<abstract xmlns="http://www.w3.org/1999/xhtml"><p>In many OECD countries, changes in demography and health conditions are putting pressure on public finance. To prevent further expansion of government spending as a percentage of GDP, public spending efficiency will need to be raised. This paper uses data envelopment analysis (DEA) to assess the efficiency of welfare spending (normalized by the working-age population) in a sample of OECD countries around 2012, focussing on health care, secondary education, and general public services. The DEA model has a two input-one output structure, with at least one of the variables representing a composite indicator controlling for country-specific factors (socio-economic environment and lifestyle factors, for example). We find wide dispersion in efficiency measures across OECD countries and provide possible quantified improvements for both output and input efficiency.</p></abstract>

In many OECD countries, changes in demography and health conditions are putting pressure on public finance. To prevent further expansion of government spending as a percentage of GDP, public spending efficiency will need to be raised. This paper uses data envelopment analysis (DEA) to assess the efficiency of welfare spending (normalized by the working-age population) in a sample of OECD countries around 2012, focussing on health care, secondary education, and general public services. The DEA model has a two input-one output structure, with at least one of the variables representing a composite indicator controlling for country-specific factors (socio-economic environment and lifestyle factors, for example). We find wide dispersion in efficiency measures across OECD countries and provide possible quantified improvements for both output and input efficiency.

Public Spending Efficiency in the OECD: Benchmarking Health Care, Education, and General Administration

Review of Economic Perspectives

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

In many OECD countries, changes in demography and health conditions are putting pressure on public finance. To prevent further expansion of government spending...

Public Spending Efficiency in the OECD: Benchmarking Health Care, Education, and General Administration

Published Online: Sep 18, 2020

Page range: 253 - 280

Received: Jan 22, 2018

Accepted: May 26, 2020

DOI: https://doi.org/10.2478/revecp-2020-0013

Keywords
Administration, DEA, education, efficiency, health care, nonparametric, public spending

© 2020 Richard Dutu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Public Spending Efficiency in the OECD: Benchmarking Health Care, Education, and General Administration

Published Online: Sep 18, 2020

Page range: 253 - 280

Received: Jan 22, 2018

Accepted: May 26, 2020

DOI: https://doi.org/10.2478/revecp-2020-0013

KeywordsAdministration, DEA, education, efficiency, health care, nonparametric, public spending

© 2020 Richard Dutu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Administration, DEA, education, efficiency, health care, nonparametric, public spending