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Assessing Public Spending Efficiency in 20 OECD Countries

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  • António Afonso,
  • Mina Kazemi

Abstract

This study follows the framework of Afonso, Schuknecht, and Tanzi (2005), aiming to look at the public expenditure of 20 OECD countries for the period 2009-2013, from the perspective of efficiency and assess if these developed countries are performing efficiently compared to each other. Public Sector Performance (PSP) and Public Sector Efficiency (PSE) indicators were constructed and Data Envelopment Analysis was conducted. The results show that the only country that performed on the efficiency frontier is Switzerland. The average input-oriented efficiency score is equal to 0.732. That is, on average countries could have reduced the level of public expenditure by 26.8% and still achieved the same level of public performance. The average output-oriented efficiency score is 0.769 denoting that on average the sample countries could have increased their performance by 23.1% by employing the same level of public expenditure. Key Words : Public Spending, Technical Efficiency, Public Sector Performance (PSP), Data Envelopment Analysis (DEA)

Suggested Citation

  • António Afonso, & Mina Kazemi, 2016. "Assessing Public Spending Efficiency in 20 OECD Countries," Working Papers Department of Economics 2016/12, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    • Handle: RePEc:ise:isegwp:wp122016
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    1. Douglas Sutherland & Robert Price & Isabelle Joumard & Chantal Nicq, 2007. "Performance Indicators for Public Spending Efficiency in Primary and Secondary Education," OECD Economics Department Working Papers 546, OECD Publishing.
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    1. Ant—nio Afonso & João Tovar Jalles & Ana Venâncio, 2023. "Government spending efficiency, measurement and applications: A cross-country efficiency dataset," Chapters, in: António Afonso & João Tovar Jalles & Ana Venâncio (ed.), Handbook on Public Sector Efficiency, chapter 3, pages 44-71, Edward Elgar Publishing.
    2. Anup Kumar Yadava & Yadawananda Neog, 2022. "Public Sector Performance and Efficiency Assessment of Indian States," Global Business Review, International Management Institute, vol. 23(2), pages 493-511, April.
    3. Afonso, António & Tovar Jalles, João & Venâncio, Ana, 2022. "Do financial markets reward government spending efficiency?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 77(C).
    4. Alessandra Cepparulo & Gilles Mourre, 2020. "How and How Much? The Growth-Friendliness of Public Spending through the Lens," European Economy - Discussion Papers 132, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    5. Tukiainen, Janne & Blesse, Sebastian & Bohne, Albrecht & Giuffrida, Leonardo M. & Jääskeläinen, Jan & Luukinen, Ari & Sieppi, Antti, 2024. "What are the priorities of bureaucrats? Evidence from conjoint experiments with procurement officials," Journal of Economic Behavior & Organization, Elsevier, vol. 227(C).
    6. Marius Sorin Dincă & Gheorghiţa Dincă & Maria Letiţia Andronic & Anna Maria Pasztori, 2021. "Assessment of the European Union’s Educational Efficiency," Sustainability, MDPI, vol. 13(6), pages 1-29, March.
    7. Svetlana Vtyurina, 2020. "Effectiveness and Equity in Social Spending - The Case of Spain," IMF Working Papers 2020/016, International Monetary Fund.
    8. European Fiscal Board (EFB), 2019. "Assessment of EU fiscal rules with a focus on the six and two-pack legislation," Reports 2019, European Fiscal Board.
    9. Economides, George & Papageorgiou, Dmitris & Philippopoulos, Apostolis, 2020. "Macroeconomic policy lessons from Greece," LSE Research Online Documents on Economics 107155, London School of Economics and Political Science, LSE Library.
    10. George Economides & Dimitris Papageorgiou & Apostolis Philippopoulos, 2020. "Macroeconomic Policy Lessons for Greece from the Debt Crisis," CESifo Working Paper Series 8188, CESifo.
    11. 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.
    12. António Afonso & João Tovar Jalles & Ana Venâncio, 2021. "Structural Tax Reforms and Public Spending Efficiency," Open Economies Review, Springer, vol. 32(5), pages 1017-1061, November.
    13. Chen, Hsien-Yi & Chen, Sheng-Syan & Chang, Chong-Chuo, 2024. "How do institutions affect output recovery after financial crises?," Journal of International Money and Finance, Elsevier, vol. 146(C).
    14. Leke Pula & Florentina Xhelili, 2022. "Government Public Spending Efficiency: A Comparative Analysis between Kosovo and EU Countries, Especially Western Balkan Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 3-17.
    15. Manuel Martínez-Blanes & Francisco Javier Rondán-Cataluña & José Manuel Velarde-Gestera, 2020. "Indicators of Efficiency in the Pharmaceutical Management of a Public Health System," Administrative Sciences, MDPI, vol. 10(2), pages 1-19, May.
    16. António Afonso & Ludger Schuknecht, 2019. "How “big” should government be?," EconPol Working Paper 23, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    17. Antonio Afonso & Ludger Schuknecht, 2019. "How “big†should government be?," Economics and Business Letters, Oviedo University Press, vol. 8(2), pages 85-96.
    18. Maria Alessandra Antonelli & Giorgia Marini, 2023. "Good health with good institutions. An empirical analysis for italian regions," Public Finance Research Papers 61, Istituto di Economia e Finanza, DSGE, Sapienza University of Rome.
    19. Afonso, António & Tovar Jalles, João & Venâncio, Ana, 2024. "Fiscal decentralization and public sector efficiency: Do natural disasters matter?," Economic Modelling, Elsevier, vol. 137(C).
    20. Andrea Salustri & Maria Alessandra Antonelli & Angelo Castaldo, 2023. "Uno studio dei sistemi di protezione sociale europei tramite l’analisi delle componenti principali," Public Finance Research Papers 59, Istituto di Economia e Finanza, DSGE, Sapienza University of Rome.

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    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C87 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Econometric Software
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • Y10 - Miscellaneous Categories - - Data: Tables and Charts - - - Data: Tables and Charts

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