Productivity convergence across US states in the public sector ::an empirical study

Abstract This paper will examine the productivity of the public sectors in the US across the states. Because there is heterogeneity across states in terms of public services provided that could impact its productivity. In fact, there could be a convergence among the states. The services provided by the public sectors have come under increased scrutiny with the ongoing process of reform in recent years. The public sector unlike the private sector or in the absence of contestable markets, and the information and incentives provided by these markets, performance information, particularly measures of comparative performance, have been used to gauge the productivity of the public service sector. This paper will examine the productivity of the public sector across states throughout the United States. The research methodology marries exploratory (i.e. Kohonen clustering) and empirical techniques (panel model) via the Cobb-Douglas production function. Given that there is a homogeneity across states in terms of the use of a standard currency, it will be easy to identify the nature of the convergence process in the public sectors by states throughout the United States