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Local Government Control and Efficiency of the Water Industry: An Empirical Analysis of Water Suppliers in East Germany

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  • Haug, Peter

Abstract

The paper deals with the effects of local governments' interference with business affairs of publicly owned utilities. A partial model is presented to illustrate the consequences of "democratic control" for the public managers' effort and the efficiency of local public production. To check the theoretical results empirically, a two-stage data envelopment analysis (DEA) is carried out for a sample of East German water suppliers. The organisational form is used as a measure for the degree of municipal control. The results of the OLS- and Tobit regression indicate an efficiency-enhancing effect of organisational forms with less distinctive control options for local politicians.

Suggested Citation

  • Haug, Peter, 2007. "Local Government Control and Efficiency of the Water Industry: An Empirical Analysis of Water Suppliers in East Germany," IWH Discussion Papers 3/2007, Halle Institute for Economic Research (IWH).
    • Handle: RePEc:zbw:iwhdps:iwh-3-07
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    References listed on IDEAS

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    Cited by:

    1. Mandy Kriese, 2008. "Effizienzanalyse der sächsischen Gemeinden," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(05), pages .3-13, October.
    2. Carvalho, Anne Emília Costa & Sampaio, Luciano Menezes Bezerra, 2015. "Paths to universalize water and sewage services in Brazil: The role of regulatory authorities in promoting efficient service," Utilities Policy, Elsevier, vol. 34(C), pages 1-10.
    3. Alexander Ebertz & Mandy Kriese & Marcel Thum & Helke Seitz, 2008. "Bewertung von lokalen Standortfaktoren für Haushalte und Unternehmen in Sachsen: Entwicklung von Indikatoren zur Überprüfung der Demographietauglichkeit von Förderprojekten der Sächsischen Aufbaubank:," ifo Dresden Studien, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 46, October.
    4. Mandy Kriese, 2008. "Effizienzanalyse der sächsischen Gemeinden," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(05), pages 3-13, October.
    5. Holländer, Robert, 2011. "Kosten und finanzielle Nachhaltigkeit in der kommunalen Wasserwirtschaft," ZögU - Zeitschrift für öffentliche und gemeinwirtschaftliche Unternehmen, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 34(4), pages 396-414.

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    More about this item

    Keywords

    efficiency; water industry; local governments; data envelopment analysis;
    All these keywords.

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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