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

Show simple item record

collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Herrera, Santiago
dc.contributor.author
Pang, Gaobo
dc.date.accessioned
2012-06-18T19:19:18Z
dc.date.available
2012-06-18T19:19:18Z
dc.date.issued
2005-06
dc.date.lastModified
2021-04-23T14:02:42Z
dc.description.abstract
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.
en
dc.identifier
http://documents.worldbank.org/curated/en/2005/06/5863405/efficiency-public-spending-developing-countries-efficiency-frontier-approach
dc.identifier.uri
http://hdl.handle.net/10986/8325
dc.language
English
dc.publisher
World Bank, Washington, DC
dc.relation.ispartofseries
Policy Research Working Paper; No. 3645
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
dc.subject
ADDITION
dc.subject
ADULT LITERACY
dc.subject
ALLOCATIVE EFFICIENCY
dc.subject
BUDGETING
dc.subject
CONSTANT RETURNS TO SCALE
dc.subject
DEBT
dc.subject
DECISION MAKING
dc.subject
DEVELOPED COUNTRIES
dc.subject
DIPHTHERIA
dc.subject
ECONOMIC ACTIVITY
dc.subject
ECONOMIC DEVELOPMENT
dc.subject
ELASTICITY OF DEMAND
dc.subject
ENROLLMENT
dc.subject
ENROLLMENT RATES
dc.subject
EXPENDITURES
dc.subject
FEASIBILITY
dc.subject
HEALTH CARE
dc.subject
HEALTH INDICATORS
dc.subject
HEALTH OUTCOMES
dc.subject
HEALTH SERVICES
dc.subject
HOSPITALS
dc.subject
IMMUNIZATION
dc.subject
INCOME
dc.subject
INCOME DISTRIBUTION
dc.subject
INCOME INEQUALITY
dc.subject
INPUT PRICES
dc.subject
INPUT USE
dc.subject
INTERNATIONAL COMPARISONS
dc.subject
LEARNING
dc.subject
LEARNING ACHIEVEMENT
dc.subject
LIFE EXPECTANCY
dc.subject
LITERACY
dc.subject
LITERATURE
dc.subject
MARGINAL PRODUCTIVITY
dc.subject
MATHEMATICAL PROGRAMMING
dc.subject
MATHEMATICS
dc.subject
MEASLES
dc.subject
MIDDLE EASTERN
dc.subject
NER
dc.subject
NORTH AFRICA
dc.subject
OIL
dc.subject
PRIMARY SCHOOL
dc.subject
PRIMARY SCHOOL ENROLLMENT
dc.subject
PRODUCERS
dc.subject
PRODUCTION TECHNOLOGY
dc.subject
PRODUCTIVITY
dc.subject
PUBLIC EXPENDITURE
dc.subject
PUBLIC SECTOR
dc.subject
READING
dc.subject
RETURNS TO SCALE
dc.subject
SCHOOLS
dc.subject
TEACHERS
dc.subject
TEACHING
dc.subject
TERTIARY EDUCATION
dc.subject
WAGES
dc.subject
YOUTH
dc.title
Efficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach
en
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.doctype
Publications & Research
okr.docurl
http://documents.worldbank.org/curated/en/2005/06/5863405/efficiency-public-spending-developing-countries-efficiency-frontier-approach
okr.globalpractice
Macroeconomics and Fiscal Management
okr.globalpractice
Environment and Natural Resources
okr.globalpractice
Finance and Markets
okr.globalpractice
Health, Nutrition, and Population
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-3645
okr.identifier.externaldocumentum
000016406_20050615105929
okr.identifier.internaldocumentum
5863405
okr.identifier.report
WPS3645
okr.language.supported
en
okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2005/06/15/000016406_20050615105929/Rendered/PDF/wps3645.pdf
en
okr.topic
Health Monitoring and Evaluation
okr.topic
Economic Theory and Research
okr.topic
Environmental Economics and Policies
okr.topic
Pharmaceuticals and Pharmacoeconomics
okr.topic
Financial Crisis Management and Restructuring
okr.topic
Environment
okr.topic
Finance and Financial Sector Development
okr.topic
Macroeconomics and Economic Growth
okr.topic
Health, Nutrition and Population
okr.unit
Development Research Group (DECRG)
okr.volume
1 of 1

Show simple item record



This item appears in the following Collection(s)