Public Sector Efficiency: An International Comparison

We compute public sector performance (PSP) and public sector efficiency (PSE) indicators, comprising a composite and seven sub-indicators, for 23 industrialised countries. The first four sub-indicators are “opportunity” indicators that take into account administrative, education and health outcomes and the quality of public infrastructure and that support the rule of law and a level playing-field in a market economy. Three other indicators reflect the standard “Musgravian” tasks for government: allocation, distribution and stabilisation. The input and output efficiency of public sectors across countries is then measured via a non-parametric production frontier technique. The study finds significant differences in PSP and PSE, which suggests a large potential for expenditure savings in many countries.

While many developing countries have devolved public responsibilities to local governments in recent years, some studies have examined whether decentralization actually leads to greater public sector allocation efficiency. This paper approaches this question by assessing the efficiency of government expenditure on public sector under fiscal decentralization. The area of public expenditure is of great importance making the findings have strong implications with regard to public sector efficiency. We compute public sector performance (PSP) and public sector efficiency (PSE) indicators, comprising of composite and 9 sub indicators, for 33 provinces in Indonesia. The first 6 sub indicators are opportunity indicators that take into account education, health outcomes, poverty, gender equality, quality of public infrastructure (transportation and energy). 3 order indicators reflect the standard musgravian tasks for the government: allocation, distribution, and stabilization. The input and output efficiency of public sectors across provinces is then measured using a non-parametric production frontier technique. Free Disposable Hull (FDH) analysis is used to estimate the extent of slack in government expenditures. The study finds significant differences in PSP and PSE, which suggests a large potential for expenditure savings in many provinces. All these findings suggest diminishing marginal products of higher public spending. We also estimate a semi parametric model of the public sector production process by regressing FDH analysis output scores on non discretionary variables using the Tobit procedure. We show that inefficiency is strongly related to GDP per capita, human development index, and degree of fiscal dependence. The central message of this paper is that increasing budgetary allocations for public sector may not be the only or most effective way to increase public sector outcome, and that more attention should be given to increasing the efficiency of expenditure. Keywords: fiscal decentralization public sector performance, public sector efficiency, free disposable hull, Tobit

The ability to measure public sector performance is a necessity for policymakers as well as academics and citizens of a country. This article aims to identify ways of measuring public sector performance using the measurement applicable to all countries and outlining opportunities for comparability among them. Thus, the authors highlight opportunities for performance measurement and public sector efficiency using various methods of non-parametric and parametric analysis. The starting point of the analysis considers the concept of performance, encompasses the proposed terms of productivity, efficiency and effectiveness; therefore, the measurement of public sector performance requires an exhaustive analysis in multidimensional terms, covering all core areas of a country. Moreover, understanding and developing robust international comparison possibilities will give in practice a structural framework for measuring the performance of particular relevance. Study findings indicate that performance measurement and implicitly public sector efficiency is a complex and difficult task that goes beyond simply measuring of productivity and efficiency, and requires aggregation of several key areas related to the results of a state. In summary, the analysis framework of the performance and efficiency of public sector is outlined both in terms of relevance of indicators and the methodology used. It demonstrates that methods of non-parametric analysis work at their best when all aspects of the production process can be captured in a limited number of input and output dimensions.KEYWORDS: performance, efficiency, public sector, non-parametric methods, parametric methods.

Since the advent of results-based management through the Organic Law No. 130-13 on the Finance Law, management control has been increasingly developing in the Moroccan public sector.With varying degrees of integration across different public institutions, management control has introduced several innovations within these organizations, the primary one being the introduction of a new management philosophy focused on the pursuit of performance and surpassing the logic of available resources.This article aims to study the impact of management control tools especially resultsbased budgeting to enhance the performance of a social public sector as higher education in the Moroccan context. At first, we will review the basic concepts related to our issue thru a literature review marking the interrelationships and overlaps of these concepts. Then, by conducting a critical analysis of various indicators issued from multiple annual reports of the higher education and scientific research and innovation ministry, to conclude by a discuss explaining the probable factors that have hindered the favorable development of the indicators in relation to the allocated budgets per program.This work serves to improve the conditions for implementing and operationalizing management control by rethinking the choice of the right tools adapted to the public context and the social character of the sector.

