IDEAS home Printed from https://ideas.repec.org/p/pie/dsedps/2014-175.html
   My bibliography  Save this paper

Global public spending efficiency in Tuscan municipalities

Author

Listed:
  • Laura Carosi
  • Giovanna D'Inverno
  • Letizia Ravagli

Abstract

The aim of this paper is the study of Tuscan municipalities public expenditure efficiency, with particular attention on the effect of the municipal size, through a DEA analysis. In line with the existing literature, the study includes a second stage analysis to explain municipal inefficiencies through a Tobit regression. The results obtained through the DEA analysis and explained by the Tobit regression appear consistent and could represent a sound suggestion to correct the expenditure of the inefficient municipalities. The new evidences related to the efficiency analysis of local government described in the paper provide an important contribution to the current debate, being this the first study carried out on Tuscan municipalities and introducing a new indicator for the computation of the efficiency scores which offer a new way of procedure. Moreover, the study addresses the long debated issue on municipal size proving that the municipal size really affects the efficiency of the public expenditure (i.e. the bigger is a municipality, the greater is its level of public spending efficiency).

Suggested Citation

  • 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.
    • Handle: RePEc:pie:dsedps:2014/175
    Note: ISSN 2039-1854
    as

    Download full text from publisher

    File URL: https://www.ec.unipi.it/documents/Ricerca/papers/2014-175.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2010. "Voter involvement, fiscal autonomy and public sector efficiency: Evidence from German municipalities," European Journal of Political Economy, Elsevier, vol. 26(2), pages 265-278, June.
    2. William W. Cooper & Lawrence M. Seiford & Joe Zhu (ed.), 2011. "Handbook on Data Envelopment Analysis," International Series in Operations Research and Management Science, Springer, number 978-1-4419-6151-8, March.
    3. 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).
    4. Peter Nijkamp & Soushi Suzuki, 2009. "A Generalized Goals-achievement Model in Data Envelopment Analysis: an Application to Efficiency Improvement in Local Government Finance in Japan," Spatial Economic Analysis, Taylor & Francis Journals, vol. 4(3), pages 249-274.
    5. 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.
    6. Conrad, Alexander & Neuberger, Doris & Trigo Gamarra, Lucinda, 2009. "The impact of regional and demographic factors on the efficiency of German savings banks," Thuenen-Series of Applied Economic Theory 111, University of Rostock, Institute of Economics.
    7. Lorenzo Boetti & Massimiliano Piacenza & Gilberto Turati, 2012. "Decentralization and Local Governments' Performance: How Does Fiscal Autonomy Affect Spending Efficiency?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 68(3), pages 269-302, September.
    8. De Borger, Bruno & Kerstens, Kristiaan, 1996. "Cost efficiency of Belgian local governments: A comparative analysis of FDH, DEA, and econometric approaches," Regional Science and Urban Economics, Elsevier, vol. 26(2), pages 145-170, April.
    9. repec:diw:diwwpp:dp832 is not listed on IDEAS
    10. Maria Sousa & Borko Stošić, 2005. "Technical Efficiency of the Brazilian Municipalities: Correcting Nonparametric Frontier Measurements for Outliers," Journal of Productivity Analysis, Springer, vol. 24(2), pages 157-181, October.
    11. Lars-Erik Borge & Marianne Haraldsvik, 2009. "Efficiency potential and determinants of efficiency: an analysis of the care for the elderly sector in Norway," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(4), pages 468-486, August.
    12. Heikki Loikkanen & Ilkka Susiluoton, 2000. "Cost Efficiency of Finnish Municipalities in Basic Service Provision 1994-2002," Regional and Urban Modeling 283600056, EcoMod.
    13. Carlo Andrea Bollino & Gianfranco Di Vaio & Paolo Polinori, 2012. "Spillover ed eterogeneità spaziali nei livelli d’efficienza delle amministrazioni locali: un’applicazione ai comuni dell’Emilia Romagna," Quaderni del Dipartimento di Economia, Finanza e Statistica 101/2012, Università di Perugia, Dipartimento Economia.
    14. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    15. Balaguer-Coll, Maria Teresa & Prior, Diego & Tortosa-Ausina, Emili, 2007. "On the determinants of local government performance: A two-stage nonparametric approach," European Economic Review, Elsevier, vol. 51(2), pages 425-451, February.
