Evaluation of Efficiency in Selected Areas of Public Services in European Union Countries

Martina Halaskova,Viktor Prokop,Renata Halaskova

doi:10.3390/su10124592

Martina Halaskova, Viktor Prokop + Show 1 more

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https://doi.org/10.3390/su10124592

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Abstract

Over the past 40 years, the service sector has become the dominant area of market economies. The public sector and services financed from public financing represent a specific group within the services sector. This paper aims to evaluate the efficiency of EU countries and find the extent to which the volume of public services (and the respective financial allocations) can have an impact on selected economic indicators. To this end, the efficiency of public expenditure in five areas of public services (general public services; health; education; social protection; and recreation, culture, and religion) in 2009 and 2016 was evaluated in relation to selected economic indicators (GDP per capita and employment in services). In addition, the efficiency of public expenditure in EU countries was evaluated in relation to the size of the public sector and traditions of public administration. For cross-country analyses within the 27 European countries, data envelopment analysis and the input-oriented variable returns to scale (VRS) model were applied. The results demonstrated that in 2009, 13 out of 27 countries were efficient as opposed to 2016, where only seven countries were efficient. In countries with bigger size of public sector, the efficiency of public expenditure on services was not established. However, there was a similarity in the efficiency of public expenditure on services between groups of EU countries regarding the tradition of public administration.

Highlights

Services currently represent a dynamically developing area of national economies
The article aimed to evaluate the efficiency of EU countries and to find the extent to which the volume of public services had an impact on the selected economic indicators in the years 2009 and 2016
Various comparative approaches can be applied to evaluate the efficiency of EU countries and their public services, e.g., typology of national industrial relations arrangements in public services [39]

Summary

Introduction

Services currently represent a dynamically developing area of national economies. Over the past 40 years, the tertiary sector (service sector) has become a dominant sphere of market economies, and the growing role of services has had a positive impact on the employment rate in services [1,2]. It must be noted, that certain types of services are excluded from the tertiary sector. Services that render the economic growth more dynamic with an emphasis on quality, development, and cultivation of human potential (education, culture, health, etc.) are part of the quinary sector. Public service . . . is a public good (goods of collective consumption)”

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