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Determinants of Government Efficiency

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  • David Hauner
  • Annette J Kyobe

Abstract

We compile the first large cross-country panel dataset of public sector performance and efficiency, encompassing 114 countries on all income levels from 1980 to 2006, with about 1,800 country-year observations for the education sector and about 900 observations for health. We regress these indicators on potential economic, institutional, demographic, and geographic determinants. Our most resounding conclusion is that higher government expenditure relative to GDP tends to be associated with lower efficiency in the respective sector. Moreover, we find that richer countries exhibit better public sector performance and efficiency, and that institutional and demographic factors also play a significant role.

Suggested Citation

  • David Hauner & Annette J Kyobe, 2008. "Determinants of Government Efficiency," IMF Working Papers 08/228, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:08/228
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    References listed on IDEAS

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    Cited by:

    1. Andreas P. Kyriacou & Leonel Muinelo-Gallo & Oriol Roca-Sagalés, 2018. "The efficiency of transport infrastructure investment and the role of institutions: an empirical analysis," Working Papers. Collection B: Regional and sectoral economics 1802, Universidade de Vigo, GEN - Governance and Economics research Network.
    2. Aghion, Philippe & Akcigit, Ufuk & Cagé, Julia & Kerr, William R., 2016. "Taxation, corruption, and growth," European Economic Review, Elsevier, vol. 86(C), pages 24-51.
    3. Bondarenko Irina, 2016. "Ratings of Investment Appeal of Regions of Russia as a Tool of Assessment of Region Management Efficiency," Economics, De Gruyter Open, vol. 4(1), pages 37-44, June.
    4. repec:ksp:journ1:v:4:y:2017:i:3:p:275-284 is not listed on IDEAS
    5. Lledó, Victor & Poplawski-Ribeiro, Marcos, 2013. "Fiscal Policy Implementation in Sub-Saharan Africa," World Development, Elsevier, vol. 46(C), pages 79-91.
    6. Christl, Michael & Köppl-Turyna, Monika & Kucsera, Dénes, 2018. "Public sector efficiency in Europe: Long-run trends, recent developments and determinants," Working Papers 14, Agenda Austria.
    7. Kyriacou, Andreas & Muinelo-Gallo, Leonel & Roca-Sagalés, Oriol, 2015. "On the redistributive efficiency of fiscal policy," MPRA Paper 63276, University Library of Munich, Germany.
    8. Banegas Rivero, Roger Alejandro & González Vergara, Reyna, 2015. "Cambios institucionales y transición cíclica en la posición fiscal para Bolivia (2003-2011)," Revista Latinoamericana de Desarrollo Economico, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana, issue 23, pages 67-96, Mayo.
    9. Vratislav Izák, 2011. "The Welfare State and Economic Growth," Prague Economic Papers, University of Economics, Prague, vol. 2011(4), pages 291-308.
    10. Susana Martins & Francisco Veiga, 2014. "Government size, composition of public expenditure, and economic development," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(4), pages 578-597, August.
    11. Fadzlan Sufian & Muzafar Shah Habibullah, 2010. "Financial Disruptions and the Evolution of Malaysian Banking Sector’s Efficiency: A Non-Stochastic Frontier Approach," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 166-186.
    12. Azar Dufrechou, Paola, 2016. "The efficiency of public education spending in Latin America: A comparison to high-income countries," International Journal of Educational Development, Elsevier, vol. 49(C), pages 188-203.
    13. Rune Sørensen, 2014. "Political competition, party polarization, and government performance," Public Choice, Springer, vol. 161(3), pages 427-450, December.
    14. repec:jle:journl:165 is not listed on IDEAS

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