Public services: A searchlight on productivity and users : report to the Expert Group on Public Finance

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THE SWEDISH MINISTRY OF FINANCE

PUBLIC SERVICES - a searchlight on productivity and users

Report to the Expert Group on Public Finance

Postal address The Expert Group on Public Finance (ESO) The Ministry of Finance S-103 33 STOCKHOLM Sweden

Visiting address Malmtorgsgatan 5 Stockholm

Telephone \46-8-763 1436 1437 1439

T ?S O ■? i -5 S£S£9 THE SWEDISH _ ^ J MINISTRY OF FINANCE

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PUBLIC SERVICES - a searchlight on productivity and users S0C IA L STUj)IE S - LIBRARY lOGAL STUDIES CENTRE, GEORGF

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Report to the Expert Group on Public Finance

English summary of Offentliga tjanster - sokarljus pa produktivitet och anvandare, Ds Fi 1986:13

T h i s 1s a summary o f t h e Swedish r e p o r t . I t has beer, p r e p a r e d by Dr. I n g v a r Ohl ss on (Summary and Appendi x 1 ) , Ms. Ma r g a r e t a Biohm ( Appendi x 2 ) and Dr. R i ch a r d Murray (Appendi x 3 ) .

St oc khol m i n F e b r u a r y 1987

The E x p e r t Group on P u b l i c F i n a n c e

Da n i e l T a r s c h y s Chai rman Goran Ar v i d s s o n Head o f S e c r e t a r i a t

CONTENTS FOREWORD Public services in Sweden Introduction Background and aim Estimating productivity trends Quantity indicators as a basis for the estimations Weights Resource consumption as a proportionality factor Quality problems Result of the tentative estimations A tentative estimate for the entire public sector Distribution profiles of the public services Public services - an important welfare component Continued productivity studies? Effects and effectiveness trends Suggestions for further work

APPENDIX 1: Outline of the project - The National Accounts Model 1.1 The national accounts as a frame of reference 1.2 The public sector in the national accounts - a consumer of resources 1.3 Productivity and valuation of services 1.4 Estimation methods

APPENDIX 2: Productivity studies 2.1 Public health and medical care 2.2 Social welfare 2.3 Education 2.4 Public roads 2.5 Twelve selected fields of central government administration 2.6 Public libraries 2.7 The national defence 2.8 Housing and community planning 2.9 Conclusions of the pilot studies

APPENDIX 3: The total public sector 3.1 Adjustments 3.2 Aggregation 3.3 Productivity trends by purpose and for the entire public sector 3.4 Aggregation problems 3.5 Effects of assumptions about public sector productivity 3.6 What do the findings tell us?

49 50 55 59 63 66 70 71 73 74

85 85 85 87 88 90 91

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PUBLIC SERVICES IN SWEDEN A summary o f some p r o d u c t i v i t y and u s e r s t u d i e s

Introduction T h i s i s a sunmary a c c o u n t o f a s e r i e s o f s t u d i e s on p u b l i c s e c t o r s e r v i c e s i n Sweden. The f o c u s i s on p r o d u c t i v i t y and d i s t r i b u t i o n . The a p p r o a c h i s macr o- economi c, and t h e c a l c u l a t i o n s a r e r e l a t e d t o t h e Swedi sh n a t i o n a l a c c o u n t s s ys t e m. T h e r e e x i s t s a f a i r l y e x t e n s i v e i n t e r n a t i o n a l l i t e r a t u r e on g e n e r a l c o n c e p t s and probl ems c o n c e r n i n g p u b l i c s e c t o r p r o d u c t i v i t y and e f f e c t i v e n e s s , and c a l c u l a t i o n s b a s e d on r e a l d a t a have been made, above a l l i n t h e Un i t e d S t a t e s . I t seems , however , t h a t a p p r o a c h e s a l o n g t h e l i n e s o f n a t i o n a l a c c o u n t s and g e n e r a l s o c i o - e c o n o mi c a n a l y s i s a r e p r a c t i c a l l y n o n - e x i s t e n t . An E n g l i s h summary o f t h e main p r o j e c t r e p o r t t h e r e f o r e seemed i n d i c a t e d t o make t h e f i n d i n g s a v a i l a b l e t o a l a r g e r p u b l i c and t o f a c i l i t a t e a more c o mpr e hens i ve d i s c u s s i o n o ^ how t o s u r v e y p u b l i c s e r v i c e s . The work i s b a s e d on s t u d i e s o f i n t e r n a t i o n a l l i t e r a t u r e and on a s e r i e s o f t e n t a t i v e c a l c u l a t i o n s f o r v a r i o u s gover nment s e c t o r s . The Swedi sh r e p o r t on whi ch t h i s summary i s b a s e d c o n t a i n s t h e f o l l o w i n g chapters: Summary 1

P r e mi s e s and o b j e c t s

2

I n t e r n a t i o n a l ove r v i e w and l i t e r a t u r e u s e d

3

P r o j e c t desi gn

4

Productivity studies

5

D istribution p r o f i le fo r the p u b lic services

6

Integrated public sector

7

E f f e c t i v e n e s s - some comments Bibliography

T h i s a b r i d g e d E n g l i s h v e r s i o n h a s been a r r a n g e d a s f ol l o ws : A co mp r e h en s i v e summary i s sup p l e me n t ed by t h r e e a p p e n d i c e s , which a r e l a r g e l y b a s e d on C h a p t e r s 3 , 4 and 6 i n t h e o r i g i n a l r e p o r t . T h i s means t h a t on t h e wh o l e , t h e a p p e n d i ce s c o v e r t h e p r o d u c t i v i t y measurement s w i t h s p e c i a l r e g a r d t o t h e m e t h o d o l o g i c a l a s p e c t s , t h e measur ement s and t h e i r r e s u l t s , and t h e s i g n i f i c a n c e o f t h e s e r e s u l t s i n so c i o - e c on o mi c a n a l y s i s . The p r o d u c t i v i t y measurement s i n t h e v a r i o u s f i e l d s o f t h e public sector also f a c i l i t a t e a presentation of the d istrib u tio n p r o f i l e o f t ^ e p u b l i c s e r v i c e s , which mi gh t i n c r e a s e t h e knowledge o f t h e i r i mp o r t a n c e i n t h e n a t i o n a l economy. I t s h o u l d be emphasi zed t h a t t h i s r e p o r t o u t l i n e s a f i r s t s t e p i n a d e vel opment p r o j e c t . I t d e s c r i b e s an a t t e m p t t o i mprove t h e knowledge a b o u t t h e p u b l i c s e c t o r i n a way t h a t can be u s e d i n s o c i o- e c o no mi c a n a l y s i s . In t h i s s t u d y , t h e p u b l i c s e c t o r i s n o t r e g a r d e d as a f i n a l c onsumer o f r e s o u r c e s , b u t p r i m a r i l y a s a p r o d u c e r o f s e r v i c e s f o r v a r i o u s p u r p o s e s . P r o d u c t i v i t y measur ement s a r e o f ma j o r i mp or t a n c e i n t h i s p r o c e s s , and make i t p o s s i b l e t o c o n t r a s t d a t a on pr oduced s e r v i c e s a g a i n s t d a t a on i n p u t o f r e s o u r c e s . The s t u d i e s have been r e s u l t - a s we l l a s m e t h o d - o r i e n t e d . The p r o d u c t i o n o f r e a l d a t a on p r o d u c t i v i t y t r e n d s - a l b e i t t e n t a t i v e and u n c e r t a i n - ha s y i e l d e d m a t e r i a l f o r f u r t h e r d i s c u s s i o n s , more d e t a i l e d a n a l y s e s o f t h e pr o b l em s , and improvement s o f t h e e s t i m a t i o n mo d el s . As t h e e s t i m a t i o n pr obl ems have been s o l v e d a l o n g s l i g h t l y d i f f e r e n t l i n e s , t h e s t u d i e s a l s o p r o v i d e exampl es o f c o n c e i v a b l e methods and m e a s u r e s , d e m o n s t r a t i n g m e r i t s and s h o r t c o mi n g s o f t h e s t a t i s t i c a l m a t e r i a l s u s e d and s u g g e s t i n g i mprovement s and f u r t h e r s t u d i e s . T h e r e i s , t o o , a growi ng i n t e r e s t i n m i c r o - a n a l y s i s o f p u b l i c a c t i v ­ i t i e s , and t h e s t u d i e s w i l l b e n e f i t such a n a l y s e s a s w e l l . Dat a and met hods a r e t o some e x t e n t t h e same. When t h e r e f o r e t h e q u e s t i o n o f f u r t h e r s t u d i e s i s r a i s e d , m i c r o - a n a l y s i s can be r e g a r d e d a s an e x t e n ­ sio n of the p r o j e c t , q u i t e i n l i n e with the d i r e c t i v e s o f the Expert Gr oup. S e v e r a l s t u d i e s mi ght be o f i mp o r t a n c e h e r e , p e r t a i n i n g t o c a l c u l a t i o n s a s we l l a s met hods, which have been e s s e n t i a l p a r t s o f t h e work now c o mp l e t e d .

In a manner o f s p e a k i n g , t h i s i s a q u e s t i o n o f

a d v a n c i n g t h e whol e f r o n t l i n e o f knowledge a b o u t t h e p u b l i c s e c t o r .

9

Background and aim The s t r u c t u r e o f t h e Swedish econony ha s changed c o n s i d e r a b l y d u r i n g t h e l a s t 5 0 y e a r s . T h i s can be I l l u s t r a t e d by t h e f o l l o w i n g f i g u r e s , whi ch show t h e p e r c e n t a g e c o n t r i b u t i o n s from v a r i o u s i n d u s t r i e s t o t h e g r o s s n a t i o n a l p r o d u c t (GNP) a t f i x e d p r i c e s

.

Agriculture

Ma n u f a c t u r i n g

and f o r e s t r y

i n d u s t r i e s _________s e r v i c e s

Private

Public services

1930

20

35

40

5

19 5 5

11

48

33

8

19 8 0

5

49

24

22

I t i s mai nl y t h e p u b l i c s e r v i c e s t h a t have grown i n i mp o r t a n c e d u r i n g t h e p o s t - w a r e r a . In t er ms o f t o t a l employment, t h e r e has been an i n c r e a s e from 6 % i n 1 9 3 0 v i a 12 % i n 19 5 5 t o 3 0 % i n 1 9 8 0 . However, t h e n a t i o n a l a c c o u n t s do n o t c l e a r l y d i s t i n g u i s h t h e f u n c t i o n s o f t h e p u b l i c s e c t o r i n t h e economy. T h i s s e c t o r i s n o t r e g a r d e d a s an i n d u s t r y i n t h e way i t would b e , i f t h e same s e r v i c e s ( e . g . medi cal c a r e , e d u c a t i o n , c u l t u r e ) wer e pr oduced i n t h e p r i v a t e s e c t o r . The aim o f t h e p r e s e n t p r o j e c t has been t o s up pl e me nt t h e Swedish n a t i o n a l a c c o u n t s w i t h some more s o p h i s t i c a t e d knowledge a b o u t t he de vel opment and u t i l i z a t i o n o f t h e p u b l i c s e r v i c e s , and t o p r e s e n t some new a p p r o a c h e s t o t h e Swedish economy, a p p l i c a b l e i n s o c i o - e c o n o mi c and s t r u c t u r a l a n a l y s e s . For s h o r t - t e r m economic a n a l y s e s on t h e o t h e r hand, t h e r e seems t o be l i t t l e need f o r such s u p p l e m e n t a t i o n s .

