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What Determines Efficiency in Local Government? A DEA Analysis of NSW Local Government

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  • Joseph Drew
  • Michael Kortt
  • Brian Dollery

Abstract

type="main" xml:id="ecpa12118-abs-0001"> Data envelopment analysis (DEA) has the potential to make strong contributions to the formulation of public policy. In particular, DEA can be used to identify the determinants of efficiency and this information can be used to inform debate around municipal boundary reform and other matters. However, there is a dearth of empirical literature on the accurate and correct specification of DEA. We use conceptual considerations to posit an ideal specification for Australian municipal DEA before estimating a number of models to demonstrate the effect of specification on the identification of determinants. Our evidence suggests that incorrect specification may well produce spurious associations and lead to poor public policymaking.

Suggested Citation

  • Joseph Drew & Michael Kortt & Brian Dollery, 2015. "What Determines Efficiency in Local Government? A DEA Analysis of NSW Local Government," Economic Papers, The Economic Society of Australia, vol. 34(4), pages 243-256, December.
    • Handle: RePEc:bla:econpa:v:34:y:2015:i:4:p:243-256
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    File URL: http://hdl.handle.net/10.1111/ecpa.2015.34.issue-4
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    Cited by:

    1. Myoungjae Choi & Ohjin Kwon & Dongkyu Won & Wooseok Jang, 2021. "Identifying the Policy Direction of National R&D Programs Based on Data Envelopment Analysis and Diversity Index Approach," Sustainability, MDPI, vol. 13(22), pages 1-17, November.
    2. Skica Tomasz & Leśniowska-Gontarz Małgorzata & Miszczyńska Katarzyna, 2019. "Measuring the Efficiency of Polish Municipalities – Data Envelopment Analysis Approach," South East European Journal of Economics and Business, Sciendo, vol. 14(2), pages 54-66, December.
    3. Plaček, Michal & Valentinov, Vladislav & del Campo, Cristina & Vaceková, Gabriela & Ochrana, František & Šumpíková, Markéta, 2021. "Stewardship and administrative capacity in green public procurement in the Czech Republic: Evidence from a large-N survey," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 33.
    4. Michal PlaÄ ek & Milan Křápek & Jan ÄŒadil & Bojka Hamerníková, 2020. "The Influence of Excellence on Municipal Performance: Quasi-Experimental Evidence From the Czech Republic," SAGE Open, , vol. 10(4), pages 21582440209, December.

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