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Productivity and efficiency of central government departments: a mixed-effect model applied to Dutch data in the period 2012-2019

Author

Listed:
  • Jos L. T. Blanc

    (IPSE Studies Foundation and affiliated with TU Delft, HD Delft, The Netherlands)

  • Alex A. S. van Heezik

    (IPSE Studies Foundation, HD Delft, The Netherlands)

  • Bas Blank

    (IPSE Studies foundation and a PhD candidate at TU Delft, HD Delft, The Netherlands)

Abstract

Central government aims to stimulate the efficiency and technical change of public organizations. However, government primarily focuses on the institutions that deliver final public services, but not on the policy making institutions. This article analyses the productivity of central government departments (CGDs). From bureaucratic theory we hypothesize that productivity of these CGDs are low. In order to measure efficiency and technical change we estimate an average cost function based on data of Dutch individual CGDs during the period 2012-2019. The dataset consists of data on various services provided, resource usage and efficiency determinants. The cost function is estimated by a mixed-effect non-linear least squares method. The outcomes show that there are large efficiency differences among CGDs. It is also striking that technical change of the CGDs is nonexistent over time, probably due to a lack of innovative behaviour, unwieldy bureaucracies and increasingly complex paperwork.

Suggested Citation

  • Jos L. T. Blanc & Alex A. S. van Heezik & Bas Blank, 2023. "Productivity and efficiency of central government departments: a mixed-effect model applied to Dutch data in the period 2012-2019," Public Sector Economics, Institute of Public Finance, vol. 47(3), pages 335-351.
    • Handle: RePEc:ipf:psejou:v:47:y:2023:i:3:p:335-351
    DOI: 10.3326/pse.47.3.2
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    References listed on IDEAS

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    More about this item

    Keywords

    central government; productivity; cost efficiency; efficiency determinants; technical change; cost function; scaling property; bureaucracy;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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