GCOE Discussion Paper Series
Global COE Program

Human Behavior and Socioeconomic Dynamics
Discussion Paper No.145

Expenditure Efficiency and the Optimal Size of Government
in Developing Countries

Yogi RAHMAYANTI and Theara HORN

July 2010

GCOE Secretariat
Graduate School of Economics

OSAKA UNIVERSITY

1-7 Machikaneyama, Toyonaka, Osaka, 560-0043, Japan

Expenditure Efficiency and the Optimal Size of Government
in Developing Countries
Yogi Rahmayanti1

Theara Horn2

Abstract
Government efficiency plays a significant role in the relationship between government
expenditure and economic growth. Based on panel data from 63 developing countries
1990 to 2003, we calculate efficiency scores using Data Envelopment Analysis,
incorporate them into a simple model of growth with government expenditure. We findthat there is a critical level of efficiency required for government expenditure to havepositive effect on growth. Further, above a critical level of efficiency, greater efficiency
lowers the optimal size of government expenditure required to maximize growth.
Keywords: Fiscal Policy, Government Expenditure, Public Sector Efficiency, Growth
JEL: H50, E6, O4

The authors thank Nobuo Akai, Tsunehiro Ootsuki, and David Flath for their comments andsuggestions, which have greatly improved the quality of this paper. Theara Horn gratefully
acknowledges financial support from JSPS Research Fellowships for Young Scientists.
1

Osaka School of International Public Policy, Osaka University, 1-31 Machikaneyama,

Toyonaka, Osaka 560-0043 Japan; E-mail: y-rahmayanti@osipp.osaka-u.ac.jp
2

Graduate School of Economics, Osaka University, 1-7 Machikaneyama, Toyonaka, Osaka,

560-0043, Japan; E-mail: hge016ht@mail2.econ.osaka-u.ac.jp

Expenditure Efficiency and the Optimal Size of Government in Developing
Countries
1. Introduction
IMF fiscal adjustment programs, which affected many developing countries,
have created a heating discussion in the fiscal policy field of study. The programs often
relied heavily on cuts in public investment that would improve today’s government cash
flow at the expense of future economic growth (Ley, 2009). Another important issue
related to government budget is the efficiency of government expenditure. Smallchanges in the efficiency with which those resources are used could have major impacts
on their GDP and attainment of other government’s objectives (World Bank, 2005). In
addition, the recent global crisis has once again brought up the debate on the importanceof fiscal policy to control macro economy.
Many studies since the 1990s have attempted to explain the relationship between
government expenditure and economic growth. At the theoretical level, Barro (1990)
has laid a framework for the relationship between government spending and economic
growth, where government spending has been added to the set of growth determinants.
At the empirical level, the result has been mixed. Both the positive and negative
relationships have respective proponents, but the more common findings are of thenegative, such as argued in Fölster and Henrekson (2001).
There are so far two separate issues in the relationship between government
expenditure and economic growth. One issue that has been explored in a lot of studies
is the optimal size of government expenditure. A study by Scully (1994), among manyothers, discusses an inverted-u-curve to represent the relationship between government
expenditure and growth, which indicates the existence of an optimal point forgovernment size. Another issue is efficiency which has been addressed in a fewer
number studies3. Among them, Angelopoulos et al. (2008) uses data from 64 (bothdeveloped and developing) countries in the period from 1980 to 2000 to calculate
efficiency scores. With econometric estimations, they find that efficiency explains
much of the non-monotonic relationship between fiscal size and economic growth, andthe relationship between government size and economic growth changes, depending on
the level of efficiency.
3

Studies on measurement of government efficiency can be found in some previous literatures
such as Afonso et al. (2003).
1