1) Source: The Swedish P u b l i c S e c t o r , S t a t i s t i c s Sweden, 1985

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Such knowledge would improve t h e b a s i c m a t e r i a l f o r p l a n n i n g , d e c i s i o n s and p u b l i c d e b at e i n r e s p e c t t o t h e a l l o c a t i o n o f r e s o u rc es t o v a r io us p u b l i c s e r v i c e s . This a s p e c t i s r e l a t e d t o t he i n c r e a s e d p o l i t i c a l a t t e n t i o n gi ven t o t h e s e questions t h e e f f o r t s t o i mprove p r o d u c t i v i t y and e f f e c t i v e n e s s i n p u b l i c services t h e d i s t r i b u t i o n o f s o c i a l w e l f a r e . The ba ckgr ound i s found i n t h e growi ng i mpo r t a n ce a t t a c h e d t o w e l f a r e d i s t r i b u t i o n q u e s t i o n s , where t h e d i s t r i b u t i o n o f s e r v i c e s forms an i m p o r t a n t p a r t t h e growth and employment q u e s t i o n s i n a l o n g - t e r m p e r s p e c t i v e . At p r e s e n t , t he n a t i o n a l a c c o u n t s g i v e a p i c t u r e o f a p u b l i c s e c t o r , where t h e p r o d u c t i o n i n t h e s e c t o r i s measured as A CONSUMPTION OF RESOURCES. T h i s i s t er med PUBLIC CONSUMPTION. I t i s assumed t h a t THE PRODUCTIVITY DOES NOT CHANGE OVER TIME. Thus, t h e p u b l i c s e c t o r i s r e g a r d e d a s a consumer o f r e s o u r c e s . There i s no f o l l o w - t h r o u g h t o t h e f u r t h e r s t e p s i n t h e p r o d u c t i o n p r o c e s s l e a d i n g t o t h e f i n a l u s e r s o f t h e p u b l i c s e r v i c e s . E x p e n d i t u r e has become t h e c e n t r a l i t e m i n t h e d i s c u s s i o n o f t h e p u b l i c s e c t o r . Planning in v arious f i e l d s of t h e s e c to r i s a ls o freque nt ly a question o f r e s o u r c e s r a t h e r t h a n o f r e s u l t s . Ther e i s a t en de ncy t o f ocus t h e a t t e n t i o n on t h e employment o p p o r t u n i t i e s c r e a t e d by t h e p u b l i c s e c t o r r a t h e r t h a n on t h e s e r v i c e s p r o d u c e d . Dat a on o u t p u t i n t h e p u b l i c s e c t o r e n a b l e u s t o make a more d e t a i l e d a n a l y s i s , a n s we r i n g q u e s t i o n s such as

What k i n d s o f s e r v i c e s h a v e b e e n p r od u c e d ? - What does t h e p r o d u c t i v i t y t r e n d look l i k e ? - Who a r e t h e u s e r s o f t h e s e r v i c e s ?

11

The p r o j e c t has s o f a r mai nl y c ov e r e d p r o d u c t i v i t y e s t i m a t i o n s , b u t i t has a l s o included c a l c u l a t i o n s of d i s t r i b u t i o n p r o f i l e s f o r public s e r v i c e s , a s we l l a s d i s c u s s i o n s o f e f f e c t i v e n e s s i n d i c a t o r s . The aim h a s been t o d e v e l o p met hods and make t e n t a t i v e c a l c u l a t i o n s i n o r d e r t o - r e p l a c e t h » a r b i t r a r y ass u mp t i o n o f a n o n - c ha n g i ng p r o d u c t i v i t y r a t e by more r e a l i s t i c e s t i m a t e s - o b t a i n more r e a l i s t i c d a t a on growth and on t h e d i s t r i b u t i o n o f t h e p u b l i c s e r v i c e s by v a r i o u s pu r p o s e s - o b t a i n i n f o r m a t i o n a b o u t t h e d i s t r i b u t i o n o f t h e p r i v a t e consumpti on g e n e r a t e d by t h e p u b l i c s e c t o r .

Estimating p ro d u c ti v i ty trends An a t t e m p t ha s been made t o c a l c u l a t e t h e p r o d u c t i v i t y t r e n d s i n some f i e l d s (sub-sectors) in the public secto r, viz. P u b l i c h e a l t h and medi cal c a r e Social welfare Education Publ1c roads National defence ( p a r t s ) Hous i ng and community p l a n n i n g ( s i m p l e c a l c u l a t i o n s ) Twelve s e l e c t e d f i e l d s o f c e n t r a l gover nment a d m i n i s t r a t i o n Public l i b r a r i e s Our a m b i t i o n ha s been t o i n c l u d e t h e e n t i r e f i n a l o u t p u t i n t h e form o f s e r v i c e s p r od u c e d by t h e p u b l i c s e c t o r .

In t e r ms o f c o s t s , t h e s t u d i e s

have c o v e r e d some 7 0 p e r c e n t o f t h e s e c t o r . The wor k i ng t i t l e ha s been t h e ' macro p r o j e c t ' . The word macro I n t h i s c o n t e x t i m p l i e s an appr oach t owa r d s l a r g e i n t e g r a t e d a r e a s f o r br o a d s o c i o - e c o n o mi c a n a l y s e s

.

1) An o t h e r a p p r o a c h would be t o a t t e m p t t o g e t mi cr o e s t i m a t e s f o r v a r i o u s government a g e n c i e s and f o r v a r i o u s l e v e l s o f p u b l i c admin­ i s t r a t i o n , s i m i l a r t o t h o s e u s e d f o r management and c o n t r o l p u r p o s e s . Such e s t i m a t e s have been made and p u b l i s h e d by t h e E x p e r t Group c o n ­ c e r n i n g e . g . t h e c o u r t s o f j u s t i c e and t h e N a t i o n a l P a t e n t and Registration Office.

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The p r o d u c t i v i t y c o n c e p t most f r e q u e n t l y used i s a s s o c i a t e d w i t h t h e c a p a c i t y t o t r a n s f o r m i n v e s t e d r e s o u r c e s i n t o pr o du c ed s e r v i c e s . Th i s c ap a ci t y i s a function o f the e n t i r e production pr oc es s , including e.g . o r g a n i z a t i o n a l and t e c h n i c a l s o l u t i o n s . The p r o d u c t i v i t y c o n c e p t i l l u s t r a t e s t h a t ' t h i n g s a r e done t h e r i g h t w a y ' , w h i l e e f f e c t i v e n e s s symbol izes t h a t ' t h e r i g h t t h i n g s a r e do n e' . P r o d u c t i v i t y i s t h e r a t i o between o u t p u t ( s e r v i c e s ) and i n p u t ( r e s o u r c e s ) . Even i f t h e p r o d u c t i v i t y r a t e i n a p a r t i c u l a r f i e l d can be measur ed w i t h o u t r e l a t i n g i t t o t h e r a t e i n some o t h e r f i e l d , t h e meas­ u r e has no s i g n i f i c a n c e i n an a b s o l u t e s e n s e . I t i s o f p r a c t i c a l c o n ­ se q u e n c e onl y i n c o mp a r i s o n s . P r o d u c t i v i t y i s o f t e n measured o v e r t i m e . In t h e macro p r o j e c t , c a l c u l a t i o n s have been made f o r t h e p e r i o d ( 1 9 6 0 ) - 1 9 70 - 1 9 8 0 . In some f i e l d s i t i s p o s s i b l e t o make compa r i s ons bet ween d i f f e r e n t u n i t s engaged i n t h e same t y p e o f p r o d u c t i o n , e . g . i n d i f f e r e n t g e o g r ap h i ca l a r e a s . The macro p r o j e c t ha s been b a s e d on a r u l e - o f - t h u m b , i mp l y i n g t h a t w h e r ev e r f e a s i b l e , t h e p u b l i c s e c t o r ' s p r o d u c t i o n o f s e r v i c e s s h o u l d be e s t i m a t e d i n t h e same way a s i f t h e p r o d u c t i o n had been p r i v a t e and thereby au toma tic a lly c l a s s i f i e d in the indu stry s e c to r in the national a c c o u n t s . S i m i l a r l y , t h e macro p r o j e c t u s e s t h e n a t i o n a l a cc o u n t s d e l i m i t a t i o n o f t h e p u b l i c s e c t o r and c o v e r s a c t i v i t i e s which i n t h e n a t i o n a l acc ount s a r e c l a s s i f i e d a s belongi ng t o t h a t s e c t o r . T h i s means t h a t t h e f undament al i d e a o f t h e e s t i m a t i o n s i s t o measure s e r v i c e s a t t h e moment o f t r a n s f e r from t h e p r o d u c e r t o t h e f i n a l c onsumer and i n t h e sh a p e i n which t h e y a p p e a r a t t h a t moment. What happens t h e r e a f t e r i s o f no i n t e r e s t i n t h e measurement p r o c e s s . I t a l s o means t h a t t h e q u a n t i t y t r e n d s a r e measur ed i n v a r i o u s f i e l d s o f t h e p u b l i c s e c t o r and s u b s e q u e n t l y a s s i g n e d w e i g h t s . F i n a l l y t he r e s o u r c e s expended t o a t t a i n t h e d i f f e r e n t r e s u l t s a r e measur ed. Of t e n t h e r e s o u r c e e x p e n d i t u r e measurement i n c l u d e s on l y l a b o u r (number o f p e r s o n s o r number o f m a n - h o u r s ) , b u t i t i s a l s o p o s s i b l e t o u s e c a p i t a l i n p u t , o r bo t h l a b o u r and c a p i t a l i n p u t ( p r o d u c t i o n f a c t o r i n p u t ) , o r the e n ti re input of resources.

I t i s t h e l a s t a p pr o ac h t h a t has been

13

u s e d h e r e i n t h e macro p r o j e c t . I f t h e r a t i o i s i n v e r t e d , i . e . i f t he measur ement s i n s t e a d would p e r t a i n t o t h e i n p u t o f r e s o u r c e s i n r e l a t i o n t o t h e q u a n t i t y o f o u t p u t , t h e r e s u l t would be what i s u s u a l l y t er med u n i t c o s t .

Quantity i n d i c a t o r s as a b a s i s f o r the e st im ati on s T h e r e i s a fundamental d i f f e r e n c e between t h e c a l c u l a t i o n s i n t h e n a t i o n a l a c c o u n t s and t h o s e i n o u r p r o j e c t . The n a t i o n a l a cc o u n t s r e f e r t o a m a r k e t economy w i t h p r i c e t a g s on t h e s o l d p r o d u c t s . The q u a n t i t y t r e n d i s o b t a i n e d by d i v i d i n g t h e s a l e s v a l u e t r e n d by t h e p r i c e t r e n d . In o u r s t u d i e s no mar k e t p r i c e d a t a have been a v a i l a b l e , and ou r p r o d u c t i v i t y t r e n d c a l c u l a t i o n s have i n s t e a d been d i r e c t l y ba s e d on quantity i n d ic a to r s .

The r e a r e s e v e r a l a s p e c t s o f t h e s e t h a t s h o u l d be n o t e d . F i r s t , t h e i r v a r i a t i o n o v e r t i me s h o u l d , a t l e a s t a p p r o x i m a t e l y , r e f l e c t t he t r e n d ( s ) o f t h e s e r v i c e ( s ) r e f e r r e d t o by t h e i n d i c a t o r . We have not been a b l e t o s t ud y t h i s q u e s t i o n i n d e t a i l . Se c o n d l y , an i n d i c a t o r mi g ht i n c l u d e s e v e r a l t y p e s o f s e r v i c e s . I f , f o r i n s t a n c e , t h e number o f h o s p i t a l i z e d p a t i e n t s i s us e d a s a q u a n t i t y i n d i c a t o r f o r t h e e n t i r e i n - p a t i e n t m e d i c a l - c a r e s ys t e m, changes i n t h i s i n d i c a t o r may be due t o c hange s i n t h e r e l a t i v e number o f v a r i o u s ­ l y e x p e n s i v e t r e a t m e n t s . The measur e mi g ht then be br oken down by q u a n t i t y i n d i c a t o r s t h a t a r e more s t a b l e o v e r t h e y e a r s . T h i s has been done i n t h e m e d i c a l - c a r e p a r t o f o u r p r o j e c t by b r e a k i n g down t h e mea s u r e ' number o f h o s p i t a l i z e d p a t i e n t s ' by d e p a r t me n t i n t h e v a r i o u s h o s p i t a l s . However, t h e i n d i c a t o r s s t i l l

r e fe r to the actual tran sfer

bet ween p r o d u c t i o n and consumpt i on.

