Efficacy,effectiveness and efficiency in human resource use: A primer on the three e's

Disputes over resource use, particularly in the public sector, often stem from conflict over what is “efficient.” This paper systematizes and critiques the most frequently encountered efficiency notions, focusing on their their use and misuse in making human resource decisions. The conclusion is drawn that a triad comprising technical, cost, and allocative efficiency is the base upon which decisions ultimately must be founded if the aim is to obtain the most value from available resources. A corollary is that other conceptions mislead more often than clarify.

Technical efficiency requires getting the most from inputs; there must be no way to obtain greater output from those we are using. It underpins cost efficiency, which requires using the production technique that sacrifices least value from other outputs foregone. Allocative efficiency demands that resources cannot be redirected to produce outputs of higher value and in turn has both technical and cost efficiency as necessary preconditions.

Allocative efficiency is by far the most problematic. Few economists object to the Pareto principle, which states that resources are being misused if redeploying inputs or redistributing outputs can yield added benefits for some members of society without harming any others. However, it is rare to find real-world cases that simple and even when it can be applied, the approach risks biasing policy toward piecemeal methods when broader perspectives may be called for. The Kaldor-Hicks approach in part overcomes these limitations, but at a price. Since it sanctions what may be substantial income redistribution, willingness to accept its implications is much less certain.     

CHANGES IN EDUCATION OUTPUTS IN ENGLISH LOCAL AUTHORITIES, 1949–1974

The literature on local outputs is dominated by cross-sectional investigations which suggest that the local socio-economic environment is a critical determinant of local policy. This paper argues that there is insufficient theoretical justification for adopting a cross-sectional methodology. It examines changes in education outputs in 57 English county borough s and 28 English county councils over the period 1949–74 and concludes that long-term trends in output change were little affected by local socio-economic conditions, changes in party control or changes in senior administrative personnel. The results suggest that case study analyses of internal policy-making processes are likely to give more insight into policy determination than current local output analyses.     

PUBLIC ADMINISTRATION REFORM IN SRI LANKA

In 1996, the government of Sri Lanka enlisted the help of international consultants to address significant weaknesses in the countr's public administration. Their study focused on reorganization of public administration structures, rationalization of public sector cadres and introduction of results-based management systems and procedures. The analysis focused on five main topics: consolidation of core strategic functions in the President's office; improvement of the policy coordination process at cabinet and ministerial levels; separation of policy-making, service delivery and regulatory functions of public administration; enhancing the effectiveness of line ministries through realigning tasks; and introduction of a results-based management system that links resource inputs with well-defined outputs of departments and offices. The urgency of public service reform has been an issue on the national agenda for some time. Until the institutional capacity and effectiveness of the public administration system is upgraded, the credibility of government efforts to bring about a more liberal and competitive market environment will be seriously in doubt. The recommendations in this article can be extended beyond Sri Lanka, serving as a general model of civil service reform for other South Asian nations.     

Housing trends of the elderly: emerging policy and implications

Housing and living environment options are both one of the most pressing problem are as for the elderly and an unavoidable policy subject for public administrators. This article analyzes the topic of housing and the elderly so as to high light selected dimensions that might have implications for decision - makers in resource considerations and allocations. An opening section gives the status of how and where the elderly are now living. Six events, or environmental and policy changes, that affect the housing options of the elderly are analyzed. These events are: high mortgage rates; rent controls; condominium conversions; tax relief measures; weatherization programs; and reverse annuity mortgages. The two dominant trends that appear to shape the future housing options of the elderly are examined. The first trend is the provision of a range of alternatives in living arrangements. The creation of alternatives, also known as a continuum of living environments, includes congregate housing, share - a - home, life care or continuing care, geriatric foster care, and single room occupancy hotels. The second major trend is the increasing provision of services in the home setting. The final portion draws together the evident implications about the housing problems of the elderly for policy makers in the public management field. Implications that have community-wide ramifications are clustered as they relate to: increasing the housing supply; regulatory mechanisms; and budgetary references.     

Allocative medicine: efficiency, disease severity, and the payment mechanism.

Health care expenditures now account for nearly 10 percent of our gross national product, the highest share ever recorded. Concerned that this represents too many resources being devoted to health care, policymakers are searching for ways to control health care expenses. These include higher coinsurance and deductibles, measures to increase market shares of health maintenance organizations, and conversion from cost reimbursement to prospective reimbursement. These measures contain many incentives for patients and providers to alter use of health care services. However, aggregate resource use may or may not be lower and more efficient under these new programs. To determine whether limited resources would be devoted to maximizing the nation's health, incentives inherent in each policy option must be examined. This article describes a classification of types of disease and medical care outputs. The framework is then used to examine incentives offered to patients and providers by three alternative payment mechanisms--capitation, fee-for-service, and payment by diagnosis--regarding types of disease treated and mix of outputs produced. This type of analysis is required to select an appropriate payment mechanism for obtaining a socially acceptable allocation of resources.     

