PUBLIC SECTOR GOVERNANCE AS A TOOL TO ENHANCE THE PRODUCTIVITY OF GOVERNMENT SPENDING: AN INTERNATIONAL COMPARATIVE STUDY

Abstract

This study examines the impact of public sector governance on government spending productivity. It also discusses the importance of government unit governance procedures in reducing corruption and improving the productive efficiency of the state's general budget. This research adopts a comparative analysis approach using secondary data from a time series from 2012 to 2022. The results show that governance procedures for public sector units through reforming the administrative systems of various state institutions are positively related to the levels of productivity of the state's government spending. The results show that implementing the necessary reforms to public sector governance, such as encouraging decentralization in the decision-making process and private sector participation, will achieve greater efficiency, transparency, and accountability in providing social and infrastructure services. The results also reveal that administrative and financial corruption involves the pursuit of political, economic, and legal gains, which can increase transaction costs, reduce the quality of project implementation, and lead to social problems. This research adds value to the literature by examining how public sector governance systems might improve the efficacy of government expenditure and promote global public sector management reform. The study empowers policymakers to identify barriers to economic growth and minimize the misallocation of public resources by formulating economic plans that optimize the use of public monies. The application of comparative analysis amplifies the efficacy of the examination, rendering the outcomes particularly advantageous for public sector entities seeking to optimize expenditure across various economic sectors.

Full text

2024
Vol.29 No.2
POLISH JOURNAL OF MANAGEMENT STUDIES
Alyaseri I., Furaijl H., Mizban B., Almagtome A., Al-Yasiri A.
PUBLIC SECTOR GOVERNANCE AS A TOOL TO ENHANCE THE
PRODUCTIVITY OF GOVERNMENT SPENDING: AN
INTERNATIONAL COMPARATIVE STUDY
Alyaseri I., Furaijl H., Mizban B., Almagtome A., Al-Yasiri A.
Abstract: This study examines the impact of public sector governance on government
spending productivity. It also discusses the importance of government unit governance
procedures in reducing corruption and improving the productive efficiency of the state's
general budget. This research adopts a comparative analysis approach using secondary data
from a time series from 2012 to 2022. The results show that governance procedures for public
sector units through reforming the administrative systems of various state institutions are
positively related to the levels of productivity of the state's government spending. The results
show that implementing the necessary reforms to public sector governance, such as
encouraging decentralization in the decision-making process and private sector participation,
will achieve greater efficiency, transparency, and accountability in providing social and
infrastructure services. The results also reveal that administrative and financial corruption
involves the pursuit of political, economic, and legal gains, which can increase transaction
costs, reduce the quality of project implementation, and lead to social problems. This research
adds value to the literature by examining how public sector governance systems might
improve the efficacy of government expenditure and promote global public sector
management reform. The study empowers policymakers to identify barriers to economic
growth and minimize the misallocation of public resources by formulating economic plans
that optimize the use of public monies. The application of comparative analysis amplifies the
efficacy of the examination, rendering the outcomes particularly advantageous for public
sector entities seeking to optimize expenditure across various economic sectors.
 Ibrahim Alyaseri, Assistant Prof, Faculty of Administration and Economics, University of
Kufa, Iraq;
 email: Ibrahimj.alyaseri@uokufa.edu.iq,
ORCID: 0000-0003-2444-782X
Hussien Furaijl, Assistant Prof, College of Pharmacy, University of Al-Ameed, Iraq;
 email: h.alfrejee@alameed.edu.iq,
ORCID: 0000-0002-4131-9304
Bilal Mizban, Assistant Prof., Faculty of Administration and Economics, University of
Basrah, Iraq;
 email: lec.bilal.noori@uobasrah.edu.iq,
ORCID: 0009-0002-9590-9147
Akeel Almagtome, Prof., Faculty of Administration and Economics, University of Kufa,
Iraq;
 corresponding author: akeelh.alhasnawi@uokufa.edu.iq,
ORCID: 0000-0001-8317-1646
Ahmed Al-Yasiri, Prof, Faculty of Administration and Economics, University of Kufa, Iraq;
 email: ahmedj.alyaseri@gmail.com,
ORCID: 0000-0002-9190-8174
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Alyaseri I., Furaijl H., Mizban B., Almagtome A., Al-Yasiri A.
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Keywords: Public sector governance, Government spending, public expenditure,
Government spending productivity
DOI: 10.17512/pjms.2024.29.2.03
Article history:
Received March 02, 2024; Revised April 14, 2024; Accepted April 27, 2024
Introduction
Economic growth is a crucial objective for economic policymakers since it increases
national output, enhancing overall quality of life and new employment possibilities.
