A Longitudinal Parametric Approach to Estimate Local Government Efficiency
Previous empirical works on municipal efficiency have mostly used cross-sectional data which makes it impossible to separate unobserved heterogeneity from inefficiency. Furthermore, they have also typically used a two stages approach which has been widely criticized as the assumptions made in the first stage are violated in the second stage, generating biased results. We present one of the first longitudinal parametric studies that analyze municipal efficiency and its determinants using a one step procedure. Furthermore, we are the first of this kind that analize overall efficiency as well as efficiency by clusters of municipalities in order to reduce heterogeneity. We use administrative datasets of Chilean municipalities for the 2008-2010 period and our results suggest that Chilean municipalities have on average an inefficiency level of 30% with a significant variance between clusters of municipalities. Also, our results suggest that socio-economic, fiscal and political variables affect municipal efficiency. In particular, we found that municipalities with tighter budget constraints are associated with more efficient municipalities.
|Date of creation:||11 Mar 2014|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2010.
"Voter involvement, fiscal autonomy and public sector efficiency: Evidence from German municipalities,"
European Journal of Political Economy,
Elsevier, vol. 26(2), pages 265-278, June.
- Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2008. "Voter Involvement, Fiscal Autonomy and Public Sector Efficiency: Evidence from German Municipalities," ZEW Discussion Papers 08-024, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2009.
"Voter involvement, fiscal autonomy and public sector efficiency: evidence from German municipalities
[Wähler-Beteiligung, Finanzhoheit und Effizienz des öffentlichen Sektors: Aussagen von deutschen," Discussion Papers, Research Unit: Market Processes and Governance SP II 2009-02, Social Science Research Center Berlin (WZB).
- Lenka Š astná & Martin Gregor, 2011. "Local Government Efficiency: Evidence from the Czech Municipalities," Working Papers IES 2011/14, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised May 2011.
- Willam Greene, 2005. "Fixed and Random Effects in Stochastic Frontier Models," Journal of Productivity Analysis, Springer, vol. 23(1), pages 7-32, January.
- William Greene, 2002. "Fixed and Random Effects in Stochastic Frontier Models," Working Papers 02-16, New York University, Leonard N. Stern School of Business, Department of Economics.
- Heikki Loikkanen & Ilkka Susiluoton, "undated". "Cost Efficiency of Finnish Municipalities in Basic Service Provision 1994-2002," Regional and Urban Modeling 283600056, EcoMod.
- Heikki A. Loikkanen & Ilkka Susiluoto, 2005. "Cost Efficiency of Finnish Municipalities in Basic Service Provision 1994-2002," ERSA conference papers ersa05p37, European Regional Science Association.
- Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
- Hung-jen Wang & Peter Schmidt, 2002. "One-Step and Two-Step Estimation of the Effects of Exogenous Variables on Technical Efficiency Levels," Journal of Productivity Analysis, Springer, vol. 18(2), pages 129-144, September.
- Wang, Hung-jen & Schmidt, Peter, 2001. "One-step and two-step estimation of the effects of exogenous variables on technical efficiency levels," MPRA Paper 31075, University Library of Munich, Germany, revised Mar 2002.
- William Greene, 2004. "Distinguishing between heterogeneity and inefficiency: stochastic frontier analysis of the World Health Organization's panel data on national health care systems," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 959-980.
- William Greene, 2003. "Distinguishing Between Heterogeneity and Inefficiency: Stochastic Frontier Analysis of the World Health Organization’s Panel Data on National Health Care Systems," Working Papers 03-10, New York University, Leonard N. Stern School of Business, Department of Economics.
- Angel Prieto & José ZofIo, 2001. "Evaluating Effectiveness in Public Provision of Infrastructure and Equipment: The Case of Spanish Municipalities," Journal of Productivity Analysis, Springer, vol. 15(1), pages 41-58, January.
- Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August.
- Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
- Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-286, July.
- Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-1248, September.
- de Sousa, Maria da Conceição Sampaio & Ramos, Francisco S., 1999. "Eficiência Técnica e Retornos de Escala na Produção de Serviços Públicos Municipais: o Caso do Nordeste e do Sudeste Brasileiros," Revista Brasileira de Economia - RBE, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 53(4), October.
- Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:54918. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.