Testing The Limits of Incrementalism: An Empirical Analysis of Expenditure Decisions by English Local Authorities, 1981–1996

Studies of budgetary outputs in public organizations are dominated by the theory of incrementalism. This perspective suggests that expenditure decisions are based on simple rules of thumb. We evaluate the validity of incrementalism by examining the annual spending decisions of 403 English local authorities over 15 budgetary cycles. Two budgetary norms are tested empirically: protect the real level of service provision, and follow central expenditure guidelines. Each of these norms is translated into two decision rules: marginality, or the size of deviations from the norm, and regularity, which refers to the consistency of such deviations over time. Few of the statistical results support the hypothesis that local expenditure decisions are dominated by general budgetary norms or specific decision rules. Our evidence therefore casts doubt on the validity of incrementalism as a theory of local budgetary outputs, and as an explanation of spending decisions in the public sector as a whole.     

POLICY-MAKING WITH A DIFFERENCE? THE TECHNICAL AND VOCATIONAL EDUCATION INITIATIVE

In this study we focus on the emergence of the technical and vocational education initiative. The formulation of the policy is found to differ from that of the conventional British policy style, in that it was announced without prior consultation with the education policy community. Further, overall responsibility for the initiative lies outside the traditional sphere of education — with the Manpower Services Commission. However, in the subsequent processing and implementation stages of the initiative, the established educational interests (local and national) are seen to move from the auditorium back to centre stage. The reasons for the original departure from the conventional policy style, those for the return to normality, and some implications, are examined.     

Cultural Resistance,Output Measures,and Audit Practice: Impact on Non-Implementation of Program-Based Budgeting in Nigeria

Excessive spending on recurrent expenditure hampers economic growth. A program-based budgeting approach has been proposed to discipline fiscal excesses of agencies outside direct civil service machinery but government is inactive. This study hypothesized that difficulty in securing output measures, resistance from politicians, agency heads, and workers; current audit practice; and cost–benefit considerations, hinder implementation. Analysis of perceptual data reveals that resistance from politicians and employees is the major factor that hinders implementation of a program-based budgeting in Nigeria. In addition, difficulty in securing measures to quantify outputs thwarts implementation initiatives, and current audit practice whereby private audit firms audit operational activities of agencies only at year-end subvert program reviews. The study recommends that politicians be advised on political considerations in budgetary allocation; a performance measurement committee be set up to develop measures of outputs acceptable to workers; and a body of auditors be nationalized to undertake audit of government agencies.     

Scottish devolution: identity and impact and the case of community care for the elderly

This article examines the emergent identity and impact of devolution in Scotland. Using the case of community care for the elderly, a model is set out for capturing the different interpretive perspectives evident in relation to a particular policy area in 1999–2001. The political story of the 'free personal care' issue, in which the Scottish Executive were unexpectedly forced into adopting a markedly different policy from the rest of the UK, is examined in some detail. Setting the episode in a broader context, four discursive thematics are identified in relation to the policy case. A model is demonstrated for examining different aspects of devolution including constitutional level and sub-system aspects of post-devolution governance. Conclusions are drawn as to the meaning which should be ascribed to the discourse associated with devolution and community care for the elderly.     

Reinventing urban government in the Netherlands: an American perspective

National agricultural policies intended to stabilize farm price and income may have different impacts on different agricultural sector of a state or a region. A policy which influences a region's agriculture also may affect the general economy of that region, depending on the degree to which agriculture is linked to the general economy. This study evaluates the economywide impact of the Flexible Planting Program (FPP) -- a recent policy designed to encourage farmers to respond more to market than to the government incentives. The study employs an integrated modeling framework which links the national and state farm sectors to the region's non-farm sectors. Because of reductions in real U.S. market prices and, in turn, Tennessee market prices of some farm commodities under FPP, production of most agricultural outputs are expected to decline in Tennessee by 1995. Study results indicate that as a result of price reductions, the agricultural sector will lose about 15 percent of output, income, and employment. These losses cause significant negative impacts on the business-related service sector. The service sector suffers a loss of 31 million dollars in total output and 523 jobs. The total income lost by the service sector (18 million dollars) will be much higher than agriculture sector (11.99 million dollars). Thus, though the FPP may deliver its intended good at the national level, the policy has the potential to cause undesirable impacts on certain regions.     

MEASURING NEED IN THE NATIONAL HEALTH SERVICE RESOURCE ALLOCATION FORMULA: STANDARDIZED MORTALITY RATIOS OR SOCIAL DEPRIVATION?