Sometimes t h e p r o d u c t i o n p r o c e s s i s i n s t e a d br oken down by a l a r g e number o f f u n c t i o n s w i t h s e l f - e v i d e n t i n d i c a t o r s f o r t h e o u t p u t o f each function.

It ems l i k e c l e r i c a l ,

l i b r a r y , mes se nger and s i m i l a r f u n c t i o n s

c a n be t r e a t e d s e p a r a t e l y , b u t i n e v i t a b l y t h i s a l s o means moving away from t h e f i n a l p r o d u c t o f t h e whol e p r o c e s s and a l o s s o f t h e e f f e c t s o f i n t e g r a t i n g t h e v a r i o u s f u n c t i o n s i n t o one u n i t . We have n o t used t h i s method i n t h e macro p r o j e c t .

14

G e n e r a l l y s p e a k i n g , we have managed t o o b t a i n q u a n t i t y i n d i c a t o r s f o r t h e s t u d i e d f i e l d s . The i n d i c a t o r s have o f c o u r s e been o f v a r i o u s t y p e s , and w i t h i n h e r e n t l i m i t a t i o n s owing t o t h e n a t u r e o f t he material.

Weights In t h e m a t t e r o f w e i g h t s , i t has n o t been p o s s i b l e t o a d he r e t o t h e r u l e - o f - t h u m b . The w e i g h t s a s s i g n e d t o t h e v a r i o u s i t e ms i n t h e n a t i o n a l a cc o u n t s f o l l o w t h e consumers' v a l u a t i o n s , a s r e f l e c t e d i n t h e p r i c e s . In t h e p u b l i c s e c t o r t h e r e a r e c h a r g e s on some s e r v i c e s , b u t i n t h e f i e l d s s t u d i e d i n o u r p r o j e c t , p r i c e f o r m a t i o n i s p r a c t i c a l l y non­ e x i s t e n t . Fo r w e i g h t s we have i n s t e a d u s e d t h e c o s t s f o r p r o d u c i n g a p a r t i c u l a r s e r v i c e . However, t h e s e a r e c l o s e l y a s s o c i a t e d w i t h t h e n a t i o n a l a c c o u n t s c o s t c o n c e p t i n a g g r e g a t e s o f t h e GNP t y p e ( ' a t f a c t o r c o s t ' ) . Fo r some p u r p o s e s t h i s i s an a l t e r n a t i v e t o t h e more f r e q u e n t m a r k e t - p r i c e a g g r e g a t e s ( ' a t mar ke t p r i c e ' ) . Thus i n t h i s c a s e t o o , t h e n a t i o n a l a c c o u n t s p r i n c i p l e s can be a p p l i e d t o o b t a i n c l e a r - c u t p r o d u c ti v ity concepts. The u s e o f c o s t s i n s t e a d o f p r i c e s a s w e i g h t s a l s o has a b e a r i n g on t h e p o l i t i c a l ev al u at i o n s governing the a l l o c a t i o n of resources to various fi e l d s in the public se ctor. Wi t h i n r e a s o n a b l e l i m i t s , v a r i a t i o n s i n t h e we i g h t s a p p e a r t o be of mi n or i mpo r t a nc e i n t h e measurement o f o u t p u t c h a n g e s . T h i s i s v e r i f i e d in international l ite r a tu r e .

Reso u r c e c onsumpt i on a s a p r o p o r t i o n a l i t y f a c t o r G e n e r a l l y s p e a k i n g , t h e r e have been no d i f f i c u l t i e s i n c a l c u l a t i n g t h e expended r e s o u r c e s a t c u r r e n t p r i c e s f o r t h e t o t a l a c t i v i t y i n t he studied field s.

In most c a s e s , t h e n a t i o n a l a c c o u n t s e x p e n d i t u r e d a t a

( t h e r e t e r me d ' p u b l i c c o n s u m p t i o n ' ) have been us e d .

15

I r r e s p e c t i v e o f w h e t he r t h e ' p u b l i c c onsumpt i on' d a t a o r more t a i l o r - m a d e e s t i m a t e s a t c u r r e n t p r i c e s have been u s e d , r e c a l c u l a t i o n s t o f i x e d p r i c e s have been n e c e s s a r y t o g e t t h e q u a n t i t y t r e n d s o f t h e u t i l i z e d r e s o u r c e s . In p a r t i c u l a r , t h e r e c a l c u l a t i o n o f man- hour s a t f i x e d p r i c e s has p r e s e n t e d a s u b s t a n t i a l probl em. Some a l t e r n a t i v e c a l c u l a t i o n s have d e mo n s t r a t ed t h a t i n f i x e d - p r i c e c a l c u l a t i o n s o f expended r e s o u r c e s , t h e c h o i c e o f p r i c e I n d i c e s i s o f m a j o r cons e qu enc e i n t h e e s t i m a t i o n o f p r o d u c t i v i t y t r e n d s .

Q u a l i t y pr obl ems One o f t h e key q u e s t i o n s 1n t h e p r o d u c t i v i t y c a l c u l a t i o n s i s r e l a t e d t o c h a n g e s i n t h e q u a l i t y o f t h e s e r v i c e s d u r i n g t h e measurement p e r i o d . Unchanged q u a l i t y would o b v i o u s l y r e p r e s e n t t h e s i m p l e s t s i t u a t i o n , b u t a c c o r d i n g t o common n a t i o n a l a c c o u n t s p r a c t i c e , t h e q u a n t i t y e s t i m a t e s s h o u l d be a d j u s t e d f o r changes i n q u a l i t y , as j u d g e d by t h e consumer s . As a g e n e r a l p r i n c i p l e , a l l q u a l i t y c hange s t h a t c a u s e changes i n t he m a r k e t p r i c e ( i f such a p r i c e does e x i s t ) s h o u l d be c o n s i d e r e d . Changes can be b o t h p o s i t i v e and n e g a t i v e . I t s h o u l d be e mpha si ze d t h a t i n t h i s c a s e q u a l i t y does n o t r e f e r t o t h e e f f e c t s from t h e u s e o f t h e s e r v i c e , b u t to the q u a l i t y of the s e r v i c e proper. The s t u d i e s i n t h e p r o j e c t i n c l u d e t e n t a t i v e d i s c u s s i o n s on q u a l i t y c h a n g e s . In some c a s e s s p e c i f i c q u a l i t y f a c t o r s have been c a l c u l a t e d , p a r t i c u l a r l y i n t h e s t u d i e s o f t h e medi cal s e r v i c e s and o f v a r i o u s administrative fields.

In most o t h e r f i e l d s t h e r e i s no e v i d e n c e t h a t

q u a l i t y c hange s would have had any s i g n i f i c a n t e f f e c t on t h e f i n d i n g s .

Re su lt of the t e n t a t i v e estim ati o n s T a b l e 0 . 1 summari zes t h e r e s u l t s o f t h e t e n t a t i v e c a l c u l a t i o n s f o r t he v a r i o u s f i e l d s o f t h e Swedi sh p u b l i c s e c t o r .

In some c a s e s t h e a v a i l ­

a b l e m a t e r i a l h a s on l y p e r m i t t e d a s t ud y o f t h e p e r i o d 1 9 7 0 - 1 9 8 0 , 1n o t h e r s I t ha s been p o s s i b l e t o I n c l u d e t h e whol e p e r i o d 1 9 6 0 - 19 80 .

16

F o r t h e e n t i r e p e r i o d t h e s t u d i e s i n d i c a t e n e g a t i v e o r unchanged p r o d u c t i v i t y t r e n d s i n a l l f i e l d s e x c e p t p u b l i c r o a d s and some a d m i n i s t r a t i v e a g e n c i e s . Where c a l c u l a t i o n s have been p o s s i b l e f o r b ot h t h e I 9 6 0 ' s and t h e 1 9 7 0 ' s , t h e t r e n d s have been more p o s i t i v e d u r i n g t h e 1 9 7 0 ' s t han dur ing t h e I 9 6 0 ' s . An o b s e r v a t i o n common t o most o f t h e s t u d i e s i s t h a t t h e p r o d u c t i v i t y f a l l s when t h e r e s o u r c e s i n c r e a s e s t r o n g l y and r i s e s when t h e r e s o u r c e s decrease. This i n d i c a t e s t h a t i t i s e a s i e r to maintain a c e r t a i n level o f o u t p u t d e s p i t e d wi n d l i n g r e s o u r c e s t h a n t o r a i s e t h e l e v e l a t a r a t e c o r r e s p o n d i n g t o an i n c r e a s e o f r e s o u r c e s . In o t h e r wor ds , t h e r e i s a l a c k o f f l e x i b i l i t y i n t h e p u b l i c s e c t o r , a l b e i t e x p l a i n a b l e by o v e r ­ head c o s t s , p e r s o n n e l p o l i c i e s e t c . T h i s p r o p o s i t i o n i s a l s o s u b s t a n t ­ i a t e d by t h e E x p e r t Group s t u d i e s on p r o d u c t i v i t y t r e n d s i n t h e ge ne r a l c o u r t s o f j u s t i c e and i n t h e Na t i o n a l P a t e n t and R e g i s t r a t i o n O f f i c e . F o r e d u c a t i o n a t t h e c ompr e hens i ve and u p p e r - s e c o n d a r y l e v e l s , t he p r o d u c ti v i ty t re n d i s c o r r e l a t e d to trends in the stu de nt population. T h u s , i n most c a s e s t h e s t u d i e s i n d i c a t e n e g a t i v e p r o d u c t i v i t y t r e n d s d u r i n g t h e y e a r s 1 9 6 0 - 1 9 8 0 , wi t h a r e l a t i v e i mprovement d u r i n g t h e l a t t e r p a r t of the period.

I t i s of t en sa i d t h a t a negative i n c l i n a t i o n

o f t h e p r o d u c t i v i t y c ur v e i s due t o a d i s r e g a r d o f q u a l i t y c h a n g e s . T h e s e may i nd e e d be i m p o r t a n t , even i f t h e s t u d i e s f a i l t o p r o v i d e any c l e a r c u t e xampl es. F u r t h e r s t u d i e s o f t h e q u a l i t y q u e s t i o n s a r e needed. An o t h e r q u e s t i o n c o n c e r n s p e r s o n n e l c o s t s t h a t can be c l a s s i f i e d as p r i v a t e con s u mp t i o n , c o n s e q u e n t t o e . g . t h e c o - d e t e r m i n a t i o n a gr eement f o r gover nment e mpl oye es. Ac co r d i n g t o t h i s a g r e e me nt , e f f e c t i v e n e s s s h o u l d be d e f i n e d a s t h e a t t a i n m e n t o f s t a t e d o b j e c t i v e s ' w i t h due r e g a r d t o t h e empl oye es' need o f s a t i s f a c t i o n i n t h e i r wor k, good w o r k i n g c o n d i t i o n s , employment s e c u r i t y , c o - d e t e r m i n a t i o n and p e r s o n a l d e v e l o p m e n t ' . I f v a r i o u s r e a l employment b e n e f i t s a r e added t o t h e list,

i t c o u l d be a r g u e d t h a t some c o s t s s h o u l d be s u b t r a c t e d from t h e

r e s o u r c e c o n s umpt i on , v i z . t h e c o s t s a s s o c i a t e d w i t h t h i s

' c onsumpt i on'

a t t h e p l a c e o f wor k. I f t h e s e c o s t s i n c r e a s e more t h a n o t h e r c o s t s , t h e p r o d u c t i v i t y s h o u l d be a d j u s t e d upwar ds, and v i c e v e r s a . However, t h e y a r e n o t l i k e l y t o have any g r e a t i mpa c t on t h e p r o d u c t i v i t y f i g u r e s , even i f i n p r i n c i p l e t he y s h o u l d n o t be i g n o r e d .

