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Efficiency in Government

For the purpose of measuring efficiency in delivery of citizen services, we shall define Governance as “provision and delivery of all the services to its clients by a Government through various departments and agencies”. This definition is simpler but consistent with the definitions given earlier. The clients in the above definition refer not just to citizens, but also corporate houses, and other government departments, all of which are recipients of some government service. While it may be argued that Governance includes more than client-services, we have deliberately chosen to limit its scope to define it so because, especially in a democratic set-up, performance of a government and its success largely depends on how efficiently it delivers the services to the clients.

  1. Measuring Governance Efficiency

Efficiency deals with efficiency of delivery of services by the Government to its citizens. Two major client-value parameters to evaluate governance are:

  1. Cost to the client to access services

  2. Perception by the client of quality of service and governance

While the first parameter is self-explanatory and is essentially objective in nature, the second parameter involves subjective judgment and is therefore difficult to measure directly. We have tried to expand on the definition of “quality of service” along the following dimensions:

  1. Speed of delivery

  2. Accuracy of delivery

  3. Timeliness of delivery

While it focuses on the cost to the client, it is also important to take into account the cost to the Government in providing services to the citizens. Cost to the government is a definite constraint and needs to be included in any framework to evaluate efficiency of service delivery.

Apart from cost savings, improving efficiency of governance will also increase client satisfaction with the Government. Another important reason to improve efficiency is to bring public services to reach greater number of people. Governments may face shortage of administrative staff, or may have in place inefficient processes that deprive many of their clients of timely delivery of services.

To summarize, the parameters along which Governance efficiency may be measured are:

  1. Cost to Government

  2. Cost to Clients

  3. Speed of delivery

  4. Accuracy of delivery – Getting the right result in one iteration

  5. Timeliness of delivery – Deviation from optimized time required for delivery of service

Cost dimension

Cost to Government per service transaction

This is defined as the sum of the employee costs and the communication cost. Employee costs is calculated as the product of number of days spent by employees on the transaction, average salary per day, and number of employees involved in delivering the service. Cost of communication is calculated as the product of average cost of each communication and the number of communication exchanges. Communication is defined as movement of data or information from one node (employee or client) to another.

Cost to client per service transaction

Cost incurred by a client is calculated as the sum of costs due to income loss, costs due to travel, and costs due to communications. Income loss is calculated as the product of number of hours spent during each visit, number of visits, and average hourly salary. Travel costs are calculated as the product of average travel time per visit, number of visits, and the average cost per travel.

Speed dimension

Throughput of service delivery

Throughput is defined as the average number of requests for a service being fulfilled in a day. This can either be determined through survey or can be calculated as the product of the average number of number of service requests under process on any given day and the total time taken to fulfill a service request.

Timeliness dimension

Delay criticality of a service

This is calculated as the ratio of the average time taken to fulfill a request over the time recommended to complete the service request.

Aggregate-level measurements

The summation of above parameter for all services provided by department will be the aggregate parameters for department and accordingly summation of parameters for all departments will provide performance indicators of the entire governance system in delivery of services.

  1. Improving Governance efficiency

Delay Criticality

While it is natural that fulfillment of some services may get delayed, it is equally important to keep the delay to levels that don’t critically add to the Government’s or client’s cost, or affect the perception of Governance.

For instance, if there was an hour-long delay in issuance of a passport that, according to Government’s directive, should not take more than 45 days, then the delay doesn’t critically add to the costs, while if there is a similar delay in the vaccination of children that, as per the Government’s recommendation, should take not more than 2 hours, then the additional cost to the client due to the delay assumes critical proportions. A high delay criticality also indicates the possibility of a substantial backlog in fulfilling service requests and needs urgent course-correction in order to ensure that service is provided to all in a timely and efficient fashion.

While the above metrics are useful in comparing various services within a governance system, the same can be used to compare various governance systems too where each system provides a number of services. In addition to the above metrics, average cost per service and average time per service can also be used to compare different governance systems along cost and time-efficiency dimensions.

Communication Contribution Matrix

The second framework deals with the cost-ratio of communications to time-ratio of communications. It indicates what proportion of the cost and duration of service delivery is made up of communication exchanges. It provides an insight into how much of a bottleneck is communication between client and government departments, and between different government departments. A high cost-ratio indicates that communications are very expensive while a high time-ratio indicates that communications are very slow and time consuming.

With advances in modern communication technology, there exists an opportunity to obtain a low communications cost-ratio and time-ratio combination.

Fulfilment capacity

This is a simple measure that indicates whether a system is able to fulfill service requests at the same rate as it receives them. Fulfillment capacity of a service is measured as the ratio of number of service requests fulfilled in a unit of time to the number of new service requests received in the same time. If fulfilment capacity is less than 1, then it indicates that the system is lagging behind in being able to fulfill all new service requests and new requests are piling up to create a backlog.

Fulfillment capacity along with Delay criticality gives a complete picture of how efficiently the service is being delivered. While low fulfilment capacity would invariably lead to high delays over time and hence need to be corrected immediately, there can be high delays even when the service is being delivered at high fulfilment capacity. This is due to a constant lag between the output and the input, i.e., while the service requests are fulfilled at the same rate as it receives new requests, there is an queue of unprocessed requests which causes a constant delay in fulfillment of each request. Such services need a temporary allocation of resources to fulfill the excess unprocessed inventory of requests.

Measurement of Governance efficiency can be measured through assessing the efficiency of service delivery. Service delivery can be measured along the dimensions of cost, speed, accuracy, and timeliness. There is scope for improvement in a number of services provided by the government with the increase in Government efficiency.

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