Explaining differences in efficiency: an application to Spanish municipalities

• Published in: Applied economics Vol. 42; no. 4; pp. 515 - 528
• Main Authors: Benito, Bernardino, Bastida, Francisco, García, José A.
• Format: Journal Article
• Language: English
• Published: London Routledge 01.02.2010; Taylor and Francis Journals; Taylor & Francis Ltd
• Series: Applied Economics
• Subjects: Decentralization; Efficiency; Local finance; Local government; Municipalities; Public administration; Public finance situation; Regional disparities; Regional economics; Spain; Sports; Studies; Water supply; Murcia Spain; Spain
• ISSN: 0003-6846; 1466-4283
• DOI: 10.1080/00036840701675560

This article, investigates efficiency in the municipal sector of the Region of Murcia (Spain). With that aim, data of 31 municipalities (69% of the response rate) have been collected. Services analysed are: police, culture, sports, green areas, refuse collection and water supply. Ratios of efficiency have been related to other control variables, such as economic level, size of the municipality, decentralization, political sign and financial situation. A weak positive relation between economic level and efficiency arises. Some weak evidence also exists that public management of refuse collection is more efficient than private. In water supply, public management by means of a company controlled by the local government is clearly more efficient than private. It also seems that the higher the tax burden, the greater the efficiency in providing services.