PRODUCTIVITY IN PUBLIC SERVICES

Abstract.  This paper discusses issues arising in the measurement of productivity in public services. Compared to measuring productivity in the private sector difficulties arise because the output of public services is often unpriced and because some public services are consumed collectively. A key problem is measuring the full range of outputs and quality improvements delivered by public sector organizations that are valued by society. Without comprehensive measures of output, productivity statistics may be misleading. I outline methods used in the measurement of both private and public sector productivity and discuss the measurement of public sector productivity in practice. Finally I discuss studies that examine factors underlying productivity differences and productivity growth in public and private sector organizations. Public sector reforms and the use of pilot schemes in public sector organizations present opportunities for research to identify causal effects on productivity.