Measuring government sector productivity in New Zealand: a feasibility study


There has been growing interest in gaining a better understanding of the performance of government services, not only in New Zealand but around the globe. This growing importance of measuring government services is reflected in a variety of international publications, notably the Atkinson Review 2005 and the Stiglitz-Sen-Fitoussi Report of the Commission on the Measurement of Economic Performance and Social Progress 2009.

The performance of government services is multi-faceted, with many different aspects that could be measured. One important aspect is productivity, which compares change in the volume of services produced with change in the volume of resources used in producing those services: providing the same amount of services for fewer inputs, or providing more services with the same amount of resources means greater productivity and vice versa.

This feasibility study is part of Statistics New Zealand’s response to the growing interest in the measurement of government services. It draws on the best practice guidance provided by other countries and international institutions, and interprets this for the New Zealand situation. The feasibility study shows that it will be possible to estimate productivity change for government health care and education services using statistical methods that are at least as good as the best methods used by other countries.

This report has benefited from the extensive understanding of the health care and education systems, and the accompanying data sources from a number of people. I am grateful for the advice received from the external advisory committee for this project, and for the invaluable assistance from the Ministries of Health and Education. Additionally, I wish to thank the authors, Phillip Lee and Jodi York.

Statistics NZ welcomes feedback from users on the methods and sources presented in this report.



Geoff Bascand
Government Statistician