Efficiency of South African local government: a comparative study of determinants using subjective satisfaction and conventional measures

Abstract

Efficiency analyses of local government structures are well researched and have provided important insights into local governance. Most of the existing literature uses observable and tangible output measures to calculate whether municipalities are efficient – this study broadens the literature by using residents’ subjective satisfaction levels with service delivery as the main output measure, using local municipal data from South Africa. This analysis uses Data Envelopment Analysis to establish how relatively efficient municipalities are to one another. In addition to this, this study assesses which municipal characteristics contribute to the efficiency of these municipalities using bootstrapped DEA and Tobit analysis. These relationships are also found for conventional models and a comparison is done to establish that using subjective satisfaction adds additional information that conventional models do not exhibit. This study shows that a number of municipal characteristics are correlated with efficient municipalities and the models using subjective satisfaction are correlated either with different characteristics, or in some cases, with the same characteristics, but in different ways. From this comparison, we found that efficiency with respect to satisfaction includes elements of quality of service provision and differing perceptions amongst people, while the conventional model only provided insight into access.