The aim of the paper is to analyse the development of efficiency and productivity in the provision of public welfare services of the Central and Eastern European countries (CEECs) over the period 1997-2006. Efficiency scores are estimated applying data envelopment analysis (DEA), which is particularly suitable for the public services. Then, Malmquist index is calculated to separate productivity and efficiency changes. In conclusion, the CEECs are found to be relatively efficient in the provision of welfare services. Nevertheless, the efficiency scores indicate the existence of potential input level saving.