Impact of the Public Administration Reform on the Economic Development of the Western Balkans
DOI:
https://doi.org/10.4335/20.4.785-807(2022)Keywords:
public administration reform, economic development, structural reforms, GDP growth, accountabilityAbstract
The aim of this paper is to research the impact of a public administration reform on the economic development of the Western Balkan (WB) countries. The research covers a ten-year period (2009 – 2019), and is conducted on a sample of 19 countries (so called New EU Member States, Turkey and 6 countries from the WB). The paper attempts to quantify the effect that the public administration reform has on the two variables of economic development, namely the real GDP Growth Rate and Trade Per Capita, in the context of analysis and impact of six governance indicators created by the World Bank, within the WGI (The Worldwide Governance Indicator). In order to prove the hypotheses, we used the dynamic panel method. The results show that there is a significant positive impact of public administration reform in the WB on the GDP growth and trade.
References
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Arellano, M. & Bond, S. (1991) Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations, The Review of Economic Studies, 58(2), pp. 277-297, http://dx.doi.org/10.2307/2297968.
Armey, R. (1995) The Freedom Revolution (Washington, DC: Regnery Publishing).
Barro, R. J. (1991) Economic growth in a cross section of countries, The quarterly journal of economics, 106(2), pp. 407-443.
Bassanini, A. & Scarpetta, S. (2001) The Driving Forces of Economic Growth: Panel Data Evidence for the OECD Countries, OECD Economic Studies, 33(2), pp. 9-56, https://doi.org/10.1787/eco_studies-v2001-art10-en.
Benhabib, J. & Przeworski, A. (2010) Economic growth under political accountability, International Journal of Economic Theory, 6(1), pp. 77-95.
Boyne, G.A., Meier, K.J., O’Toole Jnr, L.J. & Walker, R.M. (eds.) Public Service Performance: Perspectives on Measurement and Management (Cambridge: Cambridge University Press).
Brewer G.A., Choi, Y. & Walker, R.M. (2008) Accountability, Corruption and Government Effectiveness in Asia: An Exploration of World Bank Governance Indicators, Research in Public Policy Analysis and Management, 8, pp. 200-219, https://doi.org/10.1016/S0732-1317(08)17012-9.
Brunetti, A. & Weder, B. (2003) A free press is bad news for corruption, Journal of Public Economics, 87(7-8), pp. 1801-1824.
Bryson, J.M., Crosby, C.B. & Bloomberg L. (2014) Public Value Governance: Moving Beyond Traditional Public Administration and the New Public Management, Public Administration Review, 74(4), pp. 445-456, https://doi.org/10.1111/puar.12238.
Buterin, V., Škare, M. & Buterin, D. (2017) Macroeconomic model of institutional reforms’ influence on economic growth of the new EU members and the Republic of Croatia, Economic research - Ekonomska istraživanja, 30(1), pp. 1572-1593, https://doi.org/10.1080/1331677X.2017.1355260.
Dimitrova Hristova, K. (2012) Does Economic Freedom Determine Economic Growth? A Discussion of the Heritage Foundation’s Index of Economic Freedom, [A Thesis Submitted to the Faculty of Mount Holyoke College In Partial Fulfillment of the Requirements for the Degree of Bachelor of Arts with Honors], (South Hadley: Economics Department Mount Holyoke College).
Djurovic, G. & Jacimovic, D. (2014) From Stabilization and Association Process to Full Membership of Western Balkans Countries, International Journal of Information Systems and Social Change, 5(3), pp. 12–30, https://doi.org/10.4018/ijissc.2014070102.
Djurovic, G. & Stojanovic, B. (2016) The Optimization of Public Administration in the Western Balkans region, Comparative study with Baseline Analysis (Danilovgrad, Montenegro: Regional School for Public Administration, ReSPA).
Dosti, B. & Grabova, P. (2014) The size of the Public Sector: Case of Albania, Megatrend Review, 11(3), pp. 67-76.
