Difficulties Concerning Public Sector Efficiency and Performance Measurement

Abstract

The ability to measure public sector performance is a necessity for policymakers as well as academics and citizens of a country. This article aims to identify ways of measuring public sector performance using the measurement applicable to all countries and outlining opportunities for comparability among them. Thus, the authors highlight opportunities for performance measurement and public sector efficiency using various methods of non-parametric and parametric analysis. The starting point of the analysis considers the concept of performance, encompasses the proposed terms of productivity, efficiency and effectiveness; therefore, the measurement of public sector performance requires an exhaustive analysis in multidimensional terms, covering all core areas of a country. Moreover, understanding and developing robust international comparison possibilities will give in practice a structural framework for measuring the performance of particular relevance. Study findings indicate that performance measurement and implicitly public sector efficiency is a complex and difficult task that goes beyond simply measuring of productivity and efficiency, and requires aggregation of several key areas related to the results of a state. In summary, the analysis framework of the performance and efficiency of public sector is outlined both in terms of relevance of indicators and the methodology used. It demonstrates that methods of non-parametric analysis work at their best when all aspects of the production process can be captured in a limited number of input and output dimensions.KEYWORDS: performance, efficiency, public sector, non-parametric methods, parametric methods.