Our study presents a novel contribution in which we combine together bothissues of efficiency and optimal size, which were separately considered in previous
studies, to explain the relationship between government expenditure and economic
growth. First we incorporate the efficiency score into estimation models withgovernment expenditure size to show the role of efficiency in the relationship ofgovernment spending and economic growth. Second, we find optimal size ofgovernment expenditure by considering not only size of the government expenditure,
but also its efficiency.
There are two main differences between our work and that of Angelopoulos et al.
(2008). First, although we study the same research question to find the effect ofefficiency in the relationship between government size and economic growth, we use
different method of efficiency measurement and a different set of data. We use Data
Envelopment Analysis (DEA) method to calculate efficiency. Since the specificproduction function is hard to define for the public sector (Rayp and Sjipe, 2005),
employing the DEA method is favorable, as it does not require the specification of the
production function. In terms of data, this study takes into account only the developing
countries in order to avoid the possibility of unreliable benchmarking due to thedifferent characteristics between developed and developing countries. Second, we
extend the research question beyond Angelopoulos et al. (2008) by estimating the effectof efficiency on optimal size of government expenditure to maximize economic growth.
This study comes to two main conclusions. First, supporting the result ofAngelopoulos et al. (2008) we find a significant effect of efficiency on the relationshipbetween government size and growth, in this case for developing countries. We
conclude a similar pattern that the effect of government size on growth becomes
positive only after the efficiency level reaches a certain threshold. Second, we findthat efficiency also has a significant role in explaining the relationship between the
optimal size of government expenditure and growth. Above a certain efficiency
threshold, increasing efficiency will reduce the size of government expenditure required
to maximize growth. Based on these conclusions, to maximize the economic growth,
governments of developing countries should pay attention on both the size of theirgovernment expenditure and the efficiency of their spending.

22. Methodology and Data
2.1. Efficiency Measurement
In this study, efficiency measures how efficient a government is in spending its
budget to achieve its objectives. We assume that all governments are in favor of an
optimal growth, and consequently spend their budget on expenditures that are expected
to have positive impacts on growth. Efficiency is then represented by a score obtained
through a calculation involving a set of outputs, which indicate a government’s
objectives related to economic growth, and an input, which indicate the cost ofachieving those objectives.
We use DEA with output orientation and an assumption of variable return toscale (VRS). The use of output orientation is based on the assumption that governments
are concerned with the problem of increasing outcome given a pre-determined budget
size. Meanwhile, the VRS model originally suggested by Banker et al. (1984) is used toeliminate the scale effect of the budget, which possibly influences the outputs. With theconvexity assumption of the VRS model, a country’s efficiency score is measured bybenchmarking with other countries that are close in size. The efficiency score of eachcountry is determined by the following optimization problem:(1)
subject to:where denotes the technical efficiency score,
represents a vector of input andoutput,represents the compared best units ofandis a vector ofweights. Here 0≤ ≤1, in which =1 is the efficiency score of the best performing
unit located on the efficiency frontier; Smaller denotes lower efficiency. The optimalvalue of is determined through solving the optimization problem of equation (1) andthe sum is restricted to equal one to assure convexity of the efficiency frontier.

32.2. Model Specification
We posit the following growth model with government expenditure, originallydeveloped by Barro (1990):
(2)
where
is total income or GDP,is capital,is labor andexpenditure. Subscripts i and t refer to country and time.
We suppose that the effect of government expenditureis government

depends not only on

the amount of the money spent, but also on the spending efficiency. Therefore,
depends on the expenditure amount (E) and the efficiency score:(3)
The basic equation can thus be rewritten as.

By transforming equation (3) into a logarithmic form, we obtain:(4)
The basic equation is further developed into some alternative models for statisticalestimation based on the possible patterns of the effect of efficiency, as shown below:
Model 1:(5)Model2:(6)
Model 3:(7)

Model 4:(8)

where government is ratio of government spending to GDP, efficiency is efficiency
score of government spending andand trade openness.

represents control variables such as labor, capital,42.3. Critical Value of Efficiency
2.3.1. Critical Value of Efficiency on Relationship of Government Size and Growth
In Model 1, without considering efficiency, the estimation result shows that thecoefficient of Government is statistically significant and positive (see Table 2), which
implies that government size has a positive effect on growth. In Model 2, however,when we include the efficiency variable, i.e. efficiency*government, the effect ofgovernment size on growth becomes conditional to the efficiency score, i.e. ( 1+2
efficiency). This demonstrates that the effect of government becomes positive only
when 2efficiency > -1. Therefore, the critical level of efficiency, which indicates thethreshold level of government expenditure to have positive effect on growth, can beobtained:

The same calculation is also available in Angelopoulos et al. (2008). Unlike in Model 1,
we can observe here that greater government size does not always lead to increase
growth.
2.3.2. Critical Value of Efficiency on Optimal Size of Government
The optimal size of government can be calculated from Model 3 and Model 4.
We start from Model 4 where efficiency is considered. The non-stochastic part of Model
4 is as follows:(9)
which can be rewritten into:(10)
As government is ratio of government spending to GDP, thus it is in the interval [0, 1].
However, it is not common in reality for ratio of government spending to GDP to equal
0 or 1, therefore the optimal size of government should be5.