Furthermore, decreasing poverty rates in the nation is crucial since expanding
economies result in increased production and consumption, creating more job
opportunities and higher income levels, ultimately reducing poverty. Economic
growth indicates the effectiveness of national development strategies and is strongly
correlated with enhancing individuals' quality of life and economic prosperity
(Kumaat et al., 2020). Economic growth is intricately connected to a nation's
capacity to augment the production of products and services, along with
advancements in the quantity, quality, and methodologies used in their production.
Government expenditure is essential for attaining economic expansion and societal
welfare. There are varying perspectives on the correlation between government
expenditure and economic development, with some highlighting the significance of
economic growth as the main factor influencing higher public spending (Onifade et
al., 2020). Simultaneously, some individuals believe that government expenditure is
the principal instrument for guaranteeing economic expansion in every nation
worldwide (Arawomo and Adeoye, 2020).
Furthermore, government expenditure guarantees human development and well-
being beyond just economic expansion. Public expenditure is crucial for attaining
economic and social objectives, including growth, stability, equity, and economic
efficiency. It is a governmental instrument used to administer public finances and
fulfill the overall requirements of the populace. Public expenditure has the potential
to invigorate and maintain the economy, foster economic growth and fairness in the
allocation of income, and rectify market imbalances. It serves as a crucial political
instrument for organizing and guiding the financial resources required for the
operations and responsibilities of the government. Public investment expenditures
favor economic growth and may encourage private investment spending (Hamad et
al., 2022). Nevertheless, the impact of public expenditure relies on variables such as
efficiency, sufficiency, and efficacy, with suitable administration and oversight
procedures. . Public sector units are challenged to achieve more substantial outcomes
despite limited resources in today's ever-changing environment (Naamati Schneider,
2020). To support sustainable economic development and achieve the maximum
possible level of production efficiency in government units, it is necessary to provide
appropriate human resources in the field of management to rationalize administrative
decisions. Applying the principles of governance at the government level and within
its various units can contribute to achieving social welfare by rationalizing the
process of allocating economic resources (Almagtome et al., 2020).
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Understanding the objectives of the economic activity of government units is an
important element in achieving administrative success in government units by
obtaining appropriate indicators to measure performance that ensure an assessment of
the level of achievement of those objectives. Efficient management is the management
that is able to exploit the available financial resources despite their limitations and
direct them in a way that ensures the achievement of the objectives set for them within
the government program. Therefore, the application of public sector governance
mechanisms will contribute tangibly to the success of government tasks related to
providing public services and achieving government objectives effectively. At the
same time, the application of public sector governance mechanisms enhances public
confidence in government performance because it provides a great deal of
transparency in government actions, management of public funds and achievement of
set objectives. Rationalizing financial decisions in government units requires
commitment to a set of regulatory procedures that ensure the optimal use of financial
resources and allocating them to the most needed areas that contribute to achieving the
goals of national economic development in the long term by enhancing the
productivity of government agreements (AL-Jawahry et al., 2022). This paper is based
on the assumption that the application of good governance mechanisms in public sector
units will enhance the productivity of government spending in developing countries.
The application of such mechanisms will lead to increased productivity in the
allocation of economic resources to the various sectors in the country on the one hand,
and will also lead to increased public confidence in the various government institutions
on the other hand. Therefore, this paper aims to explore the impact of public sector
governance on the productivity of government spending.
Literature Review
Government spending productivity refers to the ability of government units to use
available financial resources to improve the effectiveness of outcomes (Monastiriotis
and Zilic, 2020). It optimizes existing financial and human resources to provide top-
notch economic services and initiatives (Lau et al., 2017). The efficacy of
government expenditure extends beyond cost reduction in government operations; it
also pertains to how this expenditure is allocated. The goal is to guarantee that
government expenditure has a concrete and measurable effect while using the
available financial resources effectively. Enhancing the efficacy of government
expenditure is a crucial objective for economic policymakers, as it may improve
public service provision and attain economic development for the nation (Purwanto
and Utami, 2023). Categorizing government expenditure as productive or non-
productive is essential for developing economic policies and achieving economic
progress. Various categories of government productive spending have distinct
impacts on economic development. Nevertheless, the findings obtained from
economic research investigating the correlation between productive and
unproductive government expenditure and economic growth could not provide
definitive conclusions about their link (Chu et al., 2020). While numerous studies
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analyze the influence of levels of productive and non-productive government
spending, expressed as a percentage of GDP, on economic growth, only a few
researchers have attempted to verify the relationship between changes in the level of
productivity of government spending and the level of productivity—economic
growth in the country. Previous research on government expenditure productivity
and governance indices have shown inconsistent findings, particularly when
comparing affluent nations to developing nations. Hence, the primary objective of
this research is to examine the correlation between global governance indicators,
which serve as a metric for assessing the governance of public sector entities, and
the efficiency of government expenditure as reflected in the country's gross domestic
product. The study will primarily compare 40 countries categorized into four income
classifications based on the World Bank's classification system: high-income, upper-
middle-income, below-middle-income, and low-income countries. The comparison
will be based on six global governance indicators: voice and accountability, political
stability, government effectiveness, quality of legislation, rule of law, and control of
corruption. To accomplish this objective, the research assumes a statistically
significant correlation exists between the governance of public sector units and the
productivity of government expenditure. According to the literature, the voting and
accountability index is essential for improving the efficiency of government
expenditure. Joseph (2012) indicates that voters reward political parties for
allocating funds toward disaster relief efforts but not for their investments in
catastrophe preparation. Similarly, Hussain, Mahmood, Iqbal, Mustafa, and Furqan
(2021) demonstrate that government expenditure's effectiveness is influenced by
transparency, per capita expenditures, the racial segregation index, and geographical
distance. Akuntabilitas and Negara (2022) indicate that the government's acquisition
of social infrastructure, guided by equitable governance, may significantly improve
production levels. These results highlight the intricate connection between voting
patterns, accountability measures, and the overall impact of government expenditure
on productivity and public welfare outcomes. Thus,
H1: There is a significant relationship between voting and accountability index and
productivity of government spending.
