| Abstract [eng] |
The main purpose of this master thesis is to evaluate public administration efficiency and its connection with economic development in European Union member states. The literature analysis section reviews the terminology surrounding public administration and public administration efficiency which is then synthesised and compared. It also analyses what impacts public administration efficiency and its connection with economic development. Research design and methods were then set up according to the reviewed literature. The main purpose of the research is to evaluate the effect of public administration efficiency on economic development in EU. Based on availability, data from 27 EU member states over the period of 2004-2019 was used. To carry out the empirical research panel regression using OLS common, fixed and random effects models was chosen as the method. Additionally, contrary to other studies, public administration efficiency changes rather than levels were used as variables in the research. Results of the empirical research show that the effect of public administration efficiency on economic development in EU is ambiguous. One of the tested 16 models showed statistically significant positive effect as predicted by the theoretical model, however, three showed an unexpected negative effect. Given that the measure (government effectiveness) used for efficiency, which was returning the negative coefficient, also evaluates the ability to implement political promises and quality of policies formed, it was discussed that it’s individual use when evaluating public administration efficiency can be deceiving. Alternatively, when data was split into different levels of efficiency (high-, medium- and low-level of efficiency) – statistically significant positive effect was found when using the government effectiveness measure in the medium-level sample, negative effect was found in the low-level of efficiency sample and no effect was found in the high-level sample. This suggests that in countries with low-level of efficiency, its improvements cause the economy to deteriorate when policies implemented are not geared towards the economy or are poorly made. However, when the country reaches the medium-level – efficiency gains start contributing to the growth of the economy, but the effect disappears when a country becomes highly efficient in the area of public administration. The conclusions and recommendations of the thesis summarise the key points of the literature analysis, research design, empirical research and accordingly provides suggestions for future studies. The author believes that the results of the research should encourage policymakers, especially those of countries with low level of public administration efficiency, to monitor and analyse the factors affecting public administration efficiency levels in their country and implement public administration reforms tailored specifically to the country’s needs and circumstance. |