Since the quadratic function is in degree two, it exhibits a parabolic form and thevertex of the inverted-U-shaped parabolic curve is the optimal solution. From theequation (10), the condition for the parabolic curve to have an inverted-U shape is:or.

Therefore, the critical value of efficiency can be obtained as follows:or
The optimal size of government to maximize growth is:

Therefore, we conclude that the existence of an optimal size of government expenditure
is conditional to efficiency. Note that when efficiency equals zero, Model 4 equals
Model 3 and the optimal size will be:.

2.4. Data Description
We use a sample of 63 developing countries during the period from 1990 to
2003. Developing countries are defined based on the World Bank classifications, whichconstitute low-income, lower-middle-income and upper-middle-income countries. We
focus on developing countries for several reasons. First, the similarity among sample
countries with respect to income makes the comparison more reasonable. Second, inthe literature on optimal size of government expenditure, there has been little attention
to developing countries. Third, most of the high-income countries have a high literacy
rate (e.g. 99%) and life expectancy; thus, for some countries, the figures remainunchanged through the years. This may cause bias in determining the DEA frontier.
We use three output indicators and one input indicator for the DEA calculation.
The output indicators are: literacy rate for education sector, life expectancy for health,and electricity usage for infrastructure. Education and health indicators are used as
output indicators in many studies measuring government efficiency (Afonso and Aubyn,
2004; Herrera and Pang, 2005). Many other studies find a long-term effect of
infrastructure on growth. Moreover, infrastructure development is also an important
goal of governments in developing countries. This is in line with the studies of Afonsoet al. (2003) and Angelopoulos et al. (2008). The data of literacy rate and life
expectancy are taken from the Human Development Index of the United Nations
6

Development Project, and the data on electricity usage are obtained from the World
Development Indicator of the World Bank.
For growth regression, the dependent variable is the natural logarithm of GDP
based on the constant US dollar in 2000. Independent variables constitute the share of
final consumption of government to GDP, the natural logarithm of labor force, capitalshare to GDP, and trade openness. Labor force is the number of labor force in persons.
Capital share to GDP is the ratio of gross capital formation to GDP. Trade openness isobtained by the ratio of the sum of exports and imports to GDP. All data are taken fromthe WDI. The summary and definition of variables are also available in Table 1.
3. The Effect of Efficiency on the Growth-maximizing Optimal Size of Government.
The efficiency scores and related results are reported in Appendix. We
incorporate these scores into the model to observe the effect of efficiency on therelationship between government expenditure and growth.
Before estimating the models, we conducted a poolability test to determine theappropriateness of the usage of panel regression through the F test and the Hausman test,
and the results show that panel fixed effect regression is appropriate (not reported here).
This is consistent with the fact that the slope parameters of the independent variables areunlikely similar given the different characteristics among countries. In the panel
regression, we took into account autocorrelation and heteroscedasticity of the error
component, and the endogeneity of the explanatory variables.
Failing to address the problems of autocorrelation and heteroscedasticity would
have resulted in inefficient estimates. We tested for and found autocorrelation andheteroscedasticity in the error component (not reported here). To deal with these
problems, we used panel regression with Newey-West standard error for estimation.
The problem of endogeneity of the explanatory variables, which is a typical problem inthe study of government and growth, may lead to biased estimation of how the public
sector impacts growth. This problem takes the form of, among others, omitted variables(Agell et al., 2006). Fixed effect estimation with panel data can be used in the presenceof time-constant omitted variables. However, it will not be sufficient in the presence oftime-varying omitted variables that are correlated with the explanatory variables. An
approach to deal with this endogeneity problem is the use of some instrumental
variables. The basic requirement for a variable to be used as an instrument is that it must
be exogenous in the equation, that is, it must have no partial effect on the dependent
7

variable and should not be correlated with the unobserved factors, while being related
either positively or negatively to the endogenous variable (Wooldridge, 2002).
Table 1: Descriptive statistics of variables
Variable

