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Spring 2004

The International Review of Administrative Sciences is a journal of comparative public administration that has examined the major debates in public administration for more than 75 years. The March 2004 issue contains a symposium on the theme of Public Performance Data and Private Business Decisions under the guest editorship of Professor Arie Halachmi who is a Research Associate at Zhongshan University in China and Professor of Public Management at Tennessee State University in the USA.
Professor Halachmi begins by asking why the business community should be concerned about the quality of government performance data or about which aspects of government performance are covered by regular official reports. Should business decision makers be interested in government activities to measure and report about performance just for the sake of supporting good government – a factor that is always in the interest of businesses? On its face, this question seems simple, but this superficial impression is misleading. As illustrated by the various contributions to this symposium, there are many other reasons why business executives should want to learn about various aspects of government performance and why they need to ascertain the quality of government performance reports. The well-developed interest of the not-for–profit sector in government performance data supports the proposition advanced by this collection of articles: that business managers should study government performance data for their own good.
Government performance data can provide business executives with important intelligence about the communities they serve or the localities where they have administrative, production, or service facilities. Government performance data concerning issues such as law enforcement, fire protection, water quality, emergency services, road maintenance and snow removal, education, public health, or the enforcement of various regulations can be invaluable input for savvy business decision making. More particularly, such information may be very important when business organizations seek to relocate administrative, production, service, or distribution facilities. Similarly, studying such data over time may hold clues about emerging or contracting markets and changes in consumer needs, tastes, and expectations.

This symposium has several purposes. First it aims to illustrate the potential instrumental value to private sector decision makers of data concerning government performance. Second, some articles in this collection describe how performance data is used by central and local government for decision making, planning and comparison purposes. Other contributions demonstrate how the study of performance data can generate ideas about untapped markets and possible business opportunities. As a whole, the various contributions shed light on the connection between government activities and the ecology of operations for organizations in the private sector. Highlighting the value of government performance data, these contributions articulate some important questions about the merit of these data and the ways they are compiled, analyzed and used for purposes of public policymaking and other decisions within and outside government.

The symposium begins with a group of four articles that address certain generic issues about government performance measurement and why business organizations should be interested in them. The first article reviews briefly the state of the art in government performance measurement from an American perspective. Holzer and Yang point out that measurement of performance has always been implicit in questions by agency stakeholders concerning outputs and outcomes: Is crime up? Is the air quality better? In short, is a program producing the promised results? Holzer and Yang assert that the answers to these questions can provide feedback that influences decisions to allocate or reallocate public-sector resources and to set or change priorities. They note that even though these decisions are made "internally" by governors, agency heads, public managers, and legislators, they are substantially influenced "externally" by feedback from citizens, public-interest advocacy groups, private businesses and their elected or media surrogates. Holzer and Yang suggest that if the business community wants government to be more “business like” in terms of performance measurement, then business must be willing to support government with the tax dollars to invest in those performance measurement systems.
The second article, by Mol and de Kruijf, provides a European perspective on performance measurement in government agencies. The authors report on their recent study of how and to what extent performance indicators in Dutch central government are actually embedded in performance management. They report that management control systems appear to be only partially tuned to the performance indicators specified in advance. The familiar expression “What you measure is what you get” is thereby invalidated by a plethora of restrictions imposed on the manager’s actual responsibility for measurement of outcomes not previously agreed upon. Ultimately, not being in full command will be reflected in the control stage, where actual responsibility again must to be reduced.

The third article, by Hoogenboezem, re-examines the instrumental value of local government performance data as input for business decision making. Reviewing the Urban Audit data - the EU attempt at creating comparable local statistics, Hoogenboezem claims that the insufficient quality of these data makes sound business decision making more difficult. He asserts that the recent wave of performance measurement schemes in government organizations likely will not improve the situation because these schemes are focused on internal and organizational data rather than on external data describing social and economic phenomena. Hoogenboezem notes that the preferred performance indicator for public officials is an internal one because it establishes a target that can be met. Budget minded public managers might be tempted to turn to partial (and possibly misleading) statistics to make the case for the excellent performance of an agency on their watch. Hoogenboezem concludes that, to the most likely users of local government statistics, internal indicators are the least useful. After all, individuals, organizations, and enterprises are best served by information that tells them what occurs in society rather than by information that tells them what transpires inside the government bureaucracy.