17

I ab1e ° - 1.

1

T e n t a t i v e e s t i m a t e s o f annual p r o d u c t i v i t y c h a n g e s . P e r c e n t

1960-65

1965-70

1970-75

1975-80

-4.6

-4.0

-1.4

-2.4

_____

-2.5

- .9

-7.2

+ .3

-2.7

+3. 5

+4.8

+2.1

-1.6

+1. 6

P u b l i c h e a l t h and medi cal care

2

S o c i al w e l f a r e

— —

3

Ed u c a t i o n

4

P u b l i c r oa ds ^

5

P a rts of the national defence2)

6

Housing and community

7

Twelve f i e l d s o f c e n t r a l

planning3)

gover nment a d m i n i s t r a t i o n

- .5

---------

—

+4. 7

-4.9

—

_____

+ .2

-3.3

-3.3

-5.2

+2. 5

-2.0

1) The r e p o r t on p u b l i c r o a d s does n o t i n c l u d e a breakdown by f i v e - y e a r periods.

I t c o n f i n e s i t s e l f t o t h e o b s e r v a t i o n t h a t t h e annual a v e r ­

a g e p r o d u c t i v i t y change d u r i n g t h e whole p e r i o d has been between 3 . 4 a nd 4 . 5 p e r c e n t . The f i g u r e s p r e s e n t e d h e r e f o r t h e f i v e - y e a r i n t e r ­ v a l s have been c a l c u l a t e d i n c o n n e c t i o n wi t h t h e e s t i m a t i o n s f o r t he e n t i r e p u b l i c s e c t o r made i n Appendix 3 , where a l s o an a l t e r n a t i v e c a l c u l a t i o n method has been u s e d f o r t h e p u b l i c - r o a d i n v e s t m e n t s , g i v i n g l o we r p r o d u c t i v i t y f i g u r e s t h a n t h o s e p r e s e n t e d above

2) Only Army and A i r F o r c e t r a i n i n g i s i n c l u d e d . The c a l c u l a t i o n s r e f e r t o 1 9 7 2 / 7 3 - 1 9 7 7 / 7 8 and t o 1 9 7 7 / 7 8 - 1 9 8 1 / 8 2 . 3)

Summary c a l c u l a t i o n s o n l y .

18

The f i n d i n g s mi ght a l s o be r e l a t e d t o t h e expandi ng a d m i n i s t r a t i v e s u p e r s t r u c t u r e o f t h e government s e c t o r . The p r o d u c t i v i t y t r e n d s p r e s e n t e d h e r e a r e n o t onl y a f u n c t i o n o f t h e a c t u a l p r o d u c t i o n p r o c e s s e s , b u t a l s o o f t h e a d m i n i s t r a t i v e measur es t a k e n a t v a r i o u s l e v e l s , from P a r l i a m e n t downwards. The heavy e x n a n s i o n o f t h e p u b l i c s e c t o r may have had a d e l a y i n g e f f e c t on t h e p r o d u c t i v i t y t r e n d s . I t t a k e s t i me t o make i n n o v a t i o n s work smo o t h l y . T h i s mi g h t e x p l a i n t h e change t o a p o s i t i v e p r o d u c t i v i t y t r e n d t h a t has been o b s e r v e d f o r some f i e l d s o f p u b l i c a d m i n i s t r a t i o n .

A ten t a t i v e e stimat e fo r the e n t i r e public se cto r A t e n t a t i v e e s t i m a t e ha s a l s o been made f o r t h e whol e p u b l i c s e c t o r on t h e ba si s of data f o r about 70 per cent of the public s erv ice product­ i o n . Some a d j u s t m e n t s o f t h e e s t i m a t e s i n t h e s p e c i f i c r e p o r t s have be en made, i n o r d e r t o make them mu t u a l l y compa r abl e . The f i g u r e s below show t h e p r o d u c t i v i t y t r e n d ( a n n ua l p e r c e n t a g e a v e r a g e ) :

1970-75

Annual p r o d u c t i v i t y change

-1.4

1975-80

-

1.6

1970-80 -1.5

I f t h e s e f i g u r e s a r e a p p l i e d t o t h e e s t i m a t e s o f t h e GNP a t 1 9 8 0 f i x e d p r i c e s , the following f i g u r e s are obtained (1970 = 100):

1970

1 975

1980

P r e s e n t GNP

100

114

121

GNP w i t h r e v i s e d p u b l i c s e c t o r d a t a

100

111

117

19

The GNP i n c r e a s e d by a p p r o x i m a t e l y 2 p e r c e n t a n n u a l l y d u r i n g t h e 1 9 7 0 ' s , on t h e ass u mp t i o n t h a t t h e p r o d u c t i v i t y r emai ned unchanged i n t h e p u b l i c s e c t o r . T h i s s h o u l d be compared w i t h a 1 . 5 p e r c e n t annual i n c r e a s e , i f t h e p r o d u c t i v i t y o f t h e p u b l i c s e c t o r dr opped by 1 . 5 p e r cent annually. The s i g n i f i c a n c e o f t h e c a l c u l a t e d p r o d u c t i v i t y r a t e i n t h e p u b l i c s e c t o r c a n a l s o be i l l u s t r a t e d i n t h e f o l l o w i n g way: P u b l i c consumpti on i n c r e a s e d by o n l y 18 p e r c e n t between 1 9 7 0 and 1 9 8 0 , i n s t e a d o f by t h e 3 7 p e r c e n t i t would have i n c r e a s e d i f t h e p r o d u c t i v i t y had r emained unchanged. We have a l s o br oken down t h e a c t i v i t i e s o f t h e p u b l i c s e c t o r by pur pose whi ch makes i t p o s s i b l e t o d i s t i n g u i s h how t h e c o s t s ( t h e ' p r i c e s ' ) of t h e v a r i o u s s e r v i c e s have d e v e l o p e d . T h i s t y p e o f i n f o r m a t i o n can be v a l u a b l e when a l l o c a t i n g r e s o u r c e s t o v a r i o u s p u b l i c s e r v i c e s .

D i s t r i b u ti o n p r o f i l e s of the public se rv ic es The p r o j e c t has a l s o i n c l u d e d a d i s c u s s i o n o f t h e u s e o f v a r i o u s p u b l i c s e r v i c e s , anti we have f u n c t i o n a l l y d e f i n e d f o u r c a t e g o r i e s o f s e r v i c e s ( s e c t o r br e akdown) . In t h e f i r s t c a t e g o r y , t h e s e r v i c e s a r e u s e d a s i n p u t I n p r o d u c t i o n o u t s i d e t h e s e c t o r , I . e . mai nl y i n t h e p r i v a t e s e c t o r , where t h e s e s e r v i c e s may have an i mp a c t on t h e p r o d u c t i v i t y de vel opment . In t h e s e c o n d c a t e g o r y , t h e s e r v i c e s a r e us e d a s i n p u t i n o t h e r government p r o d u c t i o n and t h u s r emain w i t h i n t h e p u b l i c s e c t o r . S e r v i c e s o f t h e s e two t y p e s a r e p r o d u c t i o n - o r i e n t e d .

In t h e p r e s e n t government a cc o u n t s

t h e y a r e c l a s s i f i e d a s f i n a l o u t p u t i n p u b l i c cons u mpt i on . T h i s g i v e s a GNP t h a t i s c o r r e s p o n d i n g l y t o o h i g h .

A t h i r d t y p e o f s e r v i c e s a r e d i r e c t e d t o wa r d s t h e h o u s e h o l d s e c t o r and a r e consumed t h e r e . They have an e f f e c t on t h e l e v e l o f l i v i n g and i n f l u e n c e t h e d i s t r i b u t i o n p r o f i l e i n v a r i o u s r e g i o n s a s we l l a s i n t h e

20

whol e c o u n t r y . Thes e s e r v i c e s a r e c o n s u m p t i o n - o r i e n t e d and c o n s t i t u t e a f i n a l o u t p u t from t h e p u b l i c s e c t o r . The f o u r t h c a t e g o r y c o n s i s t s o f s e r v i c e s p r oduc ed f o r s o c i e t y a s a whol e, no s p e c i f i c u s e r s b e i n g d i s t i n g u i s h a b l e . The n a t i o n a l d e f e n c e i s one exampl e. P u b l i c s e r v i c e s o f t h i s t y p e a r e a c t u a l l y t h e o nl y ones t h a t can a p p r o p r i a t e l y be c l a s s i f i e d as c o l l e c t i v e o r p u b l i c consumpt i on. For these four c a t e g o r i e s , the in p u t of resources ( i n th e national a c c o u n t s : P u b l i c c o n s umpt i on ) has been c a l c u l a t e d by S t a t i s t i c s Sweden. The r e s u l t i s shown i n T a b l e 0 . 2 .

Table 0 . 2

' P u b l i c c onsumpt i on' by t y p e o f u s e . C u r r e n t p r i c e s (percentage d istr ib u tio n )

19 7 0

1 9 75

1980

Private sector

8.5

8.0

7.6

Public sector

3.0

2.5

2.2

I n d i v i d u a l c on sumpt i on

61.6

63.7

68.0

C o l l e c t i v e consumpt i on

26.9

25.8

22.2

Production-oriented:

C o n s u m p t i o n - o r i en t e d :

Even w i t h a wide mar gi n o f e r r o r , t h e s e f i g u r e s c l e a r l y i n d i c a t e a p r o d u c t i o n - o r i e n t e d c onsumpt i on o f a r ound 10 p e r c e n t . S e r v i c e s t o i n d i v i d u a l s and h o u s e h o l d s domi nat e and a r e o f i n c r e a s i n g i mp o r t a n c e , e . g . e d u c a t i o n , medi cal c a r e and s o c i a l w e l f a r e . The c o l l e c t i v e p a r t c o n s t i t u t e s a r o un d 25 p e r c e n t and i s d e c l i n i n g . I t i n c l u d e s n a t i o n a l d e f e n c e , j u d i c i a r y s e r v i c e s and some g e n e r a l a d m i n i s t r a t i o n .

21

F o r t h e p r o d u c t i o n - o r i e n t e d s e r v i c e s , t h e r e seems t o be no p o i n t i n a t t e m p t i n g t o a d j u s t t h e n a t i o n a l a cc o u n t s i n r e s p e c t t o s e r v i c e s t r a n s f e r r e d t o and from t h e p r i v a t e s e c t o r .

I t m i g h t , however, be o f

i n t e r e s t t o c o n t i n u e t h e a n a l y s i s o f t h e i r p r a c t i c a l i mp o r t a n c e by s t u d i e s o f how t h e e n t e r p r i s e s u s e t h e g e n e r a l i n f r a - s t r u c t u r e p r o v i de d by t h e gover nment . I n f o r ma t i o n on a c o n t i n u o u s b a s i s i s h a r d l y necessary.

