Local government efficiency: is there anything new after Troika’s intervention in Portugal?

  • Maria BasílioEmail author
  • Clara Pires
  • Carlos Borralho
  • José Pires dos Reis
Original Paper


The austerity policies implemented in Portugal because of the bailout agreement between the Portuguese Government and the Troika include measures to increase performance and reduce costs. An analysis of local government efficiency and an assessment of its determinants is highly relevant for policy purposes, particularly when new efforts to decentralize are being discussed. The aim of this research is to evaluate the efficiency of the 278 mainland municipalities in Portugal using a two-stage procedure, combining data envelopment analysis in the first phase with fractional response models in the second. The analysis is performed for 2010 and 2015, before and after the Troika’s intervention in Portugal. Results show a similar pattern for both years, in the two stages. The results also indicate that there is no structural changes from 2010 to 2015, suggesting that the reforms implemented in municipalities did not succeed.


Municipalities Two-stage DEA Efficiency Fractional response models 

JEL Classification

C14 C35 H72 



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Copyright information

© Eurasia Business and Economics Society 2019

Authors and Affiliations

  1. 1.CIGES and Management DepartmentPolytechnic Institute of Beja (IPBeja), Escola Superior de Tecnologia e GestãoBejaPortugal

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