Public Management Reform In Developing Countries: An Empirical Investigation Of Operational And Financial Efficiency Of Private Versus Public Airports In Latin America And The Caribbean
Brown, Alvin H.
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Public enterprises in Latin American and Caribbean developing nations (LACDNs) are constantly struggling to make their public infrastructures in sectors such as banking, energy; telecommunications, trade, and aviation operate more efficiently and effectively. Public management reform is used to analyze the problems of government and provide solutions. The problems encountered are the growing cost of the public sector in conjunction with inefficient and unresponsive bureaucracies in LACDNs. Accordingly, the solutions involve governments focusing on ensuring that public enterprises are performing efficiently and effectively by adopting a holistic market approach for operating public enterprises. The purpose of this study is to examine the performance of private versus public airports in LACDNs. This study is an effort to help fill this research gap. A public management reform model is proposed for LACDNs consisting of four dimensions: privatization, organizational governance, strategic human resources management and performance based-budgeting. This model can help to improve the performance of many public enterprises by assisting public managers to identify ways of removing the barriers to effective management. This study makes three contributions: first, it provides operational and financial efficiency performance scores of airports in LACDNs; second, it develops and adopts a public management reform model for LACDNs; and third, it provides airports in LACDNs with operational and financial efficiency scores which can be compared to other airports in the region. This study utilizes a mixed method approach of a cross-sectional and qualitative design containing three different data sets: primary, archival, and face-to-face survey data. The statistical analysis will be conducted using data envelopment analysis (DEA), censored and ordinary least squared (OLS) regression. The study found that that privatization (PRIV) governance (GOVN) and strategic human resources management (SHRM) are significant across all three censored and OLS regression models. Although performance-based budgeting was not significant in any of the models, the findings largely support the proposed reform model that privatized airports practicing governance, strategic human resource management, and performance-based budgeting are financially and operationally more efficient than government owned airports.