanish Local Government," Environment and Planning A, , pages 1476-1495.
    2. Kalb, Alexander, 2009. "What determines local governments' technical efficiency? The case of road maintenance," ZEW Discussion Papers 09-047, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Martin Ardanaz & Stanislao Maldonado, 2016. "Natural Resource Windfalls and Efficiency of Local Government Expenditures: Evidence from Peru," DOCUMENTOS DE TRABAJO 014578, UNIVERSIDAD DEL ROSARIO.
    4. repec:kap:jproda:v:48:y:2017:i:1:d:10.1007_s11123-017-0500-z is not listed on IDEAS
    5. Núria Bosch & Marta Espasa & Toni Mora, 2012. "Citizen Control and the Efficiency of Local Public Services," Environment and Planning C, , pages 248-266.
    6. Dino Rizzi & Michele Zanette, 2015. "A Procedure for the Ex-Ante Assessment of Compulsory Municipal Amalgamation Programs," Working Papers 2015:22, Department of Economics, University of Venice "Ca' Foscari".
    7. da Cruz, Nuno Ferreira & Marques, Rui Cunha, 2014. "Revisiting the determinants of local government performance," Omega, Elsevier, vol. 44(C), pages 91-103.
    8. Isabel Narbón-Perpiñá & Mª Teresa Balaguer-Coll & Emili Tortosa-Ausina, 2017. "Evaluating local government performance in times of crisis," Working Papers 2017/05, Economics Department, Universitat Jaume I, Castellón (Spain).
    9. Simona Bigerna & Paolo Polinori, 2013. "Quality of Life in Major Italian Cities: Do Local Governments Cost Efficiency Contribute to Improve Urban Life Style? An Introductory Analysis," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2013(3), pages 121-144.
    10. Bernardino Benito & José Solana & María-Rocío Moreno, 2014. "Explaining efficiency in municipal services providers," Journal of Productivity Analysis, Springer, vol. 42(3), pages 225-239, December.
    11. Bönisch, Peter & Haug, Peter & Illy, Annette & Schreier, Lukas, 2011. "Municipality Size and Efficiency of Local Public Services: Does Size Matter?," IWH Discussion Papers 18/2011, Halle Institute for Economic Research (IWH).
    12. Cordero, José Manuel & Pedraja-Chaparro, Francisco & Pisaflores, Elsa C. & Polo, Cristina, 2016. "Efficiency assessment of Portuguese municipalities using a conditional nonparametric approach," MPRA Paper 70674, University Library of Munich, Germany.
    13. Cuadrado-Ballesteros, Beatriz & García-Sánchez, Isabel-María & Prado-Lorenzo, José-Manuel, 2013. "Effect of modes of public services delivery on the efficiency of local governments: A two-stage approach," Utilities Policy, Elsevier, vol. 26(C), pages 23-35.
    14. repec:cuf:journl:y:2017:v:18:i:1:moreno-enguix is not listed on IDEAS
    15. Isabel Narbón-Perpiñá & Kristof De Witte, 2016. "Local governments’ efficiency: A systematic literature review – Part I," Working Papers 2016/20, Economics Department, Universitat Jaume I, Castellón (Spain).
    16. Isabel Narbón-Perpiñá & Kristof De Witte, 2016. "Local governments’ efficiency: A systematic literature review – Part II," Working Papers 2016/21, Economics Department, Universitat Jaume I, Castellón (Spain).

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