A model for assessing the efficiency of government expenditure

Abstract

It is challenging for governments to transfer public spending into successful public programs and projects. Additionally, good governance of the public financial system is essential for economic and human development. The author suggested a model to evaluate the efficiency of public spending using data from 71 countries during the period 1996–2017. The model addresses the ability of public allocations to reach government’s objectives (e.g., controlling unemployment and enhancing economic growth) in addition to including factors related to sustainable development. Thus, econometric and statistical tests are carried out to validate the model and to measure its stability and accuracy. Building on the current model, we could therefore apply the model to individual countries to better understand each country’s public spending system and to help decision makers efficiently execute their national strategic plans.