Efficiency gains in public service delivery through information technology in municipalities |
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| Institution: | 1. Nyenrode Business University, Department of Accounting, Auditing and Control, PO Box 130, 3620 AC Breukelen, Netherlands;2. SEO Amsterdam, Netherlands;3. Department of Economics and Management, Tilburg University, Tilburg, Netherlands;4. Nyenrode Business University, Department of Accounting, Auditing and Control, Breukelen, Netherlands;5. Department of Spatial Economics, Free University, Amsterdam, Netherlands;1. Department of Organization, University of Zagreb, Faculty of Organization and Informatics Vara?din, Pavlinska 2, 42 000 Vara?din, Croatia;2. College of Arts and Sciences, Carlow University, 3333 Fifth Avenue, Pittsburgh, PA 15213, United States;1. Departamento de Computação, Universidade Federal Rural de Pernambuco, Recife, Brazil;2. Centro de Informática, Universidade Federal de Pernambuco, Recife, Brazil;1. FSA ULaval, Université Laval, Pavillon Palasis-Prince, 2325 rue de la Terrasse, Quebec, QC G1V 0A6, Canada;1. School of Law, University of Canterbury, Christchurch, New Zealand;2. Soul Machines, Auckland, New Zealand;3. Department of Computer Science, University of Kentucky, Lexington, USA;1. Mid Sweden University, Faculty of Science, Technology and Media, Department of Information systems and Technology, Forum for Digitalization, Holmgatan 10, Sundsvall 851 70, Sweden.;2. University of South Africa, Department of Information Science, Preller Street, Muckleneuk Ridge, Pretoria. |
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| Abstract: | According to public management theory and existing research on information technology (IT) value creation in the public sector, governments should actively strive to generate greater public value with IT, and the capability of public service delivery is at the center of this public value. In this study, we focus on efficiency gains in public service delivery through IT in municipal governments. First, we answer the research question: How much euro efficiency is gained in public service delivery by €1 increase in share of IT costs relative to total municipal costs? Second, we focus on contextual effects of these efficiency gains, by analyzing the effects of workforce mean age, workforce age dispersion and training costs. We use data from Dutch municipalities and study these efficiency gains in the period 2014–2018. Our empirical strategy encompasses a two-step procedure combining a stochastic frontier model and ordinary least squares models. Our analysis suggests that share of IT costs relative to total municipal costs (in short: share of IT costs) can explain efficiency in public service delivery by municipalities. Our results indicate that an increase of €1 in favour of share of IT costs leads to a net cost efficiency gain of €1.08. We also show that this effect in efficiency gains diminishes with a higher share of IT costs. Our results also show that workforce mean age, workforce age dispersion and training costs do not influence the relation between share of IT costs and efficiency. |
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