The expected link between the political stability index and government spending
productivity is significant for economic development. Political instability can
impede economic progress, while corruption may inhibit economic growth and
undermine the administration's capability (Tiganasu et al., 2022). In the same
context, Ismihan and Ozkan (2005) indicate that strong governance leads to
government efficacy and regulatory quality and favors the increase of labor and total
factor productivity. In addition, Scartascini and Tommasi (2010) reveal that
technical skill is positively connected with policies supporting laissez-faire and
political institutions encouraging policy stability, showing that trust in stable policies
boosts economic performance. Hence, a politically stable environment, efficient
administration, and productivity-oriented policies may bolster the effectiveness of
government expenditure, fostering economic development. Thus,
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H2: There is a significant relationship between the political stability index and the
productivity of government spending.
The correlation between the government efficiency index and the effectiveness of
government expenditure is seen as a crucial factor in the decision-making process
across several domains. Research suggests that taxes have a detrimental impact on
the efficiency of government performance. Both direct and indirect taxes, together
with social security payments, have a negative effect on expenditure efficiency
(Afonso et al., 2021). Alfada (2019) stated that fiscal decentralization can potentially
improve the efficiency of government expenditure in infrastructure sectors. While
education and health are positively affected, the social protection sector may see a
decline in efficiency (Ehikioya and Omankhanlen, 2021). Furthermore, there is a
negative correlation between public spending efficiency, expenditure levels, and the
ratio of public-to-private funding. On the other hand, there is a positive correlation
between public spending efficiency and indices of governance quality, such as
regulatory quality. At the same time, there is a negative correlation with the
impression of corruption (Herrera and Ouedraogo, 2018). The results emphasize the
intricate relationship between taxation, fiscal decentralization, and governance
quality influencing government efficiency and spending productivity. Thus,
H3: There is a significant relationship between the government efficiency index and
the productivity of government spending.
There are complex relationships between the legislative quality index and
government expenditure productivity. Malhotra (2008) shows that government
effectiveness has a beneficial impact on both labor productivity growth and total
factor productivity growth in Asian countries. Garayeva and Tahirova (2016)
Indicate that the quality of legislative institutions, such as their level of
professionalism, does not automatically result in increased government expenditure.
This is because nations with high levels of government spending may choose
professional structures to handle their tasks efficiently. Furthermore, the efficacy of
government expenditure in wealthy nations is heavily influenced by the quality of
institutions, but in undeveloped countries, access to financial markets has greater
significance (Rollnik-Sadowska and Dąbrowska, 2018). Fazekas and Czibik (2021)
emphasize the intricate relationship between the quality of legislation, the efficacy
of government, and the productivity of public expenditure. Thus,
H4: There is a significant relationship between the legislative quality index and the
productivity of government spending.
Studies suggest a positive correlation between the rule of law index and the
productivity of government expenditure, indicating that the rule of law benefits
production. Within this framework, Jaffe et al. (2021) demonstrate that
advancements in the rule of law increase agricultural expenditures' effectiveness.
Furthermore, Tran et al. (2016) highlight the correlation between the level of
productivity in nations and corruption measures, which are associated with indices
of social infrastructure such as the rule of law and government performance.
Moreover, a thorough examination of data across different nations by Jaffe et al.
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(2021) shows that there is a statistically significant association between the rule of
law, academic progress, and socioeconomic health measures such as GDP and
mortality rates. On the contrary, the literature shows the importance of strengthening
the rule of law for economic development in many Eastern European countries. This
is due to the close link between economic growth and the rule of law in these regions.
Thus,
H5: There is a significant relationship between the rule of law index and the
productivity of government spending.
