Decentralisation and Efficiency in Municipal Sports Services: Expenditure vs. Cost

Abstract

The choice of service delivery form (direct management, agencification, or indirect management) is one of the most important decisions in the strategic planning of sports systems. However, its influence on efficiency has not been adequately studied in the scientific literature. The aim of this paper is to analyse the service delivery form of sports services on cost efficiency and to study the implications the use of different inputs has for the analysis of cost efficiency in sports services. To answer the objectives of the study, the analysis is divided into three stages. First, the cost efficiency of municipal sports services is estimated through the partial order-m robust frontiers using two different measures of cost (budgetary expenditures and effective cost). Then, the two cost-efficiency estimations were compared by the Li test to analyse the existence of significant differences. Finally, cost efficiency was regressed on several environmental factors by a bootstrapped truncated regression. The results show that there is no significant relationship between the different forms of management when the effective cost is included as an input. However, there is a significant relationship when the budgetary expenditure is specified as input; in this case, direct municipal management is the delivery form with the highest efficiency.