Definition

DEA Measurement
OutputLiteracy rate
Percent of Adults (15 years or older) who
can read and write (%)
Life expectancy Expected number of years of life
remaining at a given age (%)
Electricity
Power consumption
per capita (kwh)MeanStandard
Deviation

Min

Max

78.7

19.8

28.35

99

64.6

8.92

36.29

78.21

1208

1207.77

20.38

6734

Input

Government share to GDP (%)

13.6

4.90

2.9

43.47

Efficiency

0.89

0.10

0.55

1

766

1620

8.20

16000

Government

Efficiency obtained from themeasurement of DEA
Gross domestic product in constant 2000
US dollars (100 million US$)
Government share to GDP (%)

13.6

4.90

2.9

43.47

Labor

Total labor force (persons)

31.2

99.2

0.51

760

Capital share

Ratio of gross capital formation to GDP(%)
Ratio of sum of imports and exports
amount to GDP (%)
Total Population (million persons)

22.3

6.5

1.6

47.1

0.7

0.3

0.1

2.8

67.8

193

1.4

1300

Official Development Assistance (million
US$)

534

616

-960

5400

GDP

OpennessPopODA

We tested the endogeneity of the explanatory variable of government
expenditure relative to GDP by using the Davidson-MacKinnon test. The null
hypothesis that any endogeneity among the regressors would not have deleterious
effects was rejected, indicating that the endogenous regressor’s effect is meaningful.
We therefore used an instrumental variable estimation method that takes into accountthe presence of heteroskedasticity and autocorrelation. The Newey-West estimation canbe used in the presence of instrumental variables with heteroskedasticity andautocorrelation problems. However, the Newey-West estimation package does not8

provide the procedure for testing the appropriateness of the instrumental variables.
Therefore, we used the generalized method of moments with heteroscedasticity-andautocorrelation-consistent standard error (GMM-HAC) estimation method. For
instrumental variables, we used logarithm of population and Official Development
Assistance as these variables possibly influence the size of government expenditure ineach country but not obviously influence economic growth. To test the appropriatenessof the instrumental variables, we computed the Kleibergen and Paap rk LM statistic for
testing underidentification and Hansen J statistic for testing overidentification. We
rejected the null hypothesis in the underidentification test, indicating that the
instruments are necessary. The result of the overidentifying restriction test was failure
to reject the null hypothesis, implying that the instruments are exogenous. The
estimation results are presented in Table 2 and Table 3.
Table 2: The Effect of Efficiency on Growth
Dependent Variable: Ln (GDP )Model 1
(Newey-West)

Government

0.021***(0.008)-

Efficiency*governmentLn(labor)
Capital share
Openness
Constant

0.778***(0.029)0.025***(0.006)-0.456***(0.160)10.93***(0.521)Model 2
( Newey-West)
(2a)
(2b)
-0.270***-0.287***(0.025)(0.026)0.324***
0.344***(0.026)(0.027)0.857***
0.779***(0.024)(0.027)0.019***(0.006)-0.702***(0.159)9.90***
11.20***(0.416)(0.474)

Hansen J statistic

1.128(p-value: 0.22)
9.543(p-value: 0.00)
GovernmentLn(pop), ODA

Kleibergen-Paap rk LM Statistic
Instrumented variable
Instrumental variables
Critical efficiency score
SampleModel 2
GMM (HAC)(2c)-0.684***(0.251)0.790***(0.292)0.138(0.300)0.008**(0.004)-0.114(0.139)
-

841

83.3%
882

83.4%
841

86.5%
836

Figures in parentheses are standard error values. Asterisks indicate variables whose coefficientsare significant at the 10 %(*), 5 %(**) and 1 %(***) levels.
9