The anti-corruption index is an essential element in the government's efforts to
rationalize financial decisions and reduce waste of public money. It is positively
reflected in increasing the productivity of government spending by addressing
unproductive spending in government units. This is what Lim, Hwang, and Song
(2011) pointed out when they explained that government efforts to combat financial
corruption lead to reducing fluctuations in the productivity of government spending.
In the same context, Adan, Nair, Arvin, and Ali (2022) explain that the presence of
modern information technology infrastructure in developing countries contributes
to enhancing government efforts to combat financial corruption. The digital
transformation of government transactions is a key point in enhancing efforts to
combat financial corruption because it reduces cases of bribery and waste of public
money through cash circulation of state revenues and the possibility of not recording
them as final revenue for the state treasury. In the same context, the study conducted
by Ogun (2018) examines the impact of the effectiveness of government efforts to
combat financial corruption on national economic development goals. This study
confirmed the relationship between financial corruption and the level of government
spending and emphasized the importance of government spending in implementing
sustainable development strategies. Thus,
H6: There is a significant relationship between control of the corruption index and
productivity of government spending.
Research Methodology and Data
Based on the Globe Bank categorization, the research sample consists of 40 nations
from across the globe, equally divided into four income groups (high-income, upper-
middle-income, below-middle-income, and low-income countries). The research
encompasses financial data over 12 years, from 2011 to 2022. It includes 480
observations, which are country-year observations sourced from the World Bank
database. The primary data source used in this research is the World Bank database.
Table 1 displays the nations in the study sample, categorized based on their income
level.
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Table 1. Research Sample Countries
High-GDP
countries
Upper-middle-
GDP
countries
Lower middle-
GDP countries
Low-income countries
Australia- AU
Armenia- AM
Algeria- DZ
Burkina Faso-BF
Austria- AT
Azerbaijan- AZ
Egypt- EG
Burundi- BI
Bahrain- BH
Belarus- BY
Honduras- HN
Congo- CD
Canada- CA
Brazil- BR
India- IN
Ethiopia- ET
Italy- IT
Iraq- IQ
Jordan- JO
Gambia- GM
Kuwait- KW
Libya- LY
Morocco- MA
Liberia- LR
Oman- OM
Malaysia- MY
Sri Lanka-LK
Madagascar- MG
Poland- PL
Russia- RU
Uzbekistan- UZ
Mali- ML
Qatar- QA
South Africa-ZA
Viet-Nam- VN
Sudan- SD
UK
Türkiye- TR
Zambia- ZM
Syria- SY
The World Bank's global governance indicators will assess how well governance is
implemented in public sector entities. Global governance indicators are specific
mechanisms for government action that help evaluate government performance and
the level of achievement of set economic goals (Handoyo, 2023).
In 1996, the World Bank issued the World Governance Indicators as measures to
determine the level of commitment of different countries to achieving a set of social
and political goals within six distinct areas of interest to stakeholders. These indicators
are: political stability, government performance, voice and accountability, legislative
quality, rule of law, and anti-corruption (Messi Lopez, Packham, and Walter, 2023).
The main objective of issuing this set of indicators is to assess the economic, social,
and political environment in each country and the degree of its impact on economic
growth in general (Saleh, Qader, and Ahmed, 2022). These indicators provide benefits
to a large group of stakeholders as they serve economic policymakers in evaluating the
country's economic policies and working to address negative aspects and improve
economic performance. To verify the effectiveness of these indicators in achieving
economic development in developing countries, the paper aims to test the impact of
applying public sector unit governance mechanisms on the productivity of government
spending in developing countries. Table 2 shows the descriptive statistics for the main
variables of the study.
Table 2. Description of Research Variables
Variables
Abbreviation
Definition
Source
Public Sector Governance
The World Bank (Global
Governance metrics) uses six
metrics to quantify the degree of
governance in public sector
entities.
The World
Bank
Voice and
Accountability
VACC
This metric assesses the caliber of
services the government provides,
the degree of autonomy in its
functioning, the efficacy
of
The World
Bank
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policies and their execution, and
the government's trustworthiness
in endorsing these policies.
Political
Stability
PSTA
Political Stability and Absence of
Violence/Terrorism is a metric
that assesses the probability of
political instability and acts of
violence driven by political
motives, such as terrorism.
The World
Bank
Government
Effectiveness
GEFF
The government can create and
execute efficient policies and
structures that enable and
encourage growth in the private
sector.
The World
Bank
Regulatory
Quality
REGQ
The metric assesses the
government's capacity to create
and execute effective policies and
regulations that facilitate and
encourage growth in the private
sector.
The World
Bank
Rule of Law
RLAW
These elements include the
efficacy of contract enforcement,
the
safeguarding of property
rights,
the efficiency of law
enforcement
authorities, the
impartiality of the
court system,
and the probability
of criminal
activities and acts of
violence.