PurposeThis paper aims to examine the use of the balanced scorecard (BSC) as a performance management tool in the public sector. Drawing on a New Zealand study of local government organzations (LGOs), it seeks to identify issues and challenges in implementing the BSC in public sector contexts.Design/methodology/approachA postal questionnaire was used to solicit public sector managers' views on the usefulness of the BSC and the factors that support or impede its implementation in practice. Follow‐up interviews with selected respondents allowed for more in‐depth exploration of managers' experiences of BSC use and outcomes.FindingsThe findings reveal low rates of BSC adoption amongst the studied LGOs. Further, perceived BSC utility is dominated by performance measurement and reporting, while the performance management role of the BSC remains relatively under‐exploited. This study identifies users' perceptions of the key challenges impeding BSC implementation in the public sector, and highlights their significance for both practice and theory.Research limitations/implicationsThis paper highlights the need for improved theorisation on several issues that present particular challenges in public sector BSC practice: modifying the BSC dimensions, designing measures that capture important qualitative outcomes, identifying the “customer” and/or achieving a genuine multi‐stakeholder approach, and mapping BSC causality relationships.Practical implicationsImproved awareness of the factors perceived to lead to successful and unsuccessful BSC implementation may enhance the uptake and utility of the BSC for measuring and managing performance in public sector organisations.Originality/valueThis study examines BSC use in local government, where it has been relatively under‐researched. It adds to prior studies by specifically examining the factors that support and impede the effective implementation of the BSC in public sector contexts.

PurposeA number of studies and indicators have ranked European countries in terms of the performance of their public sectors. This paper aims to demonstrate that there are important conceptual problems with such rankings and comparisons.Design/methodology/approachUsing the existing indicators, the paper first shows how European countries' public sectors are ranked. It then goes on to show how conceptual problems with these indicators may lead to incorrect conclusions.FindingsCountries' public sector performance cannot be summarised using a single indicator because of inability to define “the public sector” and the disagreement on what it means for public sectors to perform.Practical implicationsDespite increasing demand and supply in policy circles for international public sector indicators, the existing ones are unreliable.Originality/valueThis paper extends the assessment of international public sector indicators beyond a mere technical evaluation.

The main objective of this paper is to assess the efficiency of the European Union's public sector from a quality of governance approach, employing a two-step methodology. In the first stage, EU states' efficiency scores are determined using Data Envelopment Analysis. Once quantifying public efficiency, the second step of the methodology examines the determinants of efficiency using a quantile regression estimation technique, with an emphasis on demographic features, corruption, economic freedom, and governmental digitalization. The novelty is provided by the assessment of the public sector's efficiency and efficacy from a broader approach in order to determine the efficiency scores of European Union countries, as well as the key factors that may impact the public sector's performance. The main findings, namely that governance quality can be considered an important resource in analysing public performance and that human resources, freedom, democracy, corruption, and digitalization have an impact on efficiency, are important considerations not only for policymakers but also for society, researchers, and the academic community. Reform measures should strive to improve both the technical and democratic components of public institutions in order to more effectively and transparently allocate public resources, while taking into consideration local and national peculiarities.

