Sep 21, 2006

Articles in journals

Afonso, A., Fernandes, S.

40

14

We assess expenditure efficiency of Portuguese local governments in 2001 using Data Envelopment Analysis for production frontier estimation. We construct a composite municipal output indicator and then compute input and output efficiency scores for 51 Portuguese municipalities in the region of Lisbon and Vale do Tejo (RLVT). This allows determining the extent of municipal spending that seems to be “wasted” relative to the theoretical “best-practice” frontier. Our results suggest that RLVT municipalities could achieve, on average, the same level of output allegedly using around one third fewer resources, improving performance without necessarily increasing municipal spending.

Municipal expenditure,Technical efficiency,DEA,Lisbon