Regions' Efficiency and Spatial Disparities in Tunisia

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Regions' Efficiency and Spatial Disparities in Tunisia Proc. of the Second Intl. Conf. on Advances in Management, Economics and Social Science - MES 2015 Copyright © Institute of Research Engineers and Doctors, USA .All rights reserved. ISBN: 978-1-63248-046-0 doi: 10.15224/ 978-1-63248-046-0-131 Regions‘ efficiency and spatial disparities in Tunisia LAMIA MOKADDEM1 Abstract These deprived regions accommodate only 30% of In post-revolution Tunisia, promoting balanced the Tunisian population and less than 8% of regional development represents one of the main enterprises. These regional disparities threaten objectives in the development program of the social stability and national unity. government. Therefore, economic efficiency is an The main issue of regional disparities problem essential condition to reduce region inequality. is concerning with the regional efficiency. The term The purpose of this article is to investigate regional efficiency and spatial dependence in Tunisia. We regional efficiency mentioned under this article is propose a two-stage approach, which involves: in the used to measure the region‘s ability to use its basic first place, applying data envelopment analysis (DEA) productive resources in an economic way, to sustain for the evaluation of efficiency across Tunisian economic growth and development. delegations in the year 2010, the year preceding the This article analyses the efficiency of 252 Tunisian Tunisian revolution; and, in the second place, using delegations2 for the year 2010, the year preceding spatial statistical techniques and spatial logistic the revolution. Paying particular attention to the regression to estimate the impact of spatial role played in this context by spatial interactions dependence on efficiency results. The findings show and geographical location. For this purpose, the regions ‘efficiency is driven by structure and spatial factors. efficiency analysis is conducted by using the well- known method of Data envelopment analysis and JEL Classification: R11, R15, O18, the spatial interactions are modeled using the Keywords: efficiency, data envelopment analysis, techniques of spatial econometrics. These regional disparities, exploratory spatial data analysis, techniques allow us to measure the extent to which spatial regression, Tunisia. the efficiency of one delegation depends upon that of its neighbors, or whether the allocation of regional resources has a significant impact on the I. Introduction efficiency of the targeted regions and on the one of their neighbors(Cliff and Ord, 1973, Anselin, The regional disparity in Tunisia is now a 1988). The study of spatial externalities is essential matter of serious concern. High levels of inequality to understanding the phenomena of agglomeration and regional disparities are at the core of the root of people , institutions, activities and its effect on problems that led to the Tunisian Revolution in regional efficiency. This paper employs spatial 2011.TheTunisia's interior and coastal regions don‘t analysis, particularly exploratory spatial data have the same access to basic public services such analysis (ESDA) and spatial Logistic regression, to as water services (99% in Tunis sand 54.6%in Sidi investigate regional efficiency of Tunisian Bouzid), sanitation (96%in Tunis, and 26.4% in delegation using cross-section data. Mednine), proximity to school and the availability of a health center. These inequalities between the regions are accentuated by the concentration of economic activities in the coastal region, with coastal area areas receiving 65% of public investment, hosting alm almost 90% of enterprises and attracting 95 % of foreign investment in companies. Conversely, the hinterlands are less served in terms of infrastructure and public service. 1 Lamia Mokaddem Associate Professor of Economics at Faculty of Economical and Management Sciences of Tunis, University of Tunis El Manar, Tunisia 2 As of 2014 there are in Tunisia 24 governorates (cities)which are divided into 264 delegations(as delegation is the principal division within the governorate ). 