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Publications & Knowledge

  • Efficiency Analysis

    This section presents analytical papers on budget efficiency analysis in a variety of policy areas. While none of the papers presented in this section used a BOOST database, the techniques used in them can be extrapolated and replicated using BOOST. The objective of this section is, therefore, to encourage the user to approach policy analysis with an innovative approach taking advantage of all the tools at hand.

    Waste Not, Want Not: The Efficiency of Health Expenditure in Emerging and Developing Economies, August 2013
    This paper quantifies the inefficiency of public health expenditure and the associated potential gains for emerging and developing economies using a stochastic frontier model that controls for the socioeconomic determinants of health, and provides country-specific estimates. The results suggest that African economies have the lowest efficiency. At current spending levels, they could boost life expectancy up to about five years if they followed best practices.

    Colombia Decentralization: Options and Incentives for Efficiency (Vol. 2 of 2), 2009
    This report is intended to support the analysis and implementation of reforms aimed at a strengthening of the intergovernmental system in Colombia. In mid-2007 congress approved a legislative act as constitutional amendment that increases the level of the main transfer to sub-national governments, the General System of Transfers (SGP). However an adjustment of the regulations and institutional arrangements within the sectors is still pending. The report is intended to provide empirical evidence and technical inputs for a design of these complementary measures that are required. It will focus on examining how efficient sub-national governments are in service delivery within the existing intergovernmental arrangements and incentive framework. It will also analyze the underlying causes of low performance and suggest options for the government to address this challenge. The emphasis is on three sectors: education and health, which are both financed primarily by the SGP; and the road sector, which is financed outside the SGP. This focus will make evident the different types of intergovernmental management systems and the implications for efficiency.

    Efficiency of Public Spending in Developing Countries: An Efficiency Frontier Approach, 2005 
    This paper attempts to measure efficiency and has two major parts. The first one estimates efficiency as the distance between observed input-output combinations and an efficiency frontier (defined as the maximum attainable output for a given level of inputs). This frontier is estimated for several health and education output indicators by means of the Free Disposable Hull (FDH) and Data Envelopment Analysis (DEA) techniques. Both input-inefficiency (excess input consumption to achieve a level of output) and output-inefficiency (output shortfall for a given level of inputs) are scored in a sample of 140 countries using data from 1996 to 2002. The second part of the paper seeks to verify empirical regularities of the cross-country variation in efficiency.

    Efficiency of Public Spending in Developing Countries: A Stochastic Frontier Approach, 2005
    This study will present the stochastic frontier methodology and revisit the World Bank data while employing this alternative set of methods.  The first chapter of the presentation describes the stochastic frontier methodology.  Then , the methods will be illustrated in two applications, Christensen and Greene’s (1976) data on electricity production, which is a standard platform for studying the stochastic frontier model and second, to a previously examined data set from the World Health Organization on health care and education attainment, allowing for both measured and unmeasured heterogeneity (cross country differences).  In our second chapter, we will apply the techniques developed to the World Bank data on health care and education.  This section will illustrate a variety of computations based on the stochastic frontier methodology.  The stochastic frontier production model has provided the standard platform for single output analysis of technical inefficiency in most studies. 

    A Preliminary Non-parametric Analysis of Public Health and Education Expenditures in Developing Countries, 2004
    This report examines the efficiency of public expenditures for education and health services in developing countries. Two datasets are analyzed: the first allows cross-country comparisons, using national-level data; the second permits comparisons across municipalities in a single country.

    Brazil - Municipal education - Resources, Incentives, and Results (Vol. 2 of 2), 2002
    This research outlines the policy context, objectives, and methodology practiced, to then focus on the extent to which municipalities benefited from efforts designed to provide additional resources for education. On pp 53-57 the article used the Data Envelopment Analysis (DAE) technique to use the empirical data from the municipalities and determine the efficiency in the use of resources and the impact on education.


    Equity analysis: Documents on Benefit Incidence Analysis

    Distributive Analysis Stata Package (DASP) 2013
    This Stata program includes a module to perform Benefit Incidence Analysis.
    The main purpose of this project is to produce a comprehensive package of Stata modules to help analyze the distribution of living standards. It is hoped that this will be useful for measurement as well as for policy purposes.

    How to Do (or Not to Do) . . . a Benefit Incidence Analysis, 2010
    Benefit incidence analysis (BIA) considers who (in terms of socio-economic groups) receive what benefit from using health services. While traditionally BIA has focused on only publicly funded health services, to assess whether or not public subsidies are ‘pro-poor’, the same methodological approach can be used to assess how well the overall health system is performing in terms of the distribution of service benefits.

