The paper applies some of the latest advances of probabilistic approach to account directly for unobserved heterogeneity in the estimation of efficiency measures of performance for a sample of 154 Spanish municipalities over the period 2005–2012. Specifically, we develop time-dependent nonparametric conditional measures considering unobserved factors like local government strategies or institutional arrangements that might affect local governments performance. Moreover, we apply a second-stage approach to estimate measures of pure or managerial efficiency, which are an approximation of the unexplained part of the conditional measures after removing the effect of those latent factors. The empirical results suggest that the dynamic effect of those unobserved conditions play an important role as influencing efficiency distribution and the production set. Likewise, we identify that this influence has been more emphatic towards the core of the economic and financial crisis period. In terms of policy implications, our empirical findings suggest that Spanish municipalities could not cope and adapt their administration strategies properly and in time with the ongoing volatile crisis environment.

中文翻译：

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在存在未观察到的异质性的情况下评估市政效率

本文采用概率方法的一些最新进展，直接评估了2005-2012年间154个西班牙城市的绩效效率评估指标中未观察到的异质性。具体来说，我们在考虑可能会影响地方政府绩效的地方政府战略或体制安排等未观察到的因素的基础上，开发出与时间相关的非参数条件措施。此外，我们采用第二阶段方法来估计纯效率或管理效率的度量，这是除去那些潜在因素的影响后，条件度量中无法解释的部分的近似值。实证结果表明，那些未观察到的条件的动态影响在影响效率分布和生产集时起着重要作用。同样，我们发现这种影响在经济和金融危机时期的核心方面更为突出。就政策影响而言，我们的经验发现表明，西班牙市政当局无法在持续动荡的危机环境下及时，适当地应对和调整其管理策略。