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What determines local governments' technical efficiency? The case of road maintenance

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  • Kalb, Alexander

Abstract

In this paper we investigate the determinants of local governments' technical efficiency in road maintenance for a panel of German counties using a broad variety of estimation approaches. More specifically, we calculate efficiency indices using non-parametric (DEA) and parametric (stochastic frontier analysis) reference technologies, and examine how these efficiency indices can be explained by estimating and comparing four different regression models. The results of our analysis show that (controlling for numerous characteristics of the counties) the disposable income of the counties' citizens, intergovernmental grants (for county roads), and the payments to the counties influence efficiency negatively. Concerning political variables we find weak evidence that efficiency decreases with an increasing share of seats of left-wing parties in the county council; the hypothesis that efficiency decreases with the degree of political concentration in the county council could not be confirmed.

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  • 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.
    • Handle: RePEc:zbw:zewdip:09047
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    Cited by:

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    2. Jan Kluge & Gunther Markwardt & Christian Thater, 2015. "Self-preserving Leviathans - Evidence from Regional-level Data," CESifo Working Paper Series 5177, CESifo.
    3. Abdul Hakim & Jaka Sriyana, 2010. "Decentralization, fiscal capability and public spending efficiency," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 2(1), pages 1-12, April.
    4. William Orlando Prieto Bustos & Joan Miguel Tejedor Estupiñán, 2019. "Eficiencia Técnica de las Instituciones Públicas Locales en Colombia," Revista de Estudios Regionales, Universidades Públicas de Andalucía, vol. 2, pages 15-41.
    5. Alexander Kalb & Benny Geys & Friedrich Heinemann, 2012. "Value for money? German local government efficiency in a comparative perspective," Applied Economics, Taylor & Francis Journals, vol. 44(2), pages 201-218, January.
    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. Jan Kluge & Gunther Markwardt & Christian Thater, 2017. "Self-Preserving Leviathans Evidence from Local-Level Data," Kyklos, Wiley Blackwell, vol. 70(4), pages 594-621, November.

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    More about this item

    Keywords

    Technical efficiency; road maintenance; stochastic frontier analysis; data envelopment analysis; German counties;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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