Analysis of Public Sector Efficiency in Developed Countries

Abstract

The public sector in developed countries went through various forms of transformation in the twentieth century. The expansion of the public sector resulted in high levels of public spending in developed countries. The financial crisis of 2008 led to recessions in the economies of developed countries, the public debt growth, and actualized the issue of the public sector optimal size and efficiency. This study analysed the public sector efficiency in 19 developed countries. The analysis focuses on the relationship between the size of public expenditure and economic growth in the global financial crisis and the measures implemented. The aim of the research in this paper is a comparison of total and partial efficiency of the public sector in developed countries, in order to determine the characteristics of the public sector operations. The comparison covers the areas of the public sector operations in order to identify sources of inefficiency. Partial and overall efficiency of countries are analysed with different size and concept of the public sector, to determine the relationship between the public sector size, efficiency and welfare of citizens. The research results clearly indicate (un)justified state intervention in developed countries.

Keywords

• public sector
• efficiency; developed countries
• socio-economic indicators