The World
Bank
Control
of
Corruption
CCRP
The degree to which public power
can curtail different forms of
corruption and curb the control
exerted by elites and people with
vested interests in government
agencies within the state.
The World
Bank
Government spending
productivity
Gross Domestic
Production
GDP
The efficacy of government
expenditure is gauged by the
nation's yearly gross domestic
product.
(Chu, Hölscher,
and McCarthy,
2020)
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Table 3 presents the statistical measures that describe the data used in the
investigation.
Table 3. Descriptive Statistics
N
Minimum
Maximum
Mean
Std. Deviation
VACC
480
1.00
97.00
35.1333
27.42869
PSTA
480
.00
96.00
34.3604
25.22900
GEFF
480
1.00
97.00
43.1063
26.97566
REGQ
480
.00
100.00
43.2000
27.88692
RLAW
480
1.00
99.00
42.9417
28.03369
CCRP
480
.00
96.00
41.5250
26.41525
GDP
480
1229461721
3416645826053
480624097820
778665436639
Valid N
(listwise)
480
This paper seeks to examine the impact of governance in public sector units on the
productivity of government expenditure using a series of analytical procedures. The
initial task involves examining the governance indicators of public sector units
within the selected study sample from 2011 to 2022. This will be done by conducting
a comparative analysis of the governance indicators of public sector units, using the
six global government indicators established by the World Bank in 1996. The
analysis will be based on the four income levels specified in the current study. These
nations may be classified into high-income, upper-middle-income, lower-middle-
income, and low-income categories based on their income level. The next step
involves examining the causal connection, if any, between public sector units'
governance indicators and government spending's productivity. Additionally, it aims
to determine the direction of the relationship between public sector units and
government spending productivity, as measured by gross domestic product
indicators.
Research Results
It is necessary to assume that the data is normal so that various statistical methods
and tests can be used. A few assessments may be performed to examine the
assumption of normalcy. In this setting, we use the following methods to determine
whether our sample is normally distributed:
• Skewness
• Kurtosis
The Kurtosis and Skewness of a distribution are two metrics that can be employed
to describe the geometry of any distribution. Skewness of a distribution is a
measurement of how symmetric it is. Usually, a normal distribution is used to
illustrate the contrast. Assuming a standard distribution, the skewness value will
equal zero. A positive skewness parameter indicates a favorably skewed distribution.
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A negative skewness score indicates that the distribution is skewed to the left.
Kurtosis, on the other hand, is a statistical measure that enables one to identify whether
or not a distribution is flat in comparison to a normal distribution. On the other hand,
when the value is negative, it indicates that the distribution is typically flat, and when
the number is positive, it indicates that the distribution is substantially peaked. In the
event if the form of the distribution is exclusively average, the result of the kurtosis
statistic will include the value 0. On the other hand, if the distribution is perfectly
tapered, the kurtosis number can be deemed to be in a good position. The flatness
value, on the other hand, will be negative if the shape of the distribution is flat.
Conversely, the values that are acceptable for skewness and kurtosis vary from +1 to -
1 (Binz et al., 2013). The results of the torsion and kurtosis tests are shown in Table
4 below.
Table 4. Normality Test
Statistics
N
Skewness
Kurtosis
Statistic
Statistic
Std. Error
Statistic
Std. Error
VACC
480
0.955
.111
-0.160
.222
PSTA
480
0.555
.111
-0.652
.222
GEFF
480
0.127
.111
-0.891
.222
REGQ
480
0.273
.111
-0.917
.222
RLAW
480
0.314
.111
-0.866
.222
CCRP
480
0.362
.111
-0.613
.222
GDP
480
0.868
.111
0.323
.222
Valid N
(listwise)
480
The findings indicate that the distributions of all research variables exhibit positive
skewness. Voice and accountability Value (VACC) (0.955), Political Stability
(PSTA) (0.555), Government Effectiveness (GEFF) (0.127), Legislative Quality
REGQ (0.273), Rule of Law RLAW. (0.314), Control of corruption CCRP (0.362),
GDP (0.868) are within the permissible range of ±1.
The data in Table 4 indicate that the kurtosis statistics for all distributions remain
within the permissible range of ± 1. The values for voice and accountability
(VACC) are -0.160, political stability (PSTA) is -0.652, government effectiveness
(GEFF) is -0.891, quality of legislation (REGQ) is -0.917, rule of law (RLAW) is -
0.866, control of corruption (CCRP) is -0.613, and GDP is 0.323. The skewness and
kurtosis findings indicate that the distributions of all variables conform to a normal
distribution. The Pearson correlation coefficient will be used, since it is appropriate
for samples having normal distributions, rather than the Spearman correlation
coefficient, which is intended for samples lacking normal distribution.
