Efficient Expenditure Allocation for Sustainable Public Services?—Comparative Cases of Korea and OECD Countries

Dong Jin Shin, Byung Sub Cha and Brian H.S. Kim
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Dong Jin Shin: Population & Strategy Analysis Division, National Assembly Budget Office, 1 Uisadang-ro (Yeouido-dong), Yeongdeungpo-gu, Seoul 150-010, Korea
Byung Sub Cha: Estimates & Tax Coordination Division, National Assembly Budget Office, 1 Uisadang-ro (Yeouido-dong), Yeongdeungpo-gu, Seoul 150-010, Korea
Brian H.S. Kim: Program in Regional Information, Department of Agricultural Economics and Rural Development, Program in Agricultural and Forest Meteorology, Research Institute of Agriculture and Life Sciences, Seoul National University, 1 Gwanangno, Gwanak-gu, Seoul 08826, Korea

Sustainability, 2020, vol. 12, issue 22, 1-19

Abstract: There have been contrasting trends in government expenditures spending among OECD countries. This study analyzed and compared the efficiency of government expenditures of OECD countries and Korea, focused on the health and welfare and social overhead capital (SOC) sectors, using data envelop analysis (DEA) and Tobit methods. Based on the indicator values of national ranking, Korea ranked 19th in the health and welfare sector and 10th in the SOC sector. However, compared to other countries in the OECD, Korea’s government expenditure has shown the highest efficiency in health and welfare (rank 1 with efficiency score of 2.401), while transportation SOC was at a level below the average (rank 13 with efficiency score of 0.813). In order to maintain a high level of efficiency in health and welfare expenditures, it is important for the Korean government to understand and improve conditions of the rates of poverty, unemployment, life expectancy, and low fertility. Moreover, in order to overcome the low level of efficiency in the SOC sector, the government needs to improve the quality of transport infrastructures along with implementation of an effective infrastructure-linking system between various modes of transportation, thereby enhancing its transport network density.

Keywords: expenditure efficiency; social overhead capital; public health and welfare; data envelop analysis; tobit model; OECD (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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