Efficiency and Heterogeneity of Public Spending in Education Among Italian Regions

Abstract

The Italian educational system is strictly regulated by the Ministry of Education. However, there are strong differences in educational inputs and outputs among Regions, as can be noticed by analyzing the allocation of public budgets to the Regions and their students' (average) performance in national and international test scores. A general institutional change is ongoing in Italy, that is, the decentralization of competencies from the State to the Regions (federalism). Some insights are necessary about the efficiency of public spending on education in a comparative perspective across Regions. To estimate efficiency scores, a non-parametric technique called DEA (Data Envelopment Analysis) was used. The unit of analysis are the 18 Italian Regions, with the focus on the lower- secondary education. Then a second-stage Tobit regression was used to detect the factors affecting efficiency. The results corroborate the difference between the North and South of Italy (the Regions in the North outperform their counterparts in the South). When looking at the Regional socio-economic context, GDP per capita appears as the key determinant of efficiency.