The Relationship between Local Governments Efficiency and Quality of Life: an Empirical Analysis on Italian Provinces

Tommaso Agasisti (), Pietro Massaggia and Teo Miserocchi
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Tommaso Agasisti: Politecnico di Milano School of Management

Working papers from Società Italiana di Economia Pubblica

Abstract: This paper investigates the relationship between local government efficiency and Quality of Life (QoL) across Italian Provinces with 2019 as reference year. The study aims to assess whether local governments (municipalities within a certain province) that achieve higher technical efficiency in delivering public services also present a higher QoL for citizens. The method developed to address the research question employs bootstrapped Data Envelopment Analysis (DEA) to generate efficiency (first-stage) and QoL scores (second-stage), followed by a third-stage regression to examine the relationship between these two dimensions, also considering contextual factors. The analysis reveals significant regional disparities, with Northern Italian provinces generally displaying higher QoL outcomes compared to their Southern counterparts. We propose an innovative specification less dependent on municipal spending to measure efficiency. The results suggest that higher technical efficiency does not always translate equally into higher QoL, as this relationship might also depends on the wealth level of the areas analyzed or by the action of other government levels. Specifically, municipalities’ efficiency appears to be more relevant in less prosperous regions. The analysis is conducted both for global efficiency and for single services separately.

Keywords: Quality of Life; Technical Efficiency; Local Government; Municipalities; Public Services; Data Envelopment Analysis. (search for similar items in EconPapers)
JEL-codes: H72 (search for similar items in EconPapers)
Date: 2025-04
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