European Commission (2013) Communication from the Commission to the European Parliament and the Council, Enlargement Strategy and Main Challenges 2013–2014 (Brussels), available at: https://ec.europa.eu/smart-regulation/docs/com_2013_686_en.pdf (October 2, 2013).
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Grindle, M. S. (2007) Good Enough Governance Revisited, Development Policy Review, 25(5), pp. 553–574, https://doi.org/10.1111/j.1467-7679.2007.00385.x.
Gründler, K. & Potrafke, N. (2019) Corruption and Economic Growth: New Empirical Evidence, CESifo Working Paper, No. 7816, http://dx.doi.org/10.2139/ssrn.3467949.
Hasan, A. F. (2011) How institutions affect export quality, Economic Systems, 35(4), pp. 586-606, https://doi.org/10.1016/j.ecosys.2011.05.001.
Henry, N. (2016) Public administration and public affairs, 12th ed. (New York: Routledge).
Hofmann, H. C. H. (2008) Mapping the European administrative space, West European Politics, 31(4), pp. 662–676, https://doi.org/10.1080/01402380801905918.
Hoyos, R. & Sarafidis, V. (2006) Testing for Cross-Sectional Dependence in Panel - Data Models, The Stata Journal, 6(4), pp. 482–496, https://doi.org/10.1177/1536867X0600600403.
Kaufmann, D., Kraay, A. & Zoido-Lobatón, P. (1999a) Aggregating Governance Indicators, Policy Research Working Papers, No. 2195 (Washington, D.C.: The World Bank).
Kaufmann, D. & Kraay, A. (2004) Governance Indicators, Aid Allocation, and the Millennium Challenge Account, Development and Comp Systems, (Germany: University Library of Munich).
LiPuma, J.A., Newbert, S.L. & Doh, J.P (2013) The effect of institutional quality on firm export performance in emerging economies: a contingency model of firm age and size, Small Business Economics, 40, pp. 817–841, https://doi.org/10.1007/s11187-011-9395-7.
Markovic, I.M. ( 2017) Constitutional essays (Podgorica: CID).
Matte, R. (2016) Bureaucratic Structures and organisational Performance: A comparative study of Kampala capital city authority and national planning authority, Journal of Public Administration and Policy Research, 9(1), pp. 1-16.
Nederhand, J. & Molenveld, A. (2020) Q Methodology in Public Administration: State of the Art, In: Peters, G. (ed.) Oxford Research Encyclopedia of Politics (New York: Oxford University Press), pp. 1-16, https://doi.org/10.1093/acrefore/9780190228637.013.1448.
Neshkova, M. & Kostadinova, T. (2012) The Effectiveness of Administrative Reform in New Democracies, Public Administration Review, 72(3), pp. 324-333, https://doi.org/10.1111/j.1540-6210.2011.02483.x.
Nguyen, C.V., Giang, L. T., Tran, A. N. & Thanh Do, H. (2019) Do Good Governance and Public Administration Improve Economic Growth and Poverty Reduction? The Case of Vietnam, International Public Managment Journal, 24(1), pp. 131-161, https://doi.org/10.1080/10967494.2019.1592793.
OECD (2020) Government at a Glance: Western Balkans (Paris: OECD Publishing), https://doi.org/10.1787/a8c72f1b-en.
Onder, M. & Ulasan, F. (2016) The impact of Public Administration on Economic Growth: The case of South Korea, International Journal of Leadership Education and Management Studies, 1(1), pp. 23-43.
Pesaran, M.H. & Smith, R. (1995) Estimating Long-Run Relationships from Dynamic Heterogeneous Panels, Journal of Econometrics, 68(1), pp. 79-113, http://dx.doi.org/10.1016/0304-4076(94)01644-F.
Petrović, P., Brčerević, D. & Gligorić, M. (2019) Why is Serbian an Economic Growth underachiever?, Ekonomika preduzeća, 67(1-2), pp. 17-33.
Pham, H.T., Hoamng, H.T.T., Thalassions, I.E. & Le, A.H. (2022) The Impact of Quality of Public Administration on Local Economic Growth in Vietnam, Journal of Risk and Financial Managment, 15(4), p. 158.
