In recent years, a growing body of academic studies
have attempted to empirically assess the efficiency and
usefulness of public sector activities in industrial countries.
That is, these studies analyze the impact of government spending
on the welfare of citizens by examining a host of economic and
social indicators. Most studies have concluded that government
spending could be more efficient and less than it is today.
Comprehensive measures of government performance and efficiency
are, however, still quite limited. The objective of the
underlying study, which this paper summarizes, is to provide
proxies for measuring public sector performance and efficiency.
Two indicators, the Public Sector Performance (PSP) index and the
Public Sector Efficiency (PSE) index, are calculated for 23
industrialized countries, including Canada. A subsequent analysis
measures the "wastefulness" of public expenditures by determining
the lowest level of government spending (as a percent of GDP)
necessary to attain a given level of public sector