Evaluation of public service efficiency in the development-restricted areas of Southwest Sichuan Province in China

Abstract

The equalization of public services is the most important way to narrow the social and economic gap between Development-Restricted areas (DRA) and other developed regions in China. In the efforts to achieve the overall well-off society, decision-makers need to ensure that the public investments provide efficient services in DRA. This study applied the Data Envelopment Analysis (DEA) approach to investigate the technical efficiency (TE), pure technical efficiency (PTE) and scale efficiency (SE) among a sample of 30 counties in the southwest of Sichuan and discussed the status quo of public service efficiency of DRA in this region. Results show that in DRA, all of the 17 counties analyzed were found to be technically inefficient, with an average score of 0.222, 14(82%) counties were found to be pure technically inefficient, with an average score of 0.408, and all counties were found to be scale inefficient, with an average score of 0.742. Thirteen(76%) counties reached the benchmark of the index “percentage of GDP expenditure on education”, while only 7 (41%) counties reached the benchmark of the index “percentage of GDP expenditure on general public services” and no county reached the benchmark of the index “percentage of GDP expenditure on medical and health”. This research has revealed the prevalence of high levels of combined pure technical and scale inefficiencies in DRA of Southwest Sichuan, and the public service efficiency is significantly influenced by the regional economy and topography in these areas. It is concluded that several measures should be taken to enhance the public service efficiency of DRA including settlements migration, reinforcement of self-develop capability, and the secondary allocation methods, such as interregional ecological compensation and fiscal transfer payment.