Measuring local government efficiency is a complex task that has to take into account that they usually operate in a heterogeneous context. Therefore, the estimation of relative efficiency measures of their performance needs to account for the effect of contextual and exogenous variables on the production process. This should assure that the respective measures adequately reflect the portion of inefficiency that may be attributable to local authorities. In this paper, we apply time-dependent conditional frontier estimators to assess the performance of the 278 Portuguese mainland municipalities for the 2009-2014 period. By applying this nonparametric approach, we can avoid the strong assumptions on the specification of the estimated production function required by traditional two-stage methods. Furthermore, we examine the effect of contextual and exogenous variables on municipal efficiency levels and technological change. The results reveal that the recent local reforms introduced after the bailout agreement have slightly enhanced the performance of local authorities, but only for small and medium-sized municipalities.

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This paper aims to extend the literature on measuring efficiency in primary health care by considering the influence of quality indicators and environmental variables conjointly in a case study. In particular, environmental variables are represented by patients' characteristics and quality indicators are based on technical aspects. In order to deal with both aspects, different extensions of data envelopment analysis (DEA) methodology are applied. Specifically, we use weight restrictions to ensure that the efficiency scores assigned to the evaluated units take quality data into account, and a four-stage model to identify which exogenous variables have impact on performance as well as to compute efficiency scores that incorporate this information explicitly. The results provide evidence in support of the importance of including information about both aspects in the analysis so that the efficiency measures obtained can be interpreted as an accurate reflection of performance.

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