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Public sector efficiency: evidence for Latin America

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  • António Afonso
  • Alma Romero
  • Emma Monsalve

Abstract

We compute Public Sector Performance (PSP) and Public Sector Efficiency (PSE) indicators and Data Envelopment Analysis (DEA) efficiency scores for a sample of twenty-three Latin American and Caribbean Countries (LAC) to measure efficiency of public spending for the period 2001-2010. Our results show that the PSE is inversely correlated with the size of the government, while the efficiency frontier is essentially defined by Chile, Guatemala, and Peru. Moreover, on average, output quantities could theoretically be proportionally increased by 19 percent with the same level of inputs. In addition, the performed Tobit analysis suggests that more transparency and regulatory quality improve the efficiency scores, while more transparency and control of corruption increase output-oriented efficiency.

Suggested Citation

  • António Afonso & Alma Romero & Emma Monsalve, 2013. "Public sector efficiency: evidence for Latin America," Working Papers Department of Economics 2013/20, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    • Handle: RePEc:ise:isegwp:wp202013
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    More about this item

    Keywords

    public sector performance; technical efficiency; Tobit; DEA; Latin America; Caribbean.;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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