Resumen de Financial condition, cost efficiency and the quality of local public services
Manuel Antonio Muñiz Pérez, José Luis Zafra Gómez
The aim of the present study is to evaluate two dimensions of municipal performance, which to date have been addressed as two separate elements, namely financial condition and cost efficiency. These concepts are analyzed in a sample addressing almost 1600 local authorities in Spain, each with less than 20,000 inhabitants, using a DEA model adapted for the particular characteristics of local environment. The empirical analysis carried out shows that the financial management and the productive efficiency of local authorities are two aspects that need to be understood in any assessment of their global economic behaviour. However, these values are not interrelated, and thus it is all the more necessary to achieve a precise evaluation of each of these aspects of local management. Moreover, our analysis of cost efficiency shows that in smaller municipalities there is a trade-off between the quantity and the quality of the services provided, which is not the case among the other authorities examined.