Pollitt, C. & Bouckaert, G. (2004) Public management reform: A comparative analysis, 2nd ed. (Oxford: Oxford University Press).
Pollitt, C., Thiel, S. & Homburg, V. (eds.) (2007) New Public Management in Europe: Adaptations and alternatives (Basingstoke: Palgrave MacMillan), https://doi.org/10.1057/9780230625365.
Tariq Majeed, M. (2014) Corruption and Trade, Journal of Economic Integration, 29(4), pp. 759-782.
Van de Walle, S. (2008) What services are public? What aspects are to be ranked? The case of ‘services of general interest’, International Public Management Journal, 11(3), pp. 256–274, https://doi.org/10.1080/10967490802301260.
Van Dooren, W. (2018) Measuring Public Administration: A Feasibility study for better comparative indicators in the EU (Luxembourg: Publications Office of the European Union), https://doi.org/10.2767/819180, available at: https://ec.europa.eu/social/BlobServlet?docId=19938&langId=en (March, 2018).
Van Thiel, S. & Leeuw, F.L. (2002) The performance paradox in the public sector, Public Performance and Management Review, 25(3), pp. 267-281.
Williams, I. A. & Siddique, A. (2008) The use (and abuse) of governance indicators in economics: A review, Economics of Governance, 9(2), pp. 131-175.
Wooldridge, J.M. (2002) Econometric Analysis of Cross Section and Panel Data (Cambridge, Massachusetts: The MIT Press).
World Trade Organization (2014) Connecting to global markets - Challenges and opportunities, Case studies presented by WTO chair-holders (Switzerland) , pp. 129-146.
Wu, J., Shaomin, L. & Samsell, D. (2012) Why some countries trade more, some trade less, some trade almost nothing: The effect of the governance environment on trade flows, International Business Review, 21(2), pp. 225-238.
Acemoglu, D. & Johnson, J.R. (2004) Institutions as the fundamental cause of long-run growth, National bureau of economic research, Working papers No.10481.
Akinsola, F.A. & Odhiambo, N.M. (2017) Inflation and economic growth: A review of the international literature, Comparative Economic Research. Central and Eastern Europe, 20(3), pp. 41-56, https://doi.org/10.1515/cer-2017-0019.
Altay, A. (1999) The Efficiency of Bureaucracy On The Public Sector, Dokuz Eylül Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 14(2), pp. 35-51.
Arellano, M. & Bond, S. (1991) Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations, The Review of Economic Studies, 58(2), pp. 277-297, http://dx.doi.org/10.2307/2297968.
Armey, R. (1995) The Freedom Revolution (Washington, DC: Regnery Publishing).
Barro, R. J. (1991) Economic growth in a cross section of countries, The quarterly journal of economics, 106(2), pp. 407-443.
Bassanini, A. & Scarpetta, S. (2001) The Driving Forces of Economic Growth: Panel Data Evidence for the OECD Countries, OECD Economic Studies, 33(2), pp. 9-56, https://doi.org/10.1787/eco_studies-v2001-art10-en.
Benhabib, J. & Przeworski, A. (2010) Economic growth under political accountability, International Journal of Economic Theory, 6(1), pp. 77-95.
Boyne, G.A., Meier, K.J., O’Toole Jnr, L.J. & Walker, R.M. (eds.) Public Service Performance: Perspectives on Measurement and Management (Cambridge: Cambridge University Press).
Brewer G.A., Choi, Y. & Walker, R.M. (2008) Accountability, Corruption and Government Effectiveness in Asia: An Exploration of World Bank Governance Indicators, Research in Public Policy Analysis and Management, 8, pp. 200-219, https://doi.org/10.1016/S0732-1317(08)17012-9.
Brunetti, A. & Weder, B. (2003) A free press is bad news for corruption, Journal of Public Economics, 87(7-8), pp. 1801-1824.
