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The adequate measurement of public sector efficiency, particularly when it concerns services provision, is a delicate empirical issue and the literature on it, particularly when it comes to aggregate and international data, is rather scarce. Even when public organisations are studied, this is seldom done in an international and more aggregate framework, and international comparisons of public spending performance and efficiency do not abound. 1

In his analysis of public investment and growth Barro (1990) discusses the relevance of government expenditure in public infrastructure for economic growth, while Romer (1990) makes a point for the importance of research and development expenditure for growth. As mentioned by Feldstein (2002), a major change in the public finance literature in the last three decades is the inclusion of government spending as well as taxation as privileged topics of research. Furthermore, most authors tend to use the share of total expenditures of general government in GDP as a measure of the size of the public sector. These simple ratios by themselves give little information about the quality of the outcomes generated by public spending, and of the relative and absolute performance of the government as a provider of public goods.