Michal Struk

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

Abstract Economies of scale are a standard topic in economic theory, frequently applied, for example, in the analysis of monopolies. They exist when a firm optimising 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 minimise 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.

Decision Support of Waste Management Expenditures Efficiency Assessment

This paper is devoted to the development of methodology and information and communication technology tools for decision support in the public sector. It analyses appropriate metrics for a municipal solid waste management expenditure (MSWE) efficiency assessment using cost-effectiveness Analysis (CEA). In addition to many other methodological issues, finding a proper output (performance, outcome) measurement is important. From the point of view of municipalities, such a measurement ought to be as clear and simple to use as possible. We analyse three possible criteria – total generated municipal solid waste, population, and municipality area – for evaluating MSWE efficiency in order to examine their appropriateness for municipal administration. The analysis covers three years, from 2009 to 2011, and municipalities from the South Moravian Region of the Czech Republic. We focus on a sample of 21 municipalities with specific administrative status. Expenditures were estimated using open public data from the Czech Ministry of Finance municipal accounts database. Correlation analysis showed a very strong relationship between the three chosen criteria. Public administration can certainly use all of the criteria for an efficiency assessment of MSWE to aid in decision making. However, the most suitable criterion to be population, since efficiency analysis results showed a strong correlation between population and both CEA for waste amount and CEA for municipality area. Moreover, population has a stronger relationship with MSWE than either of the other two criteria.

Methodology for the Efficiency Evaluation of the Municipal Environmental Protection Expenditure

This paper deals with an efficiency of current municipal expenditure on environmental protection and suggests a methodology for assessing this efficiency. A proposal of methodological procedure for evaluating efficiency of municipal environmental protection expenditure uses multi-criteria evaluation, where a dominant criterion of performance is modified method of Cost-effectiveness analysis. It was implemented in open source software. The efficiency in the methodology is intended in terms of 3E methodology – Economy, Efficiency and Effectiveness, together with the methodology of sustainable development – social, environmental and economic part of sustainable development. This procedure is applied to a set of environmental protection expenditure data that come from the representative sample of municipalities in areas of waste management which were used in a project of the Ministry of Environment of the Czech Republic SP/4i1/54/08 “Analysis of municipal budgets efficiency in relation to the environmental protection”.

Population age structure and the cost of municipal waste collection. A case study from the Czech Republic

Waste management is a common public service whose provision is the responsibility of local governments. As is usual with public services, the question of its efficiency naturally arises. The majority of studies focus on such efficiency from the perspective of the provider. This is based on the assumption that waste collection expenditure is a function of available equipment and municipal characteristics. In our opinion this approach has its limitations, and therefore we have used a novel approach based on the demand from municipal citizens for waste collection services. We build on previous results obtained from data concerning social and demographic characteristics, and focus on the relationship between age and expenditure on municipal solid waste, concentrating specifically on the ageing of the population. The ageing of societies in general is a very topical issue, but there is rather little focus in research on the effects of ageing on the demand for various public services. The research that does exist in the area of waste management that takes the age factor into account typically only makes a very rough division of the population into age categories such as children, people of working age and elderly people. Such wide groups naturally contain people with a large variety of needs, and therefore often lead to ambiguous results. The goal of our paper is to examine this topic in more detail, and to estimate the effects of various age categories of municipal citizens on municipal waste expenditure. We use models with age categories differentiated by decades, an approach which provides significantly more detailed information than the age variables used in other studies in this area. We use population age and waste management expenditure data collected from more than 6100 municipalities in the Czech Republic in 2011 and 2014. The results of our investigation have shown that senior citizens of a certain age (approximately at the onset of retirement) have a surprisingly strong influence on waste management expenditure.

SWITCH TO SAVE? COMPARING MUNICIPAL SOLID WASTE EXPENDITURES BASED ON WASTE MANAGEMENT PROVIDER OWNERSHIP

The debate about public vs. private provision of municipal solid waste management has been going on for several decades with no conclusive evidence in favor of either. The presence of relevant competition in the market seems to be more important than the type of the provider. In this study, we expand on this topic and use empirical evidence to show that what matters most is the willingness of the municipality to switch waste management providers. We compare the municipal solid waste expenditures of more than 60 municipalities in the Czech Republic that changed their waste management provider in 2008-2014, both before and after the change. The results show that such a change can, on average, reduce the expenditure by several percent, and change should therefore be preferred by the municipalities instead of perpetually extending contracts with the current provider. In addition, we show that it does not matter much whether the new waste management provider is a public or private company, as costs are reduced when switching either way.​

Development of Municipal Solid Waste Generation and Expenditures: Case of Czech Municipalities

Municipal solid waste generation represents an important current environmental issue of modern societies. This paper presents trend in municipal solid waste generation, corresponding expenditures, and compares differences between various sizes of municipalities. Analyzed data covers almost 200 main municipalities from the Czech Republic during 2008–2012. Second part of the paper explores relationship between municipal waste volume, expenditures and selected social demographic parameters of municipalities using linear regression techniques and presents several models and discussion of the effects of considered variables. Results show that there is, without surprise, very strong relationship between the amount of municipal solid waste and related expenditures. Both these values are also strongly affected by the population level or alternatively amount of flats within the municipality. Either of them can thus serve as a proxy for municipal solid waste generation prediction. Additional estimated models explore effects of considered social demographic data on per capita development of expenditures and waste generation in order to estimate their marginal effects. Results presented in the models can have policy utilization regarding municipal solid waste collection fee differentiation, or serve as a supporting tool for municipal authorities when predicting development of waste volume and expenditures.