Proceedings of the Global Conference on Management and Economic
Year: 2024
DOI:
[PDF]
Economic Growth and Public Sector Productivity: A Comparative International Analysis
Thando Ngozo
ABSTRACT:
Measuring performance in the public sector is crucial. This ensures that government agencies are held accountable and effective. Such measurement also serves as an information base for decision-makers and people who develop strategic and policy plans. This study aims to assess the effects public productivity has on economic growth. It uses a quantitative approach to examine the relationship between government performance and economic development. In employing the Stochastic Frontier Analysis (SFA), this research evaluates the efficiency of the public sector; it also adopts the Data Envelop Analysis (DEA) and Tobit regression model. The findings suggest that labor and capital positively affect government output. They also indicate that education is a critical fact or in the public sector’s ability to be productive. An average technical efficiency score of 0.74 suggests that output in high- and upper-middle-income countries could be increased by 26% without extra resources. Canada has the most technically efficient public sector at 94 percent, while Chile has the least technically efficient public sector at 31 percent. The results of the Tobit regression model show that increases in population, trade, inflation, and government spending on education, health, and infrastructure lead to better efficiency. The study highlights that strategically investing in infrastructure, education, and health would lead to a far more efficient public sector.
keywords: Public sector efficiency, upper middle-income countries, high income countries, Stochastic frontier analysis, Tobit regression analysis