Is a problem shared a problem halved? Shared services and municipal efficiency

Publication Type:
Journal Article
Australian Journal of Public Administration, 2019, 78 (2), pp. 265 - 280
Issue Date:
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© 2018 Institute of Public Administration Australia It has long been argued that shared services represent an efficacious means of securing efficiencies for municipalities. Indeed, pressures from fiscal austerity, taxation limitations, and the specter of forced amalgamations have resulted in an increasing uptake of shared service arrangements. However, the extant evidence is rather inconclusive and is largely restricted to analyzing the nett efficiency outcomes for the specific service shared. We broaden this evidential base by examining the association between shared service production and the efficiency of entire municipalities. Our analysis, employing a 5-year panel of data, suggests that shared services are associated with a statistically significant reduction in overall municipal efficiency. We conclude by explicating on the public policy implications arising from our prima facie surprising results.
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