A study on the efficient provision of local public services

Hyok-Joo Rhee, University of Pennsylvania


The study is driven by the belief that there is a systematic relation between the quality of public services delivered and the territorial organization of the state. The study attempts to help understand the efficient provision of local public services when space plays a vital role. The first two models, Model 1 and 2, consider the inefficiency questions in the presence of spillovers between neighboring local governments while explicitly considering the working of the land market in space. Especially, Model 1 examines an alternative market mechanism which would ensure the efficiency of the competitive service provision by utilizing land capitalization process. Model 2, however, examines the siting problem of the obnoxious facilities and demonstrates that when localities do not coordinate their action, the inefficient spatial pattern emerges. On the other hand, Model 3 shifts the focus from the supply of the services and probe how a rural household generates and disposes of the household garbage when there are available several different methods for garbage disposal. It turns out that the amount of garbage dumping tends to decrease in the absolute amount over time, whether the garbage collection service is introduced or not. It is shown that this result is not necessarily related to the environmental awareness or the increasing disutility from the garbage dumping. However, the model indicates that the demand for garbage collection service tends to increase faster than the total amount of household garbage is actually generated. The subsequent analysis suggests that the local authority charge the service price on the basis of the marginal cost of service production, which is administratively feasible. In sum, the initial motivation which drove the study turns out to be correct. Moreover, the study suggests that the public sector should consider the efficiency question not only from the supply side but also from the demand side of the public services.

Subject Area

Urban planning|Area planning & development|Political science

Recommended Citation

Rhee, Hyok-Joo, "A study on the efficient provision of local public services" (1992). Dissertations available from ProQuest. AAI9227749.