6.Average University Selection Test (PSU) Score:

This is defined as the percentage of PSU scores equal to or greater than 450 points in municipal establishments. This score was defined, for the purpose of this research, under the assumption that each citizen who takes the University Selection Test (PSU) has a certain level of education and that he or she could potentially choose to improve that level. According to [25], it determined that the citizen participation variable, in relation with the educational level of the adult population, has a positive impact on the degree of city council efficiency. Along this same line are [23, 25, 26], which reinforce these results.

**277**

results [36, 37].

is relevant.

will be.

literature.

**3. Methodology**

a given product [24, 32].

*Efficiency of the City Councils Using Cross-Sectional Model: Challenges in Times of Change…*

The research that explain the efficiency of the city councils, usually focus and limit themselves on socioeconomic, demographic and fiscal factors. In this sense, the literature is not abundant and tends to be obsolete, above all, because the local dimension in countries like Chile has undergone various changes in the last decade,

The models that are reiterated in the theme of the efficiency of city councils also present a special interest in resources. For example, there are authors [27] that maintain that the material well-being and the quality of life of a person do not have a direct correlation, varying this relationship by the level of income of citizens, the satisfaction or dissatisfaction of basic needs, as well as other factors [28]. According to [29] the interrelation between needs, satisfaction and economic goods, is of a permanent and dialectical nature. This can be explained, on the one hand, because economic goods can affect the efficiency of satisfaction; on the other, they are

Therefore, taking into account that the municipalities are responsible for the administration of economic assets, obtained by the redistribution of resources, management has a direct impact on efficiency, as well as on factors that influence the quality of life in its set. Therefore, the planning and budget of each local reality

Different authors point out that, as Chile is analyzed from North to South, the indicators improve [30]. However, the most prominent indicators are located in the central area of the country. Meanwhile, [19, 25, 31] consider that the higher the population density of the commune, the more efficient the city council

These hypotheses will be tested by the proposed final model, to determine the behavior of the Chilean municipalities and if it is related to what is presented in the

The research and analysis of efficiency in city councils in Chile, evidenced in the literature, is usually carried out from microeconomic theory, which evaluates two

In fact, municipal efficiency is considered optimal when it reaches its maximum level of production, compared to certain inputs and the minimum level of inputs in

In order to build the database to be used to forecast the efficiency of city councils in Chile [38], the National Municipal Information System was consulted, together

In the case of Chile, the studies and methodology applied to the efficiency of the city councils are few and focused on resources, not addressing other aspects of

In relation to the methodology, the analysis was applied to 93 communes in Chile, incorporating a diverse sample of the country, both in its politicaladministrative and geographical configuration. In other ways, the study integrates communes from the northern, central and southern macro-zones of the national territory. A cross-sectional econometric regression model was developed to explain and predict the effect over the municipal efficiency measured by Quality of Life Index (QLI) [33–36]. This is validated by the assumptions of the residual before proceeding with the second objective, which is the estimation and interpretation of

*DOI: http://dx.doi.org/10.5772/intechopen.93655*

**2.6 Efficiency of Chilean city councils**

being culturally and productively diverse.

decisive in the generation and creation of these factors.

aspects of municipal efficiency: inputs and output.

importance and complexity for the economic reality.

*Efficiency of the City Councils Using Cross-Sectional Model: Challenges in Times of Change… DOI: http://dx.doi.org/10.5772/intechopen.93655*

## **2.6 Efficiency of Chilean city councils**

*Linear and Non-Linear Financial Econometrics - Theory and Practice*

have a negative effect in the city councils of Chile.

more than it can, it is exposed to financial vulnerability [23].

2.Permanent Own-Source Income (IPP) [21]:

3.Overcrowding:

4.Population Density:

5.Rate of Domestic Violence:

per km2

The FCM is the solidarity redistribution mechanism of own income in the municipalities of all Chile. In this regard, there is debate in political sectors of the country, about whether costs that are in line with resources would mean greater efficiency, since it would not translate into better provision of public services [19]. This is known in the literature as the "flypaper effect" [20], which could

This is the budget of a city council, composed of the following accounts of the budget classifier: territorial tax, municipal benefit vehicle permits, municipal benefit licenses, sanitation taxes, other duties, property rentals, driver's licenses and the like, fines and interests, concessions, aquaculture patents, mining patents and casinos. The probability that the inefficiency of public officials and local politicians increases, when there is a higher level of income that favors an increase in the fiscal capacity of the municipalities, is an aspect that the literature describes [22]. Meanwhile, the fiscal deficit could also have a negative impact on the efficiency of the city council as a variable of the IPP. If a municipality spends

This variable is the result of the absence of urban development, both in infrastructure and housing. It affects the minimum conditions of people, integrated into a commune or political-administrative and territorial space. For the purposes of the study, it represents the average level of overcrowding in households, expressed as a percentage. It is a "different type of factor that influences the efficiency of the city council" [24], since it is associated with the characteristics of local residents and how these citizens coexist with their vital environments.

Population density considers, for these purposes, the number of inhabitants

This is the rate of complaints of domestic violence reported per 100,000 inhabitants. According to studies on the subject, such violence ultimately harms an individual's health and quality of life without distinction of gender, race or ethnicity around the world. This is supported by UNICEF's definition of domestic

violence, which includes that it is an affront to the quality of life [26].

This is defined as the percentage of PSU scores equal to or greater than 450 points in municipal establishments. This score was defined, for the purpose of this research, under the assumption that each citizen who takes the University Selection Test (PSU) has a certain level of education and that he or she could potentially choose to improve that level. According to [25], it determined that the citizen participation variable, in relation with the educational level of the adult population, has a positive impact on the degree of city council efficiency. Along

6.Average University Selection Test (PSU) Score:

this same line are [23, 25, 26], which reinforce these results.

. It has been shown [25] that a smaller number of inhabitants per square kilometer can increase the average cost of supplying goods and services, so that a municipality could be more efficient if its population density were higher.

1.Municipal Common Fund (FCM):

**276**

The research that explain the efficiency of the city councils, usually focus and limit themselves on socioeconomic, demographic and fiscal factors. In this sense, the literature is not abundant and tends to be obsolete, above all, because the local dimension in countries like Chile has undergone various changes in the last decade, being culturally and productively diverse.

The models that are reiterated in the theme of the efficiency of city councils also present a special interest in resources. For example, there are authors [27] that maintain that the material well-being and the quality of life of a person do not have a direct correlation, varying this relationship by the level of income of citizens, the satisfaction or dissatisfaction of basic needs, as well as other factors [28]. According to [29] the interrelation between needs, satisfaction and economic goods, is of a permanent and dialectical nature. This can be explained, on the one hand, because economic goods can affect the efficiency of satisfaction; on the other, they are decisive in the generation and creation of these factors.

Therefore, taking into account that the municipalities are responsible for the administration of economic assets, obtained by the redistribution of resources, management has a direct impact on efficiency, as well as on factors that influence the quality of life in its set. Therefore, the planning and budget of each local reality is relevant.

Different authors point out that, as Chile is analyzed from North to South, the indicators improve [30]. However, the most prominent indicators are located in the central area of the country. Meanwhile, [19, 25, 31] consider that the higher the population density of the commune, the more efficient the city council will be.

These hypotheses will be tested by the proposed final model, to determine the behavior of the Chilean municipalities and if it is related to what is presented in the literature.