Persistent inflation in Nigeria has raised concerns about the effectiveness of conventional macroeconomic policy instruments, motivating renewed attention to the role of governance and public sector performance in shaping price dynamics. This study investigates the extent to which public sector efficiency and bureaucratic structure influence inflation outcomes in Nigeria, beyond the effects of standard macroeconomic variables. The objective is to empirically examine the relationship between inflation and public sector efficiency, institutional quality, government regime type, interest rates, real economic output, and the nominal exchange rate. The analysis focuses on Nigeria from 1981 to 2024, incorporating key macroeconomic variables by alternating democratic and military regimes, structural reforms, and recurrent inflationary experiences. Methodologically, the study adopts an econometric time-series framework, modelling inflation as a function of public sector efficiency, institutional quality, regime dummy variables, interest rates, real gross domestic product, and the nominal exchange rate. The Autoregressive Distributed Lag (ARDL) approach alongside Granger causality tests, the study assesses both short-run and long-run relationships between institutional factors and economic performance, standard diagnostic tests and robustness checks are employed to ensure the reliability of results. The findings reveal that inefficiencies in the public sector and weak institutional quality significantly exacerbate inflationary pressures, while rigid bureaucratic structures constrain effective policy transmission. Interest rates and exchange rate movements are also found to be important channels through which governance weaknesses translate into persistent inflation. Based on these findings, the study recommends strengthening public sector efficiency through institutional reforms, bureaucratic streamlining, and improved policy coordination alongside monetary measures. It concludes that sustainable inflation control in Nigeria requires an integrated macro-institutional approach that addresses governance and bureaucratic constraints in tandem with conventional economic policy tools.

Purpose – The paper aims to examine the relationship of leadership styles and employees job performance in public sectors and to identify study gaps in the areaDesign/methodology/approach – The paper used exploratory study approach and reviewed literatures related to this study. The data used for study was generated from secondary sources of articles, books and review papers.Findings – The paper provides empirical insights about how leadership styles have relations and impacts on employees’ performance and the practice of public service leadership in different contexts and nations.Research limitations/implications – This study used only qualitative method and data were gained from only secondary sources. This may cause generalizability limitations.Practical implications – The paper has significant implication for researchers, role players of public sectors leaders and experts working under the supervision of leaders or managers.Originality/value – This paper is original and own effort of the researcher.

This paper explores the macroeconomic effects of improving public infrastructure in the Philippines. After benchmarking the Philippines relative to its neighbors in terms of level of public capital and quality of public infrastructure, and public investment efficiency, it uses model simulations to assess the macroeconomic implications of raising public investment and improving public investment efficiency. The main results are as follows: (i) increasing public infrastructure investment results in sustained gains in output; (ii) the effects of improving public investment efficiency are substantial; and (iii) deficit-financed increases in public investment lead to higher borrowing costs that constrain output increases over time, underscoring the importance of revenue mobilization.

Threshold Effects of Corruption: Theory and Evidence

In recent years, it has been more crucial than ever to compare the financial performance of a few public and private sector banks.Using a variety of financial parameters to evaluate their profitability, liquidity, efficiency, and solvency, we look at the financial performance of 10 public sector banks and 10 private sector banks from 2017 to 2022.Our findings show that in the majority of the financial parameters examined, private-sector banks have outperformed public-sector banks.Better profitability metrics, including return on equity (ROE) and net interest margin, have been demonstrated by private sector banks (NIM).They can do so because of their improved asset quality, higher operational efficiency, and lower overhead expenditures.Public sector banks, on the other hand, have had difficulty maintaining profitability.In contrast, because of their greater levels of non-performing assets (NPAs) and subpar loan recovery ratios, public sector banks have found it difficult to retain profitability.The public sector banks, on the other hand, have demonstrated better liquidity ratios, such as the current ratio and cash-to-deposit ratio, demonstrating that they have more cash on hand to cover short-term obligations.This is mainly because public sector banks may retain greater cash reserves because of the government's ownership and backing, which offers a steady source of money.Private sector banks, on the other hand, have demonstrated higher efficiency ratios, such as the advances to deposits ratio, demonstrating that they are more effective at using their assets to create income.

