DIGITAL TRANSFORMATION PRESSURES RESHAPING PUBLIC SECTOR HR GOVERNANCE UNDER FISCAL CONSTRAINTS

We examine how digital transformation pressures reshape public sector human resource governance under fiscal constraint. Using institution year data from the Public Sector Digital HR Governance Dataset covering 2018 to 2024, we estimate the DigiFiscal HR Governance Model across central government ministries, public agencies, and public service commission’s operating under documented budget pressure. We operationalize digital transformation pressures through automation of HR processes, rising digital skills requirements, and data-driven HR decision systems, while modeling fiscal constraint intensity as a moderating force. We find that automation and analytics-based decision systems strengthen workforce accountability, policy compliance, and operational efficiency, whereas escalating digital skills requirements weaken governance when capability development lags behind system expansion. Fiscal constraint intensity conditions these effects by amplifying governance gains when reforms are balanced and accelerating governance erosion when fiscal stress constrains skills investment and learning. The core contribution lies in introducing a pressure-interaction explanation that shows how fiscal space converts digital transformation from a governance enabler into a governance stressor. The findings refine digital era governance and contingency theory and provide policy guidance on sequencing digital HR reforms under sustained budget discipline.