P u b l i c s e r v i c e s - an i m p o r t a n t w e l f a r e component S t a t i s t i c s Sweden ha s made c a l c u l a t i o n s o f t h e t o t a l c onsumpt i on o f t he Swedi sh p o p u l a t i o n , i n c l u d i n g t h e p a r t o f t h e p u b l i c s e r v i c e s t h a t i s d i r e c t e d t owar ds i n d i v i d u a l s and h o u s e h o l d s , b u t n o t c l a s s i f i e d as p r i v a t e consumpti on i n t h e n a t i o n a l a c c o u n t s . In 1 9 8 0 t h e t o t a l con­ sump t i o n i n Sweden was e s t i m a t e d t o MSEK 3 7 0 0 0 0 , o f whi c h , a c c o r d i n g t o t h e n a t i o n a l a c c o u n t s , p r i v a t e c onsumpt i on amounted t o MSEK 2 7 0 00 0. The c o n s u m p t i o n - o r i e n t e d p u b l i c s e r v i c e s t h u s r e p r e s e n t e d MSEK 100 00 0, o r 27 p e r c e n t o f t he t o t a l c onsumpt i on. In t h e n a t i o n a l a c c o u n t s , t h i s v e r y l a r g e p a r t i s n o t t r a n s f e r r e d t o t h e h o us e h o l d s e c t o r , nor t h e p r e v i o u s l y ment i oned c o s t s o f r e a l employment b e n e f i t s . The l a t t e r a r e p r o b a b l y c o m p a r a t i v e l y s m a l l , t hough r i s i n g . From t h e n a t i o n a l a c c o u n t s i t i s e v i d e n t l y d i f f i c u l t t o d e r i v e a p i c t ­ u r e o f t h e economy's t o t a l w e l f a r e a s p e c t s t h a t can be us e d 1n s t r u c t ­ u r a l and s o c i o- e c o no mi c a n a l y s e s . T h i s i s n o t i c e a b l e i n o t h e r c o n t e x t s a s w e l l . The g e n e r a l wage and s a l a r y n e g o t i a t i o n s p r o v i d e a s i m p l i f i e d exampl e, where t h e p u r c h a s i n g power on t h e p r i v a t e mar ke t seems t o be t h e onl y s i g n i f i c a n t i t e m i n t h e d i s c u s s i o n s . Yet t h e p u b l i c s e r v i c e s most c e r t a i n l y have c o n t r i b u t e d t o t h e w e l f a r e i n c r e a s e i n t h e 1 9 6 0 ' s and 1 9 7 0 ' s .

The c o n s i d e r a b l e p r o d u c t i o n o f s e r v i c e s i n t h e p u b l i c s e c t o r i s s t r o n g ­ l y r e l a t e d t o t h e Swedish w e l f a r e p o l i c y : Every c i t i z e n s h ou l d be g u a r ­ a n t e e d a c c e s s t o t h e s e r v i c e s w i t h o u t g r e a t economic s a c r i f i c e s . I t i s t h e r e f o r e o f i n t e r e s t t o f i n d o u t which consumer gr oups a c t u a l l y use t h e s e r v i c e s , and t h e p r o j e c t has i n c l u d e d a p i l o t s t u d y o f t h e d i s t ­ r i b u t i o n of consumption-oriented s e r v i c e s .

22

Some p o p u l a t i o n gr oups u t i l i z e p u b l i c s e r v i c e s t o a h i g h e r de g r e e t han o t h e r s . Pe r s o n s i n m e t r o p o l i t a n a r e a s , p e r s o n s w i t h a h i g h e r e d u c a t i o n a nd s e n i o r s a l a r i e d empl oyees a r e more f r e q u e n t u s e r s t h a n o t h e r s o f s e r v i c e s o f a general n a t u r e , e . g .

s e r v i c e s r e l a t e d t o c u l t u r a l and

l e i s u r e a c t i v i t i e s . A more even d i s t r i b u t i o n i s found f o r s e r v i c e s g r a n t e d on a means t e s t , such as c a r e o f t h e o l d and d i s a b l e d , a s wel l as f o r a l a r g e p a r t o f t h e p u b l i c h e a l t h and medi cal c a r e . S e l f empl oyed, p a r t i c u l a r l y f a r m e r s , u s e p u b l i c s e r v i c e s l e s s t h a n o t h e r s . We have c a r r i e d on a d i s c u s s i o n w i t h e x p e r t s a t S t a t i s t i c s Sweden a b ou t t h e p o s s i b i l i t i e s t o i mprove t h e knowledge a b o u t t h e s e r v i c e s and t h e i r u s e r s by means o f mail o r i n t e r v i e w s u r v e y s . In a d d i t i o n t o t h e q u e s t ­ i on o f who use t h e s e r v i c e s , t h e d i s c u s s i o n has c o v e r e d such t o p i c s as t h e u s e r s ' o p i n i o n o f t he q u a l i t y devel opment , t h e u s e r s ' o p i n i o n o f t h e r ange o f s e r v i c e s a v a i l a b l e , and w h e t he r i t i s f e a s i b l e t o o b t a i n d a t a on demands and n e e d s . The c o n c l u s i o n was t h a t mail s u r v e y s o f t h e u s e r s can g i v e v a l u a b l e i n f o r m a t i o n a s t o how t h e p u b l i c s e r v i c e s a r e us e d and what t h e u s e r s t h i n k o f t h e i r q u a l i t y and a v a i l a b i l i t y . To some e x t e n t such d a t a can be i n c l u d e d i n t h e p r e s e n t s t a t i s t i c s on l i v i n g c o n d i t i o n s , w h i l e d a t a on t h e demand f o r v a r i o u s s e r v i c e s a r e more d i f f i c u l t t o o b t a i n .

Con t i nue d p r o d u c t i v i t y s t u d i e s ? I t i s a t i me - c onsumi ng t a s k t o compi l e i n f o r m a t i o n a b o u t s e c t o r s o f s o c i e t y t h a t a r e n o t c o v e r e d by s t a t i s t i c s . The f i n d i n g s p r e s e n t e d h e r e as a r e s u l t of the p r o d u c ti v ity c a l c u l a ti o n s f o r the publ ic se cto r c o n s t i t u t e a t e n t a t i v e a p p r o a c h . The model d e vel oped i n c o n n e c t i o n wi t h t h e n a t i o n a l a cc o u n t s has n o t been a l t o g e t h e r a p p l i c a b l e , and f u r t h e r e f f o r t s a r e r e q u i r e d t o o b t a i n more (new) b a s i c m a t e r i a l .

It is there­

f o r e n o t y e t t i me t o i n t r o d u c e t h e p r e s e n t f i n d i n g s i n t h e annual n a t i o n a l a c c o u n t s on a r e g u l a r b a s i s , b u t t h e y mi ght s e r v e a s a s u p p l e ­ ment when t h e n a t i o n a l a c c o u n t s a r e used i n s t r u c t u r a l and r e s u l t s analyses, e.g.

i n l o n g- te r m pl anni ng.

23

I t i s o u r hope t h a t t h e m a t e r i a l w i l l pr ove u s e f u l i n s e r i o u s d e b a t es on t h e pr obl ems a s s o c i a t e d w i t h p u b l i c s e r v i c e p r o d u c t i o n . Such d i s ­ c u s s i o n s have i n f a c t a l r e a d y s t a r t e d i n t h e wake o f t h e r e p o r t s from t h e s e p a r a t e s t u d i e s . Thereby we have r e a c h e d one goal o f t h e p r o j e c t . I t s h o u l d be k e p t i n mind t h a t t h e z e r o h y p o t h e s i s a b o u t t h e p r o d u c t i v ­ i t y change i n t h e p u b l i c s e c t o r i s on l y a recommendati on by t h e UN t o t h e c o u n t r i e s which ap p l y t h e UN System o f Na t i o n a l Account s (SNA). Or a s f o r m u l a t e d i n t h e f o l l o w i n g q u o t a t i o n from a d i s c u s s i o n i n t h e U n i t e d S t a t e s , a b o u t w h e t he r o r n o t t h e annual p r o d u c t i v i t y c a l c u l a t ­ i o n s f o r t h e f e d e r a l s e c t o r s h o u l d be i n c l u d e d i n t h e o f f i c i a l n a t i o n a l a c c o un ts 1^ : ' I n my o p i n i o n , i t i s n o t a q u e s t i o n o f t h e measur es f a i l i n g t o meet an ' i d e a l ' d e f i n i t i o n o f d i r e c t o u t p u t ; r a t h e r , i t i s w h e t h e r b e t t e r e s t i m a t e s o f p r o d u c t i v i t y change f o r component p a r t s o f t he f e d e r a l gover nment s e c t o r can be d e r i v e d from t h e measur es d e v e l o p e d t ha n t h e assumed z e r o p r o d u c t i v i t y change c u r r e n t l y b e i n g u s e d f o r t h e e n t i r e gover nment s e c t o r . ' The q u e s t i o n o f c a l c u l a t i n g q u a n t i t y t r e n d s f o r p u b l i c s e r v i c e s has r e c e i v e d some a t t e n t i o n i n t h e UN i n a d r a f t manual o f p u b l i c s e c t o r statistics.

I t i s l i k e l y t o be f u r t h e r d i s c u s s e d i f t h e UN s t a r t s a new

r oun d o f SNA r e v i s i o n s . The macro p r o j e c t has y i e l d e d e x p e r i e n c e s a p p l i c a b l e i f and when t h e work c o n t i n u e s . In such a c a s e i t i s i m p o r t a n t n o t o n l y t o e n l a r g e t h e b a sic information in several f i e l d s o f the publ ic s erv ice production, bu t a l s o t o obt ain information about the re sources re q ui re d -

a

' p r i c e t a g ' showing t h e c o s t o f v a r i o u s s e r v i c e s . Such e f f o r t s have been i n i t i a t e d by t h e E x p e r t Group, t h e aim b e i n g t o i n v e s t i g a t e w h e t h e r i t would be f e a s i b l e t o o b t a i n a s y s t e m a t i c a l l y d e s i g n e d m a t e r ­ i a l f o r t h e e n t i r e p u b l i c s e c t o r . T h i s c o u l d a l s o be u s e d i n p r o d u c t i v ­ i t y c a l c u l a t i o n s a t t h e macro l e v e l , i f compa r abl e d a t a f o r s e v e r a l y e a r s become a v a i l a b l e . 1)

Jer ome Mark: S t u d i e s i n Income and Wea l t h, Vol . 4 4 , p . 3 5 3 , 1 9 8 0 .

24

More e x t e n s i v e d a t a on t h e s e r v i c e p r o d u c t i o n ( t h e f i n a l p r o d u c t s ) and a f u r t h e r breakdown o f t h e s e would f a c i l i t a t e t h e use o f sampli ng p r o c e d u r e s i n t h e e s t i m a t i o n o f t h e p r o d u c t i v i t y t r e n d s . T h i s would a l s o r e d u c e t h e pr obl em o f making a d j u s t m e n t s f o r q u a l i t y c h a n g e s . The d i s r e g a r d o f q u a l i t y c hange s i s o f t e n ment i oned i n t h e s t u d i e s . Q u a l i t y pr obl ems a r e i n h e r e n t i n t h e n a t i o n a l a c c o u n t s as w e l l , and t h e n a t i o n a l a c c o u n t s p r i n c i p l e s have a s f a r a s p o s s i b l e been f o l l o w e d . However, t h e n a t i o n a l a c c o u n t s p r o v i d e p r a c t i c a l l y no exampl es o f a d j u s t m e n t s f o r q u a l i t y v a r i a t i o n s i n s e r v i c e s . Nor i s t h e p r i v a t e s e r ­ v i c e p r o d u c t i o n s a t i s f a c t o r i l y c o v e r e d by s t a t i s t i c s . T h i s means t h a t t h e r e i s a g e n e r a l need t o ap pl y t h e n a t i o n a l a c c o u n t s ' p r i n c i p l e s ' o f d e a l i n g w i t h q u a l i t y c hange s i n s e r v i c e s . Q u a l i t y s t u d i e s have t h e r e f o r e been i n i t i a t e d w i t h i n t h e p r o j e c t i n c o n n e c t i o n wi t h t h e p r o d u c t i v i t y s t u d i e s . S p e c i a l q u a l i t y gr oups have be en e s t a b l i s h e d f o r t h e two f i e l d s o f c h i l d - c a r e and c a r e o f o l d p e o p l e . Q u a l i t y q u e s t i o n s i n medi cal c a r e a r e s t u d i e d i n c o o p e r a t i o n w i t h t h e P l a n n i n g and R a t i o n a l i z a t i o n I n s t i t u t e f o r H e a l t h and Soc i al S e r v i c e s , and a r e p o r t i s due i n t h e s p r i n g o f 1 9 8 7 . In a d d i t i o n , t h e Swedi sh I n s t i t u t e f o r He a l t h Economics has a g r e e d t o c a r r y o u t a com­ p a r a t i v e s t ud y on t h e q u a l i t y o f F i n n i s h and Swedish medi cal s e r v i c e s and on t h e i r s i m i l a r i t i e s and d i f f e r e n c e s . Qualit y questions are a ls o of i n t e r e s t in regional pr o d u c ti v ity s t u d i e s , e . g . i n c o s t c omp a r i s on s made by m u n i c i p a l i t i e s and c o un t y c o u n c i l s i n r e s p e c t t o v a r i o u s mu ni c i p al u n i t s and h o s p i t a l s . Some c o m p a r a t i v e p r o d u c t i v i t y s t u d i e s o f t h i s t y p e have been i n i t i a t e d by t h e E x p e r t Group, e . g . c omp a r i s on s o f c o s t and o u t p u t i n t h e compre­ h e n s i v e school and i n c h i l d - c a r e s e r v i c e s i n d i f f e r e n t m u n i c i p a l i t i e s . T hes e s t u d i e s i n c l u d e q u a l i t y q u e s t i o n s . Q u a l i t y and e f f e c t s a r e two r e l a t e d a s p e c t s , b u t q u a l i t y r e f e r s t o t h e c h a r a c t e r i s t i c s o f t h e s e r v i c e and n o t t o i t s r e s u l t s , w h i l e e f f e c t s r e f e r t o an o b j e c t i v e . The l a t t e r a s p e c t i s a q u e s t i o n o f management and c o n t r o l o f o p e r a t i o n s r a t h e r t h a n o f g e n e r a l s o c i o - e c o n o mi c a n a l ­ y s i s , and demands m i c r o - l e v e l u s e o f i n f o r m a t i o n on p r o d u c t i v i t y , q u a l i t y and e f f e c t i v e n e s s c h a n g e s .

