Introduction

The government is a major actor in every economy. It sets policy, helps shape and maintain social structures, collects taxation and redistributes resources. Most governments also have an extensive role in either the provision or financing of a wide range of goods and services. Often political debate over the adequacy and quality of these public services draws on ideology rather than evidence. These debates include defining the boundaries between the public and private sector, and how the public sector might be reformed or re-organised. But such debates are usually restricted by the limited amount of information about what the public sector does and what it achieves.

There are a few areas of public policy where (relatively) independent data exist that can be used to inform debates about the impact of government policies. If policies are implemented to stimulate economic growth or redistribute income, the effect might be captured within a year or two in the National Accounts or in data compiled routinely by the Inland Revenue. But, in most areas of public policy, only limited data are collected on a routine basis. In recent years, there has been considerable international interest in finding ways of routinely collecting and reporting data on the goods and services being produced by the public sector. This is partly due to the importance of public production in overall economic activity, but another important driver has been the realisation that examination of the efficiency and effectiveness of public services requires data on what is actually being delivered.

Political concern with the output and efficiency of public services is not new. In the UK, Klein points to the early 1980s as the time when the debate started to shift from measuring inputs (the number of doctors and nurses employed in the health sector; the number of teachers in schools) to outputs (the number of operations performed; the number of children taught) (Klein, 2000). At a time when a political priority was to contain the growth of public expenditure, seeking ways to improve the efficiency with which resources were used became increasingly important. Performance indicators flourished, often a motley collection of whatever administrative data happened to be available (Pollitt, 1985; Hood, 1991; Smith, 1995).