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Correlation analysis
Table 5 displays the results of a study that examined the association between global
governance indicators and government expenditure productivity using the Pearson
correlation coefficient.
Table 5. Pearson correlation coefficient results
VACC
PSTA
GEFF
REGQ
RLAW
CCRP
GDP
VACC
Pearson
Correlation
1
.629**
.660**
.731**
.697**
.735**
.631**
Sig. (2-tailed)
.000
.000
.000
.000
.000
.000
N
480
480
480
480
480
480
480
PSTA
Pearson
Correlation
.629**
1
.759**
.762**
.767**
.797**
.299**
Sig. (2-tailed)
.000
.000
.000
.000
.000
.000
N
480
480
480
480
480
480
480
GEFF
Pearson
Correlation
.660**
.759**
1
.928**
.925**
.912**
.519**
Sig. (2-tailed)
.000
.000
.000
.000
.000
.000
N
480
480
480
480
480
480
480
REGQ
Pearson
Correlation
.731**
.762**
.928**
1
.924**
.907**
.484**
Sig. (2-tailed)
.000
.000
.000
.000
.000
.000
N
480
480
480
480
480
480
480
RLAW
Pearson
Correlation
.697**
.767**
.925**
.924**
1
.940**
.439**
Sig. (2-tailed)
.000
.000
.000
.000
.000
.000
N
480
480
480
480
480
480
480
CCRP
Pearson
Correlation
.735**
.797**
.912**
.907**
.940**
1
.450**
Sig. (2-tailed)
.000
.000
.000
.000
.000
.000
N
480
480
480
480
480
480
480
GDP
Pearson
Correlation
.631**
.299**
.519**
.484**
.439**
.450**
1
Sig. (2-tailed)
.000
.000
.000
.000
.000
.000
N
480
480
480
480
480
480
480
Note: **. Correlation is significant at the 0.01 level (2-tailed).
The outcomes of the fundamental correlation analysis reveal the subsequent
relationship among the study variables:
 The results of H1 indicate a strong and statistically significant correlation
between the voting and accountability index and the gross domestic product
(GDP) of the nations included in the sample. The correlation coefficient (r) was
0.631, indicating a favorable relationship. The p-value was below 0.01,
indicating that the link is statistically significant at the 1% significance level.
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The engagement of community members in voting and decision-making,
together with their authority to hold decision-makers accountable, would
enhance the efficacy of government spending and vice versa.
 The results of H2 indicate a strong and statistically significant correlation
between the political stability index and the gross domestic product (GDP) of the
nations included in the sample. The correlation coefficient (r) was 0.299, which
indicates a positive link. The significance threshold was 1%, and the p-value was
less than 0.01. Political stability is a vital determinant that directly influences
the efficacy of government spending, as assessed by gross domestic product, and
conversely. Elevated growth rates may beneficially influence the advancement of
infrastructure projects, provided that resources are used effectively. Therefore,
the optimal allocation of economic resources will contribute to achieving social
welfare and political stability of the state.
 The results of the H3 test show that the sample nations' GDP and the government
efficiency index are strongly correlated. With a p-value below 0.01, a correlation
coefficient of 0.519, and a significance threshold of 1%, the relationship between
these variables was statistically significant. In other words, economic growth
levels and the productivity of economic resource allocation can be increased by
improving the quality of public services and enhancing citizens' confidence in
government performance.
 According to the results of H4, there is a statistically significant effect of the
quality of legislation index on the level of economic development measured by
GDP at a significance level of 1%, and the correlation coefficient for this
hypothesis (r) is 0.484. This result reflects a positive effect of the quality of
legislation variable on the economic development variable, and the probability
value is less than 0.01, which enhances the importance of this effect. The
practical effect of this result is reflected in enhancing the ability of government
units to implement the systems, instructions and legislation that govern the work
of the government, which enhances the productivity of government spending.
 The Regarding the results of hypothesis H5, it is clear that there is a strong and
statistically significant correlation between the rule of law index and the GDP of
the countries in the study sample at a significance level of 1%. The results also
show that the correlation coefficient (r) is 0.439, reflecting a positive correlation
between the two variables. Enhancing adherence to the law and upholding state
sovereignty will benefit the effectiveness of government spending and
conversely.
 The results of H6 reveal a strong and statistically significant correlation between
the control of corruption index and the gross domestic product of the sampled
nations. The correlation coefficient (r) was 0.450, showing a favorable
relationship. The significance level was set at 1%, and the p-value was found
to be less than 0.01. Corruption has a lasting impact by reducing local and
foreign savings and investment and wasting public funds. As a result, it impairs
the efficiency of government spending and vice versa.
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POLISH JOURNAL OF MANAGEMENT STUDIES
Alyaseri I., Furaijl H., Mizban B., Almagtome A., Al-Yasiri A.
