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Functional Public Sector Spending and SDGs: An Efficiency Map for the EU Countries

Author

Listed:
  • António Afonso
  • José Alves
  • Najat Bazah
  • A. J. Sánchez-Fuentes

Abstract

We evaluate the efficiency of public expenditure in the 27 European countries in achieving the Sustainable Development Goals (SDGs) of the 2030 Agenda. Using Data Envelopment Analysis (DEA), we map performance over the period 1995-2023, incorporating Musgravian functional spending – redistribution, allocation, public services, and private activities – as input variables, and constructing synthetic indices for the five pillars of the 2030 Agenda –people, planet, prosperity, peace, and partnership – as outputs. Results indicate that input efficiency scores range from 0.77 to 0.95, while output scores range from 0.88 to 0.93, suggesting a potential 5%-23.5% increase in inputs or a 7%-11.7% improvement in outputs. Denmark, Ireland, and Finland are efficient throughout the entire period, with strategic reductions in public spending correlating with high SDG performance. Sweden also has high efficiency and leads in multiple pillars by 2023. Conversely, the peace pillar remains the least achieved, while the people pillar shows the greatest progress.

Suggested Citation

  • António Afonso & José Alves & Najat Bazah & A. J. Sánchez-Fuentes, 2025. "Functional Public Sector Spending and SDGs: An Efficiency Map for the EU Countries," CESifo Working Paper Series 12036, CESifo.
    • Handle: RePEc:ces:ceswps:_12036
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    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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