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Scale and efficiency in the provision of local government services

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  • Mark Burridge

Abstract

This paper investigates the size of local authority fixed and variable costs and the extent of economies of scale and scope in the provision of local services. A flexible modelling framework is used which combines elements of both short and long run cost behaviour and allows returns to scale to vary over the output range. The empirical work based upon this model suggests that there are significant fixed costs associated with the provision of local services. Local authorities exhibit overall economies of scale over most of the observable output range, with these economies resulting largely from the cost savings associated with multiple outputs.

Suggested Citation

  • Mark Burridge, 2008. "Scale and efficiency in the provision of local government services," International Journal of Business Performance Management, Inderscience Enterprises Ltd, vol. 10(1), pages 99-107.
    • Handle: RePEc:ids:ijbpma:v:10:y:2008:i:1:p:99-107
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    Cited by:

    1. Villani, Salvatore, 2010. "Per un giusto equilibrio tra efficacia ed efficienza nell’attuazione della legge delega sul federalismo fiscale: verso la definizione dei LEP e dei costi standard delle Regioni," MPRA Paper 29513, University Library of Munich, Germany.
    2. Cesaroni, Giovanni & Giovannola, Daniele, 2015. "Average-cost efficiency and optimal scale sizes in non-parametric analysis," European Journal of Operational Research, Elsevier, vol. 242(1), pages 121-133.
    3. Villani, Salvatore, 2010. "Elementi ai fini della definizione della nozione di costo standard: una rassegna della letteratura e delle principali esperienze estere [Basic elements defining the standard cost concept. A survey ," MPRA Paper 29683, University Library of Munich, Germany.

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