Local government size and service level provision. Evidence from conditional non-parametric analysis

Although the local provision of public goods accommodates better to heterogeneous preferences and mitigates fiscal illusion problem, it comes at cost potential diseconomies scale. This paper examines relationship between municipal size service level by applying state-of-the-art non-parametric techniques a unique panel dataset Flemish data. We measure using an innovative robust conditional ‘Benefit Doubt’ model we estimate its efficiency in with expenditures means Data Envelopment Analysis model. Overall, main findings suggest presence scale, provide weak evidence on optimal good around 10,000 citizens. • examine provision. State-of-the-art are applied municipalities. Service is measured original composite indicator. Municipal expenditure assessed Analysis. Results denote scale