Working Paper
The Efficiency of States and Cities

In this study an attempt has been made to assess the potential of land as a municipal financing tool in four Indian cities, to enable better public service delivery and attainment of the MDGs. The institutional arrangements for land use are fragmented in India’s cities between the urban development authorities, which are state agencies, and the cities. To determine whether or not transfer of revenues from land to cities from the para-statal entities is justified, stochastic frontier analysis is used to determine the efficiency of Indian cities and the Indian states. The efficiency of service provision is examined taking the case of roads.