An analysis on the economic effectiveness of municipalities in Turkey

Abstract

In the present study, efficiency of municipalities and the factors affecting it are evaluated theoretically and then empirical analysis about the efficiency made. In the application part, 27 municipalities, 7 of which are metropolitan municipality, are covered. Data related to the inputs and outputs that reflect the financial, fiscal, social and demographic situation of these municipalities are taken from surveys, centralized management units and statistical units. Efficiency analysis of municipalities are made by using data envelopment analysis (DEA) and Malmquist index technique. Efficiency scores were obtained and factors which affect efficiency and the interaction among the factors are determined. Under the lights of these result and the estimations of both DEA models and Malmquist Index, it can be stated that there was a decrease in the number of efficient municipalities and the level of their efficiencies from years 2006 to 2008. Key words: Municipality efficiency, data envelopment analysis (DEA), malmquist index, tobit model.