From our result, the critical efficiency value required for government
expenditure to have positive effect on growth is approximately 84.4 percent, which isthe average of critical values obtained in Models (2a), (2b) and (2c). This implies that,on average, government expenditure has positive effect on growth when the efficiencyof government expenditure is higher than 84.4 percent.
The coefficients of the control variables of labor and capital are both
statistically significant and positive, which is consistent with the economic theory.
However, the coefficient of openness is statistically significant and negative. We argue
that, in the case of developing countries, net importers are more common than net
exporters, thus it is acceptable for the degree of openness to be negatively related to
growth.
Model 3 and Model 4 are developed to determine the optimal size ofgovernment. In Model 3, when we do not consider efficiency, the coefficient ofgovernment2 is negative, implying the unconditional existence of an optimal size. From
the results of Model (3a) and (3b), the optimal size on average is equal to 22.3 percent.
In Model 4, the critical level of efficiency required for the existence of an optimal sizeof government spending is 0.79 for Model (4a) and 0.86 for Model (4b). The optimal
size to maximize growth on the condition of efficiency exists only when efficiency isgreater than the critical level, otherwise it applies for the growth minimization condition.
Further, we analyze the result based on Model 4b. Considering the critical
efficiency values, we simulate the optimal sizes of government obtained in equation(11) with respect to efficiency and present the result in Figure 1. We observe that the
optimal government size decreases when the efficiency of government spending
increases.
Out of 63, 47 countries have efficiency scores above the critical value. From the
47 countries depicted in the figure, there are more of developing countries which spend
less than their optimal level. Some countries lie very close to the optimal line, such as
Tunisia, Panama and Costa Rica. The governments of these countries, given theirrespective efficiency level, are spending at almost optimal level to maximize theireconomic growth.
Countries which lie above the optimal level should reduce their spending toachieve more optimality. Reducing spending size is advantageous when such countries
are running deficit budget. Countries such as Uzbekistan, Belarus and Ukraine forexample, may cut their spending to improve their budget sustainability without risking
their growth target. However, if such countries have been utilizing own-source revenue,
10

government spending can be used for other than growth-promoting purposes, such as
improving social security and public welfare.
Table 3: The Effect of Efficiency on Optimal Size of Government
Dependent Variable:
Ln (GDP )Government

Model 3
(Newey-West)
(3a)
(3b)

Model 4
(Newey-West)(4a)Model 4
GMM (HAC)(4b)0.085***(0.028)0.067**(0.027)-0.762***(0.068)-1.143***(0.298)--0.992***(0.077)1.341***(0.353)-0.0019**(0.0007)-0.0015**(0.0007)0.014***(0.002)0.020***(0.005)---0.022***(0.002)-0.027***(0.007)0.831***(0.025)0.775***(0.029)0.816***(0.024)0.387**(0.151)

Capital share-

0.025***(0.006)0.009***(0.006)0.006***(0.002)

Openness--0.465***(0.159)-0.618***(0.149)0.077(0.052)

Constant

9.86***(0.480)10.67***(0.543)10.11***(0.463)-

Efficiency*government
Government 2(Efficiency*government)2
Ln(labor)

Hansen J statistic
Kleibergen-Paap rk LM
Statistic

0.672(p-value:0.41 )9.687(p-value:0.00)

Instrumented variable
Instrumental variables

GovernmentLn(pop), ODA

Optimal size without
efficiency
Optimal size at average
efficiency(=0.89)
Sample

22.3%

22.3%

-

-

-

-

17.64%

18.20%

882

841

841

836

Figures in parentheses are standard error values. Asterisks indicate variables whose coefficientsare significant at the 10 percent (*), 5 percent (**) and 1 percent (***) levels.