Bryson, J.M., Crosby, C.B. & Bloomberg L. (2014) Public Value Governance: Moving Beyond Traditional Public Administration and the New Public Management, Public Administration Review, 74(4), pp. 445-456, https://doi.org/10.1111/puar.12238.
Buterin, V., Škare, M. & Buterin, D. (2017) Macroeconomic model of institutional reforms’ influence on economic growth of the new EU members and the Republic of Croatia, Economic research - Ekonomska istraživanja, 30(1), pp. 1572-1593, https://doi.org/10.1080/1331677X.2017.1355260.
Dimitrova Hristova, K. (2012) Does Economic Freedom Determine Economic Growth? A Discussion of the Heritage Foundation’s Index of Economic Freedom, [A Thesis Submitted to the Faculty of Mount Holyoke College In Partial Fulfillment of the Requirements for the Degree of Bachelor of Arts with Honors], (South Hadley: Economics Department Mount Holyoke College).
Djurovic, G. & Jacimovic, D. (2014) From Stabilization and Association Process to Full Membership of Western Balkans Countries, International Journal of Information Systems and Social Change, 5(3), pp. 12–30, https://doi.org/10.4018/ijissc.2014070102.
Djurovic, G. & Stojanovic, B. (2016) The Optimization of Public Administration in the Western Balkans region, Comparative study with Baseline Analysis (Danilovgrad, Montenegro: Regional School for Public Administration, ReSPA).
Dosti, B. & Grabova, P. (2014) The size of the Public Sector: Case of Albania, Megatrend Review, 11(3), pp. 67-76.
European Commission (2013) Communication from the Commission to the European Parliament and the Council, Enlargement Strategy and Main Challenges 2013–2014 (Brussels), available at: https://ec.europa.eu/smart-regulation/docs/com_2013_686_en.pdf (October 2, 2013).
European Council (1993) European Council in Copenhagen, 21-22 June 1993, Conclusions of the Presidency, available at: https://www.consilium.europa.eu/media/21225/72921.pdf (July 23, 2020).
Fadic, M., Garda, P. & Pisu, M. (2019) The effect of publuc sector efficiencz on firm-level productivity growth: The Italian case, OECD Economics Department Working Papers, No. 1573, p. 35, https://doi.org/10.1787/6d20b56d-en.
Grindle, M. S. (2007) Good Enough Governance Revisited, Development Policy Review, 25(5), pp. 553–574, https://doi.org/10.1111/j.1467-7679.2007.00385.x.
Gründler, K. & Potrafke, N. (2019) Corruption and Economic Growth: New Empirical Evidence, CESifo Working Paper, No. 7816, http://dx.doi.org/10.2139/ssrn.3467949.
Hasan, A. F. (2011) How institutions affect export quality, Economic Systems, 35(4), pp. 586-606, https://doi.org/10.1016/j.ecosys.2011.05.001.
Henry, N. (2016) Public administration and public affairs, 12th ed. (New York: Routledge).
Hofmann, H. C. H. (2008) Mapping the European administrative space, West European Politics, 31(4), pp. 662–676, https://doi.org/10.1080/01402380801905918.
Hoyos, R. & Sarafidis, V. (2006) Testing for Cross-Sectional Dependence in Panel - Data Models, The Stata Journal, 6(4), pp. 482–496, https://doi.org/10.1177/1536867X0600600403.
Kaufmann, D., Kraay, A. & Zoido-Lobatón, P. (1999a) Aggregating Governance Indicators, Policy Research Working Papers, No. 2195 (Washington, D.C.: The World Bank).
Kaufmann, D. & Kraay, A. (2004) Governance Indicators, Aid Allocation, and the Millennium Challenge Account, Development and Comp Systems, (Germany: University Library of Munich).
LiPuma, J.A., Newbert, S.L. & Doh, J.P (2013) The effect of institutional quality on firm export performance in emerging economies: a contingency model of firm age and size, Small Business Economics, 40, pp. 817–841, https://doi.org/10.1007/s11187-011-9395-7.