The fourth article, by Martin and Singh, drives home a simple but important point: if for no other reason, business decision makers should study government performance data because government agencies are potential clients, too. Specifically, Martin and Singh illustrate how the study of government performance data may help business managers identify opportunities for getting government contracts. The authors assert that due to the increasing use of performance management by governments, a wealth of data and information on government services, such as critical business process factors or cost, now are available for data mining and, therefore, for marketing research and bid compilation purposes. While the main focus of the article is on the potential strategic advantages of identifying government services outsourcing opportunities, the authors caution that business firms need to realize that government contracts differ from commercial contracts.

The symposium’s second group of articles consists of five contributions that illustrate the range of and discuss certain specific topics where government performance data can be of interest to business decision makers. The first two selections in this group deal with issues relating to police performance.
The first article, by Brewer and Huque, begins with the premise that risk management in business entities can be improved by the study of police performance in general and response time in particular. Such data have the potential of informing business decision makers not only about police capacity but also about matters of safety and security for people and assets in different locations and, through the use of historical comparisons, about trends they should consider. By the same token, response time (and changes in) it may yield for business executives information regarding traffic congestion, road conditions, and access within the area covered by each police precinct. These data can help business entities negotiate more favorable deals with insurance companies or with companies that provide various security services.

The second article, by Lambropoulou, examines the extent that reform of police organizations in some European countries may affect a corresponding reform in Greece. Examining the context and some of the forces that influence police work in Greece, the author reminds the reader that the direct police impact on reducing crime is relatively low. Therefore, the police’s instrumental function, that is, crime reduction, clearing offenses, etc. is never fully accomplished. Yet, she notes, many overlook the fact that the police play other roles that are important for preserving communities. For example, supporting, advising and mediating with the public are police activities that have an integrative function, an important function from a societal point of view despite being under-appreciated by members of the police force. The same principle applies to public order. Order and safety require high levels of professionalism, problem solving skills, and timely intervention whenever there is a threat to the welfare of any community.

The third article in this group, by Mann and Gazzarin, examines the role of government as an important player in the Swiss dairy market. The authors note that the sustainability of Swiss dairy farms may depend on the willingness of the government and society to make necessary financial adjustments. Sustainability indicators for these farms are therefore related to ecological and social benefits rather than just measures of economic success. Hence, they argue that the Swiss dairy farms that are subsidized to a large extent by the government illustrate the reality that, to a growing extent, businesses cannot act independently from society’s demands. Mann and Gazzarin conclude that if it is true that businesses are increasingly dependent on their perception in society based on environmental and social criteria, this should be taken into consideration when measuring performance. This, in turn, implies that the performance of businesses is as important for the state and society as the performance of the state is for businesses.

The fourth article in this group, by Johnston, examines the role of performance measurement when governments open opportunities for private investment in traditionally public sector areas. Under these circumstances, a useful range of performance management information must be available to both government and businesses. Government needs to know how it is performing, comparatively, within and beyond its own domain for public policy purposes. Businesses must know, understand and monitor the industry environment in which investment is contemplated or in which it has already taken place. Johnston notes that performance measurement is especially important where governments wish to attract foreign investment. Using the example of the contrived National Electricity Market (NEM in Australia, this article examines the likely value to government and businesses of performance information now available in the public domain. Johnson concludes that performance monitoring, in such an environment as the electricity industry in Australia, will require strict attention to the complex range of political factors as well as the more obvious performance indicators that are easily measurable and understood.

The last article, by Warrian, argues that private firms can not only learn from public organizations and performance measurement, but can profit from it. This claim is contrary to the common assertion that government should learn from the private sector how to measure and monitor performance. The author sheds light on a potential dysfunction of performance measurement in government when the involved practices ultimately hinder success from a commercial point of view. Warrian uses the case of the Canadian steel industry to examine public policies directed at improving the innovation performance of private firms. He suggests that the most commercially successful firms are those that effectively interact with public infrastructure and social capital.

This collection of articles should alert public managers to an important way of helping businesses make the right decisions for their future. Equally important, it should kindle a greater interest by business managers in using government performance data as important input for decision making. A more salient interest by the business community in the way government agencies measure their performance under various laws may, in turn, help public administrators serve the public interest better.

Upcoming Debates

The major theme to be examined in the next edition of this web page is "Public-Private Partnerships Revisited: Implications for Future Governance." The papers in this symposium, together with other papers, will be briefly summarized on this web page and published in full in the International Review of Administrative Sciences. Information on the Review is available at http://www.iiasiisa.be/iias/airisa/airisa.htm).




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