Efficiency of Local Self-Governments in Serbia: An SFA Approach

Radulovic, Branko; Dragutinovic, Stefan

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Efficiency of Local Self-Governments in Serbia: An SFA Approach

Industrija, 43(3), 123-142, 2015

20 Pages Posted: 28 May 2020

See all articles by Branko Radulovic

Branko Radulovic

Faculty of Law, Department of Economics, University of Belgrade

Stefan Dragutinovic

Economics Institute, Belgrade, Serbia

Date Written: October 1, 2015

Abstract

We examine the extent of inefficiency in a sample of 143 Serbian local self-governments for the year 2012. The input side is described by current expenditures of the local self-governments, and the outputs are describing the provision of key public services. We use a stochastic frontier approach. Our results reveal that the “average” local self-government in the Republic of Serbia produces public services i.e. output at costs that are approximately 23 percent higher than the ‘best practice’ peers; once we control for the exogenous constraints on public service provision. We provide a brief discussion of our results and guidance for future research.

Keywords: Serbia, Local self-government, Technical efficiency, Stochastic frontier analysis

JEL Classification: H11, H40, R51

Suggested Citation: Suggested Citation

Radulovic, Branko LJ. and Dragutinovic, Stefan, Efficiency of Local Self-Governments in Serbia: An SFA Approach (October 1, 2015). Industrija, 43(3), 123-142, 2015, Available at SSRN: https://ssrn.com/abstract=3588474