National progress , a two stage DEA approach

Nation's progress is an essential element in growth theory and it measures the performance of a country which is not exclusively based on economic factors but also on social, environmental and human welfare variables. The aim of this study is to examine the influence of the potential economic, institutional, demographic and geographic determinants on the progress of a nation. The performance of a nation is measured as an estimated efficiency score within which it transforms a given number of endowments such as human and physical capital into national well-being and general human welfare. The economic, environmental and human well-being yardsticks, namely GDP per capita, persons employed, carbon dioxide emission and availability of clean water with proper sanitation facilities are used to measure the nation's progress. The estimated bias adjusted performance scores in stage 1 are regressed on the potential covariates. Simar and Wilson's double bootstrap procedure is used, which allows valid inferences in the presence of an unknown serial correlation in the efficiency scores. The second stage results reveal that the considered covariates play a significant role in the progress of a nation.