Title

Economies of scale and local government expenditure: evidence from Australia

Document Type

Article

Publication details

Drew, J, Kortt, MA & Dollery, B 2014, 'Economies of scale and local government expenditure: evidence from Australia', Administration and Society, vol. 46, no. 6, pp. 632-653.

Published version available from:

http://dx.doi.org/10.1177/0095399712469191

Peer Reviewed

Peer-Reviewed

Abstract

Controversy surrounds structural reform in local government, especially efforts aimed at involuntarily reducing the number of local authorities to secure scale economies. We examined whether scale economies exist in local government outlays by analyzing the expenditure of 152 New South Wales councils. Initially, council expenditure is characterized by scale economies. However, given the correlation between population and population density, it is important to determine whether the influence of population on expenditure is due to variations in population density. When areas are decomposed into subgroups on the basis of density, the evidence of scale economies largely disappears.