Article ID: | iaor20132894 |
Volume: | 39 |
Issue: | 3 |
Start Page Number: | 303 |
End Page Number: | 324 |
Publication Date: | Jun 2013 |
Journal: | Journal of Productivity Analysis |
Authors: | Prior Diego, Tortosa-Ausina Emili, Balaguer-Coll Maria |
Keywords: | simulation, probability |
Over the last few years, many studies have analyzed the efficiency of local governments in different countries. An accurate definition of their output bundles–i.e., the services and facilities they provide to their constituencies–is essential to this research. However, several difficulties emerge in this task. First, since in most cases the law only establishes the minimum amount of services and facilities to provide, it may well be the case that some municipalities go beyond the legal minimum and, consequently, might have an uncertain effect on efficiency when compared to other municipalities which stick to the legal minimum. Second, municipalities face very different environmental conditions, which raises some doubts about the plausibility of an unconditional analysis. This study tackles these problems by proposing an analysis in which the efficiency of municipalities is evaluated after splitting them into clusters according to various criteria (output mix, environmental conditions, level of powers). We perform our estimations using order‐