The article explores the fundamental distinctions between effectiveness and efficiency within economic theory, highlighting their complementary yet distinct roles in economic analysis. It provides a systematic classification of efficiency types including allocative, technical, dynamic, and social efficiency, while examining their applications across micro and macroeconomic contexts. The methodological foundations for measuring efficiency are thoroughly analysed, comparing traditional approaches with contemporary multi-criteria models. Special attention is given to the specifics of efficiency evaluation in regional economic development, particularly for Ukraine's western regions with their unique socio-economic characteristics. The research establishes a comprehensive framework for efficiency assessment that integrates quantitative metrics with qualitative indicators, enabling more nuanced evaluation of economic development trajectories. The proposed methodological approach accounts for resource constraints, institutional factors, and sustainability requirements while providing practical recommendations for improving efficiency measurement systems for regional policy planning and implementation. The study develops an integrated index for comprehensive assessment of the region's economic development, which includes general economic indicators, investment activity indicators, foreign economic activity indicators, innovative development indicators, tourism and recreational activity indicators, socio-economic and environmental indicators, as well as indicators of small and medium-sized business development. Based on the analysis of key economic development indicators of the western region of Ukraine, strategic priorities for its future development are identified, which include increasing the competitiveness of the regional economy, developing an innovative ecosystem, forming an effective spatial organization of the economy, integrating into the European economic space, developing human capital, ensuring environmental sustainability, developing modern infrastructure and formation of a favourable business environment.