Size Of Public Sector Research Articles

Unlocking the power and future potential of generative AI in government transformation

Purpose This paper aims to investigate whether the implementation of generative artificial intelligence (GAI) impacts government functionality. The study will analyse GAI’s positive attributes across different dimensions to comprehensively understand its value proposition for public organisations. Furthermore, the paper will outline the strategic interventions required to integrate GAI effectively within the organisational context of government transformation. Design/methodology/approach This study measures “government functionality” and “GAI implementation” using abstract macro variables as a second-order formative model. It also includes first-order measurable micro-variables to better understand the concept. In addition, the study introduces “organisational context” as a moderating factor to explain the complex dynamics of integrating GAI to improve government functionality. The study proposes a conceptual framework, which was analysed using exploratory data analysis, with primary data collected through questionnaires. Findings The study finds a positive correlation between the implementation of GAI and improved government functionality. Furthermore, it found that organisational contextualisation significantly moderates this relationship. All the empirical outcomes align with the prescribed statistical thresholds, concluding that the articulated conceptual framework holds significance. Research limitations/implications The study has significant implications for managers, researchers and anyone involved in making, implementing or evaluating decisions related to digital government through GAI. However, the study has limitations, including a limited sample size and contextualisation of the Indian public sector. Originality/value The study contributes to existing knowledge by showing that implementing GAI positively correlates with improving government functionality. It further highlights the significance of GAI implementation according to the specific organisational context.

Ideological alignment, public sector size and tax morale: empirical evidence from OECD economies

This paper analyzes the extent to which ideological differences between citizens and their governments, in conjunction with the observed size of the public sector, influence taxpayers’ intrinsic motivations to pay taxes. We utilize data from the World Values Survey and the European Values Study, encompassing 23 OECD economies from 1995 to 2018. Our findings indicate that the tax morale of citizens who hold right-wing ideological views in relation to their government significantly decreases when the public sector surpasses the OECD average. Conversely, citizens who hold left-wing ideological views in relation to their government exhibit a higher intrinsic motivation to pay taxes, particularly when the public sector is considered undersized.

Investigating the role of economic complexity in evading the resource curse

In order to propose a solution to the resource curse problem, the goal of this study is to evaluate the effectiveness of economic complexity. For this purpose, the effects of economic growth, capital accumulation, foreign capital, public sector size, and the economic complexity index are examined in this approach for nine economies with high resource dependence. In doing so, the period from 1995 to 2019 is investigated using second-generation panel data estimators. Additionally, the efficiency of the factors in consideration is divided into components based on the degree of resource dependency within the countries under examination using the recently created moments of quantile regression approach. Empirical investigation revealed that economic expansion and capital accumulation lessen the degree of resource dependence. On the other hand, the growth of the public sector and the inflow of foreign capital both exacerbate resource dependency. Moreover, it has been discovered that economic complexity can be a powerful tool for reducing resource dependence and the associated resource curse.

MODERN PRACTICES OF COMBATING BUREAUCRACY IN WESTERN EUROPE

The article is devoted to the disclosure of modern practices of countering bureaucracy in Western Europe. Based on the results of the analysis of the scientific literature on this problem, it was proved that the mechanisms of countering bureaucracy began to form around the relevant legal field, the main of which are: ensuring the election of officials and the possibility of their recall; increasing the responsibility of officials; change of the remuneration system; reducing the field of application of "personal discretion"; conclusion of fixed-term contracts, contracts; control, revision and audit; expansion of opportunities to protect the rights and freedoms of citizens; reducing the limits for the use of personal discretion; professional education. The key areas of implementation of public sector reforms are highlighted: reducing the size and scope of public sector powers; improvement of the system of providing state (administrative) services; as short as possible terms of obtaining public services; change of the civil service management system; introduction of new mechanisms of relations with the public, ethical norms and standards for civil servants; changing the pay system for officials. It is proved that the opposition to bureaucracy in Western Europe had the character of improvement, rationalization of bureaucracy, subordination of its professional activities to the interests of citizens and civil society.

