Measuring the effectiveness of budget expenditures

Abstract

The article discusses the issues of measuring the effectiveness of budget expenditures on the basis of international comparisons using the DEA method . Macroeconomic (Musgrevian) indicators as well as sectoral performance indicators in relation to administrative expenditures, education and healthcare were used. Expenditure indicators were the share of budget expenditures in GDP and indicators of expenditure on education and health care per capita. We assess the integral efficiency of budget expenditures, based simultaneously on macro economic and sectoral indicators, as well as separately the effectiveness of expenditures on health care and education. In the DEA efficiency calculations, models with one performance indicator and one type of input and models with several types of costs and benefits were used. It is noted that when calculating integral efficiency, the highest results were achieved during the two periods under consideration by countries both with high results and with a low level of costs, the same applies to calculations of sectoral efficiency. When calculating comparative efficiency, the most favorable results for Russia are related to the calculations of the effectiveness of budget expenditures for education (secondary one). According to the first model of calculations based on DEA, Russia and three other countries are at the efficiency frontier in a sample of 41 countries. It is also noted that Russia’s results in education are higher than in the countries with a similar level of spending.