Public Employment Reform, Budget Efficiency, and Governance Quality: a Panel-data Analysis from Viet Nam’s Civil Service Transformation
DOI:
https://doi.org/10.59394/JSM.151Keywords:
Public employment reform, budget efficiency, governance quality, civil service downsizing, digital transformation, Viet Nam, New Public Management, panel-data regressionAbstract
This research examines the role of public employment reform in improving budget efficiency and governance quality in Viet Nam during 2015 - 2023, the available empirical period corresponding to the implementation of civil service reform under the Politburo’s Resolution No. 39-NQ/TW dated April 17, 2015, on downsizing and restructuring of cadres, civil servants and public employees. Drawing on New Public Management (NPM) and comparative public administration reform literature, the study uses a balanced provincial panel dataset covering 63 provincial-level administrative units over nine years, yielding 567 province-year observations. The analysis estimates Pooled OLS, Fixed Effects (FE), and Random Effects (RE) models and applies the Hausman specification test to identify the preferred panel-data estimator. The findings indicate that staff reduction is positively associated with budget efficiency and governance quality. At the same time, digital transformation is directly related to better governance outcomes and strengthens the relationship between downsizing and governance quality. Training investment has a modest positive association with governance performance. In contrast, the wage reform index is not consistently significant, suggesting that wage reform has not yet been sufficiently linked to performance-based incentives. The study concludes that public employment reform can generate meaningful gains in state performance when integrated with digital transformation, professional capacity-building, and institutional accountability. The Vietnamese case offers useful lessons for developing countries seeking to modernize public administration under fiscal and institutional constraints.
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