Spatial analysis of technical efficiency in the provision of local public goods: The case of Chilean mining municipalities

Cristóbal Vásquez-Quezada and Mauricio Oyarzo

Socio-Economic Planning Sciences, 2024, vol. 96, issue C

Abstract: Countries with intensive mineral extraction generate resource windfalls for municipalities to improve population's welfare in mining areas. However, this process may be inefficient due to negative incentives inherent in their administration, moving away from the actual objective of these resources. This study analyzes the level of technical efficiency over the provision of public goods, namely public education and well-being in Chilean municipalities using a panel approach. To study technical efficiency, data were obtained from the National System of Municipal Information and the National Socioeconomic Characterization Survey, between the years 2008–2019 for 342 Chilean municipalities. Stochastic Frontier Analysis in a panel context is employed to control for heteroskedasticity and unobserved heterogeneity. Chilean municipalities are ranked by technical efficiency in the provision of public goods and their persistence in space and time is examined. Two exogenous rules are used: mining municipalities and a classification of municipalities according to their capacity of provision. Similar localities are compared, and the effects of resource windfalls over efficiency are analyzed. The results reveal that technical efficiency is lower in mining areas with high persistence over the study period, providing evidence for the need to redesign the compensation mechanism derived from mining industry.

Keywords: Stochastic frontier analysis; Public goods; Mining windfalls; Spatial and temporal persistence (search for similar items in EconPapers)
JEL-codes: H20 H40 H70 I10 I20 Q30 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0038012124002751
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:soceps:v:96:y:2024:i:c:s0038012124002751

DOI: 10.1016/j.seps.2024.102075

Access Statistics for this article

Socio-Economic Planning Sciences is currently edited by Barnett R. Parker

More articles in Socio-Economic Planning Sciences from Elsevier
Bibliographic data for series maintained by Catherine Liu ().