Efficient Delivery of Local Public Services in Ethnically Fragmented Municipalities
DOI:
https://doi.org/10.4335/13.3.299-319(2015)Keywords:
decentralization, municipal efficiency, ethnic fragmentation, public services, political variables, stochastic frontier analysis.Abstract
Macedonia started its transition from a command to a market economy after its declaration of independence in 1991 from the former Yugoslavia. In 1991, ethnic Albanians abstained from voting for the first Macedonian constitution. Soon claims of ethnic Albanians in Macedonia started to aim at proportional representation in all political institutions, more education in the Albanian language at the university level and changes to the constitution proclaiming Macedonia to be a multi-ethnic country made up, on an equal basis, of Macedonians and Albanians. In 2001, immediately after the Macedonian parliament ratified a border treaty with Serbia, ethnic Albanians clashed with Macedonian armed forces. The clashes ended with the signing of the Ohrid Framework Agreement (OFA) in 2001. Decentralization was a main preferential policy choice out of the OFA. This paper estimates the efficiency of Macedonian municipalities by using the Stochastic Frontier Analysis (SFA). We hypothesise that ethnic fragmentation may have a negative impact on the efficiency of Macedonian municipalities. We also hypothesise that political variables at municipalities in Macedonia also have impact on the municipal efficiency.
References
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Aigner D. J. & Chu S. F. (1968) On estimating industry production function, American economic review, 58(4), pp. 826-839
Aigner D. J., Lovell A. K. & Schmidt P. (1977) Formulation and estimation of stochastic frontier production function model, Journal of econometrics, 6(1), pp. 21-37, doi: 10.1016/0304-4076(77)90052-5.
Alesina, A., Baquir, R. & Easterly, W. (1999) Public goods and Ethnic Division, Quarterly Journal of Economics, 114(4), pp. 1243-1284, doi: 10.1162/003355399556269.
Alesina A. & Ferrara E. (2005) Ethnic diversity and economic performance, Journal of Economic Literature, 43(3), pp. 762-800, doi: 10.1257/002205105774431243.
Arsovski, M., Kuzev, S., & Damjanovski, R. (2006) Vojnata vo Makedonija vo 2001 godina (Skopje: Matica Makedonska).
Athanassopoulos A. & Triantis K. (1998) Assessing aggregate cost efficiency and related policy implications for Greek local municipalities, Information Systems and Operational Research, 36(3), pp. 66-83.
Balaguer-Coll, M. T., Prior-Jimenez D. & Vela-Bargues J. M. (2002) Efficiency and quality in local government management: The case of Spanish local authorities, (Barcelona: Universitat Autonoma de Barcelona), available at: http://ideas.repec.org/p/bbe/wpaper/200202.html (July 15, 2004).
Balaguer-Coll, M. T., Tortosa-Ausina, E. & Prior D. (2007) On the determinants of local government performance: A two stage nonparametric approach, European Economic Review, 51(2), 425-451, doi: 10.1016/j.euroecorev.2006.01.007.
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Boetti L., Piacenza M. & Turati G. (2009) Fiscal decentralization and spending efficiency of local governments: An empirical investigation on a sample of Italian municipalities, XXI Conference Public Choice e political economy; I fondamenti positivi della teoria di finanza pubblica, 24-25 September (Pavia: University of Pavia).
Borge, L. E., Falch T. & Tovmo P. (2008): Public Sector Efficiency: The Roles of Political and Budgetary Institutions, Fiscal Capacity and Democratic Participation, Public Choice, 136 (3–4), pp. 475–495, doi: 10.1007/s11127-008-9309-7.
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Coelli T. J. (1996) A Guide to Frontier Version 4.1: A Computer Program for Stochastic Frontier Production and Cost Function Estimation,” CEPA Working Papers N. 96/7 (Armidale NSW Australia: Department of Econometrics. University of New England) available at: https://r-forge.r-project.org/forum/attachment.php?attachid=10&group_id=
275&forum_id=908 (February 20, 2006).
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De Borger, B. & Kerstens, K. (1996) Cost efficiency of Belgian local governments: A comparative analysis of FDH, DEA, and econometric approaches, Regional Science and Urban Economics, 26(2) pp. 145-170.
Donev, D., Onceva, S., & Gligorov, I. (2002) Refugees crisis in Macedonia during the Kosovo crisis in 1999, Croatian Medical Journal, 43(2), pp. 184–189.
Easterly, W. & Levine, R. (1996) Africa’s growth tragedy: Policies and ethnic divisions, The Quarterly Journal of Economics, 112(4), pp. 1203-1250, available at: https://hec.unil.ch/docs/files/21/280/2951270.pdf (October 21, 2011), doi: 10.1162/003355300555466.
European stability initiative (2002) Ahmeti’s village (Berlin, Brussels, Istanbul: ISI) available at: http://www.bits.de/public/documents/mazedonien/Ahmetivillage_
01October2002_ps.pdf (April 15, 2007).
Eurostat (2012) S80/S20 income quintile share ratio by sex and selected age group (source: SILC) (Brussels: Eurostat) http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset
=ilc_di11&lang=en (January 12, 2012).
Fuentes, G. M. & Villodres, C. O. (2010) “The political leadership factor in the Spanish local elections, Lex Localis - Journal of Local Self-Government, 8(2), pp. 147-160, doi: 10.4335/8.2.147-160(2010).
