Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/83438 
Year of Publication: 
2011
Series/Report no.: 
IES Working Paper No. 14/2011
Publisher: 
Charles University in Prague, Institute of Economic Studies (IES), Prague
Abstract: 
We measure cost efficiency of 202 Czech municipalities of extended scope in period 2003-2008. The study is the first application of overall efficiency measurement of the local governments in the new EU member states, and the second in post-communist countries. We measure government efficiency through established quantitative and qualitative indicators of the provision of education, cultural facilities, infrastructure and other local services. First, we employ non-parametric approach of the data envelopment analysis and adjust the efficiency scores by bootstrapping. Second, we employ the stochastic frontier analysis and control for effects of various demographic, economic, and political variables. We compare scores under our preferred specification, i.e. pseudo-translog time-variant stochastic-frontier analysis with determinants, with alternative scores. The determinants that robustly increase inefficiency are population size, distance to the regional center, share of university-educated citizens, capital expenditures, subsidies per capita, and the share of self-generated revenues. Concerning political variables, increase in party concentration and the voters' involvement increases efficiency, and local council with a lower share of left-wing representatives also tend to be more efficient. We interpret determinants both as indicators of slack, non-discretionary inputs, and unobservable outputs. The analysis is conducted also for the period 1994-1996, where political variables appear to influence inefficiency in a structurally different way. From comparison of the two periods, we obtain that small municipalities improve efficiency significantly more that large municipalities.
Subjects: 
Public spending efficiency
Data Envelopment Analysis
Stochastic Frontier Analysis
local governments
JEL: 
D24
H72
Document Type: 
Working Paper

Files in This Item:
File
Size
902.71 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.