Municipality Size and Local Public Services - Do Economies of Scale Exist?

Investor logo


Year of publication 2014
Type Article in Periodical
Magazine / Source NISPAcee Journal of Public Administration and Policy : the Network of Institutes and Schools of Public Administration in Central and Eastern Europe
MU Faculty or unit

Faculty of Economics and Administration

Field Management and administrative
Keywords economies of scale; municipality; public services
Description Economies of scale are a standard topic in economic theory, frequently applied for example in the analysis of monopolies. They exist when a firm optimizing its production costs while facing some fixed costs enjoys lower per unit production costs as the production increases. Similarly to other production units municipalities have to be large enough to minimize average costs. We analysed the local public services in 205 municipalities with extended powers in the Czech Republic for the first time in this context, using regression analysis, a correlation diagram of local public services, and statistical analysis. The paper examines this issue using data from 2008 to 2012. Our analysis showed that economies of scale cannot be clearly identified for local services in municipalities with extended powers in the Czech Republic and that the size of a municipality is not a key factor influencing the provision of local services.
Related projects:

You are running an old browser version. We recommend updating your browser to its latest version.