International Productivity Monitor (Apr 2017)
Challenges in the Measurement of Public Sector Productivity in OECD Countries
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.
