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Local Government Efficiency: Evidence from Western Australia
Author(s) -
Fogarty James,
Mugera Amin
Publication year - 2013
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/j.1467-8462.2013.12015.x
Subject(s) - local government , data envelopment analysis , scale (ratio) , government (linguistics) , returns to scale , economies of scale , service (business) , service delivery framework , business , economics , public economics , public administration , economy , political science , macroeconomics , geography , production (economics) , marketing , statistics , mathematics , linguistics , philosophy , cartography
The state government of Western Australia has suggested there are economies of scale in local government service delivery and that council amalgamations would allow substantial efficiencies to be realised. In this article, the Data Envelopment Analysis method is used to measure efficiency at 98 local councils in Western Australia in 2009 and 2010. Although many councils were found to be operating under increasing returns to scale, many others were found to be operating under decreasing returns to scale. This suggests there is room for either scaling down or expanding for some local councils to achieve optimal scale .