Guide to the Measurement of Government Productivity

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Abstract

This article provides a non-technical guide to measuring productivity and efficiency in general government agencies, aimed at policy analysts and public sector managers. It introduces the major quantitative methods — including partial factor productivity and total factor productivity index numbers, data envelopment analysis (DEA), and stochastic frontier analysis (SFA) — and sets out the basic steps for their use in both time-series and cross-sectional performance measurement. The article emphasizes the challenge of defining robust output and input measures for non-marketed public services and argues that economic performance measures can serve as surrogate market incentives to spur public sector efficiency improvement.

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