Local and regional governments represent the nearest form of
government to the people and their fundamental role in addressing
citizens’ needs is acknowledged worldwide. In line
with the subsidiarity principle, the responsibility of the public
good and service delivery is primarily upon the territorial
administrations closer to the citizens, with the main advantage
of offering more suitable and better tailored solutions at
local level. In a context of scarce resources and tight budget
constraints exacerbated by the ongoing economic crisis, the
achievement of these goals is limited and needs to be pursued
in an efficient and effective way. Accordingly, the development
of tools to evaluate the performance of local and
regional government is required, as well as measures to monitor
the progress of the task achievement and instruments to
support over time the decisional process, in the interest of all
the involved shareholders, specially policy makers and citizens,
international and civil society organizations.
This dissertation contributes to the knowledge on basic service
delivery and public expenditure analysis at sub-national
level. Particularly, it deals with the provision of both general
and specific services, namely the education and water sector
ones. From a methodological point of view, innovative methods
are proposed to evaluate the service supply and public
spending in terms of efficiency and effectiveness. To show
the potentiality of the suggested tools, empirical applications
are proposed covering two EU countries, Belgium and Italy,
which are interesting study cases for their common and peculiar
features and provide complementary insights. In Chapter 2, we propose the innovative use of a composite
indicator to measure the multidimensional aspects of the
local public provision, encompassing several commonly acknowledged
municipal tasks, and to investigate the relationship
with the local government size, as the decentralization
of public activities to the municipalities calls for a more enhanced
service provision analysis at the local level. We suggest
a robust conditional version of a directional distance Benefitof-
the-Doubt approach with weight restrictions based on the
municipal expenditure composition. Specifically, we deal with
the presence of undesirable municipal service indicators and
with the heterogeneity among the municipalities in their political
preferences, priority public activities and operating environment
characteristics. To illustrate the applicability of the
suggested method, we show the construction of the municipal
service provision composite indicator for 307 Flemish municipalities
over the year 2006-2011.
As a focus on a particular service, in Chapter 3 the environmental
efficiency of 96 Tuscan (Italian) wastewater treatment
plants (WWTPs) is investigated taking into account the quality
of the outgoing water in terms of pollutant. In this regard,
the presence of the residual nitrogen in the outgoing
treated water is considered as undesirable output. The efficiency
analysis is performed by applying a novel integrated
AHP/non-radial directional distance function approach. The
obtained results are then used to identify the efficiency explanatory
variables: among them, the facilities’ capacity, the
percentage of wastewater discharged by the industrial and
agricultural activities and the level of compliance with the
pollutant concentration threshold set by the legislator have a
significant impact on the WWTP performance.
In Chapter 4, a Data Envelopment Analysis model is used
to study the efficiency of Tuscan municipalities’ public expenditure.
Five strategic functions of Tuscan municipalities are first considered carrying out a non-aggregate analysis;
then the overall expenditure composition of each municipality
and the global spending efficiency are analysed by a proposed
composite indicator. The main determinants affecting
the municipalities’ efficiency are further investigated. In particular,
the obtained results may be consistently included in
the long-standing debate on the municipal size, proving that
the bigger the municipality, the greater its level of public expenditure
efficiency.
In Chapter 5, we explore whether investment in public school
infrastructure affects students’ achievement. We use data on
extra funding to public high schools after the 2012 Northern
Italy earthquake and apply a quasi-experimental design
and an instrumental variable strategy. We find that spending
on school infrastructure increases standardized test scores in
mathematics and Italian language, and the effect is stronger
for lower-achieving students and in mathematics. These results
provide evidence in favour of a positive impact of capital
spending in improving the learning environment and performances
of high school students
