An Analysis of the Efficiency of Education Spending in Central and Eastern Europe

The paper attempts to measure relative efficiency in utilizing public education expenditures in the new EU member states in comparison to the selected EU (plus Croatia) and OECD countries. As resources allocated to education are significantly limited, a special emphasis should be given to their efficient use regarding the institutional and legal constraints. By applying non-parametric methodology, i.e. Data Envelopment Analysis (DEA), a relative efficiency is defined as the deviation from the efficiency frontier which represents the maximum output/outcome attainable from each input level. An analysis of (output-oriented) efficiency measures shows that among the new EU member states Hungary, Estonia and Slovenia seem to be good benchmark countries in the field of primary, secondary and tertiary education, respectively. The empirical results also suggest that, in general, new EU member states show relatively high efficiency in tertiary education efficiency measures.