Impacts on efficiency of merging the Swedish district courts

Judicial courts form a stringent example of public services using partially sticky inputs and outputs with heterogeneous quality. Notwithstanding, governments internationally are striving to improve the efficiency of and diminish the budget spent on court systems. Frontier methods such as data envelopment analysis are sometimes used in investigations of structural changes in the form of mergers. This essay reviews the methods used to evaluate the ex post efficiency of horizontal mergers. Identification of impacts is difficult. Therefore, three analytical frameworks are applied: (1) a technical efficiency comparison over time, (2) a metafrontier approach among mergers and non-mergers, and (3) a conditional difference-in-differences approach where non-merged twins of the actual mergers are identified by matching. In addition, both time heterogeneity and sources of efficiency change are examined ex post. The method is applied to evaluate the impact on efficiency of merging the Swedish district courts from 95 to 48 between 2000 and 2009. Whereas the stated ambition for the mergers was to improve efficiency, no structured ex post analysis has been done. Swedish courts are shown to improve efficiency from merging. In addition to the particular application, this work may inform a more general discussion on public service efficiency measurement under structural changes, and their limits and potential.