The importance of public sector size and resources volatility in carbon emissions: Empirical evidence from OECD countries

Natural resources and environmental depletion are significant concerns for both developing and developed nations. Those challenges not only surge environmental risks but also result in extensive financial damages, leading to the provision of substantial funds each year for carbon mitigation strategies. The present study aims to inspect the impact of public sector size and natural resource volatility on environmental depletion by evaluating panel data from twenty OECD member countries. Based on data availability, the selected time frame for analysis is 1995–2021. The study employs the Augmented Mean Group (AMG) approach to address potential biases arising from cross-sectional dependence (CD) and slope heterogeneity. The findings depicted a positive relationship between public sector size, natural resource volatility, and carbon dioxide (CO2) emissions in selected OECD countries. The results underscore that an increased share of government expenditures and high natural resource volatility contribute to carbon emissions. These outcomes highlight the need to condemn the highly volatile consumption of natural resources to bring stability in the resources markets and also condemn irresponsible financing of environmentally unfriendly projects for the sake of a healthier environment. The study proposed that governments should pay attention to prioritizing environmental quality when utilizing natural resources or allocating funds across various sectors.

THE SIZE OF GOVERNMENT AND ECONOMIC GROWTH IN EU COUNTRIES

The relationship between the public sector size and economic growth is the subject of many discussions. Momentarily, the four elementary streams are defined, while the resulting impact depends on the monitored sample of the countries and the employed methodology. The aim of the paper was to identify the impact of the public sector size on the economic growth of the 27 EU countries in the period 1996 to 2021. The public sector size was quantified using four different variables as total public expenditure, total public revenue, tax revenue and final government consumption. Through panel regression, the negative impact of the public sector size on the economic growth of the EU countries was demonstrated in all four models, while the most significant negative impact was reached by the final government consumption. The significant negative impact of the crisis presence on the economic growth of the EU countries was also demonstrated. The EU countries should focus their activities there to diminish the public sector growth and to manage the structure of the government expenditures from the current to capital expenditures of an investment characteristic.

The Equality Hurdle: Resolving the Welfare State Paradox

This article revisits a central tenet of the welfare state paradox, also known as the inclusion-equality trade-off. Using large-scale survey data for 31 European countries and the United States, collected over a recent 15-year period, the article re-investigates the relationship between female labour force participation and gender segregation. Emphasising the transitional role played by the monetisation of domestic tasks, the study identifies a ‘gender equality hurdle’ that countries with the highest levels of female labour force participation have already passed. The results show that occupational gender segregation is currently lower in countries with high female labour force participation, regardless of public sector size. However, the findings also indicate that high relative levels of public spending on health, education and care are particularly conducive to desegregation. Hence, rather than being paradoxical, more equality in participation begets more equality in the labour market, as well as in gendered tasks in society overall.

Social spending and chronic unemployment: evidence from OECD countries

PurposeSocial spending is at the forefront of the tools used to repair the damage caused by the global epidemic. However, one of the most critical questions in recent days is as follows: what are the effects of social expenditures in eliminating unemployment? The primary purpose of this article is to provide empirical evidence on the impact of social spending on chronic unemployment in the selected organization for economic co-operation and development (OECD) countries.Design/methodology/approachIn this study, the data of 30 selected OECD countries between 1991 and 2018 have been compiled. First, countries have been divided into four categories according to their spending intensity to determine the effects of social spending on the long-term unemployment rate. Then, the auto-regressive distributed lag (ARDL) approach and the error correction models (ECM) examine the variables' short- and long-term interactions.FindingsThe author found that the change in the share of social expenditures in GDP affects chronic unemployment similarly. This finding is consistent with the results of studies in the literature dealing with the relationship between public sector size and unemployment. However, the research findings are specifically about the effects of social expenditures on chronic unemployment. In this respect, the results reflect that expenditures with passive characteristics have an expansionary effect on long-term unemployment. In addition, the progressive effect of social expenditures on chronic unemployment is increasing in countries with high expenditure intensity. In countries with relatively low spending intensity, the impact of social spending is limited to the short run and is lower.Originality/valueMultiple studies have reported that public policies developed in line with the incentives of active employment and public or private sector investments reduce the unemployment rate by positively affecting the output/employment level. This study, unlike other studies, focuses on the effects of social expenditures on chronic unemployment. It also compares the effects of social spending on the long-term unemployment rate for countries with varying spending intensities. Therefore, this article tests the impact of social expenditures used against a concrete socioeconomic problem in the OECD sample. In this respect, the findings contribute to the literature by addressing the relationship between social spending and chronic unemployment.

