Administrative intensity and economies of scale in local government: Recent evidence from Australia

Title
Administrative intensity and economies of scale in local government: Recent evidence from Australia
Author(s)
Kortt, Michael Alexander
Toffaha, Khaled
Tran, Carolyn Thi Thanh Dung
( author )
OrcID: https://orcid.org/0000-0002-5798-0543
Email: ttran43@une.edu.au
UNE Id une-id:ttran43
Dollery, Brian
Type of document
Journal Article
Language
en
Entity Type
Publication
Publisher
Routledge
Place of publication
United Kingdom
DOI
10.1080/09540962.2026.2679167
UNE publication id
une:1959.11/74696
Abstract

This article examines the relationship between scale and administrative intensity in New South Wales (NSW) local government using a six-year panel (2018–19 to 2023–24). The authors assessed whether larger councils achieve governance and administrative efficiencies by analysing per capita administrative expenditure, with scale proxied by population and full-time equivalent staff (FTEs). Using pooled OLS, random, and fixed-effects (FE) models, we find a U-shaped relationship: administrative intensity initially falls with scale but rises at higher levels. This result persists in FE models, suggesting robustness to time-invariant council characteristics. However, when disaggregated by council type (metropolitan, regional, rural), evidence of scale effects is limited and inconsistent. These findings imply that while scale may influence administrative costs, local context and institutional factors remain critical. The results contribute to current debates on council mergers, shared services, and strategies to improve efficiency in local government administration.

Link
Citation
Public Money and Management, p. 1-10
ISSN
1467-9302
0954-0962
Start page
1
End page
10
Rights
Attribution-NonCommercial-NoDerivatives 4.0 International

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