Introduction

This chapter reviews the theoretical and empirical issues involved in undertaking international comparisons of output and productivity (outputs per inputs used) in the provision of public services. The primary focus of the chapter is on performance in aggregate sectors such as health and education, although many of the arguments carry through to more detailed comparisons such as the treatment of specific diseases or types of education. A host of measures of performance are available in the existing literature, from indexes of activity rates to surveys of consumer satisfaction, but there has been little effort to evaluate their relative merits. The purpose of the chapter is both to review existing measures and argue for a unifying framework to ensure that the measures are comprehensive in coverage and place the appropriate weights on various aspects of provision. This framework puts consumer preferences centre stage and draws from the methods employed to measure performance in the private sector.

The chapter begins with a review of existing measures used to evaluate international comparisons of performance, first considering measures for the private sector and then considering available indicators for public services. This highlights the confused picture that emerges for public services in contrast to the useful insights that arise for the private sector. The chapter considers alternative approaches that can be employed for public services and argues in favour of including information on final outcomes.