National work-family policies and the occupational segregation of women and mothers in European countries, 1999-2016.

Some scholars hypothesize that although work-family policies help incorporate women into the labour market, they do so by integrating women, and mothers specifically, into female-dominated occupations. Some suggest that although these policies are 'good' for lower educated women, they harm higher educated women by concentrating them in female-dominated professions. We revisit this debate using the highest quality data brought to bear on this question to date. We use the EU Labour Force Survey 1999-2016 (n = 21 countries, 235 country-years, 2.5 million men and women aged 20-44), combined with an original collection of country-year indicators. Specifically, we examine how the two most widely studied work-family policies-paid parental leave and early childhood education and care (ECEC)-and public sector size affect occupational segregation for men and women by educational attainment and parental status. We find no evidence that 'generous' welfare states promote segregation. Rather, a specific policy-parental leave in excess of 9 months-promotes segregation between men and women broadly, but most acutely for non-tertiary-educated mothers. Findings are generally null for paid leave of up to 9 months. ECEC is associated with greater integration, particularly for tertiary-educated women. Large public sectors are associated with segregation, with both tertiary-educated men and women more likely to work in feminized occupations. Public sector size, however, is not as tightly bundled with work-family policies as previous work suggests.

SIZE OF PUBLIC SECTOR IN MALAYSIA: PREMIERSHIP OF PRIME MINISTERS

This study aims to evaluate the size of the public sector during the premiership of three former prime ministers of Malaysia. The size of the public sector in Malaysia was measured based on total expenditure for the period 1982 - 2015. A comparison of public sector size based on the percentage of total public sector expenditure to GDP suggests that the size of the public sector was bigger during the early years of Tun Dr. Mahathir’s premiership; the percentage remained at a low level from 1994 onwards and continued during the tenure of his successors. The trend in the size of the public sector of the three prime ministers ranges from 15% to 30%, which means that the Malaysian government's sizing practices are consistent with other countries. Taking into account the government’s operating expenditure to total expenditure, the percentage of operating expenditure increased during the premiership of Dato’ Sri Najib. The government policy in the days of Dato’ Sri Najib focused on implementing government reform programs and increasing employment, which could have led to higher operating expenditure compared to development expenditure. Based on trends in government spending, the size of the government can be related to political or policy changes and economic conditions during the said prime ministers’ tenure.

The effects of inter-municipal cooperation and central grant allocation on the size of the French local public sector

The analysis of French municipalities’ public personnel expenditures allows us to study the issue of the size of the local public sector. We concentrate on two paths that French authorities have followed to limit it, i.e., the promotion of inter-municipal cooperation (IMC) and the cut in grants received by municipalities. Our objective is to evaluate their respective role in the evolution of public personnel expenditures at the municipal level, in a context where local politics comes into play. We consider a large panel dataset of municipalities embedded in IMC structures between 2011 and 2018. Our main results, obtained using an original identification strategy, are threefold. We first find evidence that a substitution effect between municipal and IMC personnel expenditures is at work. Second, we find a partisan distorsion through the grant allocation: despite its formula-based definition, aligned and unaligned municipalities are treated differently by the central government. Third, we show that cuts in grants lead to cuts in municipalities’ public wage bills, while partisanship hinders such cuts.

The Relationship Between Tax Elasticity and The Size of Public Sector in Turkey

Vergi gelirlerindeki oransal değişimin, vergi matrahındaki oransal değişime bölünmesi ile hesaplanan vergi esnekliği, kamu gelirlerinde otomatik istikrar sağlanmaya yardımcı olur. Türkiye’de 1990-2019 dönemi için toplam vergi gelirleri esnekliği ile kamu kesimi büyüklüğü arasındaki ilişkinin tespitini amaçladığımız çalışmada, kısa dönemde bir nedensellik tespit edilmemiş, ancak uzun dönemde kamu kesimi büyüklüğünden vergi esnekliğine doğru tek yönlü nedensellik tespit edilmiştir. Ayrıca Türkiye’de nüfus değişimi ve ekonomik büyüme kamu kesimi payını etkilemekte çünkü kamu kesimi büyüklüğüne doğru tek yönlü bir nedensellik tespit edilmiştir.