All methods of dividing public expenditure between competing claims become contentious, particularly when they rely on social indicators of need. The Resource Allocation Working Party (RAW) formula devised in 1976 for distributing National Health Service financial resources fairly between different parts of England relies on the size, age/sex structure and mortality rates (in the form of standardized mortality ratios – SMRS) of populations as combined surrogates for their need for health care. This paper aims to demonstrate three things: first, that RAW'S approach in selecting SMRS was sure-footed; second, that no better proxy of health care need which could be used in RAW has been produced since RAW; and third, that the continuing criticism of SMRS has been sustained by political pressures within the NHS. The result has been the application of ever more indirect and complex surrogates for'need in the resource allocation process which are known to be contaminated by the prevailing unequal supply of health service facilities.     

Evaluating local government performance in times of crisis

In recent years, Spanish local governments have come under increasing pressure to accommodate severe economic restrictions while maintaining their provision of local public services. We analyse overall cost efficiency in Spanish local governments during the period of the economic crisis (2008–2013), under four different non-parametric methodologies. Moreover, given how problematic it is to precisely define what municipalities do, we compare three different output models with various measures of quantity as well as quality. Results suggest that Spanish local government efficiency improved over the period 2008–2013 since budget expenditures (inputs) fell while local public services and facilities (outputs) were maintained. We also find evidence of the possible implications of service quality when measuring municipalities’ efficiency, and of structural differences in the average efficiency between municipalities located in different Spanish regions. Finally, our results confirm that the level and variation of efficiency scores are affected by the approach taken.     

Financial management conservatism under constraints: tax and expenditure limits and local deficit financing during the Great Recession

This paper investigates the relationship between tax and expenditure limits (TELs) and local government deficit financing decisions following the recent recession. Cities under the resource constraints are hypothesised to practise conservatism in financial management decisions and thus less likely to deficit finance during difficult times. Using data from 2005 to 2012 Comprehensive Annual Financial Reports of the 50 largest US cities, this paper finds that cities subject to a binding TEL are more likely to control expenditure growth from pre-crisis years to years following the recession; these cities are also less likely to increase deficit financing following the recession, as indicated by a relative increase in their net assets. Although continuous deficit erodes fiscal sustainability and is an undesirable management practice, deficit financing during recessions may be needed for smoothing expenditure and sustaining service provision. The management conservatism associated with the fiscal rules may contribute to the cyclicality of local spending.     

The rise of risk assessment and risk management in the United Kingdom

This article examines the reform of the health care system in England in terms of the risk assessment and risk management. Three major health policies are examined, the Health of the Nation strategy, community care and the Patient's Charter. The article demonstrates that effective risk assessment and risk management is an important component of each initiative. The Health of the Nation strategy is based on epidemiological evidence on the nature of health risks and is linked to specific targets for the reduction of harm that require effective management of risks. Community care is a well established policy designed to provide long term and continuing support for vulnerable individuals in the community. With high profile incidents in the 1980s, there has been a greater emphasis on effective risk assessment and risk management, especially to protect the public. The Patient's Charter is designed to empower users of service.

Central to this strategy is informed consent. Effective empowerment depends of the provision of adequate information, especially on the risks of treatment. Although competent adults may formally be autonomous risk-taking decision-makers, their ability to assess risk and make decisions depends on having adequate information.     

THE OMBUDSMAN IN BRITAIN: A QUALIFIED SUCCESS IN GOVERNMENT REFORM

The Parliamentary Commissioner for Administration has not been the dismal failure forecast by critics at the time the office was established in 1967. One alleged defect — not criticizing the substance of administrators' discretionary decisions — is characteristic to a large degree of other admired ombudsmen. Recruiting the Commissioner and his investigators from the civil service has not had expected harmful effects. On the other hand, the office has fallen short of the performance of other ombudsmen with regard to the public's access to the Commissioner (the MP filter), the efficiency of his investigative methods, and certain limitations on his jurisdiction. Failure so far to remove these defects appears to be the result of inadequate comparative research and analysis in support of reformers' proposals, the overly cautious and consensual style of civil service policy formulation, and opposition from members of existing institutions (MPS and the officers of civil service unions) who mistakenly believe that their complaint handling activities are threatened by proposed changes.     

