Efficiency in the provision of local public goods in Norway

Abstract

The paper estimates the demand for six local public services from survey data from the Norwegian population, following the tradition of Bergstrom et al. (1982) of estimating latent demand functions using qualitative data. The paper focuses on both efficiency of allocation within the municipal budget, and efficiency in the allocation between private and public consumption. The results suggest that within the municipal budget, too much is allocated to administration and culture, and not enough to education and care for the elderly. In addition most respondents want an increase in the total budget of the local public sector.