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Local territorial reform and regional spending efficiency

Author

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  • António Afonso
  • Ana Venâncio

Abstract

We study the effect of a Portuguese structural reform, which reduced the number of parishes, on municipality spending efficiency between 2011 and 2016. We build a composite output indicator and use Data Envelopment Analysis (DEA) to compute efficiency scores. Then, we use a second-stage regression to evaluate the effect of the reform on municipal efficiency after controlling for socio-demographic, political and economic factors. Overall, we find efficiency gains in approximately 10% of municipalities. In some regions (e.g., Alentejo and Centro), more than 50% of the municipalities improved efficiency. The second-stage results show that the structural reform did not improve local spending efficiency in Mainland Portugal, particularly in the Centro, Lisbon and Vale do Tejo regions.

Suggested Citation

  • António Afonso & Ana Venâncio, 2020. "Local territorial reform and regional spending efficiency," Local Government Studies, Taylor & Francis Journals, vol. 46(6), pages 888-910, November.
    • Handle: RePEc:taf:flgsxx:v:46:y:2020:i:6:p:888-910
    DOI: 10.1080/03003930.2019.1690995
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    Cited by:

    1. Muchen Luo & Yimin Wu, 2022. "Data-Driven Evaluation and Optimisation of Livelihood Improvement Efficiency," Sustainability, MDPI, vol. 14(13), pages 1-24, July.
    2. Chin-Yi Fred Fang, 2020. "Perspective of Local Government on the Performance Assessment of District Sports and Leisure Centers," Sustainability, MDPI, vol. 12(21), pages 1-21, October.
    3. Bruno Emmanuel Ongo Nkoa & Djondandi Wangbara & Gautier Tchoffo Tameko, 2024. "Efficiency of local public spending in Cameroon: Does population size matter?," African Development Review, African Development Bank, vol. 36(2), pages 362-376, June.
    4. Ant—nio Afonso & João Tovar Jalles & Ana Venâncio, 2023. "Government spending efficiency, measurement and applications: A cross-country efficiency dataset," Chapters, in: António Afonso & João Tovar Jalles & Ana Venâncio (ed.), Handbook on Public Sector Efficiency, chapter 3, pages 44-71, Edward Elgar Publishing.
    5. Tetiana Dei, 2025. "Financial sources of support for economic development of territorial communities," Gentrification, AG Editor, vol. 1, pages 1-98.
    6. António Afonso & Ana Venâncio, 2022. "Local Property Tax Reform and Municipality Spending Efficiency," CESifo Working Paper Series 9538, CESifo.

    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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