    16. De Borger, B & Kerstens, K. & Moesen, W. & Vanneste, J., 1994. "Explaining Differences in Productive Efficiency: An Application to Belgian Municipalities," Public Choice, Springer, vol. 80(3-4), pages 339-358, September.
    17. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
    18. Anna Montén & Christian Thater, 2011. "Determinants of Efficiency in Child-Care Provision," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 67(4), pages 378-403, December.
    19. Isabel-María García-Sánchez, 2009. "Measuring the efficiency of local police force," European Journal of Law and Economics, Springer, vol. 27(1), pages 59-77, February.
    20. Angel Prieto & José ZofIo, 2001. "Evaluating Effectiveness in Public Provision of Infrastructure and Equipment: The Case of Spanish Municipalities," Journal of Productivity Analysis, Springer, vol. 15(1), pages 41-58, January.
    21. Wilson, Paul W, 1993. "Detecting Outliers in Deterministic Nonparametric Frontier Models with Multiple Outputs," Journal of Business & Economic Statistics, American Statistical Association, vol. 11(3), pages 319-323, July.
    22. Jos Blank & Vivian Valdmanis, 2010. "Environmental factors and productivity on Dutch hospitals: a semi-parametric approach," Health Care Management Science, Springer, vol. 13(1), pages 27-34, March.
    23. Luis R. Murillo‐Zamorano, 2004. "Economic Efficiency and Frontier Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 33-77, February.
    24. Caglar S. Aksezer & James C. Benneyan, 2010. "Assessing the efficiency of hospitals operating under a unique owner: a DEA application in the presence of missing data," International Journal of Services and Operations Management, Inderscience Enterprises Ltd, vol. 7(1), pages 53-75.
    25. Cook, Wade D. & Seiford, Larry M., 2009. "Data envelopment analysis (DEA) - Thirty years on," European Journal of Operational Research, Elsevier, vol. 192(1), pages 1-17, January.
    26. António Afonso & Ludger Schuknecht & Vito Tanzi, 2005. "Public sector efficiency: An international comparison," Public Choice, Springer, vol. 123(3), pages 321-347, June.
    27. Dyson, R. G. & Allen, R. & Camanho, A. S. & Podinovski, V. V. & Sarrico, C. S. & Shale, E. A., 2001. "Pitfalls and protocols in DEA," European Journal of Operational Research, Elsevier, vol. 132(2), pages 245-259, July.
    28. Afonso, António & Fernandes, Sónia, 2008. "Assessing and explaining the relative efficiency of local government," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(5), pages 1946-1979, October.
    29. Nam Anh Tran & Gerald Shively & Paul Preckel, 2010. "A new method for detecting outliers in Data Envelopment Analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 17(4), pages 313-316.
    30. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    31. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    32. Deller, Steven C & Chicoine, David L & Walzer, Norman, 1988. "Economies of Size and Scope in Rural Low-Volume Roads," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 459-465, August.
    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. Isabel Narbón-Perpiñá & Kristof De Witte, 2016. "Local governments’ efficiency: A systematic literature review – Part I," Working Papers 2016/20, Economics Department, Universitat Jaume I, Castellón (Spain).
    2. Venturini, Fiorenza, 2020. "The unintended composition effect of the subnational government fiscal rules: The case of Italian municipalities," European Journal of Political Economy, Elsevier, vol. 63(C).
    3. Fiorenza Venturini, 2018. "The Unintended Composition Effect of the Subnational Government Fiscal Rules: The Case of Italian Municipalities," Working papers 70, Società Italiana di Economia Pubblica.
    4. Francesco Aiello & Graziella Bonanno & Luigi Capristo, 2017. "Explaining Differences In Efficiency: The Case Of Local Government Literature," Working Papers 201704, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    5. Marco Alberto De Benedetto & Sergio Destefanis & Luigi Guadalupi, 2019. "Electoral Reform and Public Sector Efficiency. Some Evidence From Italian Municipalities," Working Papers 3_237, Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno.
    6. Maria Basílio & Clara Pires & Carlos Borralho & José Pires Reis, 2020. "Local government efficiency: is there anything new after Troika’s intervention in Portugal?," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(2), pages 309-332, June.

