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Economies of Scale and Collaboration: Financial Sustainability in Local Government

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A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (31 October 2021) | Viewed by 13438

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Special Issue Editors

Prof. Jos L.T. Blank

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Guest Editor

PO Box 5015, 2600 GA Delft, The Netherlands
Interests: public sector efficiency; productivity; microeconomics; policy research; quantative methods

Dr. A.A.S. van Heezik

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Guest Editor

Delft University of Technology, Mekelweg 5, 2628 CD Delft, Netherlands
Interests: economic development; economic policy analysis

Special Issue Information

Dear Colleagues,

This special issue will present research papers that assess the efficiency and sustainability of local government with a focus on issues concerning mergers, outsourcing and various types of collaboration. Authors are encouraged to submit papers that examine local government policies regarding different forms of collaboration and upscaling, incorporating efficiency gains due to economies of scale. We are particularly interested in papers with a focus on sustainability of service delivery and finance. A strong quantative and empirical component is required, preferably including analyses based on methodologies such as Stochastic Frontier analysis and Data Envelopment Analysis. From a policy perspective the papers must contain clear policy recommendations. All types of local government services may be included.

Prof. Jos L.T. Blank
Dr. A.A.S. van Heezik
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

local government
policy analysis
mergers
collaboration
outsourcing
economies of scale
efficiency
SFA
DEA

Published Papers (5 papers)

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Research

10 pages, 1467 KiB

Open AccessArticle

Economies of Scale and Sustainability in Local Government: A Complex Issue

by Jos L. T. Blank and Thomas K. Niaounakis

Sustainability 2021, 13(23), 13262; https://doi.org/10.3390/su132313262 - 30 Nov 2021

Cited by 5 | Viewed by 3581

Abstract

Local governments may seek efficient public service delivery through scaling up production, and the quest for the optimal local government size has attracted extensive attention of scholars and policy makers. Indeed, if scale matters for local government efficiency, increasing size may be a key factor in achieving more value for money for citizens. As such, getting scale right may contribute significantly to achieving the Sustainable Development Goals (SDGs) as set out in the 2030 Agenda. Nonetheless, there is considerable uncertainty with regard to how scale shapes the average cost of local government service delivery. These uncertainties may have contributed to policy makers and public organizations disregarding the often inconclusive and sometimes contradictory empirical evidence in stimulating and allowing mergers and consolidation in many Western countries. This Special Issue is concerned with economies of scale in local government. Interesting issues to be addressed relate to the existence of general and service specific economies of scale and the implications of both for local government policy regarding various types of scaling (amalgamation, cooperation, and outsourcing). Based on a brief literature review, we inventory a number of issues which warrant further research. One of the conclusions is that the relationship between scale and sustainability is a complex issue with many aspects. Examples include the relation between economies of scale and outsourcing and cooperation, issues concerned with multi-level aspects of scale, and the trade-off that may exist between achieving economies of scale and cost efficiency (e.g., transition cost of mergers). Another conclusion is that no such thing as “one size fits all” exists. Different perspectives may play a role and should be born in mind when suggesting solutions and providing recommendations to achieve sustainable goals. Full article

(This article belongs to the Special Issue Economies of Scale and Collaboration: Financial Sustainability in Local Government)

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11 pages, 728 KiB

Open AccessArticle

Sustainable Provision of School Buildings in The Netherlands: An Empirical Productivity Analysis of Local Government School Building Operations

by Jos L. T. Blank

Sustainability 2021, 13(16), 9138; https://doi.org/10.3390/su13169138 - 16 Aug 2021

Cited by 1 | Viewed by 1677

Abstract

Building operations and construction are responsible for a large part of global energy use and carbon dioxide emissions. In this paper, we present an analysis of the efficiency and productivity of the provision of school buildings by Dutch municipalities. A cost function is estimated for the years 2005–2016 using stochastic frontier methods based on data of Dutch municipalities. The results indicate that inefficiency and unproductiveness are substantial. The provision of school buildings on a more appropriate scale, detailed performance benchmarking and including more incentives for innovative behaviour may result in a more sustainable provision of school buildings and less energy use and emission of carbon dioxide. Full article