Markovic, I.M. ( 2017) Constitutional essays (Podgorica: CID).
Matte, R. (2016) Bureaucratic Structures and organisational Performance: A comparative study of Kampala capital city authority and national planning authority, Journal of Public Administration and Policy Research, 9(1), pp. 1-16.
Nederhand, J. & Molenveld, A. (2020) Q Methodology in Public Administration: State of the Art, In: Peters, G. (ed.) Oxford Research Encyclopedia of Politics (New York: Oxford University Press), pp. 1-16, https://doi.org/10.1093/acrefore/9780190228637.013.1448.
Neshkova, M. & Kostadinova, T. (2012) The Effectiveness of Administrative Reform in New Democracies, Public Administration Review, 72(3), pp. 324-333, https://doi.org/10.1111/j.1540-6210.2011.02483.x.
Nguyen, C.V., Giang, L. T., Tran, A. N. & Thanh Do, H. (2019) Do Good Governance and Public Administration Improve Economic Growth and Poverty Reduction? The Case of Vietnam, International Public Managment Journal, 24(1), pp. 131-161, https://doi.org/10.1080/10967494.2019.1592793.
OECD (2020) Government at a Glance: Western Balkans (Paris: OECD Publishing), https://doi.org/10.1787/a8c72f1b-en.
Onder, M. & Ulasan, F. (2016) The impact of Public Administration on Economic Growth: The case of South Korea, International Journal of Leadership Education and Management Studies, 1(1), pp. 23-43.
Pesaran, M.H. & Smith, R. (1995) Estimating Long-Run Relationships from Dynamic Heterogeneous Panels, Journal of Econometrics, 68(1), pp. 79-113, http://dx.doi.org/10.1016/0304-4076(94)01644-F.
Petrović, P., Brčerević, D. & Gligorić, M. (2019) Why is Serbian an Economic Growth underachiever?, Ekonomika preduzeća, 67(1-2), pp. 17-33.
Pham, H.T., Hoamng, H.T.T., Thalassions, I.E. & Le, A.H. (2022) The Impact of Quality of Public Administration on Local Economic Growth in Vietnam, Journal of Risk and Financial Managment, 15(4), p. 158.
Pollitt, C. & Bouckaert, G. (2004) Public management reform: A comparative analysis, 2nd ed. (Oxford: Oxford University Press).
Pollitt, C., Thiel, S. & Homburg, V. (eds.) (2007) New Public Management in Europe: Adaptations and alternatives (Basingstoke: Palgrave MacMillan), https://doi.org/10.1057/9780230625365.
Tariq Majeed, M. (2014) Corruption and Trade, Journal of Economic Integration, 29(4), pp. 759-782.
Van de Walle, S. (2008) What services are public? What aspects are to be ranked? The case of ‘services of general interest’, International Public Management Journal, 11(3), pp. 256–274, https://doi.org/10.1080/10967490802301260.
Van Dooren, W. (2018) Measuring Public Administration: A Feasibility study for better comparative indicators in the EU (Luxembourg: Publications Office of the European Union), https://doi.org/10.2767/819180, available at: https://ec.europa.eu/social/BlobServlet?docId=19938&langId=en (March, 2018).
Van Thiel, S. & Leeuw, F.L. (2002) The performance paradox in the public sector, Public Performance and Management Review, 25(3), pp. 267-281.
Williams, I. A. & Siddique, A. (2008) The use (and abuse) of governance indicators in economics: A review, Economics of Governance, 9(2), pp. 131-175.
Wooldridge, J.M. (2002) Econometric Analysis of Cross Section and Panel Data (Cambridge, Massachusetts: The MIT Press).
World Trade Organization (2014) Connecting to global markets - Challenges and opportunities, Case studies presented by WTO chair-holders (Switzerland) , pp. 129-146.
Wu, J., Shaomin, L. & Samsell, D. (2012) Why some countries trade more, some trade less, some trade almost nothing: The effect of the governance environment on trade flows, International Business Review, 21(2), pp. 225-238.
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2022-11-02
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