Nowadays, governments are more careful with the use of resources and attempt to be efficient and effective to achieve sustainable economic development. This paper contrasts the efficiency and effectiveness of public spending of developed and developing countries in current conditions and their impact on economic growth. The author analyses efficiency and effectiveness measures of public spending applied by prominent cross-country empirical studies. The critical success factors for the effective performance of government through World Bank indicator of government effectiveness highlights the role of effective public budget policy. In addition, the Public Sector Performance Index and Public Sector Efficiency Index introduced by Vito Tanzi and other measures of Livio di Matteo, Konstantinos Angelopoulos are examined. Based on these approaches the author proposes several suggestions for the current condition of public budget policies of Central Asian countries and ways of improving the effectiveness and efficiency levels of their public sector. The author argues that the assumption that developing countries are less efficient than developed countries are based on several efficiency variations: the size of government expenditure, a government budget composition, aid dependency, and weak institutions. What is more, findings suggest that countries with relatively small governments that use resources more efficiently tend to achieve higher levels of economic growth that is not always the case for all developed countries. These findings have important implications for assessing the government performance on economic growth.
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