This thesis examines the issue of the efficient use of public funds at the municipal level, which represents an important aspect of public finance management and directly impacts residents’ quality of life. As the basic units of local self-government, municipalities provide numerous public services, such as infrastructure, preschool education, social, and municipal services, while their financial resources are limited.
In a theoretical framework, efficiency is defined as the ratio between resources invested and results achieved, with the goal of achieving the greatest possible impact with given resources or the same results at lower costs. It is important to distinguish between efficiency and effectiveness, as the former measures the economy of converting resources into services, while the latter measures the achievement of broader social goals. The empirical part will employ the Data Envelopment Analysis (DEA) method, which allows for the measurement of the relative technical efficiency of is an efficiency index that indicates the extent to which municipalities make optimal use of available resources. The results of the study showed that there are differences in the relative technical efficiency of public spending among municipalities in the Gorenjska statistical region. The DEA analysis revealed that 13 of the 18 municipalities analyzed achieved full efficiency, while five municipalities were assessed as inefficient. Regression analysis did not confirm a statistically significant impact of population density, unemployment rate, and the share of investment expenditures on municipal efficiency, suggesting that other factors also influence efficiency.
The main contribution of this study lies in filling a gap in empirical research on the efficiency of Slovenian municipalities and in applying a methodologically sound approach for the quantitative evaluation of public spending. The results of the study will serve as a basis for decision-makers to improve the management of municipal budgets, rationalize expenditures, and formulate more effective public policies at the local level.
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