Difficulties Concerning Public Sector Efficiency and Performance Measurement

PurposePerformance management in public sector organizations is a growing phenomenon worldwide. Increasingly, questions are being raised as to its effectiveness in achieving the objective of improving the performance of public sector organizations. Research has shown that there seems to be questionable benefits and many barriers, challenges and problems with implementing performance management and measurement in the public sector environment. The purpose of this paper is to argue that this is due to the lack of focus on the process of managing the implementation of performance measurement. The author aims to review the relevant extant literature to support these assertions and to provide a conceptual framework that integrates these ideas.Design/methodology/approachThis paper reviews the extant literature on public sector performance management and measurement and develops a conceptual framework to explain how public sector performance measurement systems can be made more effective in light of the research evidence.FindingsThis paper suggests that three important factors need to be considered in the effective implementation of a performance measurement system in the public sector. They are managerial discretion, a learning and evaluative organizational culture and stakeholder involvement. These three factors are discussed and its impact on performance measurement is explored.Research limitations/implicationsA proposed integrative framework is presented that supports the assertion of the importance of these three factors in influencing how performance measurement can lead to improved performance in public sector organizations. Some potential environmental and institutional constraints are also discussed in implementing some of the suggestions proposed.Practical implicationsThe paper provides a model that explains three important facors that need to be considered in implementing an effective performance measurement system in public sector organizations and suggestions for how it can be implemented effectively.Originality/valueThe paper integrates and synthesizes the literature on public sector performance measurement into a comprehensive conceptual framework that explains more explicitly the factors that can influence the effectiveness of a performance measurement system in the public sector.

The main objective of this paper is to assess the efficiency of the European Union's public sector from a quality of governance approach, employing a two-step methodology. In the first stage, EU states' efficiency scores are determined using Data Envelopment Analysis. Once quantifying public efficiency, the second step of the methodology examines the determinants of efficiency using a quantile regression estimation technique, with an emphasis on demographic features, corruption, economic freedom, and governmental digitalization. The novelty is provided by the assessment of the public sector's efficiency and efficacy from a broader approach in order to determine the efficiency scores of European Union countries, as well as the key factors that may impact the public sector's performance. The main findings, namely that governance quality can be considered an important resource in analysing public performance and that human resources, freedom, democracy, corruption, and digitalization have an impact on efficiency, are important considerations not only for policymakers but also for society, researchers, and the academic community. Reform measures should strive to improve both the technical and democratic components of public institutions in order to more effectively and transparently allocate public resources, while taking into consideration local and national peculiarities.

While many developing countries have devolved public responsibilities to local governments in recent years, some studies have examined whether decentralization actually leads to greater public sector allocation efficiency. This paper approaches this question by assessing the efficiency of government expenditure on public sector under fiscal decentralization. The area of public expenditure is of great importance making the findings have strong implications with regard to public sector efficiency. We compute public sector performance (PSP) and public sector efficiency (PSE) indicators, comprising of composite and 9 sub indicators, for 33 provinces in Indonesia. The first 6 sub indicators are opportunity indicators that take into account education, health outcomes, poverty, gender equality, quality of public infrastructure (transportation and energy). 3 order indicators reflect the standard musgravian tasks for the government: allocation, distribution, and stabilization. The input and output efficiency of public sectors across provinces is then measured using a non-parametric production frontier technique. Free Disposable Hull (FDH) analysis is used to estimate the extent of slack in government expenditures. The study finds significant differences in PSP and PSE, which suggests a large potential for expenditure savings in many provinces. All these findings suggest diminishing marginal products of higher public spending. We also estimate a semi parametric model of the public sector production process by regressing FDH analysis output scores on non discretionary variables using the Tobit procedure. We show that inefficiency is strongly related to GDP per capita, human development index, and degree of fiscal dependence. The central message of this paper is that increasing budgetary allocations for public sector may not be the only or most effective way to increase public sector outcome, and that more attention should be given to increasing the efficiency of expenditure. Keywords: fiscal decentralization public sector performance, public sector efficiency, free disposable hull, Tobit

We compute public sector performance (PSP) and public sector efficiency (PSE) indicators, comprising a composite and seven sub-indicators, for 23 industrialised countries. The first four sub-indicators are “opportunity” indicators that take into account administrative, education and health outcomes and the quality of public infrastructure and that support the rule of law and a level playing-field in a market economy. Three other indicators reflect the standard “Musgravian” tasks for government: allocation, distribution and stabilisation. The input and output efficiency of public sectors across countries is then measured via a non-parametric production frontier technique. The study finds significant differences in PSP and PSE, which suggests a large potential for expenditure savings in many countries.

