Productivity in the central government sector of Finland – the case of the Ministry of Transport and Communications 2000–2005

Jani Heikkinen and Mira Lehmuskoski Content Aim of data collection Contents of the survey Data features Output and outcome Results of case study Future work

Jani Heikkinen and Mira Lehmuskoski Aim of Data Collection Produce output volume indicators for: Statistics on central government productivity Central government units themselves National Accounts (if needed) One indicator in measuring public sector performance in Finland Produce information annually from every government unit

Jani Heikkinen and Mira Lehmuskoski Contents of the Annual Survey Measurement units, quantities and shares of final output. DEFINED AND RECORDED MAINLY BY UNIT ITSELF EVALUATED BY STATISTICS FINLAND Defining share of output (cost, income,working time or some other … which) MOSTLY COST SHARE Quantity of labour input. MOSTLY WORKING YEARS Expenditure of activity. FROM CENTRAL GOVERNMET BOOK-KEEPING SYSTEM Data collected always from two sequential years Explanations of changes and facts which could have affected the production of the service.

Jani Heikkinen and Mira Lehmuskoski Data features in general (I/III) The central government services are very heterogeneous and most of them are collective services, each observation is handled as a single unit in productivity measurement final output and output indicators have to be separately specified by each unit (monopoly producers). The used indicators cover the total output or at least the most important and essential final products which make up most of the total output represent as homogeneous final products as possible (classification of final products is vitally important).

Jani Heikkinen and Mira Lehmuskoski Data features in general (II/III) Productivity statistics for central government services proceeds from the micro level to the macro level, meaning that input, output and productivity indices are first compiled for each unit After compiling these indices for each unit, the aggregation of the results is made by weighting the unit growth rate output index by units share of the total costs of all the units labour input by units share of the total labour costs of all the units total input index by units share of the total costs of all the units

Jani Heikkinen and Mira Lehmuskoski Data features in general (III/III) Labour productivity for each unit is measured as the ratio of output change index to the labour input index Total productivity is approximated by cost efficiency in real terms and it is measured as the ratio of output change to the changes in labour and other activity expenditure at constant prices.

Jani Heikkinen and Mira Lehmuskoski Output and Outcome There are no outcome based quality corrections on output volume measures Output changes of different services are summed up by cost weights not by utility derived outcome weights output volume of single service should be same regardless of service provider utility can’t be measured sufficiently utility can be higher OR lower than actual costs costs, as an representatives of market price weights, give proxy measure of utility (input markets of monopoly producer!) NA is trying to measure actions between balance sheets, outcome movements drift from year to next

Jani Heikkinen and Mira Lehmuskoski Results of Case Study (I/III) Ministry of Transportation and Communication (MINTC) special project was carried out where every single agency of the administrative sector of MINTC was studied individually time series where created to check how well they would describe real events Results results of individual agencies can be read from paper general result at the level of administrative sector vs central government results

Jani Heikkinen and Mira Lehmuskoski Results of Case Study (II/III) Quality changes of high-,rail-, and fairways is approached through capacity measuring Output quality correction in research is estimated coefficient of amount cost/value based on type, length and scientific relevance of publication Institutionalised services (license, fees) are not corrected because “service” to users remains mainly same, new licenses and fees are recorded as a different types of service Very detailed division of output is used as means of quality corrections

Jani Heikkinen and Mira Lehmuskoski Results of Case Study (III/III)

Jani Heikkinen and Mira Lehmuskoski Future Work In 2005 Statistics Finland started a project to develop productivity measuring with the ministries. The goal is to measure productivity comprehensively in the authorities and institutions under the ministry. Project started with, Ministries of Education, Agriculture and Forestry, Finance and Justice. Aim is to publish at spring 2009 productivity statistics at the level of all administrative sectors (13).