(This article belongs to the Special Issue Economies of Scale and Collaboration: Financial Sustainability in Local Government)

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22 pages, 1662 KiB

Open AccessArticle

Economies of Scope and Local Government Expenditure: Evidence from Creation of Specially Authorized Cities in Japan

by Takeshi Miyazaki

Sustainability 2021, 13(5), 2684; https://doi.org/10.3390/su13052684 - 2 Mar 2021

Cited by 6 | Viewed by 2430

Abstract

There is little evidence of either the existence or absence of economies of scope in public services provided by general-purpose local governments. This study uses difference-in-differences (DID) analysis and the event study method to estimate the impact on expenditure of the designation of cities as either core cities or special case cities, thereby giving them the authority to undertake a wider range of activities, and identify the magnitude of the economies of scope in local governments using panel data for Japanese municipalities during the period 1996–2015. The findings of this research are summarized as follows. First, in the provision of public services by general-local governments, economies of scope do not occur in the short term (2–3 years), but do appear in the mid to long term (more than 5 years for core city status). After the delegation of duties, per capita expenditure for core cities increases by 2.8% immediately after the designation, but then decreases by 0.6% annually. Second, the wider the range of extra activities delegated, the greater the economies of scope. Full article

(This article belongs to the Special Issue Economies of Scale and Collaboration: Financial Sustainability in Local Government)

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13 pages, 453 KiB

Open AccessArticle

An Empirical Analysis of Scale Economies in Administrative Intensity in the Paraná State Local Government System in Brazil

by Luan V. Bernardelli, Brian E. Dollery and Michael A. Kortt

Sustainability 2021, 13(2), 591; https://doi.org/10.3390/su13020591 - 9 Jan 2021

Cited by 3 | Viewed by 1825

Abstract

A substantial empirical study has investigated scale economies in local government functions, most notably in local transportation, water, and wastewater provision. By contrast, relatively little effort has been directed at the empirical analysis of economies of scale in municipal administration, including in Brazilian local government, despite its significance for public policy on structural reform in local government. In order to address this gap in the literature, we investigate administrative scale economies in the Paraná state local government system in Brazil over the period 2006 to 2018. We find that there was a ‘U-shaped’ scale effect between council size by population and administrative intensity after controlling for a range of economic and social variables. Various public policy implications are considered. Full article

(This article belongs to the Special Issue Economies of Scale and Collaboration: Financial Sustainability in Local Government)

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11 pages, 820 KiB

Open AccessArticle

Managing Size of Public Schools and School Boards: A Multi-Level Cost Approach Applied to Dutch Primary Education

by Jos L. T. Blank and Thomas K. Niaounakis

Sustainability 2019, 11(23), 6662; https://doi.org/10.3390/su11236662 - 25 Nov 2019

Cited by 3 | Viewed by 2699

Abstract

In many countries, the provision of primary education is among the core responsibilities of local governments. One of the main questions local governments face concerns the optimal configuration of school boards and size of schools. In this paper we analyse the relation between cost and scale in school boards and in schools. The influence of both the governing layer (board) and the operational layer (school) on average cost are jointly modelled. Board cost is modelled as an aggregation of individual school cost functions so that individual school cost data are not required in order to estimate the model. The results indicate that small schools (<60) pupils are operating under sizable economies of scale. The optimum school size is estimated at roughly 450 pupils, but average cost remains roughly constant with regard to size. In contrast to school size, the effect of board size (in terms of the number of schools governed) on average cost is limited. The policy recommendation is that municipalities should create at least three schoolboards within their jurisdiction and take measures in case individual school size declines below 60 pupils. Full article

(This article belongs to the Special Issue Economies of Scale and Collaboration: Financial Sustainability in Local Government)

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Economies of Scale and Collaboration: Financial Sustainability in Local Government

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