Evaluating the Efficiency of Public Spending on Tourism as a Driver of Institutional Sustainability: Evidence from Southern Italy’s Municipalities

Tourism is a key driver of regional economies, but concerns are often raised about the effectiveness with which public resources are managed and translated into tangible outcomes. Despite its importance, research on the efficiency of public spending on tourism remains scarce and mostly confined to national scales. Therefore, this study examines how Apulian municipalities (Italy) convert public tourism expenditure into measurable tourism results, providing new evidence on the efficiency of local governance in this sector. The analysis applies a two-step econometric framework combining Stochastic Frontier Analysis (SFA) and Multiple Linear Regression to data from 247 municipalities over the period from 2020 to 2023. The results reveal generally low average efficiency levels, with only a few coastal destinations achieving high performance. The regression analysis identified key structural and territorial drivers of efficiency, including accommodation capacity, cultural production, coastal and environmental quality, and the presence of agritourism and campsites. The findings suggest that efficiency depends more on the ability of local administrations to coordinate tourism, cultural, and environmental policies than on the amount of spending. Overall, the study provides empirical evidence that an efficient allocation of tourism funds is crucial for achieving long-term sustainability goals, offering practical insights for designing more effective tourism policies.