The local governments efficiency in the EU countries: Evaluation by using the Data Envelopment Analysis

Abstract

The purpose of the article is to evaluate the efficiency of local governments of EU countries. The subject of research is the view on local governments in the European dimension, while emphasising the management system and the efficiency of local governments. The article aims to assess the efficiency of allocated expenditures of local governments in EU countries from the perspectives of government effectiveness and the perception of corruption, and to assess changes of efficiency between the periods 2012/2015 and 2015/2018. To evaluate the efficiency of local governments, Data Envelopment Analysis was applied on the sample of the 27 EU countries in the years 2012, 2015, 2018. On average, the EU countries achieve higher score of efficiency in the local governments in terms of the government effectiveness (Model 1) when comparing the efficiency score from the point of the perception of corruption (Model 2). In connection to the aim, two research questions have been verified. The results show, based on the Malmquist index, that in the majority of the EU countries in 2012/2015, there prevailed a growth of the total productivity in the local governments (in relation to the government effectiveness and the perception of corruption), which was especially impacted by a growth of the technical efficiency (Model 1), and innovation activities and management change (Model 2). The achieved findings provide valuable information for the creators of the local public policies in the individual countries.