Performance Appraisal of Iranian Municipalities by DEA Method

Efficiency is one of economic concepts, which its enhancement has always been at the focus of politics and economy practitioners in order to improve standard of living, prosperity, peace, and human security; so that all economic schools and communities relatively emphasize this notion and suggest proper political advices to increase efficiency of various factors. Nowadays, regarding the qualitative and quantitative development of cities, the role of municipalities in urban management increasingly highlighted; thus, measuring the efficiency of municipalities is necessary for planning and better performance of municipalities. The present research tried to measure the performance of municipalities exceeding one hundred people through using DEA method and constant return to output-based scale (CCR-O) and variable return to output-based scale (BCC-O) in 2010; regarding municipalities’ relatively stable revenues, permanent revenues, semi-stable and totally unstable revenues as two inputs; and costs of urban and administrative services, as well as urban construction (including 1. Improved urban traffic; 2. Improved urban environment; and 3. Establishing entertainment and income-generating facilities) as five outputs. Obtained results indicate that 16 of 44 understudy municipalities i.e. 36.36% and 17 municipalities (38.64%) are efficient in CCR and BCC methods, respectively. The mean efficiency of the first method is 86.97% and 27.87% for the second method. Moreover, once municipalities totally ranked and an efficient virtual model introduced for inefficient municipalities, the main cause of inefficiency assigned to their extreme deviation from sufficient municipalities in costs of building cultural and sport places, which requires the highest attention at change average of 240%.