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

Abstract

The efficient management of the available resources in local governments has been a topic of high interest in the field of public sector. We provide an extensive and comprehensive review of the existing literature on local governments' efficiency from a global point of view, covering all articles from 1990 to August 2016. This paper is the first of two. It covers the basic aspects related to local governments' efficiency measurement not taking into account the effect of environmental conditions. First, we show a detailed overview of the studies investigating public sector efficiency across various countries, comparing the data and samples employed, and the main results obtained. Second, we describe which techniques have been used for measuring efficiency in the context of local governments. Third, we summarize the inputs and outputs used. Finally, we discuss some operative directions and considerations for further research in the field.

Explaining Differences in Efficiency: A Meta‐study on Local Government Literature

“…Thirdly, we (a) manually consulted the principal field journals ( Journal of Productivity Analysis , European Journal of Operational Research , Local Government Studies , Cities , Omega, Journal of Urban Economics ); (b) explored additional databases, such as Google Scholar, ResearchGate and the Social Science Research Network (SSRN); (c) verified that we had not overlooked efficiency studies by scanning the references of the qualitative surveys published by da Cruz and Marques (), Narbón‐Perpiñá and De Witte (; ) and Worthington and Dollery (). The third round of the search yielded 20 additional studies.…”

“…As Glass (, p. 3) states, MRA ‘connotes a rigorous alternative to the casual, narrative discussions of research studies which typify our attempt to make sense of the rapidly expanding research literature’. Importantly, by using external information on specific observable country variables for the time and the location that primary papers refer, we provide additional information on how the socio‐environmental conditions – for example, institutions and the development level – impact on the variability of efficiency in local government (Boetti et al ., ; Monkam, ; Asatryan and De Witte, ; Narbón‐Perpiñá and De Witte, ; ).…”

Analyzing the Efficiency of County Road Production – Evidence from Eastern German Counties

“…However, quality differences may influence the efficiency scores of public services (Balaguer‐Coll et al ., ): often, decisions regarding the expenditures of local governments are not concerned with a change in the quantity of the outputs but rather their quality. Therefore, studies incorporating quality indicators are especially informative for local governments (Narbón‐Perpiñá and de Witte, ).…”

“…I conclude that for an efficiency analysis, it is crucial to use reliable data because the results are very sensitive and depend on the dataset that is used. Therefore, first, it is important to not rely on vague input and output variables but rather develop a suitable proxy for local government services (see Narbón‐Perpiñá and de Witte, ). Second, this should hold true for the selection of the sample data in general; therefore, efficiency analyses should consider other peculiarities of the government service under study (such as the deformation of the pavement and foundation of roads).…”

“…In a comparison of the results of this study to those of previous studies, the importance of data accuracy and the limitations of efficiency analyses become apparent. As highlighted by Narbón‐Perpiñá and de Witte (), there is a great need to develop reliable variables for local government services, and some of the input and output variables in previous studies are not sufficiently specific. I show that efficiency scores differ greatly depending on the quality indicator used for the case of road infrastructure.…”