Indicators for Measuring the Efficiency of Local Public Services

Abstract

The paper provides a literature review on the output variables and indicators
used to assess the efficiency of local public services (ELPS), specifically focusing
on the quantity and quality of these services from 1990 to 2024. The output var
iable refers to a specific local public service, classified by expenditure functions
(e.g., healthcare), while the output indicator measures how the service is quanti
fied (e.g., the number of health centers or hospital beds). The review reveals that
measuring a particular local public service is complex, with various output indi
cators being used. There are no standardized indicators for assessing a specific
service, and the selection of indicators depends on the characteristics of a service
and available data. The heterogeneity in measurement approaches often results
in apparent contradictions and inconsistencies in research findings, particularly
in studies exploring the determinants of ELPS. Consequently, future research,
especially comparative studies, should carefully consider the choice of output
indicators to ensure the credibility of efficiency analyses. Regarding Croatia, it
is noted that data availability makes it easier to conduct analyses at the county
level rather than for municipalities or cities. A thorough analysis of available
data at the appropriate level is essential. However, readily accessible and up-to
date local data, such as population, area, and financial reports from local units
or companies, can be useful for determining output indicators. Previous research
in Croatia has focused on the overall efficiency of public service provision at the
county, city, and municipal levels, rather than on specific services. However, it
would be feasible to assess the efficiency of education services for counties and
cities, as comprehensive and up-to-date annual data is available through the
Školski e-Rudnik system. To measure ELPS effectively, it is recommended to
combine multiple output indicators, particularly those that assess both the sup
ply and quality of the public services provided.