Administrative intensity in local government: Do administrative scale economies exist in New South Wales local government?

A vast empirical literature has investigated economies of scale in local service provision, especially in water and waste management. By contrast, the question of scale economies in local government administration has attracted much less attention, especially in Australian local government. To address this gap in the Australian empirical literature, we investigated administrative scale economies in the New South Wales (NSW) local government system for rural, regional, and urban local authorities over the period2014/15 to 2017/18. We find that total municipal population and municipal staff exhibit a U-shaped relationship with the total administration costs of urban councils in NSW. However, we find no economies of scale for administrative intensity in rural and regional councils in NSW.