Measuring Government Activity

This book summarises the available OECD and other international data on public sector inputs and processes. It also examines the existing internationally comparable data on outputs and outcomes, and recommends new approaches to measurement.

Good performance measurement frameworks show taxpayers what they are getting for their money and enable the Government to assess whether it is achieving its key objectives cost-effectively. In its final review of the quality of the data systems used by government departments to measure progress against Public Service Agreements (PSAs), the NAO concludes that the PSA framework provided a clear focus on the objectives that mattered for the then Government, and had gradually improved. The quality of data systems and of disclosures about measurement policies has risen: 58 per cent of PSA data systems, under 2007's Comprehensive Spending Review (CSR07), were fit for purpose, up from 30 per cent under the 2002 Spending Review. The NAO notes, however, that a third of CSR07 systems needed strengthening to improve controls or transparency and 10 per cent of systems were not fit for purpose. PSAs became progressively more focused on key priorities, and more clearly stated however they generally did not make clear the extent to which outcomes were the result of government activity. And financial information has been poorly linked with PSA indicators. The apportionment of annual departmental expenditure was not broken down by the indicators used to report progress and did not facilitate more in-depth analysis of the cost of progress. This hinders strategic decision-making because it is not clear what allocation of available resources could achieve the best overall results. The ability to link financial and performance information is particularly significant at a time when public sector budgets face severe cuts.

Government is the single most pervasive institution of modern life, with all facets affected by public sector activities. Over the last 100 years, government spending around the world has grown in terms of both spending percapita and share of national output. During the twentieth century, the relative size of government grew steadily, with surges during the two world wars. Figure 1.1 shows general government expenditure as a share of national output for the United States, Canada, and the United Kingdom from 1948 to 2011. In 1870, government spending to GDP ratios in these countries were well below 10 percent (Tanzi, 2011: 8), but those ratios had more than tripled by the end of the twentieth century and have continued to grow in the first decade of the twenty-first century.

Throughout the 1980s the British Civil Service devoted much time and energy developing indicators to measure the performance of government. Never before had so much stress been placed on accountability and performance; a trend which will be reinforced as government continues to devolve activities to agencies and looks for methods to assess their performance. How Organisations Measure Success analyses existing methods from their origins in the 1960s to their revival in the 1980s as part of the Financial Management Initiative and its apotheosis in the 1990s Next Steps Initiative. How Organisations Measure Success reports on two years of field research funded by the Economic and Social Research Council and will be of great interest to students of social policy and public administration as well as professionals working in government and public sector management.

The comparative analysis of government activity raises many methodological, theoretical and substantive problems. In this volume authors drawn from varied subfields of political science address some of these problems, including: the usefulness of expenditure data, case interdependence, the issue of non-decision, the measurement of the distribution of power through laws, methodological individualism, cultural explanations, politico-economic interactions, the usefulness of textual analysis and issues of accumulation and aggregation.