02171cas a2200253 a 4500 AALejournalIMF011981 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475505306 1018-5941 BD-DhAAL BD-DhAAL Grigoli, Francesco. Quality of Government and Living Standards : Adjusting for the Efficiency of Public Spending / Francesco Grigoli, Eduardo Ley. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (21 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students It is generally acknowledged that the government's output is difficult to define and its value is hard to measure. The practical solution, adopted by national accounts systems, is to equate output to input costs. However, several studies estimate significant inefficiencies in government activities (i.e., same output could be achieved with less inputs), implying that inputs are not a good approximation for outputs. If taken seriously, the next logical step is to purge from GDP the fraction of government inputs that is wasted. As differences in the quality of the public sector have a direct impact on citizens' effective consumption of public and private goods and services, we must take them into account when computing a measure of living standards. We illustrate such a correction computing corrected per capita GDPs on the basis of two studies that estimate efficiency scores for several dimensions of government activities. We show that the correction could be significant, and rankings of living standards could be re-ordered as a result. Mode of access: Internet Ley, Eduardo. IMF Working Papers; Working Paper ; No. 2012/182 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/182/001.2012.issue-182-en.xml IMF e-Library