Public Sector Efficiency: Evidence for Latin America

ISEG Economics Working Paper No. 20/2013/DE/UECE

42 Pages Posted: 9 Dec 2013

See all articles by António Afonso

António Afonso

University of Lisbon - ISEG (School of Economics and Management); UECE (Research Unit on Complexity and Economics); ISEG Lisbon School of Economics and Management,Universidade de Lisboa

Alma Romero-Barrutieta

University of Minnesota - Twin Cities

Emma Monsalve

Inter-American Development Bank (IDB)

Date Written: December 8, 2013

Abstract

We compute Public Sector Performance (PSP) and Public Sector Efficiency (PSE) indicators and Data Envelopment Analysis (DEA) efficiency scores for a sample of twenty-three Latin American and Caribbean Countries (LAC) to measure efficiency of public spending for the period 2001-2010. Our results show that the PSE is inversely correlated with the size of the government, while the efficiency frontier is essentially defined by Chile, Guatemala, and Peru. Moreover, on average, output quantities could theoretically be proportionally increased by 19 percent with the same level of inputs. In addition, the performed Tobit analysis suggests that more transparency and regulatory quality improve the efficiency scores, while more transparency and control of corruption increase output-oriented efficiency.

Keywords: public sector performance, technical efficiency, Tobit, DEA, Latin America, Caribbean

JEL Classification: C14, C61, H50, N16, O54

Suggested Citation

Afonso, António and Romero-Barrutieta, Alma and Monsalve, Emma, Public Sector Efficiency: Evidence for Latin America (December 8, 2013). ISEG Economics Working Paper No. 20/2013/DE/UECE, Available at SSRN: https://ssrn.com/abstract=2365007 or http://dx.doi.org/10.2139/ssrn.2365007

António Afonso (Contact Author)

University of Lisbon - ISEG (School of Economics and Management) ( email )

R. Miguel Lupi, 20
Lisbon, 1248-078
Portugal
+351 21 392 5985 (Phone)
+351 21 396 6407 (Fax)

HOME PAGE: http://https://www.iseg.ulisboa.pt/aquila/homepage/aafonso

UECE (Research Unit on Complexity and Economics)

Rua Miguel Lupi 20
Lisbon, 1249-078
Portugal
+351-213 925 912 (Phone)
+351-213 971 196 (Fax)

HOME PAGE: http://https://uece.rc.iseg.ulisboa.pt/

ISEG Lisbon School of Economics and Management,Universidade de Lisboa ( email )

Rua do Quelhas 6
LISBOA, 1200-781
Portugal

Alma Romero-Barrutieta

University of Minnesota - Twin Cities ( email )

271 19th Avenue South
Minneapolis, MN 55455
United States

Emma Monsalve

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

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