Public Administration: Institutions, Resource Transfer, Jobs

Abstract

The study deals with institutional peculiarities of public administration and examines the way in which bureaucratic behaviour models influence the effectiveness of government decisions and the conduct of economic policy. The methodological basis of the study is bureaucratic theory and neoinstitutional economic theory. The author proves that the ongoing institutional changes in the form of government decisions affect resource transfers between various types of economic activity, in particular, a transfer of labour and capital between economic sectors. Moreover, the ratio between risk and profitability of various types of activity, undergoing constant and dynamic changes due to these corrections, determines the dynamics of the resource and the entire economic system. However, apart from the ratio between risk and profitability, the level of manufacturability is also relevant. We present a model of determining gross value added by the specified parameters which determines the transfer of capital and labour. The model evaluates the changes in gross value added of the manufacturing sector in a situation where there are shifts in the risk of doing business within the sector. The change in the risk ratio towards its decrease in processing and increase in the transactional and raw materials sector results in a significant rise in value added in the processing sphere. The overall level of the initial manufacturability predetermines the possibility of creating jobs; therefore, the task of increasing the number of high-performance jobs is determined precisely by this state. The estimation of the number of jobs in accordance with the method proposed by the Federal State Statistics Service camouflages the scope and the essence of the problem. Instead of using salary or value added when comparing with average values, in order to evaluate high-performance jobs we suggest considering the overall manufacturability of the economic system and the number of automated workplaces that allow enhancing productivity through higher “production manufacturability”.