25

However, i m p o r t a n t p a r t s o f t h e p r o d u c t i v i t y c a l c u l a t i o n s a r e o f i n t e r e s t i n b ot h t h e macro and mi cr o a s p e c t s . The Swedish government a d m i n i s t r a t i o n ha s shown g r e a t i n t e r e s t i n t h e mi c r o a ppr oac h t owards new i n f o r m a t i o n on p r o d u c t i o n and p r o d u c t i v i t y t r e n d s . The s t u d i e s i n t h e v a r i o u s f i e l d s o f p u b l i c a d m i n i s t r a t i o n a r e based on d a t a from i n d ­ i v i d u a l government u n i t s , and e . g . t h e m e d i c a l - c a r e st udy has used d a t a from v a r i o u s h o s p i t a l s and h o s p i t a l d e p a r t m e n t s . M a t e r i al from t h e mic­ r o l e v e l has been used a t t h e macro l e v e l . The same b a s i c d a t a can o f t ­ en be us e d i n bot h so c i o - e c on o mi c a n a l y s e s and a n a l y s e s o f o p e r a t i o n s , a l t h o u g h t h e p r o c e s s i n g has t o he done a l o n g s l i g h t l y d i f f e r e n t l i n e s . T h e r e a r e numerous n a t i o n a l and i n t e r n a t i o n a l i n d i c a t i o n s t h a t mi cr o s t u d i e s on r e s o u r c e consumpt i on and o u t p u t a r e becoming more and more freque nt, p a r t i c u l a r l y a t the local l e v e l .

I f t h e macro p r o j e c t i s t o

be f u r t h e r d e v e l o p e d , we b e l i e v e t h e r e i s much t o be g a i n e d i n c o l l a b ­ o r a t i n g with micro-level p r o j e c t s . In t h e de vel opment o f p r o d u c t i v i t y e s t i m a t i o n methods f o r t h e p u b l i c s e c t o r , t h e s t a t i s t i c a l work on s e r v i c e s i n t h e p r i v a t e s e c t o r sho ul d be c o n s i d e r e d a s w e l l . Some exampl es a r e d e f i n i t i o n s o f s e r v i c e con­ c e p t s and f i x e d - p r i c e c a l c u l a t i o n s , which have been d i f f i c u l t t o h a n d l e i n t h e macro p r o j e c t . To summari ze, t h e f u t u r e work mi ght be f a c i l i t a t e d by j o i n t e f f o r t s i n various c o n stellatio n s .

E f f e c t s and e f f e c t i v e n e s s t r e n d s The n a t i o n a l a cc o u n t s do n o t make p r o v i s i o n s f o r c hange s i n t h e e f f e c t s o f t h e p u b l i c s e r v i c e s . T h i s i s o f t e n h e l d a g a i n s t t h e GNP measur e when i t i s u s e d a s an o v e r a l l measur e o f w e l f a r e - a pur p os e i t was ne v er intended to serve. Our p r o j e c t i s ba s e d on t h e n a t i o n a l a c c o u n t s and i t s p r i n c i p l e s , and t h e e f f e c t s of the s e r v ice s th e r e f o r e f a l l o u ts id e the pro d u c ti v ity c a l c u l a t i o n s . For i n s t a n c e , t h e e f f e c t s on t h e p o p u l a t i o n ' s h e a l t h o f

26

t h e medi cal s e r v i c e s a r e n o t t a k e n i n t o c o n s i d e r a t i o n .

I f some k i n d o f

h e a l t h i n d e x were t o be c a l c u l a t e d , t h i s i nd ex would a l s o t a k e i n t o a c c o u n t such f a c t o r s a s e a t i n g and d r i n k i n g h a b i t s , work p a t t e r n s , l e i s u r e a c t i v i t i e s e t c . The e f f e c t o f each f a c t o r would be d i f f i c u l t t o s p e c i f y , n o t l e a s t i n an a n a l y s i s o f c hanges o v e r t i me . Thus, t h e n a t i o n a l a c c o u n t s do n o t c o v e r t h e d i r e c t o r i n d i r e c t e f f e c t s o f t he s e r v i c e s . The i n c l u s i o n o f t h e s e e f f e c t s would have s e v e r a l c o n s e q u e n c e s , and t h e sys t e m would have t o be suppl ement ed wi t h d a t a on a number o f Loth p o s i t i v e and n e g a t i v e e f f e c t s . Some exampl es a r e t he p o l l u t i o n c a u s e d by p r o d u c t i o n and consumpti on and t he e f f e c t s o f a l c o h o l i c a bu s e , motor t r a f f i c and v i o l e n c e i n TV-programmes. Only when d a t a on t h e s e e f f e c t s have been i n c l u d e d , w i l l i t be p o s s i b l e t o e s t im a te welfare changes. A fundamental p r i n c i p l e i n t h e p r o j e c t has been t o t r e a t a l l s e r v i c e s a s e q u a l l y as p o s s i b l e from t h e measurement p o i n t o f view. T h i s means t h a t t h e s e r v i c e s a r e t o be measured a t t h e moment o f t h e i r t r a n s f e r t o t h e u s e r , and t h a t no a t t e n t i o n i s p a i d t o t h e i r e f f e c t s . F o r s e v e r a l r e a s o n s , t h e r e f o r e , e f f e c t i v e n e s s measurements p e r t a i n i n g t o t h e p u b l i c s e c t o r seem t o be l on g p r i m a r i l y t o a more d e t a i l e d l e v e l , where t h e o p e r a t i o n s o f t h e v a r i o u s government a g e n c i e s t a k e p l a c e and wher e t h e e f f e c t s can be measur ed a g a i n s t more o r l e s s c l e a r l y formulated ob jec tiv e s. No c a l c u l a t i o n s o f e f f e c t i v e n e s s t r e n d s have been made d u r i n g t h i s s t a g e o f t h e p r o j e c t . The o b s e r v a t i o n s j u s t made a r e more i n t h e n a t u r e o f c as u a l r e ma r k s . However, t h e devel opment o f methods t o i l l u s t r a t e e f f e c t i v e n e s s t r e n d s o u g h t t o be i n c l u d e d a s an i mp o r t a n t p a r t o f a programme f o r f u r t h e r improvement o f t h e knowledge a bo u t p u b l i c services.

27

S u g g e s t i o n s f o r f u r t h e r work Work on t h e f o l l o w i n g t a s k s s h o u l d p r e f e r a b l y be i n i t i a t e d a n d / o r c o mp l e t e d i n r e s p e c t t o t h e measurement o f t h e p r o d u c t i v i t y , e f f e c t i v e ­ n e s s and d i s t r i b u t i o n p r o f i l e s o f t h e p u b l i c s e r v i c e s : - To b r i n g t h e c a l c u l a t i o n s up t o t h e y e a r 1 9 8 5 and t o s u p pl e me nt them w i t h c a l c u l a t i o n s f o r t h e r e ma i n i n g f i e l d s o f t h e p u b l i c s e c t o r - To improve t h e methods f o r me a s u r i n g p r o d u c t i v i t y t r e n d s - To t e s t t h e u s e f u l n e s s o f t h e r e s u l t s a l r e a d y a t t a i n e d o r e x p e c t e d by a n a l y z i n g t h e t r e n d s i n v a r i o u s f i e l d s ( h i s t o r i c a l r e v i e w) - To i n t e n s i f y t h e r e s e a r c h on q u a l i t y c hanges and e f f e c t s i n o r d e r t o su p p l e me n t t h e p r o d u c t i v i t y mea s u r e s and t a k e a f i r s t s t e p t owar ds effectiveness calculations - To e n c o u r a g e S t a t i s t i c s Sweden t o p l a n i n t e r m i t t e n t mail s u r v e y s o f c onsumer s a b o u t t h e u s e , q u a l i t y and a v a i l a b i l i t y o f p u b l i c s e r v i c e s - To i n i t i a t e r e s e a r c h on t h e u s e o f p u b l i c s e r v i c e s i n p r i v a t e i n d u s t r i e s t h r o u g h mail s u r v e y s i n some s u i t a b l e m u n i c i p a l i t y - To c o n t i n u e t h e macro c a l c u l a t i o n s f o r t h e p u b l i c s e c t o r i n c o n n e c t ­ i o n w i t h t h e i n t e r m i t t e n t economic l o n g - t e r m p l a n n i n g . - To d e v e l op a s t r u c t u r e f o r t h e f u t u r e wor k, e . g . t h r o u g h c o l l a b o r ­ a t i o n w i t h c o n c e r n e d a u t h o r i t i e s , o r g a n i z a t i o n s and r e s e a r c h i nsti tutions.

' -

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APPENDIX 1 OUTLINE OF TME PROJECT - THE NATIONAL ACCOUNTS MODEL 1.1

The n a t i o n a l a cc o u n t s a s a frame o f r e f e r e n c e

The d e f i n i t i o n o f t h e p u b l i c s e r v i c e s used i n t h i s r e p o r t c o r r e s p o n d s on t h e whole t o t h e p u b l i c - s e c t o r c o n c e p t i n t h e n a t i o n a l a c c o u n t s s y s t e m , and we have a l s o f ound i t s u i t a b l e t o r e l a t e o u r e s t i m a t i o n model t o t h i s syst em. We have a p p l i e d a r u l e - o f - t h u m b , a c c o r d i n g t o whi ch measur ement s o f t h e s e r v i c e p r o d u c t i o n i n t h e p u b l i c s e c t o r s h o u l d be c o n d u c t e d i n t h e same way, a s i f t h e a c t i v i t y had been c a r r ­ i e d o u t i n t h e p r i v a t e i n d u s t r y and, a c c o r d i n g l y , i n c l u d e d i n t h e p r i v a t e s e c t o r i n t h e n a t i o n a l a c c o u n t s . I t s h o u l d be emphasi zed t h a t t h i s r u l e i s a p p l i e d onl y 'when a p p r o p r i a t e ' . Ther e e x i s t s a b o r d e r l i n e bet ween m a r k e t and government economy, which i s t h e v e r y r e a s on f o r our s t u d i e s on t h e p u b l i c s e r v i c e s . The a s s o c i a t i o n t o t h e n a t i o n a l a c c o u n t s a l s o a g r e e s w i t h o u r aim t o e x t e n d t h e knowledge a b o u t o f t h e p u b l i c s e r v i c e s and t o us e t h e f i n d i n g s i n s o c i o - e c on o mi c a n a l y s e s . I t has become i n c r e a s i n g l y common i n Sweden t o l ook upon t h e n a t i o n a l economy from t h e p o i n t o f view of t h e n a t i o n a l a cc o u n t s and t o l e t t h e s e form t h e b a s i s o f a n a l y s e s , n a t i o n a l b u d g e t s and l o n g - t e r m s t u d i e s . However, i n t h e i r t r e a t m e n t of t h e p u b l i c s e c t o r , t h e n a t i o n a l a c c o u n t s a r e o u t o f s t e p wi t h t h e d e vel opment o f t h e n a t i o n a l economy and t h e heavy e x p a n s i o n o f t h e p u b l i c s e r v i c e s . The t r a d i t i o n a l n a t i o n a l a c c o u n t s d a t a need t o be s u p pl e me nt e d w i t h a more i n f o r m a t i v e d e s c r i p t i o n o f t h e p o s i t i o n and functions of the public sector. The p r e s e n t s t u d i e s form an i m p o r t a n t l i n k i n t h e e f f o r t s t owar ds such a s u p p l e m e n t a t i o n , e s p e c i a l l y as r e g a r d s t h e us e o f t h e n a t i o n a l a c c o u n t s i n s o c i o- e c o no mi c and s t r u c t u r a l a n a l y s e s . F o r s h o r t - t e r m economi c a n a l y s e s , t h e work i s o f l e s s i mp o r t a n c e .

