Navigating efficiency and effectiveness relationships across local government services: Another step toward strategic resource management

Abstract

A major part of maintaining a well-managed performance measurement system in local government is providing the infrastructure for performance management. The problem is that local officials often struggle with moving from adopting performance measures to actually using them for improving services and for making resource allocation decisions. This article responds to this struggle by presenting information on the relationships between efficiency and effectiveness measures across six local government service areas, with the goal of providing guidance on using performance measures to support strategic resource management. Our research suggests that stronger correlations exist between efficiency and effectiveness measures associated with local services that possess private good characteristics, concluding that performance measures associated with market-oriented services lend themselves more readily to making resource allocation decisions.