Public efficiency in Tokyo's metropolitan local governments: the role of asset utilization and budgeting

This paper examines the efficiency of Tokyo municipalities and also the determinants of relative technical efficiency. Data envelopment analysis (DEA) was employed to measure relative technical efficiency and second stage regression was employed to measure the association of various accounting factors. The results of this unique study suggest that public efficiency has declined since the introduction of accrual accounting in 2008, due both to under-utilized asset management, as well as a mismatch between traditional cash budgeting and accruals accounting respectively.