Spatial interdependence in cost efficiency and local government optimal size: The case of Italian municipalities

Francesco Vidoli, Monica Auteri, Giorgia Marinuzzi and Walter Tortorella

Socio-Economic Planning Sciences, 2023, vol. 86, issue C

Abstract: This study provides an original approach to empirically determine the optimal size of municipalities for efficient social service delivery in Italy, accounting for spatial spillover effects across municipalities as well as endogeneity between the output provided and its cost. A highly disaggregated and up-to-date database of Italian municipalities is used to estimate, through endogenous spatial frontier of Kutlu et al. (2020), the minimum costs. In municipalities with population ranging from 2000 to 3500 economies of scale in social service provision emerge, exhibiting cost-optimality. This outcome is completely ignored in some Regional government where financing criteria are based on historical, non-public, and ex-post repayment criteria.

Keywords: Cost efficiency; Stochastic frontier analysis; Endogeneity; Spatial heterogeneity; Optimal government size (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceps:v:86:y:2023:i:c:s0038012122002828

DOI: 10.1016/j.seps.2022.101481

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