More for less or less for more? Government spending efficiency in CESEE

Markus Eller () and Tomáš Slacík ()
Additional contact information
Markus Eller: Oesterreichische Nationalbank, Foreign Research Division
Tomáš Slacík: Oesterreichische Nationalbank, Foreign Research Division

OeNB Bulletin, 2026, issue 2026/3, 29

Abstract: This paper examines the evolution of government size, effectiveness and spending efficiency in eleven Central, Eastern and Southeastern European (CESEE) EU member states over the period from 1996 to 2024. While public spending in CESEE has risen moderately, CESEE governments have remained relatively lean compared with the rest of the EU. Government effectiveness has improved overall but unevenly across CESEE countries. Using a Data Envelopment Analysis framework, we find a pronounced asymmetry between input- and output-based efficiency. CESEE countries perform broadly in line with the rest of the EU in terms of input efficiency – after having outperformed the EU in earlier periods. However, they exhibit a persistent gap in output efficiency. While this gap has narrowed somewhat, output-based efficiency has largely stagnated since around 2012 at levels well below the EU benchmark. Returns-to-scale patterns indicate that CESEE governments tend to operate at “too small” input scales; yet, in most cases they still generate sub-proportional output gains, pointing to structural weaknesses in the spending-performance nexus. Overall, improving administrative capacity and the quality of public spending appears, from an efficiency perspective, more promising for enhancing government performance than further fiscal restraint.

Keywords: government spending efficiency; government effectiveness; data envelopment analysis; CESEE (search for similar items in EconPapers)
JEL-codes: C14 H11 H50 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.oenb.at/dam/jcr:42a9d87d-9204-4d2b-924 ... iciency-in-CESEE.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:onb:oenbbu:y:2026:i:2026/3:b:1

Ordering information: This journal article can be ordered from
Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria

Access Statistics for this article

OeNB Bulletin is currently edited by Maria Teresa Valderrama and Fabio Rumler

More articles in OeNB Bulletin from Oesterreichische Nationalbank (Austrian Central Bank) P.O. Box 61, A-1011 Vienna, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Alisa Besirevic-Abdagic ().