Devolution dynamics of Spanish local government

Over the last few years, ther has been a devolutionary tendency in many developed and developing countries. In this article we propose a methodology to decompose whether the benefits in terms of effciency derived from transfers of powers from higher to municipal levels of government "the "economic dividend" of devolution) might increase over time. This methodology is based on linear programming approaches for effciency measurement. We provide anapplication to Spanish municipalities, which have had to adapt to both the European Stability and Growth Pact as well as to domestic regulation seeking local governments balanced budget. Results indicate that efficiency gains from enhaced decentralization have increased over time. However, the way through which these gains accrue differs across municipalities -in some cases technical change is the main component, whereas in others catching up dominates

Efficiency in education

Education is important at national, local and individual levels. Its benefits accrue both to society and to individuals, and as such provision of education in many countries is paid for at least in part from the public purse. With competing demands for government funding, it is important for education to be provided as efficiently as possible. Efficiency occurs when outputs from education (such as test results or value added) are produced at the lowest level of resource (be that financial or, for example, the innate ability of students). This special issue is devoted to the topic of efficiency in education, and is well-timed given that governments around the world struggle with public finances in the wake of the global financial crisis of 2008. In this paper, we explore and provide an overview of the themes of the special issue and introduce the papers contained therein

How enterprise strategies are related to innovation and productivity change: an empirical study of Japanese manufacturing firms

This study analyzes the total factor productivity of 1067 Japanese manufacturing firms. In production estimation, we employ the directional distance function and Luenberger productivity indicator. Research and development strategy survey data are used to analyze the determinant factors related to improvements in innovation and productivity. Our results indicate that increasing technology and knowledge through a ‘black box’ process is related to an increase in productivity. Furthermore, the protection and management of production knowledge and expertise is a valid method of increasing global technical change

Inefficiency in the German Mechanical Engineering Sector

This paper aims to examine the relative efficiency of German engineering firms using a sample of roughly 23,000 observations between 1995 and 2004. As these firms had been successful in the examination period in terms of output- and export-growth, it is expected that a majority of firms is operating quite efficiently and that the density of efficiency scores is skewed to the left. Moreover, as the German engineering industry is dominated by medium sized firms, the question arises whether these firms are the most efficient ones. Finally an increasing efficiency gap between size classes over time is important since that would be a signal for a structural problem within the industry. The analysis - using recently developed DEA methods like bootstrapping or outlier detection - contradicts the two first expectations. The firms proved to operate quite inefficiently with an overall mean of 0.69, and efficiency differs significantly with firm size whereas medium sized firms being on average the least efficient ones. When looking at changes in efficiency over time, we find a decreasing efficiency gap between size classes

Does Higher Cost Inefficiency Imply Higher Profit Inefficiency? Evidence on Inefficiency and Ownership of German Hospitals

This paper investigates cost and profit efficiency of German hospitals. More specifically, it deals with the question how hospital efficiency varies with ownership, patient structure,and other exogenous factors, which are neither inputs nor outputs of the production process. We conduct a Stochastic Frontier Analysis (SFA) on a multifaceted administrative German dataset combined with the balance sheets of 374 hospitals for the years 2002 to 2005.The results indicate that private (for-profit) and (private) non-profit hospitals are on average less cost efficient but more profit efficient than publicly owned hospitals

Local Government Efficiency: Evidence from the Czech Municipalities

We measure cost efficiency of 202 Czech municipalities of extended scope in period 2003-2008. The study is the first application of overall efficiency measurement of the local governments in the new EU member states, and the second in post-communist countries. We measure government efficiency through established quantitative and qualitative indicators of the provision of education, cultural facilities, infrastructure and other local services. First, we employ non-parametric approach of the data envelopment analysis and adjust the efficiency scores by bootstrapping. Second, we employ the stochastic frontier analysis and control for effects of various demographic, economic, and political variables. We compare scores under our preferred specification, i.e. pseudo-translog time-variant stochastic-frontier analysis with determinants, with alternative scores. The determinants that robustly increase inefficiency are population size, distance to the regional center, share of university-educated citizens, capital expenditures, subsidies per capita, and the share of self-generated revenues. Concerning political variables, increase in party concentration and the voters' involvement increases efficiency, and local council with a lower share of left-wing representatives also tend to be more efficient. We interpret determinants both as indicators of slack, non-discretionary inputs, and unobservable outputs. The analysis is conducted also for the period 1994-1996, where political variables appear to influence inefficiency in a structurally different way. From comparison of the two periods, we obtain that small municipalities improve efficiency significantly more that large municipalities