Managerial efficiency in local government: Implications on jurisdictional consolidation

Abstract

Using data from Maine, estimates of size economies in the production of public education services are provided under the alternative assumptions of managerial efficiency and inefficiency. While size economies were identified under the traditional assumption of managerial efficiency, limited or no size economies were identified under the more general assumption of managerial inefficiency. These results question the validity of the traditional economies of size literature and the jurisdictional consolidation policy which follows from the traditional literature.