IDEAS home Printed from https://ideas.repec.org/a/vrs/njopap/v7y2014i2p151-171n5.html
   My bibliography  Save this article

Municipality Size and Local Public Services: Do Economies of Scale Exist ?

Author

Listed:
  • Soukopová Jana
  • Nemec Juraj
  • Matějová Lenka
  • Struk Michal

Abstract

Economies of scale are a standard topic in economic theory, frequently applied, for example, in the analysis of monopolies. They exist when a firm optimising its production costs while facing some fixed costs enjoys lower per-unit production costs as the production increases. Similarly to other production units municipalities have to be large enough to minimise average costs. We analysed the local public services in 205 municipalities with extended powers in the Czech Republic for the first time in this context, using regression analysis, a correlation diagram of local public services and statistical analysis. The paper examines this issue using data from 2008 to 2012. Our analysis showed that economies of scale cannot be clearly identified for local services in municipalities with extended powers in the Czech Republic and that the size of a municipality is not a key factor influencing the provision of local services.

Suggested Citation

  • Soukopová Jana & Nemec Juraj & Matějová Lenka & Struk Michal, 2014. "Municipality Size and Local Public Services: Do Economies of Scale Exist ?," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 7(2), pages 151-171, December.
    • Handle: RePEc:vrs:njopap:v:7:y:2014:i:2:p:151-171:n:5
    DOI: 10.2478/nispa-2014-0007
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/nispa-2014-0007
    Download Restriction: no
    File URL: https://libkey.io/10.2478/nispa-2014-0007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Byrnes, Joel & Crase, Lin & Dollery, Brian & Villano, Renato, 2010. "The relative economic efficiency of urban water utilities in regional New South Wales and Victoria," Resource and Energy Economics, Elsevier, vol. 32(3), pages 439-455, August.
    2. Mervi Taalas, 1997. "Generalised Cost Functions for Producers of Performing Arts – Allocative Inefficiencies and Scale Economies in Theatres," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 21(4), pages 335-353, December.
    3. Bel Germà & Fageda Xavier & E. Mildred, 2014. "Is private production of public services cheaper than public production? A meta-regression analysis of solid waste and water services," Public administration issues, Higher School of Economics, issue 3, pages 103-140.
    4. Witte, Kristof De & Geys, Benny, 2011. "Evaluating efficient public good provision: Theory and evidence from a generalised conditional efficiency model for public libraries," Journal of Urban Economics, Elsevier, vol. 69(3), pages 319-327, May.
    5. Ferguson,C. E., 2008. "The Neoclassical Theory of Production and Distribution," Cambridge Books, Cambridge University Press, number 9780521076296, September.
    6. Bönisch, Peter & Haug, Peter & Illy, Annette & Schreier, Lukas, 2011. "Municipality Size and Efficiency of Local Public Services: Does Size Matter?," IWH Discussion Papers 18/2011, Halle Institute for Economic Research (IWH).
    7. L. R. Gabler, 1971. "Population Size as a Determinant of City Expenditures and Employment: Some Further Evidence," Land Economics, University of Wisconsin Press, vol. 47(2), pages 130-138.
    8. Kirjavainen, Tanja & Loikkanent, Heikki A., 1998. "Efficiency differences of finnish senior secondary schools: An application of DEA and Tobit analysis," Economics of Education Review, Elsevier, vol. 17(4), pages 377-394, October.
    9. Faulk, Dagney Gail & Hicks, Michael J. & Cebula, Richard J., 2011. "Book Review: Local Government Consolidation in the United States," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 41(1), pages 1-1.
    10. Matthias Walter & Astrid Cullmann, 2008. "Potential Gains from Mergers in Local Public Transport: An Efficiency Analysis Applied to Germany," Discussion Papers of DIW Berlin 832, DIW Berlin, German Institute for Economic Research.
    11. Bodkin, Ronald G & Conklin, David W, 1971. "Scale and Other Determinants of Municipal Government Expenditures in Ontario: A Quantitative Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 12(3), pages 465-481, October.
    12. repec:lan:wpaper:1015 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Plaček Michal & Ochrana František & Půček Milan & Křápek Milan, 2017. "Does Decentralized Leadership Influence the Performance of Czech Museums?," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 10(1), pages 121-139, June.
    2. Meričková Beáta Mikušová & Muthová Nikoleta Jakuš, 2019. "Bounded Rationality of Individual Action in the Consumption of Public Goods," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 12(2), pages 157-194, December.
    3. Gerard Turley & John McDonagh & Stephen McNena & Arkadiusz Grzedzinski, 2018. "Optimum Territorial Reforms in Local Government: An Empirical Analysis of Scale Economies in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 49(4), pages 463-488.
    4. Agiamoh Rosaline Georgevna, 2021. "Inter-Regional Cooperation in Waste Management: New Trends in Moscow and the Moscow Region," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 14(2), pages 9-39, December.
