Municipality Size, Institutions and Efficiency of Municipal Service Provision. The Case of Saxony-Anhalt


  • Peter Haug Forschungsabteilung Stadtökonomik, Institut für Wirtschaftsforschung Halle (IWH), Kleine Märkerstraße 8, 06108, Halle (Saale), Deutschland



Efficiency, Local public goods, Data envelopment analysis, Robust-non-parametric estimation, Local government institutions, Demographic change


In this contribution we analyze the determinants of the efficiency of municipal service provision using the example of the German state of Saxony-Anhalt. The focus lies on the effects of municipality size, institutional setting and spatial or demographic factors. We perform a-non-parametric efficiency estimation (Data Envelopment Analysis and the Convex order-m approach). In contrast to previous studies, we choose the aggregate budget of municipal associations as the object of our analysis since important competences are settled at the joint administrative level. The results show that municipal associations do not necessarily have to be less efficient than independent municipalities. Furthermore, the results for scale efficiency indicate that most municipalities of Saxony-Anhalt had a sufficiently efficient “firm size” in 2004. Moreover, demographic factors and settlement structures have a significant effect on the technical efficiency of towns and municipalities: While a higher population density might be, to some extent, efficiency-enhancing, an increasing share of senior citizens or population growth might have the opposite effect. The integration of spatial interdependencies in efficiency estimations is a complex problem that has only been solved insufficiently yet.


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Research Article

How to Cite

Haug P. Municipality Size, Institutions and Efficiency of Municipal Service Provision. The Case of Saxony-Anhalt. RuR [Internet]. 2013 Aug. 31 [cited 2024 Jul. 15];71(4):307–327. Available from: