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This is a study of international experience in measuring public service productivity. The research informs possible approaches to public sector productivity measurement for the Irish public service. The study focuses on three main aspects of productivity measurement: attempts to develop comparative, cross-national assessments of public sector efficiency and performance; national and sectoral public sector productivity measurement initiatives; and a more micro-level examination of productivity measurement, looking at organisation-based and bottom up initiatives to measure public sector productivity. Comparative cross-national assessments of public sector productivity and performance There has been a growth in recent years in international comparative studies of public sector performance. Some of these explicitly include productivity measurements; others focus more generally on broad performance issues. These international studies provide scope for a comparative assessment of how Ireland is performing, particularly if studies are repeated over time, allowing trends to be established. However, the studies themselves warn of the danger of putting too much faith in drawing comparisons, given qualifications about the type and reliability of data used to generate the indicators in the studies. It is clear that findings are of a tentative nature, and that improvements are needed if such studies are to provide a sound evidence base. In the context of improving the evidence base, the OECD’s Management in Government: Comparative Country Data project, started in 2006, is a significant initiative. National and sectoral public sector productivity measurement initiatives In recent years, various countries at both national and sectoral levels have engaged in productivity measurement initiatives. Brief reviews of progress in the UK, Finland, Sweden and Australia are examined here. This is followed by illustrative examples of productivity measurement in three sectors: health, education and local government. The evidence from national and sectoral studies of public sector productivity measurement is that despite efforts going back to the 1980s, the productivity measures being produced need to be interpreted cautiously. There is also the danger that over-simplistic use of the measures can lead to perverse consequences. Supporting evidence is needed to corroborate the findings of productivity measures. A further general point emerging from the cases examined is the lead role being taken by national statistics offices in public sector productivity measurement initiatives. The involvement of the national statistics offices is required because of a Eurostat directive on developing output measures for the national accounts. National statistics offices also play a lead role in providing quality assurance and guarantees about data reliability and validity. Where similar institutions are providing similar services, it is possible to develop comparative productivity measurements, as examples from the Australian states and from local government show. Using techniques such as frontier analysis it is possible to identify relatively efficient and relatively inefficient organisations. The same cautions as to data reliability and interpretations as raised above, however, still apply. Organisation-based and bottom up initiatives on public sector performance measurement Organisation level productivity measurement is likely to be a feasible and useful tool for those organisations that have clear, identifiable outputs that can be linked to inputs used. These measures do not necessarily need to cover the whole organisation, and may be indicators of productivity for discrete parts of the organisation. Bottom up/service user measurements of performance, such as the time and cost associated with setting up a new business, are being developed in a number of places. While they are not productivity measurements in the strict sense (as they focus on the outputs and broad performance of public sector organisations rather than linking this data to inputs in a direct manner) they do help provide a picture of what value is being delivered by public services in return for the expenditure supports provided. As such, they have a potentially important role to play in productivity measurement when interpreted in a broad sense. Bottom up measures can also be a helpful source of information to provide triangulation data for more conventional productivity studies. Developing a framework for public sector productivity measurement in Ireland Information on public sector productivity in Ireland is limited. So as to develop a broad range of measures of productivity and not rely on single data sources, a framework for the development of productivity measurement is outlined in the table below. This framework proposes that action be taken at a number of levels - cross-national, national and sectoral, and organisation-based and bottom up - to develop information on public sector productivity in Ireland. In this way, a diversity of approaches to productivity measurement can be used to provide a broad picture of productivity developments. The framework draws from lessons learned from the international experience outlined in this study.

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