Do Municipal Mergers Improve Technical Efficiency? An Empirical Analysis of the 2008 Queensland Municipal Merger Program

Title
Do Municipal Mergers Improve Technical Efficiency? An Empirical Analysis of the 2008 Queensland Municipal Merger Program
Publication Date
2018
Author(s)
McQuestin, Dana
( author )
OrcID: https://orcid.org/0000-0002-0137-0260
Email: dmcques2@une.edu.au
UNE Id une-id:dmcques2
Drew, Joseph
( author )
OrcID: https://orcid.org/0000-0003-3579-5758
Email: jdrew2@une.edu.au
UNE Id une-id:jdrew2
Dollery, Brian
Type of document
Journal Article
Language
en
Entity Type
Publication
Publisher
John Wiley & Sons, Inc
Place of publication
Australia
DOI
10.1111/1467-8500.12286
UNE publication id
une:-20170912-112448
une:-20170912-112448
Abstract
Municipal mergers remain an important instrument of local government policy in numerous countries, including Australia, despite some concerns surrounding its efficacy. We consider the claim that amalgamations enhance the technical efficiency of the merged entities by examining the 2008 Queensland compulsory consolidation program that reduced the number of local authorities from 157 to 73 councils. To test the claim, we conduct locally inter-temporal data envelopment analysis over the period 2003-2013 inclusive. Our evidence suggests that (1) in the financial year preceding the mergers, there was no statistically significant difference in the typical efficiency scores of amalgamated and non-amalgamated councils and (2) 2 years following the mergers, the typical technical efficiency score of the amalgamated councils was well below the non-amalgamated cohort. We argue this may be attributed to increased spending on staffing expenses, although comparatively larger operational expenditure also served to diminish efficiency.
Link
Citation
Australian Journal of Public Administration, 77(3), p. 442-455
ISSN
1467-8500
0313-6647
Start page
442
End page
455

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