Coefficients
Model
Unstandardized Coefficients
Standardized
Coefficients
t
Sig.
B
Std. Error
Beta
1
(Constant)
-210.647
47.241
-4.459
.000
VACC
20.88
5
1.395
.736
14.96
6
.000
The Impact analysis
To measure the impact of governance indicators of public sector units on the
productivity of government spending, the following regression model was
formulated:
Whereas:
GDP t= B0 + B1 VACC t - B2 PSTA t + B3 GEFF t +
B4 REGQ t – B5 RLAW t + B6 CCRP t +U t
GDP = Gross Domestic Product as an indicator to measure the productivity of
government spending
VACC = Voice and Accountability
PSTA = political stability
GEFF = Government Effectiveness
REGQ = Legislative Quality
RLAW = the rule of law
CCRP = control of corruption
Β = parameters
t = time
U = random error/random variable
Table 6 presents the findings of the analysis of variance among the variables for the
indicators reflecting the connection.
Table 6. Summary of Regression Model
Model
R
R Square
Adjusted R2
Std. Error of the
Estimate
1
.726a
.527
.521
538.63768
Note: a. Predictors: (Constant), CCRP, VACC, PSTA, REGQ, GEFF, RLAW
Table 7. Impact of Public Sector Governance
on Government Expenditure Productivity
ANOVAa
Model
Sum of Squares
df
Mean Square
F
Sig.
Regression
153195627.789
6
25532604.631
88.004
.000b
1
Residual
137231749.578
473
290130.549
Total
290427377.367
479
Note: a. Dependent Variable: GDP
b. Predictors: (Constant), CCRP, VACC, PSTA, REGQ, GEFF, RLAW
Table 8. Multiple Regression Model Coefficients
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PSTA
-9.332
1.642
-.302
-5.682
.000
GEFF
28.62
0
2.900
.991
9.87
0
.000
REGQ
-6.070
2.842
-.217
-2.136
.033
RLAW
-8.295
3.089
-.299
-2.686
.007
CCRP
-8.118
3.168
-.275
-2.562
.011
Note: a. Dependent Variable: GDP
The findings of the multiple regression model analysis demonstrate that the
governance of public sector entities, defined by six aspects, substantially influences
the productivity of government expenditure. This impact is statistically significant,
with a p-value of 0.001. The independent variable, which pertains to the
management of public sector units, accounts for 53% of the variability in the
dependent variable, indicating government expenditure efficiency. The coefficient
of determination value, denoted as R2, is 0.527.
Discussion
Despite its significance, public sector management encounters several problems and
hurdles that hinder the government's efficacy in accomplishing its objectives and
improving the economic welfare of society. The barriers and problems in this context
include corruption, bureaucracy, limited transparency, and inadequate accountability
systems across different national administrative tiers. Financial and administrative
corruption erodes trust in public sector entities, squandering resources and
diminishing the effectiveness of government organizations. In the same context,
excessive bureaucracy may hinder the government’s efforts to implement the
economic projects planned in the government program through complex procedures
for making investment decisions in the country. Therefore, the government should
ensure sufficient flexibility in procedures to facilitate economic decision-making.
This study examines the impact of public sector governance indicators on
government spending productivity in developing countries. According to the above
results, it is clear that there is a positive impact of applying public sector governance
mechanisms on the productivity of government spending at the state level. This
impact is expected to be positively reflected in the standard of living of the
population and contribute significantly to achieving the economic well-being of
individuals because achieving the efficiency of government spending will be
reflected in improving the quality of public services. This result is consistent with
many previous studies, including the study by Noga et al. (2021), which showed
that the good application of governance mechanisms for public sector units
positively affects the effectiveness of spending and enhances economic
development. It is also consistent with the results of Mumuni and Ngong (2023),
which show that good governance leads to improving the performance of
government units, which ultimately leads to enhancing the productivity of
government spending. In the same context, the results of Darmayoni and Khairuddin
(2023) came, which revealed that the use of information and communication
technology in public sector management improves the efficiency of public service
delivery. The results also agree with Adiel (2017), who revealed that governance
mechanisms for public sector units such as accountability and transparency
significantly affect the level of public spending.
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POLISH JOURNAL OF MANAGEMENT STUDIES
Alyaseri I., Furaijl H., Mizban B., Almagtome A., Al-Yasiri A.
The results of the current study show the tangible impact of applying governance
mechanisms of public sector units on the productivity of government spending, as
well as the importance of the proper application of these mechanisms in enhancing
public confidence in the government and its policies. The results also show the
importance of applying governance mechanisms in rationalizing public finance
decisions in the country as a whole and reducing cases of waste in public money by
making effective decisions to allocate financial resources in the areas designated for
them. For future studies, we suggest conducting studies that address the relationship
between specific types of government spending and the application of governance
mechanisms of public sector units. In addition, the impact of national cultural values
on the productivity of government spending can be tested, as national culture is an
important factor in combating financial and administrative corruption because the
motive for embezzlement or theft of public money increases or decreases depending
on the culture of society.