Persistent inflation in Nigeria has raised concerns about the effectiveness of conventional macroeconomic policy instruments, motivating renewed attention to the role of governance and public sector performance in shaping price dynamics. This study investigates the extent to which public sector efficiency and bureaucratic structure influence inflation outcomes in Nigeria, beyond the effects of standard macroeconomic variables. The objective is to empirically examine the relationship between inflation and public sector efficiency, institutional quality, government regime type, interest rates, real economic output, and the nominal exchange rate. The analysis focuses on Nigeria from 1981 to 2024, incorporating key macroeconomic variables by alternating democratic and military regimes, structural reforms, and recurrent inflationary experiences. Methodologically, the study adopts an econometric time-series framework, modelling inflation as a function of public sector efficiency, institutional quality, regime dummy variables, interest rates, real gross domestic product, and the nominal exchange rate. The Autoregressive Distributed Lag (ARDL) approach alongside Granger causality tests, the study assesses both short-run and long-run relationships between institutional factors and economic performance, standard diagnostic tests and robustness checks are employed to ensure the reliability of results. The findings reveal that inefficiencies in the public sector and weak institutional quality significantly exacerbate inflationary pressures, while rigid bureaucratic structures constrain effective policy transmission. Interest rates and exchange rate movements are also found to be important channels through which governance weaknesses translate into persistent inflation. Based on these findings, the study recommends strengthening public sector efficiency through institutional reforms, bureaucratic streamlining, and improved policy coordination alongside monetary measures. It concludes that sustainable inflation control in Nigeria requires an integrated macro-institutional approach that addresses governance and bureaucratic constraints in tandem with conventional economic policy tools.

Abstract. New Public Management is used to regulate government policies meant to enhance performance of public sector that ultimately facilitates general public interest and improve their living standards. New Public Management is inevitable as under this approach modern governments are inclined to bring reforms in an effort to improve efficiency and effectiveness of public sector by adopting private sector practices. Pakistan is also influenced by NPM as reforms in public sector have been developed and implemented to some extent with weak claims of improved performance. The lack of actual improvement in performance raises many questions on the effectiveness of NPM implementation in Pakistan. This study aims to explore these questions by measuring factors influencing performance of public sector organizations in Pakistan. This study adopted quantitative approach to conduct an empirical investigation. Research framework includes major factors of NPM based on literature. Data was collected using adopted questionnaires for each variable. Survey was done from a sample taken from public sectors enterprises in Punjab province under random sampling technique. Data was analyzed using various statistical techniques. Demographics were analyzed in the form of descriptive statistics. Research variables were analyzed using Multiple Regression analysis and Pearson Correlation analysis. Regression assumptions were tested which were fulfilled. Reliability and validity were also tested. Findings show that both “Democratization and Participation (Involvement in Decision Making)”; and “Customer Concept (Customer Orientation)” have positive influence on performance under NPM. Whereas interestingly “Decentralization (Delegation)” has negative influence on performance under NPM as a result of resistance of employees towards recent attempts of Devolution of power or authority. But surprisingly “Management Style (HR Practices)” show no influence on performance under NPM as a result of unresponsiveness of employees towards modern management related practices. Recommendations have been provided as general and specific strategies for effective implementation of NPM in order to enhance organizational performance under NPM. Keywords. Public management, Public welfare. JEL. D73, E60, H10.

Since the advent of results-based management through the Organic Law No. 130-13 on the Finance Law, management control has been increasingly developing in the Moroccan public sector.With varying degrees of integration across different public institutions, management control has introduced several innovations within these organizations, the primary one being the introduction of a new management philosophy focused on the pursuit of performance and surpassing the logic of available resources.This article aims to study the impact of management control tools especially resultsbased budgeting to enhance the performance of a social public sector as higher education in the Moroccan context. At first, we will review the basic concepts related to our issue thru a literature review marking the interrelationships and overlaps of these concepts. Then, by conducting a critical analysis of various indicators issued from multiple annual reports of the higher education and scientific research and innovation ministry, to conclude by a discuss explaining the probable factors that have hindered the favorable development of the indicators in relation to the allocated budgets per program.This work serves to improve the conditions for implementing and operationalizing management control by rethinking the choice of the right tools adapted to the public context and the social character of the sector.

