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This paper analyses determinants of public sector efficiency in 15 Central Eastern and South Eastern European (CESEE) countries. Using Data Envelopment Analysis (DEA) and panel Tobit regressions we analyse the efficiency of public expenditure on health care, education, and public administration. This paper represents the first analysis of public expenditure efficiency for this region. The countries in the sample share a similar economic transition background and transition related challenges in terms of government size and efficiency. In this paper we use input-oriented DEA to calculate efficiency scores and apply Tobit regressions to identify the determinants of public expenditure efficiency for each category. According to our results, the health care sector shows the most room for improvement. With an average input efficiency score of 0.87, the analysed countries could attain the same output with an average 13% fewer resources. The results show that Bulgaria, Estonia, and Slovenia are the most efficient, whilst Serbia, Croatia, and Bosnia and Herzegovina are the worst performers. GDP per capita has a positive effect on efficiency in the health care sector, the rising share of the elderly population reduces the efficiency coefficient, whilst a higher level of education has a positive effect on the efficiency score, as recorded in earlier studies. In education, our results suggest that countries waste an average 10% of their resources. The Czech Republic, Estonia, Poland, Romania, and the Slovak Republic represent the frontier, while the worst performers are Slovenia, Lithuania, and Latvia. The results show that GDP per capita has a positive effect on efficiency in the education sector, whilst a higher unemployment rate leads to lower efficiency scores. Regarding public administration, the average efficiency score of the analysed countries is 0.9, which indicates that countries are wasting an average 10% of their resources. Estonia and Romania are fully efficient, whilst Montenegro, Bosnia and Herzegovina, and Hungary are the most inefficient countries in the sample. As expected, GDP per capita and institutional quality have positive effects on the efficiency of public administration.

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The aim of the paper is to analyse the indicators of the healthcare system efficiency in Croatia and to assess its effectiveness based on a comparison with other EU countries. The analysis of the efficiency of the healthcare system in Croatia and 21 selected EU countries in the period from 2013 to 2018 was conducted by the application of the dynamic DEA window analysis (WDEA). According to the results of the analysis, the overall efficiency of expenditure on healthcare in relation to average life expectancy is on the lowest level in Croatia, amounting to 57% in 2018. While cost-effectiveness of the Croatian healthcare system is on the maximum level of 100%, systemic effectiveness amounts to only 48%. According to the aforementioned indicator, Croatia has recorded the lowest efficiency in relation to the selected EU countries, the efficiency of which amounted to 88% in 2018. Therefore, inefficiencies of the healthcare system are generated during the transformation of intermediary inputs into treatment outcomes, which means that Croatia could achieve the same health outcomes with a lesser engagement of intermediary resources. According to the results of the panel analysis, smoking and alcohol consumption are the key determinants of the efficiency of healthcare protection in EU countries. Croatia does not invest enough into health promotion measures and prevention of diseases, for which it spends only 3% of the overall expenditure on healthcare. Strengthening of public healthcare policies against smoking and alcohol consumption and the increase of excise duties on tobacco products and alcoholic beverages could indirectly influence the improvement of health outcomes, while maintaining the existing levels of expenditure on healthcare. Key words: healthcare system efficiency, financial sustainability of healthcare system, DEA method.

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