9 second stage the relevance of size for the level of efficiency, they conclude that sized does in fact not matter but that autonomy hurts efficieny levels.

Covering a longer period for the same set of ports, 1985-1997, and focusing on technical efficiency, Bafios, Coto and Rodriguez (1999) conclude that there is an overcapitalization of the sector and that the Spanish ports are not minimizing costs, hence reinforcing the attractiveness of the distance function-although both the cost and the distance function lead to the same policy conclusions. Relying on DEA, Tongzon (2001) confirms the relevance of the degree of capital and labor utilization in the assessment of efficiency. Also relying on DEA, Martinez et al. (1999) show that a three level grouping of the Spanish ports (large, medium, and small) for the 93-97 period refines the earlier results. In recent years, the largest ports have been the most efficient and exhibited the largest efficiency gains. The smallest ports on the other hand have been the victim of a progressive decline in their performance and medium ports seem to catch up. The main additional policy contribution of the Roll and Hayuth (1993) paper is to confirm that location matters, as revealed by a different sample.

Ignoring momentarily the doubts that the Battese-Coelli critique could cast on the results, an overall glance at the last column is however useful to get a rough order of magnitude of the levels of efficiency that can be expected for various types of combinations of models and output variables in sector. It suggests first that the efficiency of the sector is likely to be stronger in terms of production variables than in terms of cost variables, confirming that the local monopoly power many ports have is sufficient to generate rent which regulators are failing to redistribute to users. It also shows that the standard policy concerns such as overcapitalization, size or autonomy can be relevant but not always in the expected direction.

Overall, in addition to these fairly generic results, the overview provides some insights on what seems to be the minimum information requirements needed to implement a comparative performance evaluation in the port sector. The multiple output nature of the port business yields a large variety of indicators to pick from which includes non transport related activities such as the rental of space for any purpose. If allocative efficiency is important a cost function must be estimated. The challenge of separating costs between variable and total is in itself significant but modest in comparison to the challenge of assessing the opportunity cost of capital in many developing countries. This may explain why the production function will probably have to be the preferred option for efficiency measures for developing countries. The main challenge for labor inputs is obtaining a disaggregation distinguishing white and blue collars and/or permanent and temporary employees. Capital inputs will generally be the most difficult one to assess, in particular in the context of a cost function. The physical inputs or their monetary valuations will often provide good approximations. Intermediate inputs tends to be a residual category. Other factors include anything that the analyst thinks may be relevant to the port activity level. This includes of course its ownership (public vs private) in international comparisons and in some countries. It can also include market size (in Mexico, the East and West coast markets are different) and the port size, if the data available does not allow to build in economies of scale carefully enough. Finally, a time trend will often have to be tested in most of these models to pick up any technological change.

# 4. Measuring **the efficiency effects of Mexico's port reform**