Posts categorized under Government Efficiency

Local property tax reform and municipality spending efficiency

January 25, 2022
Local governments provide a plethora of public services. To finance themselves, local municipalities rely on self-generated revenues, mostly on taxation. At the same time voters usually advocate for tax and expenditure limitations. Voters’ desire to lower the price while wishing to maintain the existing level of public services, can be interpreted as pressure on local governments for increased efficiency. This study assesses the short-term impact on municipal efficiency that stems from the 2008 property tax reform.

Time overruns in public projects

March 31, 2021
Public projects tend to be perceived as having substantial cost and time deviations and overruns, i.e., with project final cost higher than forecasted and with project completion after the forecasted deadline. This paper studies the causes for such deviations from forecasts. It focuses on project-related (endogenous) reasons such as the investment amount and the sector of investment, and on (exogenous) reasons of political, legal, regulatory, and economic nature that include a dummy for government majority, a variable indicating the political leaning of the government, a dummy for the new procurement law of 2008, the rule of law and the corruption index, and GDP growth, inflation, along with dummy variables for the financial crisis and the intervention of the Troika.

Was local government efficiency affected by the Troika’s intervention in Portugal?

December 1, 2020
A decentralization process is underway in Portugal with the increased attribution of competencies to local governments hoping to benefit from efficiency gains. However, during the Troika intervention, the austerity measures adopted by the Portuguese government impacted the functioning of local administrations. This paper studies the efficiency in local governments and its drivers and provides empirical evidence about the impact of Troika’s intervention on the Portuguese municipalities. The paper evaluates the efficiency of the 278 mainland municipalities by relating the cost of providing public services to the quantity of services provided.

Local territorial reform and regional spending efficiency

September 12, 2019
Quite often, one encounters arguments advocating that mergers or amalgamation of territorial units are a pathway to reduce public spending and increase efficiency, pointing to advantages of economies of scale in the provision of public services. However, this article argues that these advantages might have been oversold. The article assesses the changes on municipal efficiency that stem from the 2013 Portuguese local territorial reform that reduced the number of local governments and parishes by around 29%.