Abstract
The aim of the study was to assess technical efficiency of local government authorities in Tanzania. The study examines the ability of the local authorities in allocating available resource efficiently in the production of output measure by internal revenue generated from local sources. The study used data envelopment analysis (DEA) in estimating the relative efficiency score of the local authorities. The findings of the study show that on average Local government authorities in Tanzania are relatively inefficient hence need to improve in the use of resources and increase the internal revenue generation, hence decrease their dependence to grants and donations from central government and donors. The results also show that scale efficiency was higher than pure technical efficiency for district councils and town council suggesting that the sources of inefficiency is managerial related problems, hence calling improvement in resource management, allocation and decision marking in order to increase their relative efficiencies.
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