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Evaluating local government performance in times of crisis

Isabel Narbón-Perpiñá (), Mª Teresa Balaguer-Coll () and Emili Tortosa-Ausina ()
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Isabel Narbón-Perpiñá: Department of Economics, Universitat Jaume I, Castellón, Spain
Mª Teresa Balaguer-Coll: Department of Accounting and Finance, Universitat Jaume I, Castellón, Spain
Emili Tortosa-Ausina: IVIE and Department of Economics, Universitat Jaume I, Castellón, Spain

No 2017/05, Working Papers from Economics Department, Universitat Jaume I, Castellón (Spain)

Abstract: In the recent years of international economic crisis, Spanish local governments have come under increasing pressure to accommodate severe economic restrictions while maintaining (or even increasing) their provision of local public services. This paper aims to analyse overall cost efficiency in Spanish local governments during the period of the economic crisis (2008–2013) which has scarcely been examined to date. To this end, we measure efficiency, for which we consider four different non-parametric methodologies. Moreover, given how problematic it is to precisely define the bundle of services and facilities that municipalities must provide, we compare three different output models in which we consider measures of quantity as well as quality. Our results suggest that Spanish local government efficiency improved over the crisis period 2008–2013 since budget expenditures (inputs or costs) fell while local public services and facilities (outputs) were maintained. We also find evidence of the possible implications of service quality when measuring local governments’ cost efficiency, and of structural differences in the average efficiency between municipalities located in different Spanish regions and provinces. Finally, our results confirm that the level and variation of efficiency scores are affected by the approach taken.

Keywords: Efficiency; local government; non-parametric frontiers (search for similar items in EconPapers)
JEL-codes: C14 H11 H70 R15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-eur and nep-ure
Date: 2017
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