Some Determinants of Intermediate Local Governments' Spending Efficiency: The Case of French Départements
Efforts undertaken by France to restructure the allocation of governmental competencies increased the importance of subnational governments by transferring additional tasks. This paper analyzes the efficiency of public spending on an intermediate government level for a sample of 96 départements in metropolitan France in 2008. Spending efficiency is measured using Data Envelopment Analysis (DEA). Results indicate significant room for improvements and detect spending inefficiencies averaging between 10 and 22 percent, depending on model specification. To explain efficiency, a bootstrapped truncated regression, following Simar and Wilson (2007), is applied. The second-stage regression shows that efficiency is also determined by exogenous factors and identifies the distance to the national capital, inhabitants' income and the share of inhabitants of an age over 65 as significant determinants of efficiency.
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- Emili Tortosa Ausina & Diego Prior & María Teresa Balaguer-Coll, 2004. "On The Determinants Of Local Government Performance: A Two-Stage Nonparametric Approach," Working Papers. Serie EC 2004-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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