Theoretical and Applied Economics (Dec 2021)
Public service delivery dilemma and economic growth challenges in the MENA Region
Abstract
The present paper investigates the impact of public service quality on economic growth in 15 MENA countries over the period 1996-2018, through the use of panel data analysis, including Fixed Effects Model, Random Effects Model and Hausman test. The Hausman test favors the fixed effect model, which clarifies that the government effectiveness index exerts a highly significant positive impact on economic growth in 15 MENA countries. While the government spending (freedom from government) exhibits a statistically insignificant positive effect on economic growth in the selected countries. Based on these findings, it could be concluded that the ideal reconciliation between delivering high-quality public services and keeping public spending low and efficient, is the perfect recipe for the MENA region’s economic success. It is also recommended that MENA governments should foster their cooperation with the private sector in the delivery of education and health care services, besides tackling administrative reforms in alignment with the goal of providing efficient public goods and services. Furthermore, anti-corruption policies should be knitted, taking into serious consideration the promotion of institutional quality and optimization of government size.
