Public Sector Efficiency: An International Comparison
Posted: 11 Aug 2005
We compute public sector performance (PSP) and efficiency (PSE)indicators, comprising a composite and seven sub-indicators, for 23 industrialised countries. The first four sub-indicators are "opportunity" indicators that take into account administrative, education and health outcomes and the quality of public infrastructure and that support the rule of law and a level playing-field in a market economy. Three other indicators reflect the standard "Musgravian" tasks for government: allocation, distribution, and stabilisation. The input and output efficiency of public sectors across countries is then measured via a non-parametric production frontier technique. The study finds significant differences in public sector performance and efficiency, which suggests a large potential for expenditure savings in many countries.
Keywords: Government expenditure, efficiency, free disposable hull, production possibility frontier
JEL Classification: C14, H50
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