This paper uses the concept of the stochastic frontier model to measure the efficiency of local governments in Taiwan. We modify Brueckner's (1979) voter's bid-rent model to identify the determinants of the market value of land. Controlling for the determinants of land value that a local government cannot change, we measure inefficiency in the local government based upon a comparison of the market value and the highest attainable value of land. Our empirical results show that there exist significant differences of efficiency levels in providing local public goods of local governments. The unweighted average of efficiency levels declines with time during the sample period. Besides, the efficiency level of a local government is significantly positively correlated to the share of civil servant holding a college or higher degree, and the ratio of the number of civil servant to population; meanwhile, it is negatively correlated to the local government's grant dependency ratio. Therefore, encouraging civil servant to go for retraining, hiring more civil servant, and enhancing the own source revenue are measures to increase the efficiency level of a local government.