Determining the Optimal Size of Local Government: The Case of Tasmanian Councils

Abstract

We estimated the optimal size of the most significant functions performed by Tasmanian councils between 1999 and 2008 using a non-parametric technique based on the shared input data envelopment analysis model. The principal advantage of this technique is that it not only provides an overall estimate of efficiency but it also allows for the estimation of 'partial efficiencies' and 'cost shares' when one input is shared among multiple outputs. Our results indicate that water supply and sewerage services, on average, were more efficient, whereas activities related to community health and safety and information systems warrant improvement. However, because the costs associated with water supply and sewerage services are considerably higher than the costs related to community health and safety and information systems, the elimination of these inefficiencies would result in greater cost savings for the Tasmanian local government sector.

Learning from Experience inNSW?

“…(, ); Marques et al . ()]. The present paper seeks to contribute to this literature by empirically investigating the outcomes of the 2000–2004 NSW council amalgamation programme by comparing merged and unmerged peer councils.…”

“…With some exceptions, such as Soul's (2000) empirical analysis of council size and per capita service costs in NSW, the Australian literature is uniformly pessimistic of municipal mergers as a means of improving local government performance. In contrast to the previous concentration on the descriptive analysis of case studies, a new strand of the Australian literature has employed the econometric analysis of state-wide data sets to determine the effect of mergers on council performance [see, for example, Dollery (2013, 2014a,b;; Drew and Dollery (2013); Drew et al (2014; Marques et al (2014)]. The present paper seeks to contribute to this literature by empirically investigating the outcomes of the 2000-2004 NSW council amalgamation programme by comparing merged and unmerged peer councils.…”

Local governments' efficiency: a systematic literature review—part I

“…Finally, Marques et al. () used a sample of 29 Tasmanian local councils between 1999 and 2008 with the aim to estimate the optimal size on local government. The mean efficiency scores in Australian municipalities range from 0.40 to 0.86; however, heterogeneous results were expected since none of the Australian studies used the same dataset and method.…”

“…In addition, the study of Marques et al. () used the number of food handling premises inspected as a variable related to community and health safety activities.…”

“…(), Monkam (), Marques et al. (), Štastná and Gregor (), Radulovic and Dragutinović (), Arcelus et al. (), Pérez‐López et al.…”