Geys, B. & Moesen, W. (2008) Exploring Sources of Local Government Technical Inefficiency: Evidence from Flemish Municipalities, Public Finance Management, 9(1), pp. 1-29.
Geys B., Heinemann, F. & Kalb, A. (2010) Voter Involvement, Fiscal Autonomy and Public Sector Efficiency: Evidence from German Municipalities, European Journal of Political Economy, 26(2), pp. 265–278, doi: 10.1016/j.ejpoleco.2009.11.002.
Horowitz, L. (2000) Ethnic groups in conflict (Berkeley & Los AngelesUniversity of California Press).
Institute for regional and international studies – IDSCS (2006) The process of decentralization in Macedonia: Prospects for ethnic conflict mitigation, enhanced representation, institutional efficiency and accountability, (Sofia-Skopje: IRIS and IDSCS), available at: http://www.iris-bg.org/files/Macedonia%20Decentralization%20Summary.pdf October 20, 2011).
Keefer, P. (2002) Clientelism, Credibility and Democracy (Washington DC: World Bank) available at: http://web.international.ucla.edu/media/files/keefer.pdf (October 18, 2011).
Leo, C. (2006) Deep federalism; Respecting community difference in national policy, Canadian Journal of Political Science / Revue canadienne de science politique, 39(3), pp. 481–506, doi: 10.1017/S0008423906060240.
Lijphard, A. (1999) Patterns of democracy (New Haven & London: Yale University Press).
Loikkanen, H. & Susiluoto, I. (2006) Cost Efficiency of Finnish Municipalities in Basic Service Provision 1994–2002, Discussion paper 96 (Helsinki: HECER – Helsinki Center of Economic Research).
Mahabil, J. (2011) Measuring efficiency of local government expenditure; An FDH Analysis of a sample of South African municipalities, Financial and FiscalCcommission of South Africa Policz Brief, , available at: http://www.info.gov.za/view/DownloadFileAction?id=148955 (October 16, 2011).
Martínez-Vázquez, J., & Mcnab, R. M. (2005) Fiscal Decentralization, Macrostability and Economic Growth. International Studies Program Working Paper 05-06 Atlanta: Andrew Young School of Policy Studies, Georgia State University (Atlanta: AYSPS Center for International Fiscal Policy), available at: http://aysps.gsu.edu/sites/default/files/documents/ispwp0506.pdf (October 14, 2011).
Meeusen, W. & Van Den Broeck, J. (1977) Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error, International Economic Review, 18(2), 435-444, doi: 10.2307/2525757.
Nieswand, M. & Seiferd, S. (2011) Some determinants of intermediate local government spending efficiency: Evidence from French departments, DIW Berlin discussion paper 1130 (Berlin: Deutsche Institute fur Wirtschaftforschung), available at: http://www.diw.de/documents/publikationen/73/diw_01.c.372972.de/dp1130.pdf (October 10, 2011).
Oates, W. (1993) Fiscal Decentralization and Economic Development, National Tax Journal, 46(2), pp. 237–243, doi: 10.1017/CBO9780511625909.011.
Sharchevich, E. (2009) Bosnia and Herzegovina and controversies of the EU integration processes (Constitutional view), Zeitschrift fur offentliches recht, 64(2), pp. 237–249.
Siljanovska-Davkova, G. (2007) Globalisation, Democracy and Constitutional engineering as mechanism for resolving ethnic conflict, Athens: VII-th World Congress of Constitutional Law, 2007 (Athens: IACL).
Stastna, L. & Gregor, M. (2010) Local government efficiency: Evidence from Czech municipalities, research supported by CERGE-EI Foundation under a program of the Global Development Network (Praque: Institute of Economic Studies, Charles University in Prague), available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1978730 (October 13, 2011).
United Nations Development Programme – UNDP (2009a) People centered analysis – PCA report (Skopje: UNDP).
United Nations development programme – UNDP (2009b) Guidelines for processing of survey database and calculation of indicators for PCA (Skopje: UNDP).
Vanden Eeckhaut, P., Tulkens, H. & Jamar, M. A. (1993) Cost Efficiency in Belgian Municipalities, In: Fried, H. O., Lovell C. A. K. & Schmidt, S. S. (eds.) The Measurement of Productive Efficiency (Oxford: Oxford University Press), pp. 300-334.
Vankovska, B. (2007) Politichki system (Skopje: Bomat Grafiks).
Weingast, B., & Witman, D. (2006) Ethnic mobilization and ethnic violence. The Oxford Handbook of political economy (Oxford: Oxford University Press).
Worthington A. (2000) Cost efficiency in Australian local government: a comparative analysis of mathematical programming and econometric approaches, Financial Accountability & Management, 16(3), pp. 201-223, doi: 10.1111/1468-0408.00105.
Wunnava P., Prasch R. & Mitra A. (2012) Globalization, institutions, and the ethnic divide: Recent longitudinal evidence, (Bonn: The Institute for the Study of Labor (IZA)) available at: http://ftp.iza.org/dp6459.pdf (May 14, 2012).
Zalduendo, J. (2003) Enterprise restructuring and transition: Evidence from Macedonia. IMF Working Paper No. 03/136 (Washington DC: IMF), available at:http://www.imf.org/external/pubs/ft/wp/2003/wp03136.pdf (May 23, 2009).
Published
2015-07-31
Issue
Section
Conference Paper (Annual Conference 2020)
