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Public sector efficiency: evidence for new EU member states and emerging markets

  • Afonso, António
  • Schuknecht, Ludger
  • Tanzi, Vito

In this paper we analyse public sector efficiency in the new member states of the European Union compared to that in emerging markets. After a conceptual discussion of expenditure efficiency measurement issues, we compute efficiency scores and rankings by applying a range of measurement techniques. The study finds that expenditure efficiency across new EU member states is rather diverse especially as compared to the group of top performing emerging markets in Asia. Econometric analysis shows that higher income, civil service competence and education levels as well as the security of property rights seem to facilitate the prevention of inefficiencies in the public sector. JEL Classification: C14, H40, H50

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Paper provided by European Central Bank in its series Working Paper Series with number 0581.

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Date of creation: Jan 2006
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Handle: RePEc:ecb:ecbwps:20060581
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  1. Afonso, António & St. Aubyn, Miguel, 2005. "Cross-country efficiency of secondary education provision: a semi-parametric analysis with non-discretionary inputs," Working Paper Series 0494, European Central Bank.
  2. DE BORGER, Bruno & KERSTENS, Kristiaan, 1994. "Cost efficiency of Belgian local governments: A comparative analysis of FDH, DEA and econometric approaches," SESO Working Papers 1994002, University of Antwerp, Faculty of Applied Economics.
  3. Gupta, Sanjeev & Verhoeven, Marijn, 2001. "The efficiency of government expenditure: experiences from Africa," Journal of Policy Modeling, Elsevier, vol. 23(4), pages 433-467, May.
  4. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
  5. António Afonso & Vítor Gaspar, 2006. "Excess burden and the cost of inefficiency in public services provision," Working Papers w200609, Banco de Portugal, Economics and Research Department.
  6. António Afonso & Miguel St. Aubyn, 2005. "Non-parametric approaches to education and health efficiency in OECD countries," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 227-246, November.
  7. De Borger, B, et al, 1994. " Explaining Differences in Productive Efficiency: An Application to Belgian Municipalities," Public Choice, Springer, vol. 80(3-4), pages 339-58, September.
  8. Tanzi,Vito & Schuknecht,Ludger, 2000. "Public Spending in the 20th Century," Cambridge Books, Cambridge University Press, number 9780521664103.
  9. Afonso, António & Ebert, Werner & Schuknecht, Ludger & Thöne, Michael, 2005. "Quality of public finances and growth," Working Paper Series 0438, European Central Bank.
  10. Luis R. Murillo-Zamorano, 2004. "Economic Efficiency and Frontier Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 33-77, 02.
  11. Isabelle Joumard & Per Mathis Kongsrud & Young-Sook Nam & Robert W.R. Price, 2004. "Enhancing the Effectiveness of Public Spending: Experience in OECD Countries," OECD Economics Department Working Papers 380, OECD Publishing.
  12. Maria Silgoner & Jesus Crespo Cuaresma & Gerhard Reitschuler, 2004. "The fiscal smile - on the effectiveness and limits of fiscal stabilizers," Money Macro and Finance (MMF) Research Group Conference 2003 87, Money Macro and Finance Research Group.
  13. Marco Buti & Paul Van den Noord, 2003. "What is the impact of tax and welfare reforms on fiscal stabilisers? A simple model and an application to EMU," European Economy - Economic Papers 187, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
  14. repec:cor:louvrp:-571 is not listed on IDEAS
  15. Fakin, Barbara & de Crombrugghe, Alain, 1997. "Field adjustments in transition economies : social transfers and the efficiency of public spending - a comparison with OECD countries," Policy Research Working Paper Series 1803, The World Bank.
  16. António Afonso & Ludger Schuknecht & Vito Tanzi, 2005. "Public sector efficiency: An international comparison," Public Choice, Springer, vol. 123(3), pages 321-347, June.
  17. Schuknecht, Ludger & Tanzi, Vito, 2005. "Reforming public expenditure in industrialised countries: are there trade-offs?," Working Paper Series 0435, European Central Bank.
  18. Tanzi, Vito & Schuknecht, Ludger, 1997. "Reconsidering the Fiscal Role of Government: The International Perspective," American Economic Review, American Economic Association, vol. 87(2), pages 164-68, May.
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