Conclusion
The effectiveness of public service performance is an important element for the
success of governments and achieving their goals set in the government program,
most notably enhancing the economic welfare of society. However, one of the
obstacles facing governments in achieving this goal is the inability of government
units to meet the requirements of economic development due to the high levels of
financial and administrative corruption in them. Therefore, the application of
governance mechanisms for public sector units can improve the efficiency of
government performance by strengthening the principle of accountability and the
rule of law. The implementation of governance mechanisms for public sector units
requires first working to combat financial and administrative corruption by
following clear government policies to achieve this goal. Many researchers believe
that the application of administrative decentralization and enhancing the role of the
private sector in the various economic sectors of the state is the best mechanism for
enhancing the productivity of government spending by creating a kind of
competition between governmental and non-governmental units. In addition, the
existence of solid governance mechanisms at the state level can enhance the
effectiveness of spending and improve the process of allocating economic resources
in the state's general budget, in addition to enhancing the quality of public services.
In order to gain public confidence, governments work to promote the principles of
governance of public sector units, especially the principle of transparency and
accountability, as foundations for gaining public opinion, giving positive
perceptions of government performance, and fulfilling electoral promises. The
advantages provided by the mechanisms of governance of public sector units are
not limited to financial savings only, but extend to achieving strategic goals for
countries represented in achieving social justice and building societies characterized
by justice, in addition to enhancing the economic welfare of society. Therefore, the
government should pay great attention to the organizational aspects of the work of
its various units in a manner that supports transparency, accountability, and
informing the public of its important financial decisions. Although the application
of mechanisms of governance of public sector units at first glance may face major
challenges related to the social and political environment of the country,
governments must have the political will to combat corruption and overcome those
with political and economic influence and those who benefit from cases of financial
and administrative corruption.
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Accordingly, it is the duty of governments to work on implementing sound
governance mechanisms that ensure sound financial decisions in allocating available
financial resources and avoiding waste of public money, in addition to tightening
control over financial transactions using advanced financial technology.
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ZARZĄDZANIE SEKTOREM PUBLICZNYM JAKO NARZĘDZIE
ZWIĘKSZAJĄCE PRODUKTYWNOŚĆ WYDATKÓW
RZĄDOWYCH: MIĘDZYNARODOWE STUDIUM
PORÓWNAWCZE
Streszczenie: W niniejszym badaniu zbadano wpływ zarządzania sektorem publicznym na
produktywność wydatków rządowych. Omówiono również znaczenie procedur zarządzania
jednostkami rządowymi w ograniczaniu korupcji i poprawie wydajności produkcyjnej
ogólnego budżetu państwa. W niniejszym opracowaniu przyjęto podejście analizy
porównawczej przy użyciu danych wtórnych z szeregu czasowego od 2012 do 2022 r. Wyniki
pokazują, że procedury zarządzania jednostkami sektora publicznego poprzez reformę
systemów administracyjnych różnych instytucji państwowych są pozytywnie powiązane
z poziomami produktywności wydatków rządowych państwa. Wyniki pokazują, że
wdrożenie niezbędnych reform zarządzania sektorem publicznym, takich jak zachęcanie do
decentralizacji w procesie podejmowania decyzji i udziału sektora prywatnego, zapewni
większą wydajność, przejrzystość i rozliczalność w świadczeniu usług społecznych
i infrastrukturalnych. Wyniki ujawniają również, że korupcja administracyjna i finansowa
wiąże się z dążeniem do korzyści politycznych, ekonomicznych i prawnych, co może
zwiększyć koszty transakcyjne, obniżyć jakość realizacji projektów i prowadzić do
problemów społecznych. W niniejszym opracowaniu badania wnoszą wartość do literatury,
ukazując, w jaki sposób systemy zarządzania sektorem publicznym mogą poprawić
skuteczność wydatków rządowych i promować globalną reformę zarządzania sektorem
publicznym. Badanie umożliwia decydentom identyfikację barier wzrostu gospodarczego
i minimalizację niewłaściwej alokacji zasobów publicznych poprzez formułowanie planów
gospodarczych, które optymalizują wykorzystanie pieniędzy publicznych. Zastosowanie
analizy porównawczej wzmacnia skuteczność badania, czyniąc wyniki szczególnie
korzystnymi dla podmiotów sektora publicznego, które dążą do optymalizacji wydatków
w różnych sektorach gospodarki.
Słowa kluczowe: zarządzanie sektorem publicznym, wydatki rządowe, wydatki publiczne,
produktywność wydatków rządowych
65