This research is focused on investigating the efficiency of Active Labor Market Policies (ALMP) expenditures of Organisation for Economic Co-operation and Development (OECD) countries including institutional quality of governance. The emphasis is on the quality of governance that affects the supply and demand of employment and the ability of governments to master public spending. Using the general method of moments (GMM) for sixteen OECD countries over the 2005/2018 period, we show that Corruption Perception Index (CPI) reduced significantly the efficiency of ALMP on unemployment rate. This result is found consistent using another corruption proxy, Corruption Kaufmann Index (CKI). Moreover, our estimation suggest that the effectiveness of governance reinforces the effectiveness of ALMP.
