Did New Public Management Matter? An Empirical Analysis of the Outsourcing and Decentralization Effects on Public Sector Size

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1. What are the contributions mentioned in the paper "Did new public management matter? an empirical analysis of the outsourcing and decentralization effects on public sector size" ?

2. What are the future works mentioned in the paper "Did new public management matter? an empirical analysis of the outsourcing and decentralization effects on public sector size" ?

3. Why do the authors use PCSE to estimate equation (5)?

4. What are the two critical assumptions to obtain unbiased standard errors estimates of the true parameters of our?

Accepted Answer

This paper evaluates whether reforms associated with the New Public Management ( NPM ) doctrine led to a reduction in public sector expenditure and employees.. This paper is an attempt to do this, especially looking at outsourcing and decentralization.. The results suggest a positive correlation between the degree of outsourcing in the provision of public services and government spending in the short term.

Accepted Answer

For example, during 1990-2000, a period of strong economic growth, the steady growth of GDP could mask increases in public spending and debt and the opposite in times of recession A major task for future research is, on the one hand, to include in the model further indicators for NPM-style reforms, such as the use of “ performance related pay ” or “ performance budgeting ” and, on the other hand, the use of reliable data on the total employment in both central and sub-central public sector levels.

Accepted Answer

Due to the detected heteroskedasticity and autocorrelation the authors use panel corrected standard errors (PCSE) to estimate equation (5).

Accepted Answer

Homoskedasticity and no serial correlation are critical assumptions to obtain unbiased standard errors estimates of the true parameters of their model so, if the authors detect heteroskedasticity or autocorrelation, the authors will use a Feasible Generalized Least Squares (FGLS) estimator or a LSDV estimator with panel corrected standard errors (PCSE).

Accepted Answer

Because the time dimension of the time series used in this analysis is considerable, it is necessary to assess if they are stationary14 or not, to avoid misspecifications in the regression models.

Accepted Answer

According to Brennan and Buchanan (1980), the decentralization of expenses (revenues) can create a “market-like solution”, limiting the taxing power of the different government levels.

Accepted Answer

Central bureaucratic providers may be more efficient than local ones, primarily due to their greater investment capacity in technology, research, development, promotion and innovation.

Accepted Answer

As regards public administration and defence employment, data includes 5 countries from 1980 to 2009, 6 from 1990-2009, 14 from 1995-2009 and 16 from 2000-9.

Accepted Answer

the authors can assess the long-run effects by estimating the cointegrating vector, next the authors include the lagged residuals as the error correction term in (7) to assess how the short-run relationship varies from the long-run one.

Accepted Answer

As regards the degree of autonomy of the countries analyzed, measured as the share of transfers in sub-national revenues (see table 7), the authors observe that countries with lower ratios, ie those with greater autonomy as measured here, are Austria and Germany, both of which are federal countries.

Accepted Answer

The key decentralization explanatory variables for their empirical analysis are EXPDEC, EMPDEC y AUT, as discussed in subsection 3.2.

Accepted Answer

The authors can see that the values of the coefficients and parameters associated with the different variables of interest and their statistical significance do not differ too much from those obtained in estimating equation (2), ie the static model in first differences, which may indicate the robustness of their results.

Accepted Answer

Breitung (2005) showed, through a series of Monte Carlo simulations, that DOLS estimator, although preferred to FMOLS and POLS, may be biased if T is small.

Accepted Answer

Ronald Coase (1937) is credited with first introducing the transaction cost concept to economic theory, which was later developed by Oliver Williamson (1979, 1989, 1998).

Did New Public Management Matter? An Empirical Analysis of the Outsourcing and Decentralization Effects on Public Sector Size

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Most frequently asked questions

1. What are the contributions mentioned in the paper "Did new public management matter? an empirical analysis of the outsourcing and decentralization effects on public sector size" ?

2. What are the future works mentioned in the paper "Did new public management matter? an empirical analysis of the outsourcing and decentralization effects on public sector size" ?

3. Why do the authors use PCSE to estimate equation (5)?

4. What are the two critical assumptions to obtain unbiased standard errors estimates of the true parameters of our?

5. Why is it necessary to assess if the time series used in this analysis is stationary?

6. According to Brennan and Buchanan (1980), the decentralization of expenses can create?

7. Why are central bureaucratic providers more efficient than local ones?

8. How many countries have data on government expenditures and defence employment?

9. What is the simplest way to assess the long-run effects of the model?

10. What is the degree of autonomy of the countries analyzed?

11. What are the key decentralization explanatory variables for their analysis?

12. What is the significance of the coefficients and parameters in equation (7)?

13. How does Breitung (2005) show that DOLS is biased?

14. Who first introduced the transaction cost concept to economic theory?

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References

Econometric Analysis of Cross Section and Panel Data

The Nature of the Firm

Econometric Analysis of Panel Data

A Pure Theory of Local Expenditures

Transaction-Cost Economics: The Governance of Contractual Relations

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