IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL 1

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Public spending efficiency, governance, political and economic policies: Is there a substantial causal relation? Evidence from selected MENA countries

Riadh Brini and Hatem Jemmali

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Abstract

In this paper, we seek first a robust methodology for estimation of the relative public spending efficiency of eleven Middle East and North African (MENA) countries over the period 1996- 2011. Using the non-parametric Data Envelopment Analysis (DEA), we estimate relative efficiency scores for four main disaggregated accounts of public spending that are administration, health, education and infrastructure. In the second part of the paper, the Tobit regression model is used to determine the impact of governance, political and economic factors on public spending efficiency. The results show mainly that Jordan is the most efficient in public spending on administration, education and health and Tunisia on infrastructure. While Libya, Algeria and Yemen are relatively less efficient in public spending on administration and health. Moreover, the results indicate that political stability, trade freedom and economic growth have a positive effect on public spending efficiency. Nevertheless, Voice and accountability affect negatively such efficiency.

keywords:

Public spending efficiency; governance; political and economic policies; DEA; MENA region

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