The macroeconomic effects of public sector efficiency in advanced economies

Christos Chrysanthakopoulos, Panagiotis Bouloumpasis, Manolis Skotoris and Athanasios Tagkalakis

International Economics, 2025, vol. 182, issue C

Abstract: This paper computes public sector efficiency scores in a group of 30 advanced economies from 2000 to 2021. Next, it examines by means of the local projection method the short-to medium-term effects of public sector efficiency on the debt ratio, productivity, and private investment. We find that an increase in public sector efficiency lowers public debt and enhances its medium-term sustainability. It also significantly increases labor productivity and private investment. The results remain valid after several robustness checks have been performed.

Keywords: Public spending efficiency; DEA; Debt sustainability; Productivity; Private investment (search for similar items in EconPapers)
JEL-codes: C14 E23 H11 H50 O49 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:182:y:2025:i:c:s211070172500023x

DOI: 10.1016/j.inteco.2025.100600

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