Cost inefficiency of municipalities after amalgamation

Arbeitspapier

This paper focuses on the increase in slack costs due to municipality amalgamation, which is pushed forward in several countries to achieve economies of scale. Employing the stochastic frontier cost function to estimate the inefficiency of local public expenditure due to slack, this study investigated 479 Japanese municipalities that had amalgamated from 2000 to 2005. This work used the technical inefficiency variable Number of municipalities that participated in an amalgamation and a dummy variable for The newly-established-municipality form of amalgamation. Results show that these variables have an impact on the cost inefficiency of local public expenditure. Average efficiency scores in the two estimations carried out were 1.145 and 1.100. The estimation results showed that municipality amalgamation produces integration costs (slack) in an administrative organization. The degree of slack depends on the form of amalgamation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: MAGKS Joint Discussion Paper Series in Economics ; No. 14-2013

Classification and Topics

• Classification: Wirtschaft
• Subject: Municipality amalgamation ; Cost inefficiency ; Slack cost ; Stacastic frontier analysis ; Japan

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Nakazawa, Katsuyoshi
• Event: Veröffentlichung
• (who): Philipps-University Marburg, Faculty of Business Administration and Economics
• (where): Marburg
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/73038
• Last update: 10.03.2025, 11:42 AM CET