Can governance at the right scale increase productivity? A comparative scoping review (original) (raw)

Public sector and productivity: Governance at the right scale

Background paper for the OECD-EC High-Level Expert Workshop Series “Productivity Policy for Places”, April 18-19., 2021

‘Place matters’ has become a mantra among diverse researchers and scholarship on local and interregional dynamics, political institutions and actors and has ballooned in recent years. Public sector governance entails the institutions by which public goods and services are delivered and how collective goals are determined and accomplished. Enhancing productivity is a common rationale for devolution, outsourcing and new institutional configurations and a recurring theme in public administration reforms. This paper takes stock of how governance at the right scale can improve public sector (and private sector) productivity in different types of places—urban, rural and remote. It draws on theoretical, empirical and policy literature to explore: (1) How scale matters to public sector productivity and governance; (2) How governance at the right scale can be enhanced (e.g., getting the incentives right); (3) The barriers to productivity improvements in all types of regions and (4) Future opportunities and challenges, including those related to the Covid-19 pandemic.

Myths and Realities of Economies of Scale in Local Government

This paper investigates the claim that larger local authorities serving larger populations are more efficient and can save money through economies of scale. We review an extensive range of international research on this topic and on local authority mergers. We also examine the relationship between size and expenditure and service levels, drawing on available data on Irish local government. Overall, the research suggests a weak link between size and efficiency, and there is little evidence to suggest that larger local authorities will be more efficient or cost less than smaller local authorities. In an Irish context, this article critically examines some of the fundamental assumptions about the relationship between scale and efficiency in the context of Irish local government. The research suggests that most local authority services do not appear to possess economies of scale, and merging local authorities may have little or no effect on savings in most services – indeed larger local authorities can sometimes be more expensive due to diseconomies of scale. Local authority mergers also involve considerable transitional costs. There are however certain selected areas within local government where economies of scale may exist – the most likely candidates are highly specialised services, the production costs of capital-intensive services, and some administrative overheads and ‘back office’ corporate functions. However, reaping savings from these areas could be done through local authorities entering into shared service arrangements which do not involve the transitional costs implied by full-scale mergers. Contrary perhaps to popular belief, county and city councils, the primary units of local government in Ireland, are in any case already very large by international standards.

WHAT MAKES CITIES MORE PRODUCTIVE? EVIDENCE FROM FIVE OECD COUNTRIES ON THE ROLE OF URBAN GOVERNANCE

Journal of Regional Science, 2017

In estimating agglomeration benefits across five OECD countries, this paper represents the first empirical analysis that contrasts cross‐country evidence on agglomeration benefits with the productivity impact of metropolitan governance structures, while taking into account the potential sorting of individuals across cities. The comparability of results in a multicountry setting is supported through the use of a new internationally harmonised definition of cities based on economic linkages rather than administrative boundaries. The analysis finds that cities with fragmented governance structures tend to have lower levels of productivity. The estimated elasticity for an increase in the number of local jurisdiction is 0.06, which is halved by the existence of a metropolitan governance body. The productivity effect is sizeable and at least as important as the agglomeration benefit found due to city size.

Governance and Metropolitan Areas

International Journal of Science and Research (IJSR) 7(12):806-810, 2018

Cities around the globe always play vital roles in both local and global levels. Starting at the local level, cities provide their residents with a set of services and products that they need while maintaining an acceptable quality of life and developing local economies. While on the global scale, cities are considered sources of economic growth and the nations' driving forces towards development in cultural, social, political and economic life. These roles face restrains as cities expand neglecting their administrative boundaries while experiencing a shortage in either financial or jurisdictional capacity to fulfill their responsibilities. Such expansion and shortage need coordination among local governments through introducing different models of governance targeting successful coordination among local governments. These models of coordination range from voluntary actions among local governments, to the establishment of larger entities at Metropolitan scale. Thus, this paper firstly identifies the evolution of the term Metropolitan and its relation to the City. Besides, the relations between city, metropolitan areas, governance, and performance are described. Thirdly, different models of metropolitan governance will be explored. This paper presents a comparison between different models of metropolitan governance showing that there nothing as best model. It is concluded that enhancement of metropolitan areas governance is directly linked to five main pillars. These main pillars of governance depend more on providing appropriate fiscal powers to achieve effectiveness rather than the selection of the right model of governance (model of coordination).

The Dynamics between State Control and Metropolitan Governance Capacity

Administrative Sciences, 2020

Due to the national importance of metropolitan areas, central governments seek to make them as attractive and competitive as possible. In many cases, this is done through state control over metropolitan areas and their governance arrangements. This article examines the relationship between state control and metropolitan governance capacity based on a comparative case study of four metropolitan areas: Auckland, Dublin, Montreal and Oslo. These areas represent different models of metropolitan governance, as well as different forms of state control. We studied state control by focusing on political and administrative decentralization: how independently can the metropolitan government make decisions and perform its tasks? The conclusion is that the different dimensions of decentralization are connected to capacity, but not straightforwardly. This study indicates that state involvement through different forms of control can increase metropolitan governance capacity, but only if it is com...

Governance Mechanisms and Improving the Performance of Local Authorities: Review of the Literature

Although the application of good governance the local government sector requires a profound administrative revolution affecting the behavior of all the players concerned, the issues of quality and excellence have forced local governments to change roles and responsibilities. In this context, this paper examines and synthesizes a literature review of the mechanisms of public governance to see to what extent the missions and purposes of this governance impact the performance of local authorities. To this end, the first part of this paper deals with a literature review on the concept of governance, its components, and its mechanisms in local authorities. The second part defines performance and its measurement tools in local authorities. In conclusion, the third part explores the impact of good governance on improving the performance of local authorities.