The quality and efficiency of public service delivery in the UK and China

In this paper we examine the efficiency of public service delivery at regional level in two countries, the UK and China. We introduce a method based on Data Envelopment Analysis (DEA) which measures the aggregate country level inefficiency. This country level inefficiency is then decomposed into three components: 1) lack of best practices at regional level; 2) quality of the public service delivery; 3) potential efficiency gains realizable via reallocation of inputs across regions. Our empirical results show that UK and China behave very differently across these three dimensions. Most of UK inefficiency comes from the reallocation effect, while most of the Chinese inefficiency is attributable to lack of best practices. UK also shows higher levels of quality with respect to China. We speculate about the fiscal centralization/decentralization structure of the two countries as a possible explanation for such differences.