    Analyzing Health Equity Using Household Survey Data: A Guide to Techniques and Their Implementation (World Bank, 2008)
    The aim of this guide is to provide researchers and analysts with a step-by-step practical guide to the measurement of a variety of aspects of health equity. Chapter 14 (pp.165-175): Who Benefits from Health Sector Subsidies? provides a detailed Benefit Incidence Analysis on health.

    How Useful Are Benefit Incidence Analyses (BIA) of Public Education and Health Spending?, 2003
    The paper demonstrates the usefulness of BIA in two dimensions. First, the paper finds, among other things, that overall education and health spending are poorly targeted; benefits from primary education and primary health care go disproportionately to the middle class, particularly in sub-Saharan Africa, HIPCs and transition economies; but targeting has improved in the 1990s. Second, simple measures of association show that countries with a more pro-poor incidence of education and health spending tend to have better education and health outcomes, good governance, high per capita income, and wider accessibility to information.

    Practical Applications

    Social Spending, Poverty and Gender Equality in Kenya, a Benefit Incidence Analysis, 2009
    This paper uses a benefit incidence approach to estimate who gains from these services, both on average and at the margin, using data from the 2005/06 Kenya Integrated Household Budget Survey (KIHBS).

    The Center for Efficiency and Productivity Analysis provides a statistical software package for free to perform different types of frontier and efficiency analysis, as well as detailed guidelines and working papers on the topic.

  • A Public Expenditure Review (PER) is a key diagnostics instrument used to evaluate the effectiveness of public finances. Within the World Bank, PERs continue to be among the most critical and commonly used corporate tools to analyze and engage on the quality of public expenditure and financial management systems in client countries, serving as the main instruments guiding and influencing policy dialogues around reforms covering the full public finance cycle and help mainstream public finance diagnostics in sectoral operations.

    A PER typically analyzes government expenditures over a period of years to assess their consistency with policy priorities, and what results were achieved. A PER may analyze government-wide expenditures or may focus on a particular sector as Health Care, Education, or Infrastructure.

    Many governments have made strides to include PERs as part of their budget planning cycle. Whether across the whole of government or focusing on a single sector, by examining how public expenditure was allocated and managed, governments and donors are better able to assess not only the impact of their investment, but also the effectiveness of budget planning and execution. PERs help diagnose spending problems and help countries develop more effective and transparent budget allocations. The objective is to establish a baseline understanding of key fiscal management and policy challenges, highlight priority reform areas for policymakers, and set the agenda for the next phase of budgetary planning.

    To access all PERs, click here. To see PERs dedicated to education sector, click here.


    Education: Education Public Expenditure Review Guidelines (World Bank 2017) - This PER guideline contains the Checklist to conduct a PER in education and analytical techniques complemented by country examples.

    Water and sanitation: Public Expenditure Review from the Perspective of the Water and Sanitation Sector (World Bank 2012) - The objective of this guidance note: public expenditure review from the perspective of the water supply and sanitation sector is to provide World Bank staff with a body of knowledge and good practice guidelines to help them evaluate the allocation of public resources to water and sanitation services in a consistent manner and to increase their knowledge of public expenditure issues in the sector

    Security and criminal Justice: Securing Development – Public Finance and the Security Sector (World Bank 2017) This book highlights the role played by public finance in the delivery of security and criminal justice services. It seeks to strengthen policy and operational dialogue on security sector issues by providing national and international stakeholders with key information on security expenditure policy and management. :

    Agriculture - Practitioners’ Toolkit for Agriculture Public Expenditure Analysis (World Bank, 2011) - This toolkit for analyzing public expenditures in agriculture contributes to a broader effort to enhance the focus, quality, and appropriate scaling of public spending in the sector. More specifically, the toolkit has two goals: to provide checklists for practitioners conducting various kinds of agriculture public expenditure analyses, and to provide selected examples on aspects of the checklist to help guide analysis

    Climate Change - CLIMATE CHANGE PUBLIC EXPENDITURE AND INSTITUTIONAL REVIEW SOURCEBOOK - This Climate Change Public Expenditure and Institutional Review Sourcebook (CCPEIR) seeks to provide practitioners with the tools and information needed to respond to the public expenditure policy and management challenges arising from climate change. It is a series of notes and supporting materials written to consolidate current research and international experience, to identify emerging practice, and to provide practical and applicable guidance for staff of central finance agencies, development agencies, environmental agencies, and international organizations working on climate change issues. 

    Health: forthcoming

    Irrigation: Forthcoming

    Social protection: Forthcoming