    5. Matějová Lenka & Nemec Juraj & Křápek Milan & Klimovský Daniel, 2017. "Economies of Scale on the Municipal Level: Fact or Fiction in the Czech Republic?," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 10(1), pages 39-59, June.
    6. Soukopová Jana & Klimovský Daniel, 2016. "Local Governments and Local Waste Management in the Czech Republic: Producers or Providers?," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 9(2), pages 217-237, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Laura Carosi & Giovanna D'Inverno & Letizia Ravagli, 2014. "Global public spending efficiency in Tuscan municipalities," Discussion Papers 2014/175, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    2. Cordero, José Manuel & Pedraja-Chaparro, Francisco & Pisaflores, Elsa C. & Polo, Cristina, 2016. "Efficiency assessment of Portuguese municipalities using a conditional nonparametric approach," MPRA Paper 70674, University Library of Munich, Germany.
    3. Víctor Fernández-Blanco & Ana Rodríguez-Álvarez & Aleksandra Wiśniewska, 2019. "Measuring technical efficiency and marginal costs in the performing arts: the case of the municipal theatres of Warsaw," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 43(1), pages 97-119, March.
    4. Koppitz David & Půček Milan & Ochrana František & Plaček Michal, 2015. "Comparative Analysis of Selected Factors Affecting Heating Costs of Schools in Selected Balkan Countries," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 8(1), pages 61-84, June.
    5. Victor Fernandez-Blanco & Ana Rodriguez-Alvarez, 2015. "Measuring allocative efficiency in cultural economics: The case of Fundacion Princesa de Asturias," ACEI Working Paper Series AWP-09-2015, Association for Cultural Economics International, revised Oct 2015.
    6. Víctor Fernández-Blanco & Luis César Herrero & Juan Prieto-Rodríguez, 2013. "Performance of cultural heritage institutions," Chapters, in: Ilde Rizzo & Anna Mignosa (ed.), Handbook on the Economics of Cultural Heritage, chapter 24, pages i-i, Edward Elgar Publishing.
    7. María José Barrio-Tellado & Luis César Herrero-Prieto, 2019. "Modelling museum efficiency in producing inter-reliant outputs," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 43(3), pages 485-512, September.
    8. Víctor Fernández-Blanco & Ana Rodríguez-Álvarez, 2018. "Measuring allocative efficiency in Cultural Economics: the case of “Fundación Princesa de Asturias” (The Princess of Asturias Foundation)," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(1), pages 91-110, February.
    9. Iliopoulos, Panagiotis & De Witte, Kristof, 2024. "The expenditure composition and trade-offs in local government budgets," Socio-Economic Planning Sciences, Elsevier, vol. 93(C).
    10. Giuseppe Liddo & Michele G. Giuranno, 2020. "The political economy of municipal consortia and municipal mergers," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(1), pages 105-135, April.
    11. Werner W. Pommerehne & Charles Beat Blankart, 1979. "Les économies d'échelles dans les services urbains," Revue Économique, Programme National Persée, vol. 30(2), pages 338-354.
    12. Bönisch, Peter & Haug, Peter & Illy, Annette & Schreier, Lukas, 2011. "Municipality Size and Efficiency of Local Public Services: Does Size Matter?," IWH Discussion Papers 18/2011, Halle Institute for Economic Research (IWH).
    13. Jose M. Cordero & Francisco Pedraja-Chaparro & Elsa C. Pisaflores & Cristina Polo, 2017. "Efficiency assessment of Portuguese municipalities using a conditional nonparametric approach," Journal of Productivity Analysis, Springer, vol. 48(1), pages 1-24, August.
    14. Germa Bel & Anton Costas, 2006. "Do Public Sector Reforms Get Rusty? Local Privatization in Spain," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 9(1), pages 1-24.
    15. Ying Li & Yung-Ho Chiu & Tai-Yu Lin & Tzu-Han Chang, 2020. "Pre-Evaluating the Technical Efficiency Gains from Potential Mergers and Acquisitions in the IC Design Industry," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 19(02), pages 525-559, April.
    16. Sufian, Fadzlan & Abdul Majid, Muhamed Zulkhibri, 2007. "Consolidation and efficiency: Evidence from non-bank financial institutions in Malaysia," MPRA Paper 12128, University Library of Munich, Germany, revised 01 May 2007.
    17. Jean Beuve & Marian W. Moszoro & Stéphane Saussier, 2019. "Political contestability and public contract rigidity: An analysis of procurement contracts," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(2), pages 316-335, April.
    18. Pierre Ouellette & Valérie Vierstraete, 2010. "Malmquist indexes with quasi-fixed inputs: an application to school districts in Québec," Annals of Operations Research, Springer, vol. 173(1), pages 57-76, January.
    19. Castiglione, Concetta & Infante, Davide & Zieba, Marta, 2023. "Public support for performing arts. Efficiency and productivity gains in eleven European countries," Socio-Economic Planning Sciences, Elsevier, vol. 85(C).
    20. M. Portela & A. Camanho & A. Keshvari, 2013. "Assessing the evolution of school performance and value-added: trends over four years," Journal of Productivity Analysis, Springer, vol. 39(1), pages 1-14, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:njopap:v:7:y:2014:i:2:p:151-171:n:5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.