Efficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach

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dc.creatorHerrera, Santiago
dc.creatorPang, Gaobo
dc.date2012-06-18T19:19:18Z
dc.date2012-06-18T19:19:18Z
dc.date2005-06
dc.date.accessioned2026-07-01T01:19:27Z
dc.descriptionGovernment spending in developing countries typically account for between 15 and 30 percent of GDP. Hence, small changes in the efficiency of public spending could have a major impact on GDP and on the attainment of the government's objectives. The first challenge that stakeholders face is measuring efficiency. This paper attempts such quantification and has two major parts. The first part estimates efficiency as the distance between observed input-output combinations and an efficiency frontier (defined as the maximum attainable output for a given level of inputs). This frontier is estimated for several health and education output indicators by means of the Free Disposable Hull (FDH) and Data Envelopment Analysis (DEA) techniques. Both input-inefficiency (excess input consumption to achieve a level of output) and output-inefficiency (output shortfall for a given level of inputs) are scored in a sample of 140 countries using data from 1996 to 2002. The second part of the paper seeks to verify empirical regularities of the cross-country variation in efficiency. Results show that countries with higher expenditure levels register lower efficiency scores, as well as countries where the wage bill is a larger share of the government's budget. Similarly, countries with higher ratios of public to private financing of the service provision score lower efficiency, as do countries plagued by the HIV/AIDS epidemic and those with higher income inequality. Countries with higher aid-dependency ratios also tend to score lower in efficiency, probably due to the volatility of this type of funding that impedes medium term planning and budgeting. Though no causality may be inferred from this exercise, it points at different factors to understand why some countries might need more resources than others to achieve similar educational and health outcomes.
dc.formatapplication/pdf
dc.formattext/plain
dc.identifierhttp://documents.worldbank.org/curated/en/2005/06/5863405/efficiency-public-spending-developing-countries-efficiency-frontier-approach
dc.identifierhttps://hdl.handle.net/10986/8325
dc.identifierhttps://doi.org/10.1596/1813-9450-3645
dc.identifier.urihttp://hdl.handle.net/123456789/417054
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper; No. 3645
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo/
dc.rightsWorld Bank
dc.subjectADDITION
dc.subjectADULT LITERACY
dc.subjectALLOCATIVE EFFICIENCY
dc.subjectBUDGETING
dc.subjectCONSTANT RETURNS TO SCALE
dc.subjectDEBT
dc.subjectDECISION MAKING
dc.subjectDEVELOPED COUNTRIES
dc.subjectDIPHTHERIA
dc.subjectECONOMIC ACTIVITY
dc.subjectECONOMIC DEVELOPMENT
dc.subjectELASTICITY OF DEMAND
dc.subjectENROLLMENT
dc.subjectENROLLMENT RATES
dc.subjectEXPENDITURES
dc.subjectFEASIBILITY
dc.subjectHEALTH CARE
dc.subjectHEALTH INDICATORS
dc.subjectHEALTH OUTCOMES
dc.subjectHEALTH SERVICES
dc.subjectHOSPITALS
dc.subjectIMMUNIZATION
dc.subjectINCOME
dc.subjectINCOME DISTRIBUTION
dc.subjectINCOME INEQUALITY
dc.subjectINPUT PRICES
dc.subjectINPUT USE
dc.subjectINTERNATIONAL COMPARISONS
dc.subjectLEARNING
dc.subjectLEARNING ACHIEVEMENT
dc.subjectLIFE EXPECTANCY
dc.subjectLITERACY
dc.subjectLITERATURE
dc.subjectMARGINAL PRODUCTIVITY
dc.subjectMATHEMATICAL PROGRAMMING
dc.subjectMATHEMATICS
dc.subjectMEASLES
dc.subjectMIDDLE EASTERN
dc.subjectNER
dc.subjectNORTH AFRICA
dc.subjectOIL
dc.subjectPRIMARY SCHOOL
dc.subjectPRIMARY SCHOOL ENROLLMENT
dc.subjectPRODUCERS
dc.subjectPRODUCTION TECHNOLOGY
dc.subjectPRODUCTIVITY
dc.subjectPUBLIC EXPENDITURE
dc.subjectPUBLIC SECTOR
dc.subjectREADING
dc.subjectRETURNS TO SCALE
dc.subjectSCHOOLS
dc.subjectTEACHERS
dc.subjectTEACHING
dc.subjectTERTIARY EDUCATION
dc.subjectWAGES
dc.subjectYOUTH
dc.titleEfficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach

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