The study tries to identify the existence of spatial spillover and spatial heterogeneity in local government efficiency. This is done by using information from a newly constructed database covering 341 municipalities from the Emilia-Romagna region (Italiy).

The methodology is based on a two-step procedure. In the first step, cost efficiency scores are estimated by means of non-parametric Data Envelopment Analysis (DEA). In the second step, an Exploratory Spatial Data Analysis (ESDA), which is based on Moran’s I statistic, is applied to the efficiency scores computed in the previous step. Signature: Descentra.-an econ. 120