Local territorial reform and regional spending efficiency

• Autor(a) principal: Afonso, António
• Data de Publicação: 2020
• Outros Autores: Venâncio, Ana
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.5/25499
• topic: Public Spending Efficiency; Local Government; Data Envelopment Analysis (DEA); Local Territorial Reform

We study the effect of a Portuguese structural reform, which reduced the number of parishes, on municipality spending efficiency between 2011 and 2016. We build a composite output indicator and use Data Envelopment Analysis (DEA) to compute efficiency scores. Then, we use a second-stage regression to evaluate the effect of the reform on municipal efficiency after controlling for socio-demographic, political and economic factors. Overall, we find efficiency gains in approximately 10% of municipalities. In some regions (e.g., Alentejo and Centro), more than 50% of the municipalities improved efficiency. The second-stage results show that the structural reform did not improve local spending efficiency in Mainland Portugal, particularly in the Centro, Lisbon and Vale do Tejo regions.