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The macroeconomic effects of public sector efficiency in advanced economies

Author

Listed:
  • Chrysanthakopoulos, Christos
  • Bouloumpasis, Panagiotis
  • Skotoris, Manolis
  • Tagkalakis, Athanasios

Abstract

This paper computes public sector efficiency scores in a group of 30 advanced economies from 2000 to 2021. Next, it examines by means of the local projection method the short-to medium-term effects of public sector efficiency on the debt ratio, productivity, and private investment. We find that an increase in public sector efficiency lowers public debt and enhances its medium-term sustainability. It also significantly increases labor productivity and private investment. The results remain valid after several robustness checks have been performed.

Suggested Citation

  • Chrysanthakopoulos, Christos & Bouloumpasis, Panagiotis & Skotoris, Manolis & Tagkalakis, Athanasios, 2025. "The macroeconomic effects of public sector efficiency in advanced economies," International Economics, Elsevier, vol. 182(C).
    • Handle: RePEc:eee:inteco:v:182:y:2025:i:c:s211070172500023x
    DOI: 10.1016/j.inteco.2025.100600
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    More about this item

    Keywords

    Public spending efficiency; DEA; Debt sustainability; Productivity; Private investment;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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