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Public Spending Efficiency in the OECD: Benchmarking Health Care, Education, and General Administration

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  • Dutu Richard

    (Economics Department-LEDa, the University of Paris Dauphine, place du Maréchal de Lattre de Tassigny, 75016Paris, France)

  • Sicari Patrizio

    (Economics Department,OECD, 2 rue André Pascal, 75016Paris, France)

Abstract

In many OECD countries, changes in demography and health conditions are putting pressure on public finance. To prevent further expansion of government spending as a percentage of GDP, public spending efficiency will need to be raised. This paper uses data envelopment analysis (DEA) to assess the efficiency of welfare spending (normalized by the working-age population) in a sample of OECD countries around 2012, focussing on health care, secondary education, and general public services. The DEA model has a two input-one output structure, with at least one of the variables representing a composite indicator controlling for country-specific factors (socio-economic environment and lifestyle factors, for example). We find wide dispersion in efficiency measures across OECD countries and provide possible quantified improvements for both output and input efficiency.

Suggested Citation

  • Dutu Richard & Sicari Patrizio, 2020. "Public Spending Efficiency in the OECD: Benchmarking Health Care, Education, and General Administration," Review of Economic Perspectives, Sciendo, vol. 20(3), pages 253-280, September.
    • Handle: RePEc:vrs:reoecp:v:20:y:2020:i:3:p:253-280:n:1
    DOI: 10.2478/revecp-2020-0013
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    Keywords

    Administration; DEA; education; efficiency; health care; nonparametric; public spending;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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