Babeş-Bolyai University. Faculty of Political, Administrative and Communication Sciences. Public Administration Department
Transylvanian Review of Administrative Sciences vol:2014 issue:Special issue pages:202-222
Using a principal-agent framework and multi-country survey data of over 400 public sector organizations, this article examines the effect of result control on the use of financial management techniques in public sector organizations. In order to avoid invalid conclusions, we test for heteroskedasticity and model residual variance using a heterogeneous choice model. This model yields important insights into the effect of result control that would be overlooked in a misspecified ordered logit model. Our findings reveal that result control matters, although size and primary task of the organization also prove to be determinants of the use of financial management techniques. Within the context of the continuous attempts being made to improve public sector performance, policy makers should thus develop different strategies for different (individual) agencies, while relying on a strong ex-post result control, when they want to stimulate the use of financial management techniques.