PurposeThis paper aims to examine the use of the balanced scorecard (BSC) as a performance management tool in the public sector. Drawing on a New Zealand study of local government organzations (LGOs), it seeks to identify issues and challenges in implementing the BSC in public sector contexts.Design/methodology/approachA postal questionnaire was used to solicit public sector managers' views on the usefulness of the BSC and the factors that support or impede its implementation in practice. Follow‐up interviews with selected respondents allowed for more in‐depth exploration of managers' experiences of BSC use and outcomes.FindingsThe findings reveal low rates of BSC adoption amongst the studied LGOs. Further, perceived BSC utility is dominated by performance measurement and reporting, while the performance management role of the BSC remains relatively under‐exploited. This study identifies users' perceptions of the key challenges impeding BSC implementation in the public sector, and highlights their significance for both practice and theory.Research limitations/implicationsThis paper highlights the need for improved theorisation on several issues that present particular challenges in public sector BSC practice: modifying the BSC dimensions, designing measures that capture important qualitative outcomes, identifying the “customer” and/or achieving a genuine multi‐stakeholder approach, and mapping BSC causality relationships.Practical implicationsImproved awareness of the factors perceived to lead to successful and unsuccessful BSC implementation may enhance the uptake and utility of the BSC for measuring and managing performance in public sector organisations.Originality/valueThis study examines BSC use in local government, where it has been relatively under‐researched. It adds to prior studies by specifically examining the factors that support and impede the effective implementation of the BSC in public sector contexts.

Takes an exploratory approach to the development of an accountability framework for environmental performance of the Australian Commonwealth public sector. Explains that the aim of the environmental performance accountability framework is for the various stakeholders to understand the actions of Commonwealth public sector organizations and consequences of those actions for ecological systems; to become familiar with the trends and changes in trends in public sector environmental performance; and to place stakeholders in a position to promote change when performance is not acceptable. Examines three interrelated strands of literature. Identifies key institutional stakeholders in the Commonwealth public sector. Synthesizes the literature related to public sector transformation, and reviews the flourishing literature on environmental accounting and reporting, and links it to the concept of environmental accountability. Drawing on this literature, explores interrelationships between three characteristics of environmental performance at the federal level in the Australian public sector: criticality of natural capital; information uncertainty; and regulatory response. Examines environmental accountability dimensions of each of these characteristics. Concludes by making three policy recommendations: first, measurement of environmental performance should focus on criticality of natural capital and informational uncertainty as bounded by the precautionary principle; second, the measures of criticality of natural capital and informational uncertainty should determine the extent of direct accountability to parliament for each public sector organization’s environmental performance; and, finally, a third party attestation of reported information is needed. Also makes some suggestions for extending this exploratory research.

Claim settlement management is the one of the most important service that comes under the crucial quality of life insurance service. The objectives formulated in this study are to study the claims settlement practices of public and select private sector life insurance companies, India and to analyze the effect of claim settlement practices on the operating efficiency and profitability performance of public sector and select private sector life insurance companies, India. The exploratory research design is applied. The convenient sampling technique is used for selecting the companies from the life insurance industry which constitutes 87.07% share in the industry as per IRDA Annual report 2009–10. The LIC of India is the only one state owned firm in the public sector and ICICI Prudential Life Insurance, HDFC Life Insurance, SBI Life Insurance and Bajaj Allianz Life Insurance companies under private sector were taken as sample. The IRDA annual reports and the selected company annual reports from 2001–02 to 2012–13 were used for collecting the required data. The various benefits such as maturity benefits, death claims, annuity, etc., paid to the policy holders by the select public and private sector companies are analyzed. Operating efficiency of life insurance companies are calculated by using data envelopment analysis tool with the dea online software. The market share (MS), Return on Assets (ROA), Claim Settlement Ratio (CSR) and Claim Rejection Ratio (CRR) were calculated. These are analyzed by using statistical tools such as linear growth rates, compound annual growth rates, and coefficient of variance, mean and coefficient of correlation. The analyzed reveals that LIC of India is the industry leader not only in sale of policies but also in the benefit payments. In overall benefit payments among the select private sector life insurance companies, ICICI Prudential Life insurance was the top performer followed by HDFC Life insurance, Bajaj Allianz life insurance and SBI Life insurance. It is concluded that the claim settlement practices of life insurance industry had statistically significant impact on their profitability as well as operating efficiency. More-over, claim settlement practices of select life insurance players had statistically significant positive impact on the profitability but they had statistically significant negative impact on their operating efficiency due to increased operational risk for enhanced sales or more underwritten policies Hence companies should maintain optimum claim settlement practices to achieve good market share and profitability.

