Technical and allocative efficiency.

Summary The efficiency of the firm is at the heart of the concerns of the microeconomic theory of production. For banks, efficiency corresponds not only to an internal objective, but also to a commercial necessity. The objective of this paper is to show, first, the relevance of the distance function as a tool for measuring efficiency, and second, to propose an application to the banking industry. While the distance function is relevant for many industries, it is particularly relevant for the banking industry. The Mauritanian banking sector, which has been undergoing restructuring and modernization for several years, presents an interesting field of study that provides the Mauritanian authorities with a decision-making tool for liberalizing the banking industry.