Summary and Conclusions

Abstract

The aim of this book is to investigate different aspects of the technical or cost efficiency of local governments in Germany. Thereby, technical efficiency is defined as producing as much output as possible given a certain amount of inputs (“output-orientation”) or, vice versa, the usage of the minimum amount of input(s) given a certain amount of output (“input-orientation”). In contrast, cost efficiency is defined as reducing costs (e.g. for providing a certain amount of public goods and services) as much as possible given a certain amount of input(s). Investigations on the efficiency of (local) governments and its causes or determinants can be very helpful, since they provide useful information for policy makers or politicians concerning the reduction of potential inefficiencies. The elimination of potential (cost) inefficiencies, in turn, reduces (public) expenditures and therefore can help to consolidate public finances.