Quality of Government and Living Standards
It is generally acknowledged that a government's output is difficult to define and its value is hard to measure. The practical solution adopted by national accounts systems is to equate output value to input costs, but well-documented ineffici...
| Main Authors: | , |
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| Format: | Brief |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/09/16750755/quality-government-living-standards http://hdl.handle.net/10986/17093 |
| Summary: | It is generally acknowledged that a
government's output is difficult to define and its
value is hard to measure. The practical solution adopted by
national accounts systems is to equate output value to input
costs, but well-documented inefficiencies in government
activities make this approximation questionable. One
solution is to purge from gross domestic product (GDP) the
fraction of government inputs that is wasted. This note
illustrates such a correction, computing corrected per
capita GDP on the basis of two studies that estimate
efficiency scores for several dimensions of government
activities. Results show that the correction could be
significant and reorder the rankings of living standards. |
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