A Hybrid Approach to Estimating the Efficiency of Public Spending on Education in Emerging and Developing Economies
25 Pages Posted: 20 Feb 2014
Date Written: January 2014
The measurement of the efficiency of public education expenditure using parametric and non-parametric methods has proven challenging. This paper seeks to overcome the difficulties of earlier studies by using a hybrid approach to measure the efficiency of secondary education spending in emerging and developing economies. The approach accounts for the impact of the level of development on education outcomes by constructing different efficiency frontiers for lower- and higher-income economies. We find evidence of large potential gains in enrollment rates by improving efficiency. These are largest in lower-income economies, especially in Africa. Reallocating expenditure to reduce student-to-teacher ratios (where these are high) and improving the quality of institutions (as measured by the "governance effectiveness" indicator in the World Bank's Governance Indicators database) could help improve the efficiency of education spending. Easing the access to education facilities and reducing income inequality (as measured by the Gini coefficient) could also help improve efficiency.
Keywords: Government expenditures, Education, Africa, Emerging markets, Developing countries, Cross country analysis, Education expenditure, efficiency, hybrid, developing economies, emerging economies, education spending, educational outcomes, public education, public expenditure, education sector, school enrollment, education facilities, education outcomes, educational output, completion rates, access to education, educational efficiency, expenditure efficiency, schooling, education systems, efficiency of government expenditure, student educational outcomes, education indicators, public spending, school enrollments, health expenditure, returns to education, education services
JEL Classification: H51, I12, I18
Suggested Citation: Suggested Citation