Quality of Life and Efficiency in Italian Municipalities

Abstract

The focus of our research is to assess the relationship between local government performance and urban quality of life (QoL), following the recent literature (Morais & Camanho, Omega, 2011). QoL is a multifaceted concept that is difficult to measure as it includes various aspects of well-being related to economic, environmental, and social dimensions of life. The perception of public service quality depends partially on inputs employed. Likewise, the concept of local government efficiency is not so easy to define, because potential inefficiencies in public service provision may create political and social frictions and the definition of government output may be controversial. We take into account these problems by explicitly considering not only traditional “desirable” outputs, like education, welfare, environment, urban transportation, local police and other relevant public services, but also “undesirable” outputs such as number of pollutants and number of accidents. The objective of our research is to analyze urban QoL using parametric and nonparametric procedures to evaluate the impact of both desirable and undesirable outputs and non-discretionary variables on the efficiency achieved by municipalities. We also include in the QoL measurement relevant variables such as budget constraints, social-economic conditions and political contexts. The empirical analysis uses a large dataset on municipalitý characteristics (main sources are the Association of Italian City Councils, ANCI, National Institute for Statistics, ISTAT and Legambiente, Italian environmental association) with detailed information on budgets, grants, taxation, structural variables related to QoL and social and environmental aspects. This procedure allows us to build a model of intervention to identify “best urban practices”. We employ data from 1997 to 2008 covering a wide span of time before the economic crisis, using as output indicators the Legambiente Survey and other environmental variables. As an input indicator we use the total cost of public services which also includes payments for capital and third parties services (Balaguer-Coll et al., European Economic Review, 2007). We proxy other inputs affecting administrators’ behavior with Int Adv Econ Res (2014) 20:347–348 DOI 10.1007/s11294-014-9473-0