This study of local public sector efficiency, the first attempted in an Australian context using frontier measurement techniques, seeks to survey and estimate the level and determinants of productive, allocative, technical and scale efficiency in Australian local government. It finds that a major influence on efficiency in local government is the imposed contextual environment, that efficiency varies markedly across particular local governments, and that productive efficiency in the provision of local public services has improved during the recent program of microeconomic reform. The first theoretical section of the study examines the econometric and mathematical methods that have been employed in the recent history of efficiency measurement. Starting with an assessment of the significance of Farrell's (1957) pioneering work on the analysis of productive efficiency, it extends this approach to the orthodox analysis of deterministic frontiers, and discusses the ongoing analysis of stochastic frontiers. The theoretical section also examines the alternative mathematical programming approach to the analysis of productive efficiency, as well as examining some extensions to this approach. The section concludes with a discussion of various theoretical issues involved in selecting an appropriate analytical technique and interpreting the resultant findings. The second section of the study contains a comprehensive survey of empirical work on frontier efficiency measurement techniques. It examines various applications using microeconomic efficiency methods in the fields of financial services, healthcare, education, local public services, and other selected applications. Attention is paid to the preferred analytical techniques used in each field, especially those concerning input/output specification. The main finding of this section is that the nature of the sample itself often requires careful analysis, especially as institutional and environmental factors can exert a strong influence on efficiency measures. The third section of the study provides a brief overview of local government in Australia, with particular emphasis on internationally distinguishable characteristics. The function and financing of Australian local government is discussed, with special attention paid to the state of New South Wales. The institutional section also examines the progress of microeconomic reform in Australian local government, and discusses the extant approaches to comparative performance measurement and process benchmarking. The final section of the study is concerned with a contemporary empirical evaluation of local public sector efficiency in Australia. The analysis is not only the first undertaken in Australia using frontier measurement techniques, but this is also the only study to simultaneously evaluate efficiency in a number of different local government functions, across both jurisdictions and time. The results indicate that allocative inefficiency, rather than technical inefficiency, represents the main source of productive inefficiency in local government, and that technical inefficiency is largely the result of scale inefficiencies.
| Identifer | oai:union.ndltd.org:ADTP/253747 |
| Creators | Worthington, Andrew Charles |
| Source Sets | Australiasian Digital Theses Program |
| Detected Language | English |
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