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Some New Thoughts on Performance Evaluation of Governments: An Application to Indian Cities

Author

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  • Simanti Bandyopadhyay

    (National Institute of Public Finance and Policy New Delhi)

Abstract
The present paper is an attempt to build up a framework which can holistically analyse the performance of governments bringing in the financial parameters as well as service delivery. We propose a three step methodology capturing different aspects of performance, integrated in the same framework. We generate the expenditure efficiency scores of governments based on expenditure and service delivery, applying non parametric Data Envelopment Analysis in the first step. This also enables us to identify the possible sources of mis-utilisation of resources on different expenditure heads. The second step consists of a detailed assessment of fiscal patterns of governments with Principal Component Analysis based on revenue, demand, cost, socio-demographic, expenditure-adequacy and service-adequacy indicators. The components generated in the second step can also explain the differences in efficiency scores in resource utilization generated in the first step. Also, each step can generate ranks for the governments. A composite rank from both the steps can act as an index of overall performance of the governments. The methodology is applied to the urban local governments of the state of Tamil Nadu to get some insightful results.

Suggested Citation

  • Simanti Bandyopadhyay, 2014. "Some New Thoughts on Performance Evaluation of Governments: An Application to Indian Cities," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1430, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper1430
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    File URL: http://icepp.gsu.edu/files/2015/03/ispwp1430.pdf
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    References listed on IDEAS

    as
    1. Simanti Bandyopadhyay & M. Govinda Rao, 2009. "Fiscal Health of Selected Indian Cities," Development Economics Working Papers 22970, East Asian Bureau of Economic Research.
    2. Léopold Simar & Paul Wilson, 2000. "Statistical Inference in Nonparametric Frontier Models: The State of the Art," Journal of Productivity Analysis, Springer, vol. 13(1), pages 49-78, January.
    3. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 2008. "The Measurement of Productive Efficiency and Productivity Growth," OUP Catalogue, Oxford University Press, number 9780195183528.
    4. De Borger, Bruno & Kerstens, Kristiaan, 1996. "Cost efficiency of Belgian local governments: A comparative analysis of FDH, DEA, and econometric approaches," Regional Science and Urban Economics, Elsevier, vol. 26(2), pages 145-170, April.
    5. De Borger, B & Kerstens, K. & Moesen, W. & Vanneste, J., 1994. "Explaining Differences in Productive Efficiency: An Application to Belgian Municipalities," Public Choice, Springer, vol. 80(3-4), pages 339-358, September.
    6. Dominique Deprins & Léopold Simar & Henry Tulkens, 2006. "Measuring Labor-Efficiency in Post Offices," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 285-309, Springer.
    7. Simanti Bandyopadhyay, 2011. "Finances of Urban Local Bodies in Jharkhand: Some Issues and Comparisons," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1113, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    8. Duncombe, William & Yinger, John, 2000. "Financing higher student performance standards: the case of New York State," Economics of Education Review, Elsevier, vol. 19(4), pages 363-386, October.
    9. Simanti Bandyopadhyay, 2012. "Performance Evaluation of Urban Local Governments: A Case for Indian Cities," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1232, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    10. Ladd, Helen F., 1994. "Fiscal impacts of local population growth: A conceptual and empirical analysis," Regional Science and Urban Economics, Elsevier, vol. 24(6), pages 661-686, December.
    11. Andrew Reschovsky & Jennifer Imazeki, 2003. "Let No Child Be Left Behind: Determining the Cost of Improving Student Performance," Public Finance Review, , vol. 31(3), pages 263-290, May.
    12. M. Govinda Rao & Richard M. Bird, 2011. "Coping with Change: The Need to Restructure Urban Governance and Finance in India," IMFG Papers 04, University of Toronto, Institute on Municipal Finance and Governance.
    13. Simanti Bandyopadhyay & O.P.Bohra & Aishna Sharma, 2011. "Decentralization in Jharkhand: Some Implications for Urban Service Delivery," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1114, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    14. Simanti Bandyopadhyay, 2013. "Estimating Fiscal Health of Cities: A Methodological Framework for Developing Countries," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1319, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    15. Pidot, George B, Jr, 1969. "A Principal Components Analysis of the Determinants of Local Government Fiscal Patterns," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 176-188, May.
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