Political short termism and government spending efficiency in Sub-Saharan Africa

This chapter shows how policy myopia or political short-termism influences government spending efficiency in a sample of 29 countries in Sub-Saharan Africa. Our argument is founded on the premise that inefficiency in government spending on long term public goods; specifically, on education and health, is not so much because of corruption but is as a result of the neglect of the sectors by politicians because improvements in both public goods do not have any significant impact on their chances of being reelected. We adopt a stochastic frontier model that provides a single-step approach to estimating both technical efficiency and its determinants. Our results show that corruption is not a significant factor influencing the efficiency of government spending on education and health while bureaucracy quality has a positive effect on efficiency. This suggests that the root cause of inefficiency in spending on development outcomes observed in the region is not directly related to corruption but to the “myopic” behaviour of politicians who neglect investment in long term public goods and divert resources to short term outcomes that deliver visible returns. Among other implications, the neglect of these outcomes will result in poor financial management practices among bureaucrats in the sector and also serve as a disincentive for labour to perform their activities effectively.