© J.C. Baltzer AG, Science Publishers Chapter 6 Restricted best practice selection in DEA: An overview with a case study evaluating the socio-economic performance of nations Boaz Golany a,b and Sten Thore b a Faculty of Industrial Engineering and Management, Technion – Israel Institute of Technology, Haifa 32000, Israel b IC 2 Institute, The University of Texas at Austin, 2815 San Gabriel, Austin, TX 78705-3596, USA We discuss modifications in the concept of efficiency that occur in Data Envelopment Analysis when best practice selection is subjected to additional constraints reflecting insti- tutional circumstances, externalities, equity considerations or other extraneous information. Such additional constraints restrict the feasible production possibility set on the envelop- ment side problem. We provide an overview of constraints that may be present on the envelopment side; some of them mimic the well-known cone-ratio and assurance region models on the multiplier side problem. The discussion is mainly in terms of policy-based constraints that are external to the physical input-output relationships and instead reflect the institutional setting of the efficiency rankings, including considerations of the economic and social policy. A numerical example which rates the socio-economic performance of both developed and developing nations is provided to illustrate our model developments. 1. Introduction The idea of conditioning the DEA calculations to allow for the presence of additional information arose first in the context of bounds on factor weights in DEA’s multiplier side problem. This led to the development of the cone-ratio [11] and assur- ance region models [26]. Both methods constrain the domain of feasible solutions in the space of the virtual multipliers. They have often been invoked to incorporate separate price data into the calculations. But these methods extend also to more general situations when limits on the virtual multipliers are being defined in a broader policy-making context. Annals of Operations Research 73(1997)117 – 140 117