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Challenges in the Measurement of Public Sector Productivity in OECD 180 Countries

Author

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  • Edwin Lau
  • Zsuzsanna Lonti
  • Rebecca Schultz

Abstract

Productivity is one of the main engines of economic growth. While most existing work on productivity has focused on the private sector, there is great value in better understanding productivity in the public sector, given government's important role in the provision of goods and services and its substantial contribution to overall GDP. However, the measurement of public sector productivity as a first step towards better understanding its dynamics is fraught with challenges, as the public sector differs substantially from the private sector in some of its key characteristics. This article examines current country practices and challenges to measure public sector productivity and identifies five areas to further enhance measurement efforts: (i) improvements to input measurement and cost accounting, (ii) standardization and comparability of measures, (iii) output measurement beyond the education and health sectors, (iv) a typology of activities at the micro level, and (v) intra-governmental co-ordination on productivity measurement. The article also calls for further research on the policy drivers for public sector productivity to delve deeper into how governance frameworks can be mobilized to achieve greater public sector productivity in support of effective public governance and ultimately the well-being of citizens.

Suggested Citation

  • Edwin Lau & Zsuzsanna Lonti & Rebecca Schultz, 2017. "Challenges in the Measurement of Public Sector Productivity in OECD 180 Countries," International Productivity Monitor, Centre for the Study of Living Standards, vol. 32, pages 180-195, Spring.
    • Handle: RePEc:sls:ipmsls:v:32:y:2017:10
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    References listed on IDEAS

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    1. Paul Schreyer, 2010. "Towards Measuring the Volume Output of Education and Health Services: A Handbook," OECD Statistics Working Papers 2010/2, OECD Publishing.
    2. Nils Gutacker & Chris Bojke & Silvio Daidone & Nancy J. Devlin & David Parkin & Andrew Street, 2013. "Truly Inefficient Or Providing Better Quality Of Care? Analysing The Relationship Between Risk‐Adjusted Hospital Costs And Patients' Health Outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 22(8), pages 931-947, August.
    3. Delphine Moretti, 2016. "Accrual practices and reform experiences in OECD countries Results of the 2016 OECD Accruals Survey," OECD Journal on Budgeting, OECD Publishing, vol. 16(1), pages 9-28.
    4. Adriana Castelli & Diane Dawson & Hugh Gravelle & Andrew Street, 2007. "Improving the measurement of health system output growth," Health Economics, John Wiley & Sons, Ltd., vol. 16(10), pages 1091-1107, October.
    5. Patrick Dunleavy & Leandro Carrera, 2013. "Growing the Productivity of Government Services," Books, Edward Elgar Publishing, number 14497, March.
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    Cited by:

    1. Patricia Cubi-Molla & Martin Buxton & Nancy Devlin, 2021. "Allocating Public Spending Efficiently: Is There a Need for a Better Mechanism to Inform Decisions in the UK and Elsewhere?," Applied Health Economics and Health Policy, Springer, vol. 19(5), pages 635-644, September.
    2. Diego Muniz Benedetti & Diana Vaz Lima, 2022. "Micro-Level Public Entities’ Efficiency Reporting Using Combined Adaptation of Activity-Based Costing (ABC) and Free Disposable Hull (FDH) Analysis," Public Organization Review, Springer, vol. 22(4), pages 1121-1138, December.

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    More about this item

    Keywords

    Productivity; OECD; Policies; Global Productivity; Total Factor Productivity; Wages; GDP; Goods and Services; government provisions; measurment; cost accounting; intra-government co-ordination;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H4 - Public Economics - - Publicly Provided Goods
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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