An Assessment of Public Spending Efficiency of Health and Education in Nigeria

Abstract

This study analysed the efficiency of Nigeria’s public spending in the health and education sectors using the non-parametric Data Envelopment analysis (DEA) approach. It further examined the environmental variables (which can be economic, institutional or demographic factors) influencing public spending efficiency in these sectors for the period 2000–2022 using censored Tobit regression and fractional logistic regression. The empirical results showed that the average public spending efficiency scores of health and education are 0.979 and 0.912, respectively, implying that Nigeria can still improve the efficiency of these two sectors even though it is relatively high. The second analyses of the regression results revealed that broad money and the size of government spending are the economic variables which have significant influence on the efficiency of both the health and education sectors. Control of corruption and government effectiveness are the government institutional variables that have a significant influence on efficiency. Both urbanization and population growth have been found to significantly influence public spending efficiency. This study strongly recommends the deliberate implementation of policies and measures that will improve the performance of government institutions and the development of secured urban centres in Nigeria, which will help ensure improvement in public spending efficiency in Nigeria.