PurposeA number of studies and indicators have ranked European countries in terms of the performance of their public sectors. This paper aims to demonstrate that there are important conceptual problems with such rankings and comparisons.Design/methodology/approachUsing the existing indicators, the paper first shows how European countries' public sectors are ranked. It then goes on to show how conceptual problems with these indicators may lead to incorrect conclusions.FindingsCountries' public sector performance cannot be summarised using a single indicator because of inability to define “the public sector” and the disagreement on what it means for public sectors to perform.Practical implicationsDespite increasing demand and supply in policy circles for international public sector indicators, the existing ones are unreliable.Originality/valueThis paper extends the assessment of international public sector indicators beyond a mere technical evaluation.

Purpose – The paper aims to examine the relationship of leadership styles and employees job performance in public sectors and to identify study gaps in the areaDesign/methodology/approach – The paper used exploratory study approach and reviewed literatures related to this study. The data used for study was generated from secondary sources of articles, books and review papers.Findings – The paper provides empirical insights about how leadership styles have relations and impacts on employees’ performance and the practice of public service leadership in different contexts and nations.Research limitations/implications – This study used only qualitative method and data were gained from only secondary sources. This may cause generalizability limitations.Practical implications – The paper has significant implication for researchers, role players of public sectors leaders and experts working under the supervision of leaders or managers.Originality/value – This paper is original and own effort of the researcher.

In recent years, it has been more crucial than ever to compare the financial performance of a few public and private sector banks.Using a variety of financial parameters to evaluate their profitability, liquidity, efficiency, and solvency, we look at the financial performance of 10 public sector banks and 10 private sector banks from 2017 to 2022.Our findings show that in the majority of the financial parameters examined, private-sector banks have outperformed public-sector banks.Better profitability metrics, including return on equity (ROE) and net interest margin, have been demonstrated by private sector banks (NIM).They can do so because of their improved asset quality, higher operational efficiency, and lower overhead expenditures.Public sector banks, on the other hand, have had difficulty maintaining profitability.In contrast, because of their greater levels of non-performing assets (NPAs) and subpar loan recovery ratios, public sector banks have found it difficult to retain profitability.The public sector banks, on the other hand, have demonstrated better liquidity ratios, such as the current ratio and cash-to-deposit ratio, demonstrating that they have more cash on hand to cover short-term obligations.This is mainly because public sector banks may retain greater cash reserves because of the government's ownership and backing, which offers a steady source of money.Private sector banks, on the other hand, have demonstrated higher efficiency ratios, such as the advances to deposits ratio, demonstrating that they are more effective at using their assets to create income.

In the face of the perpetual performance problem of the public sector, governments’ commitment to improving this performance has generated demand for performance measurement as an important financial-managerial tool for last two decades. Economic, efficient and effective use of public money in the course of public activities can be ensured through performance measurement (performance measures and indicators). However, the are some serious difficulties in measuring performance in the public sector due to the political and uncertain nature of public goods and services. Therefore, there is nothing straightforward about the concept of public sector performance; and the moral and political foundations of public services as well as their performance should be taken into consideration in the public service. This is all about the “politics of public sector performance”.

PurposeThe purpose of this research paper is to identify the impact of contextual and processual factors on the development, use and impact of performance measurement systems in voluntary and community organisations.Design/methodology/approachThe paper reviews the applicability of business and public sector performance measurement frameworks to voluntary organisations. It presents the findings of a study through four case studies and draws conclusions on the impact of measurement systems in the voluntary sector.FindingsThe research identifies a low utilisation of performance measurement frameworks and discusses what systems are currently used, how such systems are administered and the impact of measurement on performance.Research limitations/implicationsThe evidence is based on four micro‐voluntary organisations that receive public sector funding. The findings are based on the perceptions of the organisations delivering the services and illustrate the relationship between the public and voluntary sectors. Further, cases utilising a range of stakeholders should be studied to examine the validity, reliability and generalisability of the presented results. However, given that there is practically no empirical evidence at all on this issue at present, the study provides useful evidence that can be further developed.Practical implicationsThe research findings present contextual and processual barriers to measuring the efficiency and effectiveness of voluntary organisations. For performance measurement frameworks to support current practice, these barriers need to be recognised and addressed.Originality/valueThe paper highlights performance measurement implications for a sector that is unaccustomed to scrutiny. As little research has been conducted within this sector, these findings contribute to the body of knowledge.