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Benchmarking PublicSpending Efficiency inEducation, Health, andInfrastructure in Ireland Yen Mooi SIP/2025/090 IMF Selected Issues Papers are prepared by IMF staff asbackground documentation for periodic consultationswith member countries.It is based on the informationavailable at the time it was completed on May 20, 2025. Thispaper is also published separately as IMF Country Report No25/129. 2025JUL IMF Selected Issues PaperEuropean Department Benchmarking Public Spending Efficiency in Education, Health, and Infrastructure in IrelandPrepared by Yen Mooi Authorized for distribution by Yan SunJuly 2025 IMF Selected Issues Papersare prepared by IMF staff as background documentation for periodicconsultations with member countries.It is based on the information available at the time it wascompleted on May 20, 2025. This paper is also published separately as IMF Country Report No 25/129. ABSTRACT:The paper benchmarks Ireland’s public spending efficiency to peer countries in infrastructure,health, and education using a variety of indicators and maps the efficiency frontiers in these sectors using theData Envelopment Analysis (DEA) method. It finds that while Ireland is at the efficiency frontier for educationspending, there is room for potential gains in public spending efficiency on health and infrastructure. Achievingthese gains could create further fiscal space to improve Ireland’s buffers for shocks in an environment ofheightened global uncertainty and structural shifts. SELECTED ISSUES PAPERS Benchmarking Public SpendingEfficiency in Education, Health,and Infrastructure in Ireland Ireland Prepared by Yen Mooi1 IRELAND BENCHMARKING PUBLIC SPENDING EFFICIENCY IN EDUCATION, HEALTH, ANDINFRASTRUCTUREIN IRELAND____________________________________________________ 2 A. Introduction ________________________________________________________________________2B. Infrastructure________________________________________________________________________5C. Health_______________________________________________________________________________7D. Education _________________________________________________________________________12E. Concluding Remarks ______________________________________________________________15 FIGURES 1. Public Spending _____________________________________________________________________32. Spending Range of Selected Expenditure Categories in Ireland and the Euro Area(2023)__________________________________________________________________________________33. Gap in Major Spending Categories Between Ireland and EU Peers (2023) ___________44. Selected Infrastructure Indicators ___________________________________________________65. Investment Efficiency Frontier _______________________________________________________76. Selected Health Outcomes __________________________________________________________87. Selected Health Inputs ______________________________________________________________98. Health Spending __________________________________________________________________109. Efficiency Frontier of Health Spending ____________________________________________1210. Education Outcomes_____________________________________________________________1311. Education Spending _____________________________________________________________1312. Efficiency Frontier of Education Spending________________________________________14 References___________________________________________________________________________16 BENCHMARKING PUBLIC SPENDING EFFICIENCY INEDUCATION, HEALTH, AND INFRASTRUCTURE INIRELAND The paper benchmarks Ireland’s public spending efficiency to peer countries in infrastructure, health,and education using a variety of indicators and maps the efficiency frontiers in these sectors using theData Envelopment Analysis (DEA) method. It finds that while Ireland is at the efficiency frontier foreducation spending, there is room for potential gains in efficiency for public spending on health andinfrastructure. Achieving these gains could create further fiscal space to improve Ireland’s buffers forshocks in an environment of heightened global uncertainty and structural shifts. A.Introduction Enhancing public spending efficiency will help de-risk Ireland’s public finances. Ireland’s strong fiscal position in recent years has been supported by a large increase in corporateincome tax (CIT) revenues, which are highly concentrated and vulnerable to external policy shifts aswell as firm- or sector-specific shocks. It is unclear how long the windfall CIT revenue source will last,without which Ireland’s underlying fiscal position would have been considerably weaker. Enhancingpublic spending efficiency—by enabling the same quality of outcomes and delivery of publicservices with less spending, or better outcomes with a given level of spending, or a mix of the two—can help improve Ireland’s fiscal buffers for shocks. Furthermore, at the current juncture of the Irisheconomy operating at full capacity, lim