30

T r a n s a c t i o n s in t he n a ti o n al accounts A g r e a t number o f economic t r a n s a c t i o n s a r e r e c o r d e d i n t h e n a t i o n a l a c c o u n t s , where t h e y a p p e a r i n an a g g r e g a t e d form. As i n o t h e r book­ k e e p i ng s y s t e ms , t h e t r a n s a c t i o n s a r e e n t e r e d on v a r i o u s a c c o u n t s , wi t h one i ncomi ng and one o u t g o i n g s i d e . Most i m p o r t a n t i n t h e d i s c u s s i o n below a r e t h e a c c o u n t s o f p r o d u c t i o n , income r e d i s t r i b u t i o n and expend­ i t u r e , which c o v e r t r a n s a c t i o n s between v a r i o u s e n t i t i e s i n t h e n a t i o n ­ a l economy. These e n t i t i e s a r e v a r i o u s l y grouped a c c o r d i n g t o t he pr obl ems t o be i l l u s t r a t e d o r s o l ve d . T r a d i t i o n a l gr oups a r e ge ner a l gover nment , e n t e r p r i s e s and h o u s e h o l d s . These t h r e e p r i n c i p a l s e c t o r s may a l s o be f u r t h e r d i v i d e d i n t o s u b - s e c t o r s , e . g .

c e n t r a l and l o c a l

gove r nme nt , v a r i o u s i n d u s t r i e s e t c . The t r a n s a c t i o n s t a k i n g p l a c e between t h e e n t i t i e s may be r e a l o r mon­ e t a r y . Real t r a n s a c t i o n s mean t h a t r e a l o b j e c t s change owner s. These o b j e c t s can be c o mmod i t i e s , s e r v i c e s o r r e a l p r o p e r t y . Monetary t r a n s ­ a c t i o n s a r e made by means o f f i n a n c i a l o b j e c t s , e . g . money o r n e g o t i ­ a b le instruments.

How a r e t h e r e a l t r a n s a c t i o n s e v a l u a t e d ? The r e a l t r a n s a c t i o n s a r e e n t e r e d i n t o t h e n a t i o n a l a cc o u n t s i n t he a g g r e g a t e d form L pq, where q r e p r e s e n t s v a r i o u s amounts o f goods and s e r v i c e s e x p r e s s e d i n some q u a n t i t a t i v e mea s u r e , and p d e n o t e s t h e u n i t v a l u e o f each q u a n t i t y . The mar ke t economy o f f e r s two a l t e r n a t i v e ways o f o b t a i n i n g u n i t v a l u e s i n t h e n a t i o n a l a c c o u n t s . One i s t o us e t h e mar ke t p r i c e s , which r e f l e c t t h e mar gi nal i n t e r c h a n g e a b i l i t y o f goods and s e r v i c e s . The us e o f m a r k e t p r i c e s s e t a c c o r d i n g t o consumer p r e f e r e n c e s l e a d s t o a c o n s u m p t i o n - o r i e n t e d sys t e m o f w e i g h t s . The second a l t e r n a t i v e i s t o u s e t h e c o s t s . As t h e mar ke t p r i c e s have o f t e n been r e du ce d by s u b s i d i e s o r i n c r e a s e d by i n d i r e c t t a x a t i o n , t hey do n o t r e f l e c t t h e t r u e p r o d u c t i o n c o s t . Ag a i n s t a ba ckgr ound o f

31

w e l f a r e p o l i c i e s o r a need t o r e t a i n some p r o d u c t i o n c a p a c i t y as a con­ t i n g e n c y r e s e r v e i n c e r t a i n key a r e a s , t h e government aims t o i n f l u e n c e t h e c onsumpt i on o f goods and s e r v i c e s by a f f e c t i n g t h e p r i c e s . The n a t i o n a l a c c o u n t s t h e r e f o r e c o n t a i n an a l t e r n a t i v e s e t o f a g g r e g ­ a t e s v a l u e d a t f a c t o r c o s t . The pr obl ems a r e app r oac h ed from t h e c o s t s i d e i n s t e a d o f from t h e u s e r s i d e , and t h e c a l c u l a t i o n s o f i n p u t and o u t p u t a t f i x e d p r i c e s o v e r a p e r i o d o f t i me g i v e a more c l e a r c u t p i c t u r e o f t h e p r o d u c t i o n p r o c e s s and i t s c a p a c i t y , as wel l a s o f t h e economi c p o t e n t i a l .

Q u a l i t y c hange s - a c o m p l i c a t i o n Th e r e a r e some s p e c i f i c v a l u a t i o n and i n d e x pr obl ems i n t h e measurement o f c hange s i n r e a l t r a n s a c t i o n s i n t h e n a t i o n a l a c c o u n t s . As a ge ner a l p r i n c i p l e , t h e changes i n a p a r t i c u l a r f i e l d a r e o b t a i n e d by d i v i d i n g t h e nominal v a l u e s ( t u r n o v e r e t c . ) o f t h e a g g r e g a t e d r e a l t r a n s a c t i o n s by a p r i c e i n d e x s e r i e s p e r t a i n i n g t o t h e same f i e l d . For exampl e, p r i v a t e consumpt i on i s r e c a l c u l a t e d by means o f t h e consumer p r i c e i ndex. P r i c e i n d e x s e r i e s a r e c u s t o m a r i l y ba s e d on t h e p r i c e t r e n d s f o r a number o f r e p r e s e n t a t i v e c ommodi t i es ( r e a l o b j e c t s ) . In t h e s e s e r i e s , on which i n t u r n t h e c a l c u l a t i o n o f c h an g e s i n r e a l t r a n s a c t i o n s be t wee n two o c c a s i o n s a r e b a s e d , t h e r e a r e two i n h e r e n t p r obl ems. The f i r s t i s r e l a t e d t o t h e r e q u i r e m e n t t h a t t h e q u a l i t y o f t h e r e p r e s ­ e n t a t i v e commodi t i es o u g h t t o r e ma i n unchanged between t h e measurement o c c a s i o n s . I f i t i s n o t , t h e v a l u e s i n t h e i n d e x s e r i e s s h o u l d be a d ­ j u s t e d I n r e s p e c t t o t h e q u a l i t y c hange . In t h e n a t i o n a l a c c o u n t s t h i s c ha ng e s h o u l d be v a l u e d from t h e consumer p o i n t o f vi ew. A f r e q u e n t l y m e n t i on e d example a r e t h e c h a n ge s from one y e a r ' s model t o t h e n e x t i n t h e c a r s s e l e c t e d a s r e p r e s e n t a t i v e commodi t i es i n t h e consumer p r i c e i n d e x . In t h a t c a s e t h e q u a l i t y c hange s a r e e v a l u a t e d by an e x p e r t p a n e l on b e h a l f o f t h e c onsumer s . A r a i s e d p r i c e s h o u l d t h e n be r educed by t h e v a l u e o f a q u a l i t y r i s e , o r i n c r e a s e d by t h e v a l u e o f a q u a l i t y deterioration.

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The s econd i n d e x pr obl em i s r e l a t e d t o t h e c o mp l e x i t y o f some o f t h e r e a l o b j e c t s i n c l u d e d i n t h e measur ement s. One example i s t h e g r e a t amount o f s o p h i s t i c a t e d mac hi ner y and equi pment pr oduced by t h e e n g i n ­ e e r i n g i n d u s t r y . In t h i s f i e l d i t i s n o t p o s s i b l e t o f i n d s t a n d a r d i z e d q u a n t i t y i n d i c a t o r s , which can be f o l l o w e d and measur ed o v e r a p e r i o d o f t i me . I n s t e a d , a number o f l e s s c o m p l i c a t e d c h a r a c t e r i s t i c commod­ i t i e s a r e s e l e c t e d , which a r e more e a s i l y me a s ur a bl e from t h e q u a l i t y p o i n t o f vi ew. A n e c e s s a r y c o n d i t i o n t h e n i s t h a t t h e t r e n d s f o r t h e r e p r e s e n t a t i v e commodity and t h e i t e m s i t r e p r e s e n t s can be r e a s o n a b l y assumed t o c o - v a r i a t e . I t s h o u l d be n o t e d t h a t s o f a r no p r o v i s i o n s have been made i n t h e Swedish n a t i o n a l a c c o u n t s f o r c hange s i n t h e q u a l i t y o f s e r v i c e s . I t i s d i f f i c u l t enough t o f i t t h e p r o d u c t i o n o f s e r v i c e s i n t o t h e p r e s e n t n a t i o n a l a c c o u n t s s ys t e m. F o r s e r v i c e s pr oduced i n t h e p r i v a t e s e c t o r , t h e r e a r e s e v e r a l met hods o f c a l c u l a t i n g t h e t r e n d s a t f i x e d p r i c e s . When t he s e r v i c e s a r e d i r e c t l y a s s o c i a t e d wi t h r e c e i p t s , t h e s e can o f t e n be r e c a l c u l a t e d by means o f a p r i c e i nd e x . Sometimes a f i x e d r e l a t i o n s h i p i s assumed between t h e s e r v i c e s and some o t h e r me a s u r a b l e i t e m , e . g . t h e t u r n o v e r f o r s e r v i c e s a s s o c i a t e d wi t h t h e s a l e o f goods. The s e r v i c e can a l s o be d i r e c t l y measur ed i n q u a n t i t a t i v e t e r m s , e . g . i n number o f t o n - k i l o m e t r e s f o r t h e conveyance o f g oods, o r number of p a s s e d d r i v i n g - 1 i c e n c e t e s t s f o r d r i v i n g s c h o o l s e t c . In some i n s t a n c e s t h e c a l c u l a t i o n s a r e b a s e d on h y p o t h e t i c a l a s s u m p t i o n s , e . g . i n ba nki ng and i n s u r a n c e , where t h e e s t i m a t i o n s a r e b a s e d on t h e c o s t s , and t h e p r o d u c t i v i t y i s assumed t o i n c r e a s e by two p e r c e n t a n n u a l l y .

1.2

The p u b l i c s e c t o r i n t h e n a t i o n a l a c c o u n t s - a consumer o f resources

How t h e n , i s t h e p u b l i c s e c t o r t r e a t e d i n t h e n a t i o n a l a c c o u n t s ? T a b l e 2 . 1 shows t h p a c c o u n t s f o r t h i s s e c t o r , i . e . p r o d u c t i o n , income r e d i s t ­ r i b u t i o n , e x p e n d i t u r e and f i x e d c a p i t a l f o r m a t i o n . To f a c i l i t a t e u n d e r s t a n d i n g , some s i m p l i f i c a t i o n s have been made. The f i g u r e s o f t h e c a p i t a l a cc ount a r e t h e r e f o r e not q u i t e c o r r e c t .

