Purpose – Artificial intelligence (AI) has received much attention due to its promethean-like powers to transform the management and delivery of public sector services. Due to the proliferation of research articles in this context, research to date is fragmented into research streams based on different types of AI technologies or a specific government function of the public sector (e.g. health, education). The purpose of this study is to synthesize this literature, identify challenges and opportunities, and offer a research agenda that guides future inquiry.

Design/methodology/approach – This paper aggregates this fragmented body of knowledge by conducting a systematic literature review of AI research in public sector organisations in the Chartered Association of Business Schools (CABS)-ranked journals between 2012 and 2023.

Findings – The search strategy resulted in the retrieval of 2,870 papers, of which 61 were identified as primary papers relevant to this research. These primary papers are mapped to the ten classifications of the functions of government as classified by the Organisation for Economic Co-operation and Development (OECD), and the reported challenges and benefits aggregated.

Originality/value – This study advances knowledge by providing a state-of-the-art of AI research based the OECD classifications of government functions, reporting of claimed benefits and challenges and providing a research agenda for future research.

Keywords AI, Artificial intelligence, Public sector, Decision-making

Paper type Literature review