Public Sector Productivity

Public Sector Productivity has only recently begun to be measured. We have applied methodology developed by the Office of National Statistics (ONS) to key public services focusing on social protection, the processing of goods for customs and the collection of taxes. Our results show that productivity in the area of social protection and tax collection had a negative trend up to the early 2000s but with a steady upward recovery since 2005. Meanwhile, productivity has had an upward tend in the area of customs but it has also experienced a flat period in the late 1990s and early 2000s. Our models suggest that such a trend in the three public services was due to significant re-organisational changes, investment in ICT, and the shifting of services to online provision.


Productivity is defined as the ratio of outputs to inputs. When applied to the public sector, productivity becomes a key performance indicator that shows how efficiently public resources are employed in providing public services. Until not too long ago productivity in the public sector was assumed to be flat as outputs were given the same price as the cost of producing them. Recent methodological approaches suggest to measure outputs directly in order to count with realistic productivity estimates. Empirical public sector productivity studies are still in its infancy.

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