We often hear that people from our environment complain about the quality of public services provided by the state – we see queues in health centers, counters where we always lack a document, high utility bills. On the other hand, we pay relatively high taxes, as public spending in Serbia is at about the same level as in Germany.
In principle, it is possible to assess how efficient the public sector in Serbia is in providing services to citizens – this does not measure whether the state is doing the things it needs to do, but how efficiently it is doing the things it needs to do.
There are several methodological approaches to measuring the efficiency of the public sector – one of them was proposed by former IMF chief economist Vito Tanci: it first averages the value of output observed in the whole set, and then observes the results of each country in relation to the existing average. This means that if e.g. we talk about education, first we calculate the average PISA results of all observed countries, and then we look at where Serbia is in relation to this average.
Using this methodology, I calculated the level of efficiency of the public sector of European countries in transition (EU members + Western Balkans + Turkey). This analysis tells us that in terms of public sector efficiency, Serbia is at the bottom of the observed countries, along with Croatia and Romania.
How exactly do we come to this calculation? The methodology will be explained in more detail later in the text; in short: the final value, the efficiency of the public sector, is obtained by comparing the output (production of the entire public sector) with the input (level of public spending). We calculate the production of the entire public sector on the basis of an average of 7 special indices related to education, health, infrastructure, etc.
Ideally, we are between two possibilities: by increasing public efficiency we could reach the same level of public services with a significantly lower level of public spending, or with the current level of public spending we could reach a significantly higher level of public services. It is also possible to find yourself somewhere in between, with a partial increase in the quality of services and lower taxes. This would be seen on the chart through the movement of Serbia towards the red line, towards the result of the Czech Republic (first), Albania (second) or Lithuania (third scenario), Talas reports.
