IDEAS home Printed from https://ideas.repec.org/a/taf/pubmgr/v18y2016i1p91-109.html
   My bibliography  Save this article

Application of Baumol's Cost Disease to Public Sector Services: Conceptual, theoretical and empirical falsities

Author

Listed:
  • Stephen J. Bailey
  • Ari-Veikko Anttiroiko
  • Pekka Valkama

Abstract

This paper argues that justifying lack of productivity improvements in public services by referring to Baumol's Cost Disease (BCD) is conceptually confused, theoretically misspecified and empirically blind. BCD misconceptualizes public services as categorically distinct from manufactured goods and is based on a theory of productivity not directly applicable to many public services, therefore failing to recognize evidence of substantial scope for improving public services' productivity. Analysis of the structural and behavioural unbundling of value creation and decomposition of professional skills in service provision leads this paper to conclude that public services are not as technologically non-progressive as BCD asserts.

Suggested Citation

  • Stephen J. Bailey & Ari-Veikko Anttiroiko & Pekka Valkama, 2016. "Application of Baumol's Cost Disease to Public Sector Services: Conceptual, theoretical and empirical falsities," Public Management Review, Taylor & Francis Journals, vol. 18(1), pages 91-109, January.
    • Handle: RePEc:taf:pubmgr:v:18:y:2016:i:1:p:91-109
    DOI: 10.1080/14719037.2014.958092
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/14719037.2014.958092
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/14719037.2014.958092?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hammer, Michael & Champy, James, 1993. "Reengineering the corporation: A manifesto for business revolution," Business Horizons, Elsevier, vol. 36(5), pages 90-91.
    2. Ard-Pieter de Man, 2004. "The Network Economy," Books, Edward Elgar Publishing, number 3189.
    3. Barry P. Bosworth & Jack E. Triplett, 2003. "Productivity measurement issues in services industries: \\"Baumol's disease\\" has been cured," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 23-33.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Corlet Walker, Christine & Druckman, Angela & Jackson, Tim, 2021. "Welfare systems without economic growth: A review of the challenges and next steps for the field," Ecological Economics, Elsevier, vol. 186(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert Rowthorn & Ken Coutts, 2004. "De-industrialisation and the balance of payments in advanced economies," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(5), pages 767-790, September.
    2. Andreja Benkovic & Juan Felipe Mejía, 2008. "Tourism as a driver of economic development: The Colombian experience," Documentos de Trabajo de Valor Público 10630, Universidad EAFIT.
    3. Toppen, R. & Smits, M.T. & Ribbers, P.M.A., 1998. "Improving process performance through market network design : A study of the impact of electronic markets in the financial securities sector," Other publications TiSEM c3c8d2ea-7727-475e-83cf-d, Tilburg University, School of Economics and Management.
    4. Byrd, T. A. & Marshall, T. E., 1997. "Relating information technology investment to organizational performance: a causal model analysis," Omega, Elsevier, vol. 25(1), pages 43-56, February.
    5. Félicia Saïah & Diego Vega & Harwin de Vries & Joakim Kembro, 2023. "Process modularity, supply chain responsiveness, and moderators: The Médecins Sans Frontières response to the Covid‐19 pandemic," Production and Operations Management, Production and Operations Management Society, vol. 32(5), pages 1490-1511, May.
    6. V.K. Gupta, 2016. "Strategic framework for managing forces of continuity and change in innovation and risk management in service sector: a study of service industry in India," International Journal of Services and Operations Management, Inderscience Enterprises Ltd, vol. 23(1), pages 1-17.
    7. Douglas Dean & Richard Orwig & Douglas Vogel, 2000. "Facilitation Methods for Collaborative Modeling Tools," Group Decision and Negotiation, Springer, vol. 9(2), pages 109-128, March.
    8. Harry Hummels & Patrick Nullens, 2022. "‘Other-wise’ Organizing. A Levinasian Approach to Agape in Work and Business Organisations," Humanistic Management Journal, Springer, vol. 7(2), pages 211-232, October.
    9. Magdalena LUCA (DEDIU), 2014. "Business Process Reengineering," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 233-236.
    10. Tina George Karippacheril & Soonhee Kim & Robert P. Jr. Beschel & Changyong Choi, 2016. "Bringing Government into the 21st Century," World Bank Publications - Books, The World Bank Group, number 24579.
    11. Stephan Kudyba, 2006. "Enhancing Organisational Information Flow And Knowledge Creation In Re-Engineering Supply Chain Systems: An Analysis Of The U.S. Automotive Parts And Supplies Model," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 10(02), pages 163-173.
    12. Nurmi, Raimo, 1998. "Knowledge-intensive firms," Business Horizons, Elsevier, vol. 41(3), pages 26-32.
    13. Csaba Deák, 2005. "Change by Successful Projects - IT and Change Projects in Hungary," Theory Methodology Practice (TMP), Faculty of Economics, University of Miskolc, vol. 3(01), pages 17-22.
    14. Daniele Binci, 2013. "L?equilibrio organizzativo attraverso il clima. L?evidenza empirica di un ente locale," ECONOMIA E DIRITTO DEL TERZIARIO, FrancoAngeli Editore, vol. 2013(1), pages 65-97.
    15. Vansina, L.S. & Taillieu, T.C.B., 1994. "Business process reengineering or socio-technical system design in new clothes?," WORC Paper 94.09.064/3, Tilburg University, Work and Organization Research Centre.
    16. Katarzyna Rupik, 2008. "The efficiency of the marketing planning model in the network organizations," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 18(3), pages 53-69.
    17. Francesco Daveri & Cecilia Jona-Lasinio, 2005. "Italy's Decline: Getting the Facts Right," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(4), pages 365-410, December.
    18. Rajat Roy & Justine Brown & Chris Gaze, 2003. "Re-engineering the construction process in the speculative house-building sector," Construction Management and Economics, Taylor & Francis Journals, vol. 21(2), pages 137-146.
    19. Awolusi & Olawumi Dele & Akeke & Niyi Isreal & Akinruwa & Temitope Emmanuel, 2014. "Modeling Business Process Re-Engineering and Organizational Performance in the Nigerian Oil and Gas Industry," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 3(5), pages 336-350.
    20. Fındık, Derya & Beyhan, Berna, 2014. "A Perceptual Measure of Innovation Performance: Micro Level Evidence from Turkey," MPRA Paper 60961, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:pubmgr:v:18:y:2016:i:1:p:91-109. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RPXM20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.