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X-efficiency: economists and managers view it differently

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  • Robert Mefford

    (University of San Francisco)

Abstract

Leibenstein’s X-efficiency theory offers a view of productivity that differs from traditional neoclassical economics in terms of whether inefficiency exists, what causes it, and how to eliminate it. Extensive discussion of X-efficiency has occurred among economists but little has been said by the group that in the theory is primarily responsible for reducing inefficiency —managers of firms—. This article examines the viewpoints of economists and managers on the basic tenets of X-efficiency theory and what the policy implications for firms and society are of these differing views.

Suggested Citation

  • Robert Mefford, 2017. "X-efficiency: economists and managers view it differently," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 1(2), pages 25-30, September.
    • Handle: RePEc:beh:jbepv1:v:1:y:2017:i:2:p:25-30
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    References listed on IDEAS

    as
    1. Richard B. Freeman & James L. Medoff, 1979. "The Two Faces of Unionism," NBER Working Papers 0364, National Bureau of Economic Research, Inc.
    2. Mefford, Robert N, 1986. "Introducing Management into the Production Function," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 96-104, February.
    3. Kwan, Simon H., 2006. "The X-efficiency of commercial banks in Hong Kong," Journal of Banking & Finance, Elsevier, vol. 30(4), pages 1127-1147, April.
    4. Marvin E. Rozen, 1985. "Maximizing Behavior: Reconciling Neoclassical and X-Efficiency Approaches," Journal of Economic Issues, Taylor & Francis Journals, vol. 19(3), pages 661-685, September.
    5. Stigler, George J, 1976. "The Xistence of X-Efficiency," American Economic Review, American Economic Association, vol. 66(1), pages 213-216, March.
    6. Dean, James W & Perlman, Mark, 1998. "Harvey Leibenstein as a Pioneer of Our Time," Economic Journal, Royal Economic Society, vol. 108(446), pages 132-152, January.
    7. Clark, Jeffrey A & Siems, Thomas F, 2002. "X-Efficiency in Banking: Looking beyond the Balance Sheet," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(4), pages 987-1013, November.
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    More about this item

    Keywords

    X-efficiency; management; productivity; socio-technical theory; economic development;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D20 - Microeconomics - - Production and Organizations - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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