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The fiscal outlay efficiency matters when the performance-based allocation of funds is made to state governments by the central government in a federal structure of an economy like India. Also the efficiency cannon of public expenditure is a key aspect in the field of public economics. Thus, a study to evaluate the efficiency in fiscal outlay of Indian states has been conducted.

The paper offers a three divisions–based paradigm under Network Data Envelopment Analysis framework to compare the performance of fiscal entities (say Indian state governments) in converting available fiscal resources into desired short-run and long-run growth and development objectives. The network efficiency score has been taken as a measure of the quality of fiscal outlay management that is trifurcated into divisional efficiencies representing budgeting process, fiscal outlay efficiency process and fiscal outlay effectiveness process.

It has been noticed that the states are under performing in achieving short-run growth targets and so the efficiency process division has been identified a major source of fiscal under performance. Suboptimum allocation of fiscal expenditure under various heads within the fiscal resources, as explained under budgeting process, is another major cause of fiscal under performance.

The study purposes a three divisions–based paradigm that takes into account efficiency of a state in (1) planning budget, (2) achieving short-run growth targets and (3) achieving long-run development targets. These three stages are named as budgeting process efficiency, fiscal outlay efficiency and fiscal outlay effectiveness, respectively. Therefore, a new paradigm called BEE paradigm is proposed to evaluate performance of fiscal entities in terms of fiscal outlay efficiency.

In existing literature on measuring efficiency of public expenditure, the public sector outputs have been made as function of fiscal expenditure as input treating the said outlay as an exogenous variable. In present context, the fiscal expenditure has been treated endogenous to the budgeting process. A high inefficiency on account of budgeting process supports this treatment too.

The importance of health care is growing worldwide, and the health sector receives a good proportion of GDP. As health care costs are increasing, it is important to assess the performance of health care facilities across countries. Therefore, this paper aims to examine the effectiveness of data envelopment analysis, which is one of the most important techniques currently available to model and measure the efficiency of national health care systems across the world.

In this paper, the effectiveness of the operation of 180 countries is evaluated using data envelopment analysis (DEA). The countries selected are the members of the World Health Organization. Efficiency measures are calculated with respect to two groups of indicators, namely health status and health service coverage. In the health status group, four outputs representing mortality rates and one input representing the total expenditure on health is used in the analysis. In the health service coverage group, two outputs representing immunisation coverage and one input representing the total expenditure on health are used in the analysis.

Using data for the year 2008 from World Health Statistics (WHO), 45 countries are found to be efficient.

The value of the paper lies in the fact that it is one of the few studies to examine the robustness of data envelopment analysis to evaluate the performance of health care systems across countries.