Good Governance and Organizational Performance in Public Sector Organizations: Evidence from Ethiopia's Amhara Regional State

Good Governance and Organizational Performance in Public Sector Organizations

Abstract

Despite the widespread promotion of good governance as a mechanism for improving public sector effectiveness, evidence regarding its contribution to organizational performance and the challenges affecting its implementation remains limited in Ethiopia's public sector. This study examined the relationship between good governance practices and organizational performance in selected public sector organizations in the Amhara Regional State, and identified the governance principles most strongly emphasized and the major challenges affecting implementation. A mixed-methods approach analyzed quantitative data from 342 survey samples using SEM AMOS and Chi-square tests, alongside qualitative data from interviews and document analysis. Good governance significantly enhances organisational performance, with the principles of the rule of law, accountability, consensus-building, and participation being identified as preferred approaches to achieving this goal. However, significant challenges hinder effective governance, including weak legal frameworks, limited public participation, economic difficulties, and insufficient political will, which are exacerbated by corruption and crises. To enhance governance in the Amhara Region, recommendations include establishing a Good Governance Implementation Agency (GGIA), developing a Regional Ethical Leadership Development strategy, and fostering Public-Private Partnerships (PPPs). Future research should explore preferences for governance principles and conduct longitudinal studies on intervention effects.