Spatial effects on local government efficiency

Santolini, Raffaella

doi:10.1111/pirs.12475

Cited by 8 publications

(7 citation statements)

References 56 publications

(117 reference statements)

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“…It is possible that local efficiency is affected by the characteristics of nearby municipalities because neighbours can affect equilibrium prices in the provision of public goods and services (Skevas & Grashuis, 2019). In addition, natural resource revenue can affect the political competition that determines the quantity and quality of publicly provided goods and services in decentralized governments as well as the efficiency of this provision (Revelli & Tovmo, 2007; Santolini, 2020). To our knowledge, there are no studies that analyse the possible presence of interregional spillovers of external shocks of revenue on a local government's efficiency.…”

Section: Resultsmentioning

confidence: 99%

“…To our knowledge, there are no studies that analyse the possible presence of interregional spillovers of external shocks of revenue on a local government's efficiency. There is, however, evidence of spillover effects on efficiency at the firm level (Pede, Areal, Singbo, McKinley, & Kajisa, 2018; Skevas & Grashuis, 2019), country level (Adetutu, Glass, Kenjegalieva, & Sickles, 2015; Glass, Kenjegalieva, & Sickles, 2016), regional level (Santolini, 2020; Tsionas & Michaelides, 2016) and local government level (Fusco & Allegrini, 2020; Geys, 2006; Revelli & Tovmo, 2007; Santolini, 2020). This paper focuses on the effect of neighbours' royalties on local efficiency, trying to capture the possibility that more royalties in nearby municipalities affect local equilibrium prices or intermunicipal political competition and thus local efficiency.…”

Section: Resultsmentioning

confidence: 99%

“…External shocks on revenue in neighbouring municipalities can create incentives to reduce the local provision of health care services, which affects local efficiency. In addition, political competition can lead to spillover effects (Revelli & Tovmo, 2007; Santolini, 2020). Indeed, royalties in neighbouring municipalities reduce efficiency in these localities, which, in turn, reduces the pressure on the local provision of health care.…”

Section: Resultsmentioning

confidence: 99%

See 2 more Smart Citations

The natural resource curse: Evidence from the Colombian municipalities

Ayala‐García

Dall’erba

2021

Papers in Regional Science

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This paper evaluates the effect of natural resource revenue on expenditure efficiency. Using a panel of Colombian municipalities over 2003–2011, we use a two‐step procedure to estimate the effect of natural resource revenue on municipal efficiency. First, the technical efficiency of local governments is calculated through a robust non‐parametric method. These estimates are then used in a second step to evaluate how the local government's efficiency varies with exogenous variation in royalties. Our findings indicate that royalties reduce efficiency in the provision of education and health care services, providing evidence of one of the mechanisms explaining the natural resource curse.

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Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

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The natural resource curse: Evidence from the Colombian municipalities

Ayala‐García

Dall’erba

2021

Papers in Regional Science

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“…We adopt the spatial panel data model (SPDM), a flexible model specification approach to capture possible spatial interactions of default risk on local government debts. With extensive availability of panel datasets, the SPDM has been widely applied in empirics of regional science (Almeida et al, 2021; Donfouet et al, 2018; Fingleton & Arbia, 2008; Hortas‐Rico & Rios, 2020; Santolini, 2020). The general expression of SPDM is specified as follows:

{Risk}_{it} goodbreak= ρ \sum_{j \neq i} w_{ij} {Risk}_{jt} goodbreak+ X_{it} β goodbreak+ θ \sum_{j \neq i} w_{ij} X_{jt} goodbreak+ α_{i} goodbreak+ η_{t} goodbreak+ u_{it},

u_{it} goodbreak= λ \sum_{i \neq j} w_{ij} u_{jt} goodbreak+ ε_{it},

where the dependent variable Risk it represents the level of debt default risk of city i in year t , which is endogenously determined by neighbouring cities' behaviours,

\sum_{j \neq i} w_{ij} {Risk}_{jt}

.…”

Section: Methodsmentioning

confidence: 99%

Political competition, spatial interactions, and default risk of local government debts in China

Hou

Lyu

et al. 2022

Papers in Regional Science

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The paper investigates the institutional mechanism behind increasing local government debts and default risk in the last decade in China. Using prefectural‐level data from 2010 to 2017, we study the default risk on local government debts through the lens of spatial interactions. Empirical results identify positive spatial interactions of default risk among political neighbouring cities, but not for merely geographic or economic neighbours. Moreover, the spatial interactions vary with local leader's political incentives. These findings altogether suggest the spatial interactions of default risk is driven by political competition among local leaders. The study also rules out alternative explanations such as resource flow effects.

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“…The author gives an overview of multipliers for the USA ranging from 0.6 to 1.8. A study related to public spending investigated the relationship in the efficiency of public administration through the speed of payments (Santolini, 2020). The analysis covered the Marche region in the period from 1998 to 2008 and found significant spatial dependence, not only on the level of public spending but also on the speed of spending of public funds.…”

Section: Variables and Datamentioning

confidence: 99%

Impact of transport infrastructure on local development in Dalmatia

Grgić

2021

Regional Science Policy & Practice

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This paper aims to determine the impact of transport infrastructure on local development in Dalmatia. To examine the direct, indirect and feedback effects, a spatial Durbin model was used on a sample of 131 local administrative units in a period from 2010 to 2018. Since transport infrastructure varies very little over the 9 years, the spatial‐fixed effect model was not appropriate. In fact, the financial crisis paved the way for the time‐fixed effect model. The impacts were determined by estimating the direct, indirect and overall effects for the road network as a whole, as well as for each individual road category. Besides, the analysis was done for the coastline, hinterland, and islands to estimate the effects for spatially heterogeneous areas. The results vary, in terms of strength and statistical significance, with spatial heterogeneity, but also with different road classifications. In hinterland, direct and total impacts are positive, on the other hand direct, indirect and total effects on the coastline are not statistically significant. This shows us the complexity of the research area and indicates the prudence of researching at the lowest possible level and with indicators of road infrastructure as analytical as possible.

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Spatial effects on local government efficiency

Cited by 8 publications

References 56 publications

The natural resource curse: Evidence from the Colombian municipalities

The natural resource curse: Evidence from the Colombian municipalities

Political competition, spatial interactions, and default risk of local government debts in China

Impact of transport infrastructure on local development in Dalmatia

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