Efficiency of Local Government Spending: Evidence for the Lisbon Region
In this paper we measure and analyse expenditure efficiency of Portuguese local governments using a non-parametric technique for production frontier estimation known as Free Disposal Hull. We first construct an index of municipal performance and then compute input and output efficiency scores for 51 Portuguese municipalities located in the region of Lisbon and Vale do Tejo (RLVT) in order to estimate the extent of municipal spending that seems to be 'wasted' relative to the 'best-practice' frontier. The results of our empirical analysis suggest that RLVT municipalities could achieve, on average, roughly the same level of local output with about 39 percent fewer resources, i.e. local performance could be improved without necessarily increasing municipal spending.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL|
Web page: https://aquila1.iseg.ulisboa.pt/aquila/departamentos/EC
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