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This paper assesses the relative efficiency of government spending on health care and education in Croatia by using the so-called Data Envelopment Analysis. The analysis finds evidence of significant inefficiencies in Croatia's spending on health care and education, related to inadequate cost recovery, weaknesses in the financing mechanisms and institutional arrangements, weak competition in the provision of these services, and weaknesses in targeting public subsidies on health care and education. These inefficiencies suggest that government spending on health and education could be reduced without undue sacrifices in the quality of these services. The paper identifies ways to do that.

Medical care --- Education --- Finance. --- Croatia --- Appropriations and expenditures. --- Children --- Education, Primitive --- Education of children --- Human resource development --- Instruction --- Pedagogy --- Schooling --- Students --- Youth --- Delivery of health care --- Delivery of medical care --- Health care --- Health care delivery --- Health services --- Healthcare --- Medical and health care industry --- Medical services --- Personal health services --- Narodna Republika Hrvatska --- Socijalistička Republika Hrvatska --- SRH --- Hrvatska --- S.R.H. --- Kroatien --- SR Hrvatska --- SR Croatia --- People's Republic of Croatia --- Croazia --- Socialist Republic of Croatia --- NR Hrvatska --- Khorvatii︠a︡ --- Ḳroʼeṭyah --- Horvátország --- Repubblica di Croazia --- Civilization --- Learning and scholarship --- Mental discipline --- Schools --- Teaching --- Training --- Public health --- קרואטיה --- クロアチア --- Kuroachia --- クロアチア独立国 --- Kuroachia Dokuritsukoku --- Croatia (Republic : 1941-1945) --- Public Finance --- Health Policy --- Education: General --- National Government Expenditures and Health --- Health: General --- National Government Expenditures and Education --- Analysis of Health Care Markets --- Public finance & taxation --- Health economics --- Health systems & services --- Health care spending --- Health --- Education spending --- Expenditures, Public --- Croatia, Republic of

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Enhancing the efficiency of education and health spending is a key policy challenge in G7 countries. The paper assesses this efficiency and seeks to establish a link between differences in efficiency across countries and policy and institutional factors. The findings suggest that reforms aimed at increasing efficiency need to take into account the nature and causes of inefficiencies. Inefficiencies in G7 countries mostly reflect lack of cost effectiveness in acquiring real resources, such as teachers and pharmaceuticals. We also find that high wage spending is associated with lower efficiency. In addition, lowering student-teacher ratios is associated with reduced efficiency in the education sector, while immunizations and doctors' consultations coincide with higher efficiency in the health sector. Greater autonomy for schools seems to raise efficiency in secondary education.

Public Finance --- Education: General --- National Government Expenditures and Health --- National Government Expenditures and Education --- Health: General --- National Government Expenditures and Related Policies: General --- Public finance & taxation --- Education --- Health economics --- Health care spending --- Education spending --- Health --- Expenditure --- Expenditures, Public --- Germany --- Medical economics --- Finance