Measuring and Explaining Country Efficiency in Improving Health and Education Indicators

Using a worldwide panel data set for the period 1990-98 and a stochastic frontier estimation method, this paper measures the efficiency of countries in improving net primary enrollment and life expectancy. Per capita expenditures on the respective social sectors and the adult literacy rate are used as inputs in the estimation of the production frontiers, which are allowed to vary by region. An analysis of the determinants of the efficiency measures suggests that bureaucratic quality and urbanization both have strong positive impacts on efficiency, albeit decreasing at the margin. By contrast, corruption does not appear to have a statistically significant impact.