The efficiency of health and education expenditures in the Philippines |
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Authors: | Rouselle F Lavado Emilyn C Cabanda |
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Institution: | (1) Philippine Institute for Development Studies, NEDA-Makati Building, 106 Amorsolo St., Legaspi Village, Makati City, Philippines;(2) School of Global Leadership and Entrepreneurship, Regent University, 1333 Regent University Drive, Virginia Beach, VA 23464, USA |
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Abstract: | This paper attempts to measure the efficiency of provinces in the Philippines in utilizing public resources for health and
education where only 1% of the total budget is spent for health and 3% is allocated for education. With such budget constraints,
it is important to examine the efficiency of spending on social services as small changes can have a major impact in achieving
the Millennium Development Goals. Efficiency is defined as the deviation from the frontier which represents the maximum output
attainable from each input level. This efficiency frontier is estimated using the data envelopment analysis, free disposal
hull and Malmquist-DEA. We use expenditures for social services for input and primary and secondary enrollment rates, literacy
rate per province, and life expectancy for outputs. An analysis of efficiency scores shows that provinces where the level
of inequality is higher (as measured by the Gini coefficient) as well as those who receive a larger portion of their budget
as grants are among the least efficient. This research can help in the budget allocation and rationalization among Philippine
provinces. |
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Keywords: | Efficiency Health and education expenditure Philippines Data envelopment analysis Free disposal hull Malmquist-DEA |
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