Local Government Efficiency in German Municipalities


  • Benny Geys Norwegian Business School, Nydalsveien 37, 0442, Oslo, Norway
  • Friedrich Heinemann “Corporate Taxation and Public Finance” Research Unit, Zentrum für Europäische Wirtschaftsforschung, L 7, 1, 68161, Mannheim, Germany
  • Alexander Kalb “Corporate Taxation and Public Finance” Research Unit, Zentrum für Europäische Wirtschaftsforschung, L 7, 1, 68161, Mannheim, Germany




Local government performance, Stochastic frontier analysis, German municipalities


This article evaluates German local governments’ cost efficiency using a sample of 1,021 municipalities in the state of Baden-Württemberg for the year 2001. We thereby concentrate on overall or ‘global’ efficiency scores—rather than estimate efficiency for one particular service—and explicitly account for exogenous or non-discretionary influences. The latter not only corrects for influences possibly beyond the control of local policy-makers, but also allows some indication of the determinants of such ‘global’ efficiency. Our results indicate that there is a substantial divergence in efficiency across municipalities despite a homogeneous institutional setting. As especially smaller municipalities appear less efficient, these results support a case for policy programmes aimed at boundary reviews or more extensive inter-communal cooperation among small municipalities.


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Research Article

How to Cite

Geys B, Heinemann F, Kalb A. Local Government Efficiency in German Municipalities. RuR [Internet]. 2013 Aug. 31 [cited 2024 Jul. 15];71(4):283–293. Available from: https://rur.oekom.de/index.php/rur/article/view/687