Public Investment efficiency in developing countries: Is there a sectoral gap?

Abstract This article aims at analyzing the effectiveness of public investments in developing countries using data envelopment models (DEA) and stochastic frontier analysis (SFA) on a panel of 75 countries in development over a period of 21 years. The results show that overall, the sample countries are efficient in the Debreu-Farrell sense of almost 82.58%. Furthermore, the results of our study show that corruption control and legal rules remain key factors in achieving better efficiency of public investment across the different sectors in PEDs. Through this article, we suggest that public investment be prioritized towards fundamental sectors of development such as education and health. It will also be necessary to take the necessary measures to improve governance to hope for better efficiency of public investment in developing countries. JEL Code: E22, H21, H51, H52, H54