We show the relevance of government expenditure inefficiency using the Barro (1990) model. We estimate government inefficiency for 52 developing countries using a data envelopment analysis. The estimated inefficiencies are subsequently used in a general to specific approach in order to identify their determinants. We find the government expenditure inefficiency is primarily determined by governance and political variables, and structural country variables. Economic policy determinants apparently count less. Government inefficiency of the Sub Saharan countries in the sample is substantially higher.
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Find related papers by JEL classification: O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development H50 - Public Economics - - National Government Expenditures and Related Policies - - - General H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
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