Efficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach
Government 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 meas...
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| Format: | Policy Research Working Paper |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2005/06/5863405/efficiency-public-spending-developing-countries-efficiency-frontier-approach http://hdl.handle.net/10986/8325 |
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okr-10986-83252021-04-23T14:02:42Z Efficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach Herrera, Santiago Pang, Gaobo ADDITION ADULT LITERACY ALLOCATIVE EFFICIENCY BUDGETING CONSTANT RETURNS TO SCALE DEBT DECISION MAKING DEVELOPED COUNTRIES DIPHTHERIA ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ELASTICITY OF DEMAND ENROLLMENT ENROLLMENT RATES EXPENDITURES FEASIBILITY HEALTH CARE HEALTH INDICATORS HEALTH OUTCOMES HEALTH SERVICES HOSPITALS IMMUNIZATION INCOME INCOME DISTRIBUTION INCOME INEQUALITY INPUT PRICES INPUT USE INTERNATIONAL COMPARISONS LEARNING LEARNING ACHIEVEMENT LIFE EXPECTANCY LITERACY LITERATURE MARGINAL PRODUCTIVITY MATHEMATICAL PROGRAMMING MATHEMATICS MEASLES MIDDLE EASTERN NER NORTH AFRICA OIL PRIMARY SCHOOL PRIMARY SCHOOL ENROLLMENT PRODUCERS PRODUCTION TECHNOLOGY PRODUCTIVITY PUBLIC EXPENDITURE PUBLIC SECTOR READING RETURNS TO SCALE SCHOOLS TEACHERS TEACHING TERTIARY EDUCATION WAGES YOUTH Government 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. 2012-06-18T19:19:18Z 2012-06-18T19:19:18Z 2005-06 http://documents.worldbank.org/curated/en/2005/06/5863405/efficiency-public-spending-developing-countries-efficiency-frontier-approach http://hdl.handle.net/10986/8325 English Policy Research Working Paper; No. 3645 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
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Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ADDITION ADULT LITERACY ALLOCATIVE EFFICIENCY BUDGETING CONSTANT RETURNS TO SCALE DEBT DECISION MAKING DEVELOPED COUNTRIES DIPHTHERIA ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ELASTICITY OF DEMAND ENROLLMENT ENROLLMENT RATES EXPENDITURES FEASIBILITY HEALTH CARE HEALTH INDICATORS HEALTH OUTCOMES HEALTH SERVICES HOSPITALS IMMUNIZATION INCOME INCOME DISTRIBUTION INCOME INEQUALITY INPUT PRICES INPUT USE INTERNATIONAL COMPARISONS LEARNING LEARNING ACHIEVEMENT LIFE EXPECTANCY LITERACY LITERATURE MARGINAL PRODUCTIVITY MATHEMATICAL PROGRAMMING MATHEMATICS MEASLES MIDDLE EASTERN NER NORTH AFRICA OIL PRIMARY SCHOOL PRIMARY SCHOOL ENROLLMENT PRODUCERS PRODUCTION TECHNOLOGY PRODUCTIVITY PUBLIC EXPENDITURE PUBLIC SECTOR READING RETURNS TO SCALE SCHOOLS TEACHERS TEACHING TERTIARY EDUCATION WAGES YOUTH |
| spellingShingle |
ADDITION ADULT LITERACY ALLOCATIVE EFFICIENCY BUDGETING CONSTANT RETURNS TO SCALE DEBT DECISION MAKING DEVELOPED COUNTRIES DIPHTHERIA ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ELASTICITY OF DEMAND ENROLLMENT ENROLLMENT RATES EXPENDITURES FEASIBILITY HEALTH CARE HEALTH INDICATORS HEALTH OUTCOMES HEALTH SERVICES HOSPITALS IMMUNIZATION INCOME INCOME DISTRIBUTION INCOME INEQUALITY INPUT PRICES INPUT USE INTERNATIONAL COMPARISONS LEARNING LEARNING ACHIEVEMENT LIFE EXPECTANCY LITERACY LITERATURE MARGINAL PRODUCTIVITY MATHEMATICAL PROGRAMMING MATHEMATICS MEASLES MIDDLE EASTERN NER NORTH AFRICA OIL PRIMARY SCHOOL PRIMARY SCHOOL ENROLLMENT PRODUCERS PRODUCTION TECHNOLOGY PRODUCTIVITY PUBLIC EXPENDITURE PUBLIC SECTOR READING RETURNS TO SCALE SCHOOLS TEACHERS TEACHING TERTIARY EDUCATION WAGES YOUTH Herrera, Santiago Pang, Gaobo Efficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach |
| relation |
Policy Research Working Paper; No. 3645 |
| description |
Government 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. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Herrera, Santiago Pang, Gaobo |
| author_facet |
Herrera, Santiago Pang, Gaobo |
| author_sort |
Herrera, Santiago |
| title |
Efficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach |
| title_short |
Efficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach |
| title_full |
Efficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach |
| title_fullStr |
Efficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach |
| title_full_unstemmed |
Efficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach |
| title_sort |
efficiency of public spending in developing countries : an efficiency frontier approach |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2005/06/5863405/efficiency-public-spending-developing-countries-efficiency-frontier-approach http://hdl.handle.net/10986/8325 |
| _version_ |
1764407623832043520 |