New Public Management and Relationship with Business: Role of Financial Inclusion

Financial issues are one of the important factors influencing new public management and relations with stakeholders. The purpose of this study is identifying and formalization of hidden structural links between the level of financial inclusion and new public management in the context of a business environment. This was done through a two-step analysis of 22 World Bank indicators: G 20 Financial Inclusion Indicators (6), Worldwide Governance Indicators (6), Doing Business (10) for 93 countries with different levels of economic development in 2014. In the first phase, using the principal component method 9 most relevant indicators were selected, three in each group that participated in the next phase of the study. Financial Inclusion Indicators remained the following: Account, ATMs per 100,000 adults and POS terminals per 100,000; from the Worldwide Governance Indicators Control of Corruption, Government Effectiveness and Rule of Law; from the Doing Business-Global group: Ease of doing business, Paying taxes and Resolving insolvency. In the second phase of the study, two systems of simultaneous structural equations were built. They help to identify the hidden links between financial inclusion and new public management in the context of a business environment. It has been found that financial inclusion of the population has a stronger statistically significant direct impact on the business environment than on new public management. As the level of financial inclusion of the population per unit of business environment increases, it will improve 7,234 times, while new public management will improve 0,470 times.