Decoding worldwide efficiency: Linking government spending, corruption, gender inequality, and renewable energy practices.

ABSTRACT

Countries have become increasingly concerned about the impact of their activities and their alignment with sustainable development goals. Consequently, it is necessary to examine their performance efficiency in a unified manner, accounting for economic, environmental, and social variables. A country's performance efficiency is defined as the ratio of observed output to frontier output, given the country's productive resources. In this paper, we use the frontier technique of Data envelopment analysis (DEA) to estimate the frontier output. The objective of this study is to assess the performance efficiency of 111 worldwide countries and to examine whether gender inequality, the share of renewable energy consumption, the government control of corruption and government expenditure on education could explain differences in performance. We employed the non-parametric DEA model using three inputs (capital, labor, and primary energy consumption) and one output (GDP). We also considered an additional output (CO2 emissions); however, the results were identical to the one output model because CO2 emissions and primary energy consumption are highly correlated (0.96). We find that there is a negative impact of gender inequality, a positive impact of the share of renewable energy consumption and government control of corruption on performance efficiency. Our results also indicate that reducing CO2 emissions required transitioning towards renewable energy and using the energy efficiently. However, we did not find a positive relationship between government expenditures on education and country efficiency.