Transformations  in
Business & Economics

INDICATORS OF GOVERNMENT EFFECTIVENESS IN EUROPEAN COUNTRIES: EMPIRICAL ANALYSIS WITH THE USE OF PANEL DATA[1]⁷
Martina Halaskova, Veronika Linhartova, Beata Gavurova, Peter Niroda

ABSTRACT: Based on a theoretical and empirical approach, the authors strive to evaluate government effectiveness according to the government effectiveness index and the impact of selected (socio-economic) indicators on government effectiveness in European countries in the years 2003-2019. The research examines the position of European countries (EU-27 and the United Kingdom) and focuses on the specification of determinants in transition economies and non-transition economies. The highest government effectiveness in 2003-2019 is observed in Scandinavian countries, whereas the lowest government effectiveness was found in two examples of transition economies, Romania and Bulgaria. Panel data analysis was used for the analysis, specifically the Fixed effects model. The results of the analysis demonstrate the impact of the observed determinants on government effectiveness in transition economies (model 1) and in non-transition economies (model 2). The most significant determiners to affect government effectiveness are GDP per capita and government expenditures on public services in both models (despite a different structure in transition and non-transition economies). Other factors that have a major effect on government effectiveness in transition economies are parliamentary seats held by women, the corruption perception index, and the percentage of women in the position of senior administrators. Our findings can be beneficial for public policymakers in the implementation of government measures and as a basis for changes in the leadership of individual governments leading to increased efficiency.

KEYWORDS:  government effectiveness, indicators, public expenditures, evaluation, EU countries, transition economies, non-transition economies, panel data.

JEL classification:  H11, P20, C33.

⁷Acknowledgments:  This research was supported by the Scientific Grant Agency of the Ministry of Education, Science, Research, and Sport of the Slovak Republic and the Slovak Academy Sciences as part of the re-search project VEGA No. 1/0590/22: "Exploration of natural, social and economic potential of areas with environmental burdens in the Slovak Republic for the development of specific forms of domestic tourism and quantification of environmental risks”. This work is supported within project VEGA 1/0683/21 "Generation Gap and Provision of Public Services and Administration" and SGS Project SP2022/74 "Computational Intelligence in the Prediction of Economic Quantities, Data Mining and Economic Process Modeling”.