The Performance Paradox in the Public Sector

Nowadays, states spend more attention, time, and money on performance measurement
and evaluation in the public sector than ever before (Organization for Economic
Cooperation and Development [OECD], 1996; Pollitt & Bouckaert, 2000, p. 87;
Power, 1997). Results-based management is the talk of the day at all levels of the public
sector: local, regional, national, and even supra national. Schools and universities,
local governments, and other administrative agencies, also developmental aid organizations
(nongovernmental organizations and international nongovernmental organizations)
and organizations such as theWorld Bank, are all involved in producing data
and information on performance results and—if possible–impact. Power (1994, 1997,
2000) even refers to the “audit explosion” or the “audit society.” Believers in NewPublic
Management (NPM) attribute a high priority to measuring output and outcomes
and aim to base their new policies and management activities on this type of information—
ideally meant to make policy implementation more efficient and effective.
However, evaluation studies show that many attempts to introduce results-based management are still unsuccessful (see, for example, Leeuw&Van Gils, 1999, for a review
of Dutch studies). Nevertheless, the need for measuring output, outcomes, and evaluation
activities remains an important element in statements by politicians and administrators
focused on improving government’s performance.

Below, we will argue that this increase of output measurement in the public sector
can lead to several unintended consequences that may not only invalidate conclusions
on public sector performance but can also negatively influence that performance.We
will show that a number of characteristics of the public sector can be counterproductive
to developing and using performance indicators, illustrated by different examples.
Finally, we will conclude with some suggestions on how to deal with the problem of
performance assessment in the public sector. We believe this question is important
because—although not without problems—performance measurement indeed can be
of value to the public sector.