Determinants of public spending efficiency in education and health: evidence from selected CEMAC countries

Abstract

This paper analyses the efficiency of public spending in the education and health sectors of Cameroon, Chad and Central African Republic. It also examines the institution and economic factors influencing spending efficiency in these sectors in the countries selected for the period 2000–2012. The public sector efficiency scores are estimated in the first stage by using the non-parametric Data Envelopment Analysis (DEA) approach while in the second stage, the panel data Tobit and the Fractional Logit regression techniques are used to determine the effect of institutional and economic factors on public spending efficiency in the education and health sectors. The results from the estimation show that Cameroon is more efficient than Chad and Central African Republic in its public spending in education and health. Chad is least efficient in public spending in education, although it spends more on education as compared to the other countries in the study. The results also indicate that the quality of budgetary and financial management has a positive and statistically significant influence on efficiency while corruption has a negative and significant influence on public spending efficiency in the education and health sectors. The results put together recommend that efforts should be put in place to curb corruption and improve on the quality of budgetary and financial management.