Determination of Optimal Size of Government in Relation to Output Growth in Nigeria: A Monte Carlo Simulation Evidence

This paper attempted to estimate optimal size of public sector that prompts positive output growth in Nigeria based on Monte Carlo simulation of estimated parameters of an error correction model having controlled for regime effect. Our motivation derives from economic theory that absence of government could be injurious to output growth culminating in unavailability of contracts and public goods. Using different policy scenarios of public sector share in GDP, the study validates and supports the tenets of Rahn Curve that economy shrinks when government grows enormous as we found 40% public sector spending as proportion of GDP as optimal public sector size that stimulates positive growth rate of about 0.095% having controlled for regime effect. By implication, our original contribution in this study is amplified on our empirics that public sector role in Nigerian economy is less than or equal to 40%. Consequently, any size of public sector beyond forty percent is economically destructive as it capable of stimulating negative spill overs on the economy due to growing taxes and public debt repayment. Hence, public sector spending should be significantly less than forty percent or at most forty percent for purpose of economic growth. This indeed translates to enforcing responsible fiscal policy centred on forty percent public sector size.

Income segregation's impact on local public expenditures: Evidence from municipalities and school districts, 1980–2010

Residential income segregation within local political jurisdictions has risen considerably since 1980 in the U.S. Despite this trend, and a growing body of research on wealth inequality and its impact on public sector size, income segregation's own influence over local public choice has not been thoroughly investigated. Using block-group income distributions for the years 1980, 1990, 2000, and 2010 income segregation is measured for individual U.S. municipalities and school districts, where the spatial distribution of income may carry the most political relevance. Estimates indicate that rising income segregation reduced per-capita spending growth considerably for both municipalities and school districts. These findings are robust to various model specifications and to the use of instrumental variables that adjust for the potential endogeneity of local income segregation. This evidence is consistent with the view that intra-jurisdictional income segregation undermines trust between community members and complicates collective action. However, a-spatial income inequality continues to be positively correlated with local public sector size, as suggested by recent empirical research.

A supply-demand model of public sector size

We develop a supply-demand model for the public sector with a political equilibrium. The model considers the inefficiencies caused by taxes and includes costs associated with the provision of public goods to consumers. We show that the size of the public sector may depend on the median voter's income, population size, costs associated with paying tax, and quality of institutions, all of which reflect the costs of provisioning public goods. The estimates for the Organisation for Economic Co-operation and Development member countries are compatible with theoretical predictions; however, they do not confirm Wagner's law, which holds that the public sector share does not grow with an increase in income. A greater dependency ratio and the Gini coefficient increase demand for redistribution policies. Greater government effectiveness is a supply-side factor that increases the public sector's share in an economy.

MALAYSIAN PUBLIC SECTOR SIZE: A COMPARISON WITH OTHER ASEAN COUNTRIES

The aim of this paper is to evaluate the size of the public sector (based on percentage of public sector expenditures to Gross Domestic Product (GDP) and percentage of public sector revenues to GDP) of Malaysia and compare it with other Associations of Southeast Asian Nations (ASEAN) countries. This study utilised a descriptive approach to compare the size of Malaysian public sector with other ASEAN countries (Brunei, Cambodia, Indonesia, Laos, the Philippines, Thailand, and Vietnam). The data were retrieved from 2000 to 2014 (15 years) that involved examination of documents from Key Indicators of Developing Asian and Pacific Countries Reports. Findings revealed that Malaysia ranks number three in terms of the size of public sector among ASEAN countries. Findings also indicated that the Malaysian percentage of public sector expenditure to GDP is around 20% to 30% which is considered as optimal size for the public sector. Malaysia also shows a deficit budget for 2000 to 2014, and similar trends were reported for other ASEAN countries. Meanwhile, the limitations of this study are that it is descriptive in nature and does not test any relationships between variables. Hence, future research may take into account other factors such as economic growth and government efficiency, and test relationships with the size of the public sector.

