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Determinants of Government Efficiency

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  • Mr. David Hauner
  • Ms. Annette J Kyobe

Abstract

We compile the first large cross-country panel dataset of public sector performance and efficiency, encompassing 114 countries on all income levels from 1980 to 2006, with about 1,800 country-year observations for the education sector and about 900 observations for health. We regress these indicators on potential economic, institutional, demographic, and geographic determinants. Our most resounding conclusion is that higher government expenditure relative to GDP tends to be associated with lower efficiency in the respective sector. Moreover, we find that richer countries exhibit better public sector performance and efficiency, and that institutional and demographic factors also play a significant role.

Suggested Citation

  • Mr. David Hauner & Ms. Annette J Kyobe, 2008. "Determinants of Government Efficiency," IMF Working Papers 2008/228, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2008/228
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    2. Bernardo Furtado, 2013. "Balancing investments in public service personnel and its healthcare provision output: an efficiency analysis for Brazilian municipalities," ERSA conference papers ersa13p1183, European Regional Science Association.
    3. António Afonso & João Tovar Jalles & Ana Venâncio, 2021. "Taxation and Public Spending Efficiency: An International Comparison," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 63(3), pages 356-383, September.
    4. Douanla Tayo Lionel, 2015. "Determinants of Health Spending Efficiency: a Tobit Panel Data Approach Based on DEA Efficiency Scores," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(4), pages 56-71, August.
    5. Hatra Voghouei & Mohammad Ali Jamali, 2018. "Determinants of government efficiency: does information technology play a role?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(3), pages 285-298, September.
    6. Banegas Rivero, Roger Alejandro & González Vergara, Reyna, 2015. "Cambios institucionales y transición cíclica en la posición fiscal para Bolivia (2003-2011)," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo", issue 23, pages 67-96, Mayo.
    7. Afonso, António & Tovar Jalles, João & Venâncio, Ana, 2024. "Fiscal decentralization and public sector efficiency: Do natural disasters matter?," Economic Modelling, Elsevier, vol. 137(C).
    8. El-Husseiny, Ghada & Yousri, Dina & Richter, Christian, 2022. "Towards A Doughnut Economy," Conference papers 333495, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Gloria O. Dzeha & Joshua Abor & Festus Turkson & Elikplimi Agbloyor, 2018. "Technical Efficiency and Technical Change in Africa: The Role of Money from the Diasporas," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(7), pages 177-177, July.
    10. Vratislav Izák, 2011. "The Welfare State and Economic Growth," Prague Economic Papers, Prague University of Economics and Business, vol. 2011(4), pages 291-308.
    11. Marwa Sahnoun & Chokri Abdennadher, 2020. "Education and Corruption: a Stochastic Frontier Analysis: Evidence from Developed and Developing Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(3), pages 968-981, September.
    12. Fadzlan Sufian & Muzafar Shah Habibullah, 2010. "Financial Disruptions and the Evolution of Malaysian Banking Sector’s Efficiency: A Non-Stochastic Frontier Approach," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 166-186.
    13. Gergana Mihaylova-Borisova & Presiana Nenkova, 2021. "DEA Efficiency Approach in Comparing Macroeconomic Performance of EU and Balkan Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 42-62.
    14. Lucas Menescal & José Alves, 2023. "Tax structure and public sector efficiency: new evidence for developing countries," Working Papers REM 2023/0291, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.

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