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Quality of Government and Living Standards

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  • Francesco Grigoli Author-Email: fgrigoli@imf.org Author-Name: Eduardo Ley Author-Email: eley@worldbank.org

    (World Bank)

Abstract

It is generally acknowledged that a government’s output is difficult to define and its value is hard to measure. The practical solution adopted by national accounts systems is to equate output value to input costs, but well-documented inefficiencies in government activities make this approximation questionable. One solution is to purge from gross domestic product (GDP) the fraction of government inputs that is wasted. This note illustrates such a correction, computing corrected per capita GDP on the basis of two studies that estimate efficiency scores for several dimensions of government activities. Results show that the correction could be significant and reorder the rankings of living standards.

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Bibliographic Info

Article provided by The World Bank in its journal Economic Premise.

Volume (Year): (2012)
Issue (Month): 89 (September)
Pages: 1-6

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Handle: RePEc:wbk:prmecp:ep89

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  1. Jean Spinks & Bruce Hollingsworth, 2009. "Cross-country comparisons of technical efficiency of health production: a demonstration of pitfalls," Applied Economics, Taylor & Francis Journals, vol. 41(4), pages 417-427.
  2. Nazmul Chaudhury & Jeffrey Hammer & Michael Kremer & Karthik Muralidharan & F. Halsey Rogers, 2006. "Missing in Action: Teacher and Health Worker Absence in Developing Countries," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 91-116, Winter.
  3. Rajkumar, Andrew Sunil & Swaroop, Vinaya, 2008. "Public spending and outcomes: Does governance matter?," Journal of Development Economics, Elsevier, vol. 86(1), pages 96-111, April.
  4. Nazmul Chaudhury & Jeffrey S. Hammer, 2004. "Ghost Doctors: Absenteeism in Rural Bangladeshi Health Facilities," World Bank Economic Review, World Bank Group, vol. 18(3), pages 423-441.
  5. Francesco Grigoli & Eduardo Ley, 2012. "Quality of Government and Living Standards," World Bank Other Operational Studies 17093, The World Bank.
  6. Angus Deaton & Alan Heston, 2009. "Understanding PPPs and PPP-based national accounts," Working Papers 1186, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
  7. Michael Kremer & Nazmul Chaudhury & F. Halsey Rogers & Karthik Muralidharan & Jeffrey Hammer, 2005. "Teacher Absence in India: A Snapshot," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 658-667, 04/05.
  8. Chaudhury, Nazmul & Hammer, Jeffrey S., 2003. "Ghost doctors - absenteeism in Bangladeshi health facilities," Policy Research Working Paper Series 3065, The World Bank.
  9. Gupta, Sanjeev & Kangur, Alvar & Papageorgiou, Chris & Wane, Abdoul, 2014. "Efficiency-Adjusted Public Capital and Growth," World Development, Elsevier, vol. 57(C), pages 164-178.
  10. Victoria Gunnarsson & Stéphane Carcillo & Marijn Verhoeven, 2007. "Education and Health in G7 Countries," IMF Working Papers 07/263, International Monetary Fund.
  11. Dasgupta, Partha, 2001. "Human Well-Being and the Natural Environment," OUP Catalogue, Oxford University Press, number 9780199247882, September.
  12. Isabelle Joumard & Christophe André & Chantal Nicq, 2010. "Health Care Systems: Efficiency and Institutions," OECD Economics Department Working Papers 769, OECD Publishing.
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Cited by:
  1. Francesco Grigoli & Javier Kapsoli, 2013. "Waste Not, Want Not," IMF Working Papers 13/187, International Monetary Fund.
  2. Francesco Grigoli Author-Email: fgrigoli@imf.org Author-Name: Eduardo Ley Author-Email: eley@worldbank.org, 2012. "Quality of Government and Living Standards," World Bank - Economic Premise, The World Bank, issue 89, pages 1-6, September.
  3. Musharraf Cyan & Jorge Martinez-Vazquez & VIoleta Vulovic, 2013. "Measuring tax effort: Does the estimation approach matter and should effort be linked to expenditure goals?," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1308, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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