Assessing government spending efficiency and explaining inefficiency scores: DEA-bootstrap analysis in the case of Saudi Arabia

Figures & data

Table 1. Saudi Arabia: Ratio of government expenditure to gross domestic product (GDP) from 2010 to 2020

Year	Ratio of government expenditure to GDP (%)
2010	33.97
2011	33.36
2012	33.32
2013	35.64
2014	40.35
2015	41.34
2016	36.18
2017	33.10
2018	34.51
2019	33.37
2020	33.39

Source: Statistica.

Table 2. Summary statistics on inputs and outputs

		Mean	Standard deviation	Min	Max
Inputs	Public spending on education	0.1680	0.0445	0.0464	0.2467
	Public spending on health	0.0664	0.0228	0.0212	0.0948
	Public spending on infrastructure	0.1984	0.0659	0.1256	0.3788
Outputs	Primary school enrolment	23.0135	11.5445	8.7200	56.3800
	Secondary school enrolment	26.0125	13.7338	8.4150	58.8100
	1/infant mortality	0.0497	0.0146	0.0240	0.0725
	Life expectancy	72.3535	2.1933	68.2443	75.4970
	ElecTransPower (Million)	11,499.7	7,308.9	3,985	28,399.2
	EnerConsCapita	5,285.296	901.893	3,687.471	7,043.846
	TelPer100Habit	12.744	3.492	7.079	16.975

NB: All inputs are explained in total public expenditure percentage.

Table 3. VRSTE of public spending on education, health and infrastructure for the period 1988–2013

Year	Education	Health	Infrastructure
1988	0.238	0.945	0.591
1989	0.194	0.947	0.570
1990	0.303	0.977	0.524
1991	0.524	1	0.599
1992	0.378	0.971	0.664
1993	0.346	0.980	0.719
1994	0.357	0.973	1
1995	0.426	0.978	0.715
1996	0.475	0.982	0.726
1997	0.451	0.985	0.664
1998	0.377	0.978	0.710
1999	0.308	0.956	0.813
2000	0.389	0.960	0.867
2001	0.434	0.965	0.961
2002	0.411	0.967	0.993
2003	0.449	0.972	1
2004	0.503	0.976	1
2005	0.541	0.979	0.948
2006	0.526	0.980	0.971
2007	0.612	0.986	0.923
2008	0.649	0.993	0.921
2009	0.677	0.994	0.959
2010	0.816	1	1
2011	0.865	1	1
2012	0.937	1	1
2013	1	1	1
Mean	0.507	0.979	0.840

NB: VRSTE: Variable Return to Scale Technical Efficiency.

Table 4. TE of public spending over the period 1988–2013 under many hypothesis of return to scale

Years	CRSTE	VRSTE	SCALE
1988	0.471	0.918	0.514
1989	0.554	0.920	0.602
1990	0.955	0.988	0.967
1991	1.000	1.000	1.000
1992	0.858	0.983	0.873
1993	0.875	0.974	0.898
1994	0.789	0.953	0.827
1995	0.935	0.971	0.962
1996	0.890	0.974	0.914
1997	0.773	0.967	0.799
1998	0.596	0.964	0.618
1999	0.565	0.955	0.591
2000	0.659	0.985	0.669
2001	0.984	0.984	1
2002	0.932	0.999	0.933
2003	1	0.980	1
2004	0.950	1.000	0.950
2005	0.896	0.983	0.911
2006	0.882	0.993	0.889
2007	0.919	0.998	0.921
2008	0.949	0.993	0.956
2009	0.966	1	0.966
2010	1	1	1
2011	1	1	1
2012	1	1	1
2013	1	1	1
Mean	0.861	0.980	0.876

NB: CRSTE: Constant Return to Scale Technical Efficiency; SCALE: Scale Efficiency.

Table 5. Description of explanatory variables used

Variables	Variables	Descriptions	Expected signs
Govscale	$z_1$	The scale of government as measured by the ratio of government expenditure reported to GDP. This variable seems to be associated with technical efficiency scores and size of government.	+
Unemp	$z_2$	The unemployment rate, which can be used to show the impact of the business cycle on public expenditure (Young et al., 1999).	-
Gdpgrowth	$z_3$	GDP growth	+
Inflation	$z_4$	Inflation	-
Bmg	$z_5$	Broad money growth	+
Urban	$z_6$	Urbanization	+

Table 6. Main specific models: DEA-bootstrap approach

Variables	Parameters	Model 1 Education	Model 2 Health	Model 3 Infrastructure	Model 4 Combined
Constant	${\alpha }_0$	−6.600*	0.315*	−2.865*	−0.500**
Govscale	${\alpha }_1$	0.521*	0.052*	−0.109	0.205*
Gdpgrowth	${\alpha }_2$	0.412	−0.071***	−0.314	−0.136***
Inflation	${\alpha }_3$	2.089*	0.252*	−1.038**	0.232
Bmg	${\alpha }_4$	−0.497	−0.064***	1.043*	0.070
Unemp	${\alpha }_5$	2.392	0.970*	−5.812*	0.033
Urban	${\alpha }_6$	8.487*	0.744*	5.001*	1.764*

Note: *, ** and *** represent significance at 1%, 5% and 10%, respectively.

Young, P. C., Pedregal, D., & Tych, W. 1999. Dynamic Harmonic Regression. Journal of Forecasting. 18, 369–394.

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