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Economics of Governance

Erschienen in:

27.10.2018 | Original Paper

Economies of scale and governance of library systems: evidence from West Virginia

verfasst von: Amir B. Ferreira Neto, Joshua C. Hall

Erschienen in: Economics of Governance | Ausgabe 3/2019

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Abstract

Public libraries are a billion dollar industry in the United States. We explore the institutional determinants of public library technical efficiency using data from West Virginia. We first document considerable cross-district variation in library efficiency. While the average library district in our sample is between 81 and 90% efficient depending upon the year and measure, there are many district-years that are under 50%. We then explain our technical efficiency measures as a function of institutional variables reflecting the type of district and sources of funding. We find consistent evidence that urban libraries are more inefficient, perhaps because they are too small to achieve sufficient economies-of-scale in production of library services. In addition, we find revenue from local sources is associated with reduced efficiency, contrary to what would be predicted by local public goods producer theory.

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One reason to look within states, like we do with West Virginia, is that technical efficiency is a relative measure and the institutional constraints and funding methods vary so much across political jurisdictions that comparing Hawaii to West Virginia can be problematic.

We also calculate the TE using a constant return to scale assumption, and use it to identify the libraries operating under increasing returns to scale and the scale efficiency. It is interesting that no library operates under decreasing returns to scale.

Library programs are services provided to its patrons. For instance, children’s programs usually focus on education-related programs such as reading groups and activities or science programs, and entertainment programs like crafting and gaming programs. Adult programs, on the other hand, often focus on book activities, development of skills such as coding, and job search services. For more detail on these programs visit http://www.ala.org/alsc/kickstart and http://www.ala.org/tools/atoz/adultservices/adult_lib_svcs.

West Virginia Library Commission (2013) lists seven different types of public library governing authorities. We count anything that is not a county commission or a municipality as multi-jurisdictional. For example, the six joint County/Municipality library systems are counted as multi-jurisdictional, as are the nine Board of Education/County/Municipality governed library systems.

Special laws are laws initiated locally and passed by the Legislature. These laws set aside part of the tax dollars from local government (Board of Education, County or City) to public libraries. Some of special laws have been in place since 1930s and the most recent is from 1994. However, since 2013 it is no longer a mandatory that Board of Educations to continue providing funding to public libraries. For more on these special laws, see West Virginia Library Commission (2013).

All city libraries are, by definition, smaller in area—but maybe not population—than county or multi-jurisdictional libraries.

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Titel: Economies of scale and governance of library systems: evidence from West Virginia
verfasst von: Amir B. Ferreira Neto
Joshua C. Hall
Publikationsdatum: 27.10.2018
Verlag: Springer Berlin Heidelberg
Erschienen in: Economics of Governance / Ausgabe 3/2019
Print ISSN: 1435-6104
Elektronische ISSN: 1435-8131
DOI: https://doi.org/10.1007/s10101-018-0215-2