OPTIMIZING PUBLIC BUDGET PERFORMANCE THROUGH VALUE FOR MONEY PRINCIPLES: A QUALITATIVE STUDY OF INEFFICIENCY IN PUBLIC EXPENDITURE

Abstract

Public expenditure is a fundamental fiscal instrument for governments to deliver public services, stimulate economic development, and improve public welfare. Despite substantial increases in public budget allocations, inefficient expenditure management remains a persistent challenge, resulting in a mismatch between financial resources utilized and the benefits generated. Previous studies have primarily examined public expenditure efficiency using quantitative approaches focused on capital expenditure and economic growth, leaving limited discussion of inefficiency across the entire public budgeting cycle. This study aims to identify the forms of public expenditure inefficiency, examine the factors contributing to inefficiency, and analyze the application of the Value for Money (VfM) framework in identifying and reducing inefficiency in public expenditure management. A qualitative descriptive approach was employed using secondary data collected through library research, including scholarly journals, academic books, government regulations, official reports, and policy documents. The data were analyzed through data reduction, data display, and conclusion drawing based on the Value for Money dimensions of economy, efficiency, and effectiveness. The findings reveal that public expenditure inefficiency occurs in multiple forms, including excessive bureaucratic expenditure, poorly targeted programs, inefficient procurement, delayed budget absorption, weak planning and monitoring, program duplication, underutilized infrastructure, low-quality outputs, and corruption-related irregularities. These inefficiencies are driven by weak institutional capacity, inaccurate data, limited transparency, fragmented coordination, and inadequate accountability mechanisms. The study highlights that the consistent implementation of the Value for Money framework can strengthen accountability, improve budget governance, optimize public expenditure performance, and ensure that public resources generate sustainable benefits for society.