Efficiency of local public spending in Cameroon: Does population size matter?

Abstract

Promoting decentralization is currently high on the global agenda. To date, the existing literature in the African context, and more specifically in Cameroon, has not established a link between the size of local authorities and the efficiency of their infrastructure spending. This study therefore attempts to fill this gap in the literature by empirically examining the effect of population size on the efficiency of local public spending in Cameroon. Using the two-stage Data Envelopment Analysis model on a sample of 100 communes for the period 2017–2020 to estimate composite efficiency scores and the censored Tobit model to determine the effect of population size on the efficiency of local public spending, the results show that population size and density positively and very significantly affect the efficiency of local public spending. In light of these results, we recommend that the state make population size the main allocation key for transfers and subsidies to local authorities and that communes organize themselves into inter-municipalities to benefit from economies of scale and curb spillover effects.