ORIGINAL RESEARCH article
Front. Polit. Sci.
Sec. Comparative Governance
Volume 7 - 2025 | doi: 10.3389/fpos.2025.1614884
Efficiency of public spending at the municipal level: evidence for the Peruvian case 2017 - 2023
Provisionally accepted
- Universidad Nacional del Altiplano, Puno, Peru
Select one of your emails
You have multiple emails registered with Frontiers:
Notify me on publication
Please enter your email address:
If you already have an account, please login
You don't have a Frontiers account ? You can register here
This study evaluates the determinants of public spending efficiency at the provincial level in Peru by integrating Data Envelopment Analysis (DEA) with two alternative econometric models: a bootstrapped random-effects Tobit model and a spatial Durbin model. Using panel data from 196 provinces over seven years, DEA efficiency scores under constant returns to scale (CRS) and variable returns to scale (VRS) were estimated and analyzed to assess the impact of intergovernmental transfers, local tax revenues, and spatial interdependencies. The Tobit model accounts for the bounded nature of efficiency scores and shows that Foncomún transfers significantly improve both technical efficiency (VRS_TE) and scale efficiency, while canon transfers primarily enhance scale efficiency due to their infrastructure-oriented allocation but have limited effects on managerial performance. Local tax revenues positively influence technical efficiency, reflecting better expenditure management in fiscally autonomous municipalities, but they have no significant effect on scale efficiency. In contrast, the spatial Durbin model captures spatial dependencies and reveals significant negative spillover effects, indicating that higher efficiency in neighboring provinces can reduce local efficiency due to competition for resources and overlapping administrative functions. These findings contribute to the literature by providing robust empirical evidence on the interplay between fiscal transfers, managerial capacity, and spatial interdependencies, offering actionable insights for policymakers seeking to optimize local government performance and improve public service delivery. Keyword: DEA, efficiency, public spending, production possibilities frontiers, local government.
Keywords: DEA, Efficiency, Public spending, production possibilities frontiers, Local Government
Received: 20 Apr 2025; Accepted: 11 Sep 2025.
Copyright: © 2025 QUISPE LINO, ROJAS APAZA and BLANCO ESPEZUA. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: RAUL ROJAS APAZA, rrojas@unap.edu.pe
Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.