IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v200y2024i1d10.1007_s11127-024-01144-6.html
   My bibliography  Save this article

A tale of government spending efficiency and trust in the state

Author

Listed:
  • António Afonso

    (Universidade de Lisboa
    REM–Research in Economics and Mathematics, UECE–Research Unit on Complexity and Economics
    CESifo Research Fellow (Center for Economic Studies and Ifo Institute))

  • João Tovar Jalles

    (Universidade de Lisboa
    ISEG, Universidade de Lisboa
    Universidade Nova de Lisboa
    IPAG Business School)

  • Ana Venâncio

    (Universidade de Lisboa
    ADVANCE/CSG and CESifo (Center for Economic Studies and Ifo Institute))

Abstract

This paper empirically links the efficiency and performance assessment of the general government, proxied by efficiency scores, to the trust in government. Government spending efficiency scores are first computed via data envelopment analysis (DEA). Then, relying on panel data and instrumental variable approaches, we estimate the effect of public sector efficiency on citizens trust on national governments. The sample covers 36 OECD countries between 2007 and 2019. We find that the more efficient countries in terms of government spending are Australia, Chile, Ireland, New Zealand, South Korea, Switzerland. Secondly, our main finding is that better public sector spending efficiency is positively associated with citizens’ higher trust in governments. In general, political economy variables and the existence of fiscal rules do not seem to significantly affect our measure of trust. The results hold using alternative proxies for public sector efficiency, alternative measures for trust, specifications with different control variables and different empirical approaches (instrumental variables).

Suggested Citation

  • António Afonso & João Tovar Jalles & Ana Venâncio, 2024. "A tale of government spending efficiency and trust in the state," Public Choice, Springer, vol. 200(1), pages 89-118, July.
    • Handle: RePEc:kap:pubcho:v:200:y:2024:i:1:d:10.1007_s11127-024-01144-6
    DOI: 10.1007/s11127-024-01144-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11127-024-01144-6
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11127-024-01144-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Government spending efficiency; DEA; Panel data analysis; Confidence effects; Ideology; Fiscal rules;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:200:y:2024:i:1:d:10.1007_s11127-024-01144-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.