Public sector efficiency: evidence for new EU member states and emerging markets

Afonso, António; Schuknecht, Ludger; Tanzi, Vito

doi:10.1080/00036840701765460

Cited by 250 publications

(230 citation statements)

References 18 publications

(13 reference statements)

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“…Note that this approach, through the convexity spending on education and health. Using similar techniques, Gupta and Verhoeven (2001), Sijpe and Rayp (2007) and Afonso et al, (2006) focused on developing countries. Finally, Balaguer-Coll et al, (2007) considered using DEA to analyze the efficiency of local governments in Spain.constraint 1 k Σ = (which accounts for variable returns to scale) forms a convex hull of intersecting planes, as the frontier production plane is defined by combining some actual production planes.…”

Section: Measurement Of Public Sector Efficiencymentioning

confidence: 99%

Fiscal decentralization and public sector efficiency: evidence from OECD countries

2013

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This paper empirically examines the relationship between fiscal decentralization and public sector efficiency. A country-level dataset is used to measure public sector efficiency in delivering education and health services and the new indices are regressed on well-established decentralization measures. The analysis is carried out for 21 OECD countries, between 1970 and 2000. Irrespective of whether public sector efficiency concerns education or health services, an inverted U-shaped relationship has been identified between government efficiency in providing these services and fiscal decentralization. This relationship is robust across several different specifications and estimation methods.

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Section: Measurement Of Public Sector Efficiencymentioning

confidence: 99%

Fiscal decentralization and public sector efficiency: evidence from OECD countries

2013

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“…We measure the degree of openness by computing the sum of exports and imports as a percentage of GDP. Afonso et al (2006) remark that exports also can act as a proxy for the degree of international competition in labor and capital markets, and that greater competitiveness would penalize public inefficiency disproportionately. If the penalizing effect of Afonso et al (2006) dominates, we expect a positive sign in the correction; if Roderik's stabilizing requirement dominates, we expect a negative sign.…”

Section: Other Control Variablesmentioning

confidence: 99%

“…According to Branson and Lovell (2001), New Zealand's growth maximizing tax burden is 22.5%, far below the observed tax burden of 28%. Afonso et al (2006) calculate that countries with lean public sectors and with public expenditure ratios of about 30% of GDP tend to be the most efficient countries in terms of public performance. As we show below, our results are somewhat similar, in that we estimate the average optimal size for the OECD countries to be around 40% of GDP with a standard deviation of 5%.…”

Section: The Armey Curvementioning

confidence: 99%

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Sizing the government

Witte

Moesen

2009

Public Choice

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Is there such a thing as an optimal government size? We investigate the so-called Armey curve, which claims an inverted U-shaped relationship between government size and economic performance, using non-parametric Data Envelopment Analysis (DEA). The DEA scores are linked to control variables, such as initial per capita income, openness, population density, urbanization, country size and family size. For 23 OECD-countries we estimate the country specific efficiency scores, which reveal the extent to which a country uses excess public resources to achieve the observed growth rate of GDP.

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“…In a recent OECD efficiency study of the health sector, Hungary ranked lowest among OECD countries ( Figure 7) (OECD, 2009a). Hungary also ranked among the lowest among the new member states in a recent European Central Bank assessment of overall public sector efficiency (Afonso et al, 2006). Hungary's poor comparative performance with regard to the efficiency of public administration, however, begs the question: how large is the efficiency gap?…”

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confidence: 99%

Sustaining the Momentum of Fiscal Reform in Hungary

Forthun

Hagemann

2010

OECD Economics Department Working Papers

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Hungary has faced a considerable challenge to regain credibility following persistent and high fiscal deficits. Efforts during recent years have produced substantial results. The fiscal deficit has been brought down significantly and, despite the recession, fiscal consolidation has continued to help restore foreign investor confidence. Short-term fiscal adjustment needed to be accompanied by measures that can durably improve Hungary’s fiscal position, however, and it has; the adoption in 2009 of a pension reform and a Fiscal Responsibility Act, creating a Fiscal Council and fiscal rules hold that potential. These results should not lead to complacency. Some expenditure cuts, such as lower public salaries, may prove difficult to sustain. Fiscal consolidation in the past owed both to expenditure cuts and revenue increases. As a result, and despite an important tax reform starting in the second half of 2009 and extended from the beginning of 2010, marginal tax rates remain high, with adverse effects on the labour market and growth. Going forward, the government needs to contain public expenditure growth and improve public administration efficiency to reduce the public “footprint” on the economy and allow lower taxes. Key areas that warrant intensified efforts are public administration and health. The government should help secure a prominent role for the Fiscal Council and sufficient experience needs to accumulate before considering any substantial changes in the fiscal rules. Finally, improvements to make taxation less distortive should continue by further reducing tax wedges, and increasing the role of wealth taxes, notably for local governments. This Working Paper relates to the 2010 OECD Economic Survey of Hungary (www.oecd.org/eco/surveys/hungary). Soutenir le rythme de la réforme budgétaire en Hongrie Le défi auquel se trouve confrontée la Hongrie est de restaurer sa crédibilité après avoir accusé de lourds déficits persistants. Les efforts déployés ces dernières années ont été très fructueux. Le déficit budgétaire a été nettement réduit et, malgré la récession, l’assainissement des finances publiques a raffermi la confiance des investisseurs étrangers. L’ajustement budgétaire à court terme a dû néanmoins se doubler de mesures à même d’améliorer durablement les finances publiques, ce qui a été fait, l’adoption, en 2009, d’une réforme des retraites et d’une loi de responsabilité budgétaire, mettant en place un Conseil budgétaire et des règles de politique budgétaire, y a contribué Mais la tâche n’est pas terminée. Certaines réductions de dépenses, notamment du côté des rémunérations dans le secteur public, pourraient être difficiles à mettre en oeuvre. Dans le passé l’assainissement budgétaire a été obtenu grâce à la réduction des dépenses et à l’augmentation des recettes. En conséquence, et malgré l’importante réforme fiscale du second semestre 2009 qui continue au début de 2010, les taux marginaux d’imposition restent élevés, ce qui a des effets négatifs sur le marché du travail et sur la croissance. Pour l’a...

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Public sector efficiency: evidence for new EU member states and emerging markets

Cited by 250 publications

References 18 publications

Fiscal decentralization and public sector efficiency: evidence from OECD countries

Fiscal decentralization and public sector efficiency: evidence from OECD countries

Sizing the government

Sustaining the Momentum of Fiscal Reform in Hungary

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