Measuring the administrative efficiency of EU Leader Development Programmes with DEA: An application in the local implementation of Greek Leader+

Nikos Pettas1 and Ioannis Giannikos Department of Business Administration, University of Patras, Greece Abstract LEADER constitutes one of the main instruments of intervention in the rural development domain. The LEADER approach is based around local action groups (LAGs) developing and implementing a Local Development Strategy in a coherent geographical rural area, via a locally delegated, bottom up approach. The evaluation of the LEADER+ program has received increased attention by academics and practitioners alike. This evaluation concerns two levels of administration. On the one hand, funding authorities such as the EU or central governments need to verify the achievement of minimum economic standards and to control local action groups (LAGs) involved in the implementation of local development plans. On the other hand, LAGs need to demonstrate the added value of the work they carry out and to identify best practices that may be adopted. Data Envelopment Analysis (DEA) appears to be particularly suited to this twofold evaluation. This paper applies a DEA model for the assessment of administrative (or operational) efficiency of 39 LAGs implementing the Greek LEADER+ Programme. The LAGs are considered entities transforming public resources to services related to the LEADER+ Programme. The model considers inputs that reflect all the resources used and outputs that capture all the services offered by each LAG in the implementation of LEADER. Additional specifications of the model are applied, concerning the number of outputs in accordance with the hierarchical levels of the programmes structure. Through the application of the model, the type of returns to scale on individual LAGs efficiency is assessed and their optimum size is determined. The model also includes proportional constraints which reflect the balanced budget of LEADER, and restrict the proportion of the total input/output of any given LAG. The LAGs were ranked in terms of their efficiency and super-efficiency. Realistic absorption targets have been set for each inefficient LAG, as well as for the entire national programme. Finally, the effects of local external factors on the inefficiencies of LAGs were also examined. The results of this analysis may be used at the level of LAGs in order to determine peers and identify best practices but also at the level of the Hellenic Ministry of Rural Development and Food as measurements of the LAGss performance. Key words: DEA, LEADER, Rural development, efficiency

Address for correspondence: Nikos Pettas, Department of Business Administration, University of Patras, Patras 26500, Greece, npettas@upatras.gr