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Improving efficiency through consolidation of jurisdictions? Evidence from the cantons of Switzerland

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Listed:
  • Philippe K. Widmer
  • George Elias
  • Peter Zweifel

Abstract

The purpose of this paper is to analyze the optimal scale of local jurisdictions (cantons) in Switzerland applying Data Envelopment Analysis (DEA) to the years 2000 to 2004. Aggregate output performance indicators for four local government activities (administration, education, health, and transportation) are used to measure technical and scale efficiency and to derive DEA scores. Results show that these public services fail to exhibit economies of scale, undermining quests for centralization of public good provision while suggesting the possibility of Tiebout competition.

Suggested Citation

  • Philippe K. Widmer & George Elias & Peter Zweifel, 2012. "Improving efficiency through consolidation of jurisdictions? Evidence from the cantons of Switzerland," ECON - Working Papers 085, Department of Economics - University of Zurich.
    • Handle: RePEc:zur:econwp:085
    as

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    File URL: https://www.zora.uzh.ch/id/eprint/63506/1/econwp085.pdf
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    References listed on IDEAS

    as
    1. Léopold Simar & Paul Wilson, 2000. "Statistical Inference in Nonparametric Frontier Models: The State of the Art," Journal of Productivity Analysis, Springer, vol. 13(1), pages 49-78, January.
    2. GIJBELS, Irène & MAMMEN, Enno & PARK, Byeong U. & SIMAR, Léopold, 1997. "On estimation of monotone and concave frontier functions," LIDAM Discussion Papers CORE 1997031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Philippe Widmer & Peter Zweifel, 2012. "Fiscal Equalization, Tiebout Competition, and Incentives for Efficiency in a Federalist Country," Public Finance Review, , vol. 40(1), pages 3-29, January.
    4. Olson, Mancur, Jr, 1969. "The Principle of "Fiscal Equivalence": The Division of Responsibilities among Different Levels of Government," American Economic Review, American Economic Association, vol. 59(2), pages 479-487, May.
    5. Mehdi Farsi & Massimo Filippini, 2006. "An Analysis of Efficiency and Productivity in Swiss Hospitals," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 142(I), pages 1-37, March.
    6. 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.
    7. Antonio Afonso & Ludger Schuknecht & Vito Tanzi, 2010. "Public sector efficiency: evidence for new EU member states and emerging markets," Applied Economics, Taylor & Francis Journals, vol. 42(17), pages 2147-2164.
    8. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
    9. Rui Nuno Baleiras, 2001. "To fragment or to consolidate jurisdictions: the optimal architecture of government," Nova SBE Working Paper Series wp401, Universidade Nova de Lisboa, Nova School of Business and Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    DEA; efficiency measurement; economies of scale; public good provision; Switzerland;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • 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
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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