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Measuring and explaining government efficiency in developing countries

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  • Glenn Rayp
  • Nicolas Van De Sijpe

Abstract

Governments in developing countries play an important role in the growth process, most notably through their budgetary policies. This potentially beneficial role is, however, hindered by government expenditure inefficiency. This is illustrated in a basic model of public spending and economic growth. Government efficiency is estimated for 52 developing countries using data envelopment analysis and subsequently employed in a general to specific approach in order to identify its determinants. We find government expenditure efficiency is primarily determined by structural country variables and governance indicators. Economic policy determinants apparently count less. The Asian countries and low income European countries in the sample have a significantly higher and lower efficiency, respectively.

Suggested Citation

  • Glenn Rayp & Nicolas Van De Sijpe, 2007. "Measuring and explaining government efficiency in developing countries," Journal of Development Studies, Taylor & Francis Journals, vol. 43(2), pages 360-381.
  • Handle: RePEc:taf:jdevst:v:43:y:2007:i:2:p:360-381
    DOI: 10.1080/00220380601125230
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    References listed on IDEAS

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    1. Afonso, Antonio & St. Aubyn, Miguel, 2006. "Cross-country efficiency of secondary education provision: A semi-parametric analysis with non-discretionary inputs," Economic Modelling, Elsevier, vol. 23(3), pages 476-491, May.
    2. António Afonso & Ludger Schuknecht & Vito Tanzi, 2005. "Public sector efficiency: An international comparison," Public Choice, Springer, vol. 123(3), pages 321-347, June.
    3. Laffont, Jean-Jacques, 2001. "Incentives and Political Economy," OUP Catalogue, Oxford University Press, number 9780199248681.
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    Citations

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    Cited by:

    1. Ribeiro, Marcio Bruno, 2008. "Eficiência do gasto público na América Latina: uma análise comparativa a partir do modelo semi-paramétrico com estimativa em dois estágios," Gestión Pública 67, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Djedje Hermann YOHOU, 2015. "In Search of Fiscal Space in Africa: The Role of the Quality of Government Spending," Working Papers 201527, CERDI.
    3. Antonis Adam & Manthos Delis & Pantelis Kammas, 2014. "Fiscal decentralization and public sector efficiency: evidence from OECD countries," Economics of Governance, Springer, vol. 15(1), pages 17-49, February.
    4. James Alm & Denvil Duncan, 2014. "Estimating Tax Agency Efficiency," Public Budgeting & Finance, Wiley Blackwell, vol. 34(3), pages 92-110, September.
    5. Antonis Adam & Manthos Delis & Pantelis Kammas, 2011. "Public sector efficiency: leveling the playing field between OECD countries," Public Choice, Springer, vol. 146(1), pages 163-183, January.
    6. Rouselle Lavado & Emilyn Cabanda, 2009. "The efficiency of health and education expenditures in the Philippines," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 17(3), pages 275-291, September.
    7. Dobdinga C. Fonchamnyo & Molem C. Sama, 2016. "Determinants of public spending efficiency in education and health: evidence from selected CEMAC countries," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(1), pages 199-210, January.
    8. Eric Wang & Eskander Alvi, 2011. "Relative Efficiency of Government Spending and Its Determinants: Evidence from East Asian Countries," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 1(1), pages 3-28, June.
    9. Dobdinga Fonchamnyo & Molem Sama, 2016. "Determinants of public spending efficiency in education and health: evidence from selected CEMAC countries," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(1), pages 199-210, January.
    10. Aleksander Aristovnik, 2011. "The relative efficiency of education and R&D expenditures in the new EU member states," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 13(5), pages 832-848, August.
    11. James Alm & Denvil Duncan, 2014. "Estimating Tax Agency Efficiency," Public Budgeting & Finance, Wiley Blackwell, vol. 34(3), pages 92-110, September.
    12. Riadh Brini & Hatem Jemmali, 2015. "Public Spending Efficiency, Governance, and Political and Economic Policies: is there a Substantial Casual Relation? Evidence from Selected MENA Countries," Working Papers 947, Economic Research Forum, revised Sep 2015.
    13. Sok-Gee Chan Mohd & Zaini Abd Karim, 2012. "Public Spending Efficiency And Political And Economic Factors: Evidence From Selected East Asian Countries," Economic Annals, Faculty of Economics, University of Belgrade, vol. 57(193), pages 7-24, April- Ju.

    More about this item

    Keywords

    JEL Codes: H21; H50; O23;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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