Countries which lie under the optimal line should increase spending while improving
efficiency. Countries which lie far below the optimal line, such as Guatemala,11

Bangladesh, and Dominican Republic, Indonesia and Vietnam, may simply spend too
little, and will reduce their distances to the optimal line significantly by increasing theirspending amount. However, by improving efficiency, the amount required to achieve
optimality will be less. Increasing government spending achieved through borrowed
fund creates interest liability which reduces budget flexibility. Therefore, improving
efficiency not only will help achieving optimality, it also supports budget sustainability.
Figure1: Decreasing function of optimal size of government with respect toefficiency score.
Government Size
30

Actual government size
Optimal size

25

20

South Africa
BrazilJordanZimbabwe
Algeria
China
Nicaragua

15

TurkeyHonduras
Egypt

10

5

Belarus Ukraine
PolandUzbekistan
LatviaLithuania Russia
MoroccoBulgaria

Colombia
LebanonTunisia

PanamaUruguayCosta Rica
Malaysia Argentina Tajikistan
Armenia
Philippines Mexico
Chile
Venezuela
EcuadorEl Salvador
RomaniaParaguay Thailand
Sri Lanka
Peru
Indonesia
Dominican Vietnam
GuatemalaRepublic
Bangladesh
Syria

Jamaica

0
0.86

0.88

0.9

0.92

0.94

12

0.96

0.98

1

Efficiency
1.02

Improving efficiency may take form in various measures, such as choosing moreproductive spending and improving governance of government spending. In otherwords, improve the “what and how” to spend. Focusing on spending items that have
impact on economic growth, such as education, health, and infrastructure will improvethe efficiency level. Improvement can also be achieved through better budget
disbursement by streamlining the excessive bureaucratic chain and increasing
accountability.
4. Concluding Remarks
This study finds a significant role for efficiency in the relationship between
government expenditure and economic growth for the developing countries. We findthat the effect of government expenditure on growth depends on the level of efficiency.
Only when the efficiency exceeds a certain critical level, the effect becomes positive.
Furthermore, the optimal size of government can also be achieved only above a certain
efficiency level, at which the optimal size is a decreasing function of the efficiency
scores.
The finding of this study implies that the improvement of efficiency will resultin a smaller optimal government size required to maximize growth. Intuitively, when
government spends the resources for the right purposes and in the right manner, theamount required to maximize growth is smaller. Therefore, we suggest thatgovernments of developing countries should pay attention not only to the size ofgovernment expenditure but also to the efficiency of their spending. The improvementof the spending efficiency can provide a solution to the shortage of fiscal space that isoften the case in developing countries.
However, the result of this study should be interpreted as more indicative thandefinitive. One basic problem here arises from the method of developing the efficiency
score. Using a non-parametrical approach provides little choice in terms of statisticalassessment. Furthermore, as it is a relative measurement, the choice of sample may
affect the efficiency score.

13

References
Afonso, A., Schuknecht, L., Tanzi, V. (2003), “Public Sector Efficiency: an
International Comparison”, European Central Bank Working Paper Series, No.
242.
Afonso, A., Aubyn, M.St. (2004), “Non-parametric Approaches to Education and
Health Expenditure Efficiency in OECD Countries”, Department of Economics
of School of Economics and Management of Technical University of Lisbon
Working Papers Series, No. 2004/01.
Agell, J., Ohlsson, H., Thoursie, P.S. (2006), “Growth Effects of Government
Expenditure and Taxation in Rich Countries: A Comment”, European Economic
Review, Vol. 50 p. 211-218.
Angelopoulos, K., Philippopoulos, A., Tsionas, E. (2008), “Does public sector
efficiency matter? Revisiting the Relation between Fiscal Size and Economic
Growth in a World Sample”, Journal of Public Choice, Vol. 137, p. 245-278.
Barro, R.J. (1990), “Government Spending in A Simple Model of Endogenous Growth”,
The Journal of Political Economy, Vol. 98, No. 5, p. 103–125.
Banker R.D., Charnes, A., Cooper, W.W. (1984) “Some Models for Estimating
Technical and Scale Inefficiencies in Data Envelopment Analysis”, Management
Science, Vol. 30, p. 1080-1092.
Fölster, S., Henrekson, M. (2001), “Growth Effects of Government Expenditure andTaxation in Rich Countries”, European Economic Review, Vol. 45, p. 15011520.
Herrera, S., Pang, G. (2005), “Efficiency of Public Spending in Developing Countries:
An Efficiency Frontier Approach”, World Bank Policy Research Working Paper.
Ley, E. (2009), “Fiscal Policy for Growth”, World Bank’s Poverty Reduction andEconomic Management Notes, No. 131.
Rayp, G., Sijpe N.V.D., (2007), “Measuring and Explaining Government Efficiency in
Developing Countries”, Journal of Development Studies, Vol. 43 , Issue 2, p.
360-381.
Scully, G.W. (1994), “What is the Optimal Size of Government in the United States?”,National Center for Policy Analysis, No.188.
Wooldridge, J.M. (2002), “Introductory to Econometrics: A Modern Approach Second
Edition”, USA: South Western.