207 Proc. of the Second Intl. Conf. on Advances in Management, Economics and Social Science - MES 2015 Copyright © Institute of Research Engineers and Doctors, USA .All rights reserved. ISBN: 978-1-63248-046-0 doi: 10.15224/ 978-1-63248-046-0-131 helped to formulate the benchmarks for regional II. Evaluation of regions’ development. efficiency indicator using In this study we consider a Variable Returns to Scale (VRS) Data Envelopment Analysis (DEA) data envelopment analysis model and we use the output-oriented method of (DEA) Banker, Charnes and Cooper(1984). We assess the relative efficiency of individual Tunisian delegations for 2010, within each of the above- Data envelopment analysis method evaluation was mentioned twenty four governorates defined initiated by Charnes, Cooper and Rhodes (1978) according to the Tunisian nomenclature of and was extended by Banker, Charnes, Cooper territorial units having already considered the (1984) by including variable returnsto scale. DEA desegregation level. is a non-parametric method that uses linear programming techniques to analyze consumed inputs and produced outputs of the decision making A. Data units (DMUs) and builds an efficient production frontier based on best practices. The efficiency of To use the DEA approach in order to obtain each decision making unit is then measured in efficiency measures, we need data about the relation to this frontier. This relative efficiency is delegation‘s inputs and outputs. The selection of calculated based on the ratio of the weighted sum of inputs and outputs is based on the available all outputs and the weighted sum of all inputs. information and indicators. In Table 1, we present Several regional applications of DEA have the main variables taken into consideration in emerged. Charnes et al. (1989) applied this method calculating the DEA. to evaluate economic performance of 28 Chinese The first goal indicator to be maximized is the cities in 1983 and 1984. per capita income growth. However, no local Tong (1996, 1997) used DEA to investigate the income measures used by local governments were changes in production efficiency in 29 Chinese available. To overcome this problem, we selected provinces. Bernard and Cantner (1997) applied the human capital indicators registered in delegation empirical DEA to selected regions of the French accounts for the year 2010 as a measure for the economy from 1978-89. In a recent study, Maudos, delegation‘s economic growth; a better Pastor and Serrano (2000) analyzed the relationship measurement tool would be that of productivity between efficiency and production structure in growth. Since we do not observe outputs, it is hard Spain 1964-93. Ilkka Susiluoto and Heikki A. to measure productivity (Glaeser E, Kallal H.D Loikkanen (2001) studied inter-regional and inter- Scheinkman, J.A and Shleifer.A (1992)). For temporal differences in efficiency (or productivity) Glaeser E. L and Saiz A(2003) education share is a in Finnish regions during the period 1988-1999. particularly powerful predictor of income growth. IlkkaSusiluoto (2003) examined efficiency rates for The authors find that cities with higher skills are the 83 Finnish and 81 Swedish regions during the growing because they are becoming more period 1988-1999. Axel Schaffer, Léopold Simar economically productive (compared to cities where and Jan Rauland (2010) identified and examined there are less skills). They say their analysis implies efficiency in 439 German regions. They show that that "city growth can be promoted with strategies the regions‘ efficiency is driven by an arguably that increase the level of local human capital." They spatial and a non-spatial structural factor. Soo Nah assert that economic revitalization efforts should and Hong YulJeong (2010) measured the efficiency concentrate on "basic services, amenities, and of the Korean and Chinese large cities and then quality public schools that will lure the most explored the implications on the two countries‘ skilled," and on boosting the education level of efficiency in these cities. Danijela Rabar (2013) local residents. Here, the share of students with evaluated regional efficiency of Croatian counties a bachelor degree (HUM) is used as a measure of in three-year period (2005-2007) using VRS data quality of education and as indicator of per capita envelopment analysis model. The study identifies income growth. The second goal indicator to be efficient counties as benchmark members and maximized is living standards (CONS) measured by inefficient counties that are analyzed in detail to consumption per capita. The third goal indicator to determine the sources of inefficiency. be maximized is the share of people who live in Finally,Giedrė Dzemydaitė, Birutė Galinienė families with purchasing power parity (PPP) equal (2013) applied DEA analysis to evaluate to $1 per day. The DEA variable to be maximized, Lithuanian regions efficiency.The results identified POV, is thus defined as 100% minus extreme four efficient regions (Vilnius, Klaipėda, Utena and poverty rates. The fourth goal indicator to be Marijampolė) and five inefficient regions ( Alytus, maximized is the employability rate (EMP); hence, Tauragė, Kaunas, Šiauliai, Panevėžys). The study a DEA variable to be maximized, EMP, is defined as 100% minus TU; that is, the unemployment rate. 208 Proc. of the Second Intl. Conf. on Advances in Management, Economics and Social Science - MES 2015 Copyright © Institute of Research Engineers and Doctors,
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