Planning,Budgeting, and Health Care Performance in Ukraine

Abstract

The Government of Ukraine has not pursued health care reforms now commonplace in the rest of Europe and Central/Eastern Europe that rely less upon centralized, state delivery of services and more on decentralized operational responsibilities and competition for services that increase patient choice. The Ukrainian health sector suffers from personnel overspecialization and facility overcapacity, resulting in high-cost, low productivity services. Budget funds are unavailable for operations and maintenance resulting in poor quality services. The state provides health care as a constitutionally-protected monopoly, relying on the traditional command and control model which ignores cost/quality competition options and responsibilities to patients. Overall, the system which produces these results is over-centralized, requiring achievement of physical service norms without providing sufficient funds. The centralized system does not monitor or evaluate services beyond narrow financial accountability and control requirements. The health care system is paradoxically over-centralized but unable to regulate or control local health care official decisions to ensure compliance with national standards. Needed are reforms in the health care policy and operational areas to produce the supply of services needed for national economic recovery. In the short-term, the budgetary framework can be improved as an operational/management guide through development of comparative information on results. Most of this information can be based on the economic classification consistent with the chart of accounts. Funding stability can be increased to improve expenditure control by implementing a new fiscal transfer formula that provides discretion (i.e., block grants) and performance criteria (i.e., outcome measures). In the medium-term, building on the technical foundation of physical norms and statistical reporting, the health care budgeting and financial management system should shift emphasis to: program planning, policy and management analysis, and public communications. The results of these reforms should lead to decentralized health care operations, service analysis, and delivery responsibilities. At the same time, the reforms should lead to proper centralization of responsibilities for strategic policy decisions, safety regulation, national standards, and program evaluation.     

Price policy,poverty, and power within rural West African households

This paper explores the impact of agricultural price policy on poverty in West Africa, a region in which prices are an important tool for raising rural household incomes. A game-theoretic, collective model of household income generation and resource allocation is developed that incorporates three features typical of West African rural households: preference heterogeneity among women and men, individual resource control, and power-mediated bargaining over resource control in the face of changes in households' economic environments. To explore price effects, the model is used to simulate the income impacts of large increases in cotton prices accompanying fast-paced agricultural liberalisation in Burkina Faso in the 1980s. The paper shows that where resources are controlled individually by household members, rather than pooled, Pareto efficiency in income generation does not hold. The impact of agricultural price policy on poverty is mediated by bargaining over resource control within households. Both the relative bargaining power of women and men and the degree of preference heterogeneity between them play fundamental roles in the outcome of such bargaining. The results point to a lower ability of households to take advantage of price incentives and thereby raise their incomes than a unitary household model, in which preferences do not differ and resources are pooled, predicts. They suggest that the effectiveness of price policy in reducing poverty in the region would be enhanced by taking into account the incentive structure within households as well as individual household members' ability to bargain over the benefit and cost streams flowing from price changes.     

Community councils in Wales

One set of problems facing anyone trying to track public expenditure programmes is how to handle the intergovernmental aspects. This can be illustrated by Rose and Davies's study of public expenditure in Britain. Amongst these problems are changes to the system of grants from central government to local authorities and transfers of functions between local and central government. There are also problems in the consistency with which Rose and Davies use central government grant or all of relevant expenditure in devising programmes. As a result, Rose and Davies findings about local government expenditure programmes lack consistency over time or between programmes. These discrepancies occur in what in some cases are the largest programmes in their policy area, so they also undermine the empirical and theoretical conclusions drawn about policy change as a whole in Britain. Alternative approaches and data may provide a more meaningful tracking of policy change.     

Population size or population density? An empirical examination of scale economies in South Australian local government, 2015/16

ABSTRACT

Advocates of amalgamation typically claim that substantial scale economies flow from municipal mergers, which generate larger local government entities by population size. We examined whether economies of scale exist in council outlays by analysing the expenditure of 68 South Australian local government areas using data from the 2015/16 financial year. However, given the correlation between population size and population density it is important to determine whether the influence of population size on expenditure is due to variations in population density. We find that when local government areas are stratified into subgroups on the basis of population density, the evidence of economies of scale largely evaporates. From a policy perspective, this suggests that in place of municipal mergers, policymakers should instead explore avenues for shared service arrangements in those functions which exhibit scale economies.     

PUBLIC–NONPROFIT PARTNERSHIP PERFORMANCE IN A DISASTER CONTEXT: THE CASE OF HAITI

During disasters, partnerships between public and nonprofit organizations are vital to provide fast relief to affected communities. In this article, we develop a process model to support a performance evaluation of such intersectoral partnerships. The model includes input factors, organizational structures, outputs and the long‐term outcomes of public–nonprofit partnerships. These factors derive from theory and a systematic literature review of emergency, public, nonprofit, and network research. To adapt the model to a disaster context, we conducted a case study that examines public and nonprofit organizations that partnered during the 2010 Haiti earthquake. The case study results show that communication, trust, and experience are the most important partnership inputs; the most prevalent governance structure of public–nonprofit partnerships is a lead organization network. Time and quality measures should be considered to assess partnership outputs, and community, network, and organizational actor perspectives must be taken into account when evaluating partnership outcomes.