14

Appendix: Performance, Government Size and Optimal Size with Rank OrderCountry
Armenia
Belarus
Bulgaria
Chile
Costa Rica
LatviaLithuania
PolandRomania
RussiaTajikistan
UkraineUruguay
Uzbekistan
Argentina
MoroccoSri Lanka
Venezuela
VietnamMexicoThailand
Malaysia
PanamaParaguay
Philippines
Dominican Rep.
EcuadorJamaica
Colombia
Bangladesh
El Salvador
Peru
Syria
Tunisia
GuatemalaJordanLebanonIndonesia

Efficiency Rank
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
0.99
0.99
0.98
0.98
0.98
0.97
0.97
0.96
0.96
0.96
0.96
0.95
0.95
0.95
0.94
0.93
0.93
0.93
0.93
0.93
0.92
0.92
0.92
0.91

1
1
1
1
1
1
1
1
1
1
1
1
1
1
15
15
17
17
17
20
20
22
22
22
22
26
26
26
29
30
30
30
30
30
35
35
35
38

Government Size
(%)
13.12
20.28
16.97
11.25
13.56
19.32
19.36
19.78
10.82
17.86
13.27
19.97
12.38
20.86
10.85
18.02
9.77
10.50
7.58
10.63
10.39
12.23
14.59
9.91
11.53
6.08
11.20
13.50
16.74
4.63
9.57
9.49
12.78
15.93
6.21
18.20
16.85
7.57
15

OptimalSize (%)
14.20
14.14
14.14
14.15
14.14
14.14
14.14
14.14
14.21
14.14
14.16
14.14
14.14
14.16
14.24
14.25
14.46
14.43
14.50
14.53
14.56
14.69
14.82
14.83
14.83
14.98
14.94
15.08
15.28
15.47
15.57
15.67
15.43
15.58
15.95
16.13
15.71
16.57

Deviation from
optimal size (%)
-1.08
6.14
2.82
-2.90
-0.58
5.18
5.21
5.64
-3.39
3.72
-0.88
5.83
-1.76
6.71
-3.39
3.77
-4.69
-3.92
-6.92
-3.91
-4.17
-2.46
-0.23
-4.92
-3.30
-8.90
-3.74
-1.59
1.46
-10.84
-6.00
-6.18
-2.64
0.35
-9.75
2.07
1.14
-9.00

Country
Indonesia
BrazilChina
South Africa
Nicaragua
Egypt
Honduras
TurkeyZimbabwe
Bolivia
Pakistan
Botswana
India
Kenya
Nepal
Ghana
Togo
Yemen, Rep.
ZambiaTanzania
SenegalCote d'Ivoire
Ethiopia
Nigeria
Mozambique

Efficiency Rank
0.91
0.90
0.90
0.90
0.89
0.88
0.88
0.88
0.87
0.85
0.82
0.80
0.80
0.80
0.79
0.76
0.75
0.75
0.75
0.74
0.71
0.66
0.63
0.63
0.58

38
39
39
39
43
44
44
44
47
48
49
50
50
50
53
54
55
55
55
58
59
60
61
61
63

Government Size
(%)
7.57
18.76
15.09
19.13
14.95
11.16
11.31
12.80
17.02
14.01
11.41
25.32
11.60
16.08
9.08
11.33
11.92
16.10
16.15
12.80
13.27
10.71
11.83
16.07
10.70

OptimalSize (%)
16.57
17.17
16.79
17.54
17.72
19.94
19.15
19.44
29.46
-

Deviation from
optimal size (%)
-9.00
1.59
-1.70
1.59
-2.78
-8.78
-7.83
-6.64
-12.44-

Note: (-) refers to “not available” for countries whose efficiency score is lower than the criticalvalue (0.86), for which the optimal size does not exist.

16