Public Service Spending: Efficiency and Distributional Impact—Lessons from Asia

Efficiency and equity are cornerstones in rational service delivery in the public sector. This paper benchmarks efficiency and equity in public spending on health, education and social protection in a broad group of ADB member economies. The paper describes public expenditure trends in health, education, and social protection in the region. Following Herrera and Pang (2005), a formal efficiency benchmarking exercise is conducted using Data Envelopment Analysis and available input and output data from World Development Indicators, Government Finance Statistics, and ADB databases to deconstruct each member economy’s efficiency changes in health and education spending. The paper then reviews service provision inequality within ADB economies using utilization rates and benefit incidence, and notes the deficiency of pro-poor spending in some sectors.