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The Impact of Reducing the Administrative Costs on the Efficiency in the Public Sector


  • Matei, Ani
  • Savulescu, Carmen


The goal of the paper is to evaluate the impact of reducing the administrative costs on the efficiency in the public sector. Within the general framework provided by the specialised literature, the proposed methodology uses the classical model of a function of production, thus describing the factors of influence of the administrative costs on production and productivity in the public sector. The theoretical results are empirical exemplified for a local service of public utility. Adapting the theoretical model to the empirical situation is grounded on statistic methods of analysis and regression. The interpretation of results inscribes in the economic framework specific for public economics. The results aim both the novel model of analysis and the concrete evaluation of the economic impact of reducing the administrative expenditure in the public sector. At the same time, the general topic of reducing the administrative costs is extended towards the public sector. The most relevant conclusion refers to the capacity of the classical economic models in developing the public sector

Suggested Citation

  • Matei, Ani & Savulescu, Carmen, 2009. "The Impact of Reducing the Administrative Costs on the Efficiency in the Public Sector," MPRA Paper 19018, University Library of Munich, Germany, revised 15 Nov 2009.
  • Handle: RePEc:pra:mprapa:19018

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    References listed on IDEAS

    1. Ani Matei & Lucica Matei, 2007. "Systemic Models of Local Development," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 1(1(506)), pages 11-24, January.
    2. Matei, Ani, 2007. "Empirical Approaches About the Input-Output Model for the Local Economic Development: Case Study in Braila Municipality," MPRA Paper 18907, University Library of Munich, Germany, revised 10 Aug 2009.
    3. Antonio Afonso & Ludger Schuknecht & Vito Tanzi, 2010. "Public sector efficiency: evidence for new EU member states and emerging markets," Applied Economics, Taylor & Francis Journals, vol. 42(17), pages 2147-2164.
    4. António Afonso & Ludger Schuknecht & Vito Tanzi, 2005. "Public sector efficiency: An international comparison," Public Choice, Springer, vol. 123(3), pages 321-347, June.
    5. Matei, Ani & Dinu, Teodora, 2009. "Improvement of Government Financing through Non-Conventional Methods: Reducing the Administrative Costs in the Public Sector," MPRA Paper 18905, University Library of Munich, Germany, revised 17 Jun 2009.
    6. International Monetary Fund, 1998. "Public Sector Efficiency and Fiscal Austerity," IMF Working Papers 98/56, International Monetary Fund.
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    More about this item


    administrative costs; efficiency; productivity; public sector;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other

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