Unlocking the black box: A comprehensive meta-analysis of the main determinants of within-region income inequality

Regional income inequality is a topic of increasing relevance worldwide that has received considerable scientific attention. However, a clear-cut, comprehensive view has yet to be put forward of the main determinants of regional income inequality. Indeed, the extant empirical literature on the topic has reported differing results. Thus, this study develops a comprehensive meta-analysis using 33 comparable empirical studies spanning 29 years of research, involving 28 main determinants of which the most frequently mentioned were regional development, human capital, manufacturing/industry share, unemployment, financial development, and trade openness. After adjusting for publication bias and heterogeneity in the results reported by the primary studies, we conclude that the not very frequently addressed institutional related determinants (financial development, fiscal policies and public sector size), substantially contribute to reduce within-region income inequality, particularly in lower-income settings. In a smaller extent, human capital and trade openness also mitigate within-region income inequality. Region level of development, urbanization and, in a lesser extent, technological intensity aggravate within-region income inequality.

Dimensions of tax burden: a review on OECD countries

PurposeThe tax burden, defined as the ratio of the collected taxes in a particular period against the total product, is commonly used to determine the effect of fiscal and tax policies on the socioeconomic structure. The purpose of this study is to examine how the changes in some macroeconomic indicators affect the tax burden.Design/methodology/approachSystem generalized method of moments approach is used for 34 Organisation for Economic Co-operation and Development (OECD) members in the period of 1993-2016.FindingsBased on the research findings, variables such as income per capita, foreign trading volume, the capacity of employment, unemployment and economic share of industry sector effect tax burden in a statistically significant and positive direction. The reason that lies behind the positive effect of unemployment on tax burden is the fact that the sense of social state is not abandoned. Thus, it is predicted that the state will increase public transfer expenditures in the short term due to unemployment, this increase will impose a financial burden on the public sector both in the medium and long term and finally, there will be an increase in the tax burden.Originality/valueResults in the literature suggest that there are many reasons for increasing tax burden such as socio-economic development, financial and organizational structure and the globalization process. However, according to this study, it seems that gross domestic product per capita, the size of the industry sector, openness, employment capacity and unemployment rate also have a positive and significant effect on tax burden in the long run. Ultimately, these results demonstrate that tax burden, one of the most important indicators of the public sector size in the sample of the states and period in hand, is influenced positively by all independent variables and increases slightly but surely. These results suggest that the tax state is still a determinative factor in the socioeconomic field within its taxation tools.

Unlocking Access to Finance for SMEs

Countries in the MENAP and CCA regions have the lowest levels of financial inclusion of small and medium enterprises (SMEs) in the world. The paper provides empirical evidence on the drivers of SME access to finance for a large sample of countries, and identifies key policy priorities for these two regions: economic and institutional stability, competition, public sector size and government effectiveness, credit information infrastructure (e.g., credit registries), the business environment (e.g., legal frameworks for contract enforcement), and financial supervisory and regulatory capacity. The analysis also shows that improving credit information, economic competition, the business environment along with economic development and better governance would help close the SME financial inclusion gap between MENAP and CCA regions and the best performers. The paper concludes on the need to adopt holistic policy strategies that take into account the full range of macro and institutional requirements and reforms, and prioritize these reforms in accordance with each country’s specific characteristics.

DOES BIG GOVERNMENT HURT GROWTH LESS IN HIGH‐TRUST COUNTRIES?

Social trust is linked to both public sector size and to economic growth, thereby helping to explain how some countries combine high taxes with high levels of economic growth. This paper examines if social trust insulates countries against the negative effects of public sector size on growth, documented in several studies. We note that the effect is theoretically ambiguous. In panel data from 66 countries across 40 years, we find no robust evidence of insulation effects: when excluding countries with uncertain trust scores, our results suggest that big government hurts growth also in high‐trust countries, and that the mechanism is by lowering private investments. (JEL H10, O11, P16, Z10)