Measuring regional quality of government: the public spending quality index based on government contracting data

Government contracting is crucial for defining the quality of government and public services because it amounts to about 29% of government spending. However, regional quality of government indicators, especially for public spending, are largely missing. We assess the quality of public spending by transparency, competition, efficiency and corruption using a novel database of 4 million contracts from the EU-28 between 2006 and 2015. We find that public spending quality is associated with gross domestic product (GDP)/capita, the European quality of government index (EQI) and public sector meritocracy. We confirm large within-country regional variations, but also find considerable change over time: the steady deterioration of performance in old European Union member states.