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The public sector fiscal efficiency in Italy: the case of Lombardy municipalities in the provision of the essential public services

Author

Listed:
  • Tommaso Agasisti

    (Politecnico di Milano School of Management)

  • Antonio Dal Bianco

    (Eupolis Lombardia)

  • Massimo Griffini

    (Politecnico di Milano School of Management)

Abstract

This paper evaluates how efficient are the municipalities located in the most populous Italian Region (Lombardy) in providing essential public services: general administration, municipal and administrative police, waste collection, road network and street lighting. The empirical analysis is conducted through bootstrap Data Envelopment Analysis (DEA) on a sample of 331 municipalities with more than 5,000 inhabitants, and refers to the three years 2010, 2011 and 2012. The results highlight that there is room for substantial improvement of efficiency : the same level of output can be obtained while reducing the resources of about 33%. A second-stage truncated regression reveals that: the structure of population matters, scale effects do exist, and more financially healthy municipalities are also more efficient in providing essential services.

Suggested Citation

  • Tommaso Agasisti & Antonio Dal Bianco & Massimo Griffini, 2015. "The public sector fiscal efficiency in Italy: the case of Lombardy municipalities in the provision of the essential public services," Working papers 25, Società Italiana di Economia Pubblica.
    • Handle: RePEc:ipu:wpaper:25
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    References listed on IDEAS

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    3. McDonald, John, 2009. "Using least squares and tobit in second stage DEA efficiency analyses," European Journal of Operational Research, Elsevier, vol. 197(2), pages 792-798, September.
    4. Alberto Alesina & Roberto Perotti, 1997. "Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects," IMF Staff Papers, Palgrave Macmillan, vol. 44(2), pages 210-248, June.
    5. Maria Sousa & Borko Stošić, 2005. "Technical Efficiency of the Brazilian Municipalities: Correcting Nonparametric Frontier Measurements for Outliers," Journal of Productivity Analysis, Springer, vol. 24(2), pages 157-181, October.
    6. de Sousa, Maria da Conceição Sampaio & Cribari-Neto, Francisco & Stosic, Borko D., 2005. "Explaining DEA Technical Efficiency Scores in an Outlier Corrected Environment: The Case of Public Services in Brazilian Municipalities," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 25(2), November.
    7. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
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    Cited by:

    1. 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.

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    More about this item

    Keywords

    global efficiency; public services; municipalities; bootstrap Data Envelopment Analysis;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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