Chapter 1: Introduction: why has government productivity been so neglected in economics and public management?
In advanced industrial societies, public sector activities account for substantial shares of total economic activity. In the UK, for instance, the government’s share of final consumption represented almost 24 per cent in 2009 (Office for National Statistics, 2010a). So it matters a great deal to national competitiveness and to overall economic welfare how well government sector production activities are organized. For many decades, the conventional wisdom has been that government is a low productivity sector where improvements in the organization of activities always take place with a slower tempo than in the private sector, creating a significant drag on changes in the rest of the economy. Many observers argue that the public sector performs far worse than this, constituting a huge zone of the economy where productivity increases hardly at all, and may even move negatively over a long period.