Efficiency Analysis of Public Library Services Based on Establishing Entity and Outsourcing

Changhee Kim,Kanghwa Choi,Hyunjung Kim

doi:10.3390/su12219205

Changhee Kim, Kanghwa Choi + Show 1 more

Open Access

https://doi.org/10.3390/su12219205

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Abstract

This study investigates the difference in service efficiency based on establishing entity and outsourcing in 847 public libraries in Korea. The public libraries were categorized into three types based on establishing entity and outsourcing, where Type 1 libraries are those established and directly managed by the Office of Education under the central government, Type 2 libraries are established and directly managed by local governments, and Type 3 libraries are established by local governments and their operations are outsourced. Each library type was analyzed and compared using data envelopment analysis (DEA), and results found that public libraries established by local governments are more efficient than those established by the central government, while outsourcing operations improved the efficiency of public libraries. Further analysis of the projection point and excess quantity of input showed that the main cause of inefficiency for Type 1 libraries is the library area, and for Types 2 and 3, the number of periodicals. This study provides guidelines for the sustainable performance of public library services based on the factors of foundation and operational patterns.

Highlights

The efficiency of public services has come under scrutiny since the late 1980s with the introduction of new public management that emphasized the need to apply market principles such as competition and operating performance to the public sector [1,2,3,4,5]
The objectives of this study are to analyze the efficiency of public library services based on the establishing entity and outsourcing
Type 1 showed higher scale inefficiency (61.64%) to operational inefficiency (34.91%), while Types 2 and 3 both exhibited lower scale inefficiency to operational inefficiency, which were 41.59 to 48.01% and 28.83 to 44.17%, respectively. These results suggest that 61.64% of the libraries in Type 1 suffer from scale inefficiency, which can be improved by increasing the utilization of employees, library area, books, business hours, and periodicals

Summary

Introduction

The efficiency of public services has come under scrutiny since the late 1980s with the introduction of new public management that emphasized the need to apply market principles such as competition and operating performance to the public sector [1,2,3,4,5]. The establishing entity of the public service affects the degree of non-rivalry and non-excludability in the public service [8,9], and typically, the central government provides pure public services that strongly exhibit non-rivalry and non-excludability, whereas local governments provide quasi-public services that weakly exhibit either non-rivalrous or non-excludable qualities [10] In this sense, the malleability in which market principles can be applied to public services may depend on the degree to which the service needs to embody these two characteristics, which in turn, may depend on the type of entity establishing the service, i.e., the central or local government. While outsourcing public services is criticized for producing inefficiencies or for resulting in higher expenditures incurred from the transaction with private entities that override intended cost savings [12], other studies have reported that the outsourcing of public services increase efficiency [13,14], by ways of optimizing the number of public servants to effectively reduce financial expenses [15,16] and improving service quality through the import of the expertise, resources, and technology of the private sector [17,18]

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