Abstract. New Public Management is used to regulate government policies meant to enhance performance of public sector that ultimately facilitates general public interest and improve their living standards. New Public Management is inevitable as under this approach modern governments are inclined to bring reforms in an effort to improve efficiency and effectiveness of public sector by adopting private sector practices. Pakistan is also influenced by NPM as reforms in public sector have been developed and implemented to some extent with weak claims of improved performance. The lack of actual improvement in performance raises many questions on the effectiveness of NPM implementation in Pakistan. This study aims to explore these questions by measuring factors influencing performance of public sector organizations in Pakistan. This study adopted quantitative approach to conduct an empirical investigation. Research framework includes major factors of NPM based on literature. Data was collected using adopted questionnaires for each variable. Survey was done from a sample taken from public sectors enterprises in Punjab province under random sampling technique. Data was analyzed using various statistical techniques. Demographics were analyzed in the form of descriptive statistics. Research variables were analyzed using Multiple Regression analysis and Pearson Correlation analysis. Regression assumptions were tested which were fulfilled. Reliability and validity were also tested. Findings show that both “Democratization and Participation (Involvement in Decision Making)”; and “Customer Concept (Customer Orientation)” have positive influence on performance under NPM. Whereas interestingly “Decentralization (Delegation)” has negative influence on performance under NPM as a result of resistance of employees towards recent attempts of Devolution of power or authority. But surprisingly “Management Style (HR Practices)” show no influence on performance under NPM as a result of unresponsiveness of employees towards modern management related practices. Recommendations have been provided as general and specific strategies for effective implementation of NPM in order to enhance organizational performance under NPM. Keywords. Public management, Public welfare. JEL. D73, E60, H10.

Takes an exploratory approach to the development of an accountability framework for environmental performance of the Australian Commonwealth public sector. Explains that the aim of the environmental performance accountability framework is for the various stakeholders to understand the actions of Commonwealth public sector organizations and consequences of those actions for ecological systems; to become familiar with the trends and changes in trends in public sector environmental performance; and to place stakeholders in a position to promote change when performance is not acceptable. Examines three interrelated strands of literature. Identifies key institutional stakeholders in the Commonwealth public sector. Synthesizes the literature related to public sector transformation, and reviews the flourishing literature on environmental accounting and reporting, and links it to the concept of environmental accountability. Drawing on this literature, explores interrelationships between three characteristics of environmental performance at the federal level in the Australian public sector: criticality of natural capital; information uncertainty; and regulatory response. Examines environmental accountability dimensions of each of these characteristics. Concludes by making three policy recommendations: first, measurement of environmental performance should focus on criticality of natural capital and informational uncertainty as bounded by the precautionary principle; second, the measures of criticality of natural capital and informational uncertainty should determine the extent of direct accountability to parliament for each public sector organization’s environmental performance; and, finally, a third party attestation of reported information is needed. Also makes some suggestions for extending this exploratory research.

The purpose of this research is to propose a strategy of managing performance in the public sector. The primary data have been collected through questionnaires administered to managers and professionals; and interviews administered to heads of planning and ICT departments. Secondary data were collectedthrough reviewing documents (plans, reports, proclamations and regulation). Findings of this study indicate that performance management system is disconnected at the top that weakened accountability of managers in the public sector. Besides, agencies responsible for performance management have not developed systems to monitor and evaluate performances of public organisations and their managers. As a matter of fact, public organisations have made a lot of progress in introducing LAN, developing web pages and using the internet for information sharing. However, they have not developed database systems and computerized MIS that are important for the management of performance. The other problem of managing performance in the public sector is the different agencies that are directly or indirectly involved in managing the performance of a particular public organisation. These are: first, the organisation itself, which is striving to implement BSC; second, the Planning and Budgeting unit of MoFED, which has not gone beyond the traditional activities of compiling plans and performance reports of public organisations, but attempting to implement Performance Based Budgeting, and finally, the Ministry of Civil Service, which is responsible for preparing guidelines for evaluation of employee performance. To emphasise the importance of performance management in the public sector, the Ethiopian government can learn from the experiences of some African countries, which have organised performance management units under the offices of Prime Ministers. Keywords : Results-Based Performance Management, balanced scorecard, process control, accountability, reward systems, organizational capacity, MIS.