Efficiency of Regional Public Expenditures on Education and Healthcare: Evaluation from Citizens’ Perspective

Abstract

International comparisons demonstrate that Russia lags behind OECD countries in terms of citizen satisfaction with the quality of public services in education and healthcare. However, traditionally public perceptions of the quality of service delivery are not taken into account when evaluating public expenditures. Given the overall client centricity trend in the Russian public administration, the assessment of public expenditures on the basis of citizens’ satisfaction with the quality of public services is highly relevant. The paper proposes and implements an approach to evaluating the efficiency of public expenditures on primary and secondary education and primary healthcare based on the ratio of citizens’ satisfaction with the quality of public services and per capita expenditures from regional consolidated budgets. The authors demonstrate that citizens’ perceptions weakly correlate with the level and dynamics of budget expenditures on primary and secondary education and primary healthcare services. Thus, citizens’ priorities and expectations are not fully accounted for in the budgeting process. The proposed approach helped to identify Russian regions with high and low efficiency of public spending on primary and secondary education and primary healthcare. It is recommended to use this approach as a diagnostic tool for identifying regions and sectors requiring in-depth public expenditure review and to expand the proposed approach to evaluate public spending from citizens’ perspective in other areas.