    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. D'Inverno, Giovanna & Carosi, Laura & Ravagli, Letizia, 2018. "Global public spending efficiency in Tuscan municipalities," Socio-Economic Planning Sciences, Elsevier, vol. 61(C), pages 102-113.
    2. 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).
    3. Isabel Narbón-Perpiñá & Kristof De Witte, 2016. "Local governments’ efficiency: A systematic literature review – Part I," Working Papers 2016/20, Economics Department, Universitat Jaume I, Castellón (Spain).
    4. 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.
    5. Kalb, Alexander, 2009. "What determines local governments' technical efficiency? The case of road maintenance," ZEW Discussion Papers 09-047, ZEW - Leibniz Centre for European Economic Research.
    6. Jose M. Cordero & Cristina Polo & Nickolaos G. Tzeremes, 2020. "Evaluating the efficiency of municipalities in the presence of unobserved heterogeneity," Journal of Productivity Analysis, Springer, vol. 53(3), pages 377-390, June.
    7. 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.
    8. Enrique J. Buch‐Gómez & Roberto Cabaleiro‐Casal, 2020. "Turnout, political strength, and cost efficiency in Spanish municipalities of the autonomous region of Galicia: Evidence from an alternative stochastic frontier approach," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 533-553, June.
    9. Alexander Kalb, 2014. "What Determines Local Governments' Cost-efficiency? The Case of Road Maintenance," Regional Studies, Taylor & Francis Journals, vol. 48(9), pages 1483-1498, September.
    10. da Cruz, Nuno Ferreira & Marques, Rui Cunha, 2014. "Revisiting the determinants of local government performance," Omega, Elsevier, vol. 44(C), pages 91-103.
    11. Florian Dorn, 2021. "Elections and Government Efficiency," ifo Working Paper Series 363, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    12. Francesco Aiello & Graziella Bonanno, 2019. "Explaining Differences In Efficiency: A Meta‐Study On Local Government Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 33(3), pages 999-1027, July.
    13. Simona Bigerna & Paolo Polinori, 2013. "Quality of Life in Major Italian Cities: Do Local Governments Cost Efficiency Contribute to Improve Urban Life Style? An Introductory Analysis," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2013(3), pages 121-144.
    14. Núria Bosch & Marta Espasa & Toni Mora, 2012. "Citizen Control and the Efficiency of Local Public Services," Environment and Planning C, , vol. 30(2), pages 248-266, April.
    15. lo Storto, Corrado, 2020. "Performance evaluation of social service provision in Italian major municipalities using Network Data Envelopment Analysis," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    16. Lenka Šťastn᠍ & Martin Gregor, 2015. "Public sector efficiency in transition and beyond: evidence from Czech local governments," Applied Economics, Taylor & Francis Journals, vol. 47(7), pages 680-699, February.
    17. Afonso, António & Fernandes, Sónia, 2008. "Assessing and explaining the relative efficiency of local government," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(5), pages 1946-1979, October.
    18. Isaac Otoo & Michael Danquah, 2021. "Fiscal decentralization and efficiency of public services delivery by local governments in Ghana," African Development Review, African Development Bank, vol. 33(3), pages 411-425, September.
    19. Caitlin T. O’Loughlin & Paul W. Wilson, 2021. "Benchmarking the performance of US Municipalities," Empirical Economics, Springer, vol. 60(6), pages 2665-2700, June.
    20. Mai, Nhat Chi, 2015. "Efficiency of the banking system in Vietnam under financial liberalization," OSF Preprints qsf6d, Center for Open Science.

    More about this item

    Keywords

    Spending efficiency; Municipalities; Data Envelopment Analysis; Tobit regression.;
    All these keywords.

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:pie:dsedps:2014/175. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/dspisit.html .

    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.