Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76149
Authors: 
Widmer, Philippe
Zweifel, Peter
Year of Publication: 
2008
Series/Report no.: 
Working Paper, Socioeconomic Institute, University of Zurich 0804
Abstract: 
The purpose of this paper is to analyze the efficiency of the 26 Swiss cantons over the period 2000 to 2004 applying Data Envelopment Analysis (DEA). A Total Public Sector Performance (TPSP) indicator for eight local government activities (administration, public safety, education, culture and sport, health, transportation, environment and spatial planning, and public economy) is calculated to measure technical efficiency. Efficiency scores are then related to the fiscal equalization scheme designed to reduce disparities between cantons with the expectation to find a negative relationship. Results show the existing scheme to indeed have a negative influence on the performance of financially advantaged cantons. Surprisingly, however, earmarked transfers from the confederation to the cantons are not found to have a stronger negative influence on cantonal performance, contradicting the rationale for their suppression in a recent reform. Most public services fail to exhibit economies of scale, undermining quests for centralization of public good provision and suggesting the possibility of Tiebout competition.
Subjects: 
DEA
efficiency measurement
federalism
fiscal equalization
public finance
Switzerland
Tiebout competition
JEL: 
C14
C67
H11
H72
H83
Document Type: 
Working Paper

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