Measuring public sector productivity

This paper reviews the conceptual foundations, measurement challenges, and emerging international practices in the measurement of public sector productivity. Despite the size and importance of the public sector in OECD economies, measuring its productivity remains considerably more difficult than in market sectors. Public services are usually provided free of charge and lack economically meaningful prices. The paper clarifies the statistical and methodological challenges to measure public sector productivity across countries. It then discusses the principal measurement approaches used in the System of National Accounts, including input-based, output-based, and quality-adjusted output methods, highlighting their respective strengths and limitations. The paper also reviews recent country experiences to improve the measurement of public sector productivity. The analysis concludes that, despite persistent conceptual and comparability challenges, advances in data availability and statistical methods offer significant opportunities to strengthen the measurement of public sector productivity and thereby improve the evidence base for public policy and public expenditure decisions.