Abstract

Productivity is commonly defined as a ratio of a volume measure of output to a volume measure of input use. The definition of productivity as being concerned with the relationship between input and output does not cover issues that many people have in mind when they talk about public sector productivity. In many countries, public sector productivity has been assumed to be zero in the national accounts. But recently there have been several attempts to measure it. The aim of this paper is to develop a framework to measure public sector productivity in Sri Lanka. A range of earlier studies on productivity measurement have been critically examined and analyzed to identify a suitable approach. Productivity level vs. productivity change, disaggregated vs. aggregated approach, monetary measurement, Output index method, matrix method and scorecards are some of the methods presented in literature. The authors suggest to use an input output approach to measure productivity in Sri Lankan public sector which will include three basic steps; measuring inputs, measuring outputs and calculating productivity indices. However, there are number of challenges meet in the process including measuring outcomes, intangibility of services, not attributing prices for services, difficulty in including capital costs, managerial perceptions etc. Though crossnational assessments are difficult to carry out, it is recommended at least to measure national, sectoral, and organizational level productivity calculations in Sri Lanka. National Productivity secretariat which is backed by Asian Productivity Organization can operate and lead this task at organizational level while Department of Census and Statistics could measure productivity at national level.

Key Words – Productivity Measurement, Public sector, Sri Lanka.