A Productivity Growth Accounting Approach to the Ranking of Developing and Developed Nations

Productivity growth accounting studies generally focus on productivity growth or decline in more developed countries such as the Organization of Economic Cooperation and Development (OECD) members. In this paper, we develop a generalized efficiency index for a much larger set of 57 national governments (NGs), both developing and developed, by employing four components of gross national product and five resource-availability indicators. Using a Data Envelopment Analysis (DEA) linear-programming approach, we maximize the components of Gross National Product (GNP), subject to minimizing specific resource-input measures. If used with appropriate precautions, the DEA-based comparative production-efficiency measures developed here can be used by individual NGs and international organizations like the World Bank and the International Monetary Fund to make equitable and sustainable lending-allocation decisions in the public and private sectors of the increasingly interdependent global economy.ERRATUM: Section 2 ‘DEA National Government (NG) Model’ draws heavily from Ehsan H. Feroz, Raymond Raab and Stephen Haag, “An Income Efficiency Model Approach to Economic Consequences of the OSHA Cotton Dust Regulations” Australian Journal of Management Volume 26, Number 1, June 2001, pp. 86-89. While the context here is different (NG), the basic parameters and expositions of the models are the same. Since this problem arose mainly because of the authors’ failure to submit corrections to the proof in a timely fashion, the authors sincerely regret any confusion or misperception created by this unintended overlap between the two papers. Remaining errors are the responsibility of the authors