A measure of the efficiency of public spending on education: FDH analysis for Latin America

This article examines the efficiency of public spending on education in Latin America using the Free Disposable Hull (FDH) analysis. Despite the increase in education spending, it is argued that Peru and other countries in the region face problems of efficiency and quality in their education systems. The relationship between per-student spending on primary education and literacy rates is analyzed, using data spanning 18 years and comparing groups of countries with similar per capita incomes. The FDH methodology allows for an assessment of the relative efficiency of spending, providing a ranking of countries. The results suggest that Costa Rica and Paraguay are the most efficient, while several countries, including Peru, show improved performance, albeit below the regional average. The study finds that higher spending does not always translate into greater efficiency, and it emphasizes the importance of other factors in reducing illiteracy rates. The implications of this study highlight the need to improve the management of education spending to optimize its effectiveness and contribute to human development. (Abstract and audio: Department of Economic Publications)