33

Table 2 . 1

The a c c o u n t s o f t h e p u b l i c s e c t o r i n t h e Swedish n a t i o n a l a c c o u n t s . SEK 1 00 0 m i l l i o n s , 1 9 8 4 . C u r r e n t p r i c e s PRODUCTION ACCOUNT

Out goi ngs 1 I n t e r m e d i a t e consumpti on ' 64 7 9 “ 2 Compensation of 151.7 empl oyees 3 Consumption o f f i x e d 8.5 capital 5.6 4 In d irec t taxes _ m T

Incomings 5 Sale's- o f goods and services I Consumption ( r e s i d u ­ ally calculated)

9.2 221.5 TTf fTT

INCOME REDISTRIBUTION ACCOUNT Out qoi ngs 6 Subsidies 7 I n t e r e s t s , net 8 S o c i al i n s u r a n c e benefits 9 Ot h e r c u r r e n t t r a n s f e r s I I D i s p o s a b l e income ( r e s i d u a l item)

39.9 ' 18.7 112.3 89.4 219.0 4/8.4

Incomings 10 O p e r a t i n g s u r p l u s ut public e n t e r p r i s e s 13.9 11 I n d i r e c t t a x e s 127.5 12 D i r e c t t a x e s 169.4 13 S o c i a l i n s u r a n c e contributions 103.7 i a nt.hpr c u r r e n t t r a n s f e r s 6 3 . 9 478.4

EXPENDITURE ACCOUNT Ou t g oi n g s ___ p u b l i c c onsumpt i on d i l .s I I I Sa v i n g ( r e s i d u a l i t e m) - 2 . 5 21^.0

1

Incomings ‘ I I D i s p o s a b l e income

TTTTfT TTT7CT

CAPITAL ACCOUNT Ou t goi ngs 1 5 Gross c a p i t a l f o r ma t i o n T I X .8 16 I n c r e a s e i n s t o c k s IV F i n a n c i a l s a v i n g (r e s i d u a l item) _ -15.0 5TTT

Incomings I I I Savi ng 17 Consumption o f f i x e d c a p i t a l (= i t e m 3)

“ =275“ 8.5 ~571T

Gr os s c a p i t a l f o r ma t i o n does n o t i n c l u d e i n v e s t m e n t s i n P ^ l i c u t i l i t y s e r v i c e s , nor c e r t a i n i n v e s t m e n t e x p e n d i t u r e s , which a r e e n t e r e d a s p u b l i c c onsumpt i on.

34

The p r o d u c t i o n a c c o u n t does n o t i l l u s t r a t e a p r o d u c t i o n p r o c e s s . On t h e o u t g o i n g s i d e a r e f ound p u r c h a s e s o f goods and s e r v i c e s from t h e p r i v ­ a t e s e c t o r ( 1 ) , f a c t o r i n p u t i n t h e form o f l a b o u r ( 2 ) and c a p i t a l

(3),

and f i n a l l y i n d i r e c t t a x e s ( 4 ) . On t h e i ncomi ng s i d e , t h e r e i s i n add­ i t i o n t o t h e s a l e s o f goods and s e r v i c e s ( 5 ) , a r e s i d u a l i t e m t o b a l ­ a n ce t h e o u t g o i n g s i d e . The r e i s no s u r p l u s o r d e f i c i t i n t h e a c c o u n t . The r e s i d u a l i t e m i s s u b s e q u e n t l y t r a n s f e r r e d t o t h e e x p e n d i t u r e a c c o u n t and c l a s s i f i e d t h e r e as p u b l i c consumpti on ( I ) . T h i s a c c o u nt a l s o c o v e r s t h e f u nd i n g o f consumpti on and s a v i n g ( I I I ) by a d i s p o s a b l e i ncome i tern ( I I ) . The d i s p o s a b l e income has i n t u r n been o b t a i n e d by a r e d i s t r i b u t i o n o f income a s shown i n t h e income r e d i s t r i b u t i o n a c c o u n t . The s t a t e c o l l ­ e c t s t a x e s and o t h e r t y p e s o f income ( 1 0 - 14 ) and pays t r a n s f e r s t o e n t e r p r i s e s and h o u s e h o l ds ( 6 - 9 ) . The r e s i d u a l i t e m becomes t h e d i s p o s a b l e income ( I I ) . The i n f o r m a t i o n p r o v i d e d by t h e n a t i o n a l a c c o u n t s i n r e s p e c t t o t h e p r o d u c t i o n o f t h e p u b l i c s e c t o r can be d e s c r i b e d a s f o l l o ws : The p r o d u c t i o n i n t he s e c t o r i s measured as A CONSUMPTION OF RESOURCES. T h i s i s t er med PUBLIC CONSUMPTION. I t i s assumed t h a t THE PRODUCTIVITY DOES NOT CHANGE OVER TIME. Thus, t h e p u b l i c s e c t o r i s r e g a r d e d a s a consumer o f r e s o u r c e s . Ther e i s no f o l l o w - t h r o u g h t o t h e f u r t h e r p r o d u c t i o n p r o c e s s l e a d i n g t o t h e f i n a l consumers o f t h e p u b l i c s e r v i c e s . T h i s t r e a t m e n t o f t h e p u b l i c s e c t o r d e r i v e s from t h e f a c t t h a t t h e n a t i o n a l a cc o u n t s were o r i g i n a l l y i n t e n d e d as a b a s i s f o r economic s h o r t - t e r m a n a l y s e s o f ma r ke t e conomi es gover ned by a s y s t e m o f p r i c e s . The d i s c u s s i o n o f t h e p u b l i c s e c t o r t h e n became e x p e n d i t u r e - f o c u s e d , and t h e p l a n n i n g i n v a r i o u s f i e l d s a l s o became a q u e s t i o n more o f r e s o u r c e s t h a n o f r e s u l t s .

35

A d i f f e r e n t growt h r a t e ? The n a t i o n a l a cc o u n t s p r i n c i p l e o f a ssumi ng t h a t t h e p u b l i c s e r v i c e p r o d u c t i v i t y r e ma i ns ' u n c h a n g e d ' , a f f e c t s t h e measurement o f t h e GNP t r e n d s a t f i x e d p r i c e s . Two n u mer i ca l exampl es w i l l i l l u s t r a t e t h e i m p l i c a t i o n s i n an a n a l y s i s o f growt h and s t r u c t u r a l c han ge s i n t h e t o t a l n a t i o n a l economy. A c c o r d i n g t o t h e n a t i o n a l a c c o u n t s t h e GNP i n c r e a s e d d u r i n g t h e p e r i o d 1 9 6 0 - 19 8 0 by more t h a n 9 0 p e r c e n t a t f i x e d p r i c e s , on t h e a s sumpt i on t h a t t h e p r o d u c t i v i t y change i n t h e p u b l i c s e c t o r had been z e r o . I f , however, we assume t h e p r o d u c t i v i t y i n t h e p u b l i c s e c t o r t o have i n c r e a s e d by 2 p e r c e n t a n n u a l l y ( a n i n c r e a s e equal t o t h e one assumed f o r t h e bank and i n s u r a n c e s e r v i c e s i n t h e p r i v a t e s e c t o r ) , t h e GNP would have i n c r e a s e d by 120 i n s t e a d o f by 9 0 p e r c e n t . The p u b l i c s e c t o r s h a r e o f t h e GNP would t h e n have amounted t o 40 i n s t e a d o f 30 per cent. I f , on t h e o t h e r hand, t h e p r o d u c t i v i t y i n t h e p u b l i c s e c t o r had d r o pp e d by 2 p e r c e n t a n n u a l l y , t h e GNP would onl y have i n c r e a s e d by 7 5 p e r c e n t , and t h e p u b l i c s e c t o r would have r e p r e s e n t e d 2 2 p e r c e n t o f t h e t o t a l GNP. The se c ond example i l l u s t r a t e s t h e e f f e c t o f p r o d u c t i v i t y c hange s on t h e knowledge o f how t h e p u b l i c s e c t o r ' s r e a l r e s o u r c e s a r e d i s t r i b ­ u t e d . Suppose t h a t two f i e l d s , r e q u i r i n g a p p r o x i m a t e l y equal r e s o u r c e s , e . g . medi cal s e r v i c e s and e d u c a t i o n , a c c o r d i n g t o t h e n a t i o n a l a cc o u n t s h ad t h e same i n c r e a s e i n r e s o u r c e s between 1 9 6 0 and 1 9 8 0 ( i n 1 9 8 0 prices).

I f t h e p r o d u c t i v i t y were t o r i s e by 2 p e r c e n t a n n u a l l y i n one

f i e l d and f a l l by 2 p e r c e n t i n t h e o t h e r , t h e n t h e o u t p u t i n 1 9 8 0 i n t h e f i r s t f i e l d would be t wi c e a s h i gh as i n t h e s econd. There i s a n o t h e r p r o d u c t i v i t y a s p e c t t o n o t e as w e l l . P u b l i c s e r v i c e s , f o r i n s t a n c e i n f r a - s t r u c t u r e i t e m s , a r e u t i l i z e d by p r i v a t e e n t e r ­ p r i s e s . P u bl i c s e r v i c e s a r e a l s o used e . g . t o c o u n t e r - a c t p o l l u t i o n f r om p r i v a t e i n d u s t r i e s . Thus t h e p u b l i c s e c t o r c o n t r i b u t e s t o t h e p r o d u c t i o n and i t s devel opment 1n t h e p r i v a t e s e c t o r .

36

Who us e t h e s e r v i c e s ? P u b l i c c onsumpt i on i n t h e n a t i o n a l a cc o u n t s can be br oken down by v a r i o u s p u r p o s e s ( e d u c a t i o n , v a r i o u s t y p e s o f c a r e e t c . ) . T h i s i s done a c c o r d i n g t o i n t e r n a t i o n a l s t a n d a r d c l a s s i f i c a t i o n s , which a r e a l s o a v a i l a b l e i n n a t i o n a l Swedish v e r s i o n s . The r e i s , however, no way o f f i n d i n g o u t from t h e n a t i o n a l a cc o u n t s who us e t h e v a r i o u s s e r v i c e s p r o d u c e d i n t h e p u b l i c s e c t o r . In p r i n c i p l e , t he s e r v i c e s can be c l a s s ­ i f i e d a c c o r d i n g t o u s e r i n one o f t he f o l l o w i n g f o u r c a t e g o r i e s : 1)

The p r i v a t e s e c t o r ( p r o d u c t i o n )

2)

The p u b l i c s e c t o r ( i n t e r m e d i a t e cons u mpt i on )

3)

The ho u s e h ol d s e c t o r ( f i n a l c o nsumpt i on)

4)

The s o c i e t y ( c o l l e c t i v e c o n s u m p t i o n ) .

The s e r v i c e s can be r e g a r d e d a s one-way r e a l t r a n s a c t i o n s t o t he r e c e i v e r s . They a r e n o t p a i d f o r d i r e c t l y , e x c e p t i n some c a s e s by modes t f e e s , b u t a r e f i n a n c e d c o l l e c t i v e l y t h r o u g h t a x e s and o t h e r pu b l ic revenues. In t h e n a t i o n a l a c c o u n t s , t h e s e r v i c e s a s s o c i a t e d w i t h 1 ) and 3 ) a r e n o t e n t e r e d u nd e r t h e i r e x t e r n a l u s e r s , a l t h o u g h t h i s would be p o s s i b l e by c l a s s i f y i n g t h e s e r v i c e s a s r e a l s u b s i d i e s . Such a r e - a r r a n g e m e n t c o u l d be i mpl ement ed i n t h e p r e s e n t sys t e m and would t he n s u b s e q u e n t l y a f f e c t some o f t h e v a r i o u s a g g r e g a t e s (GNP e t c . ) u s e d i n so c i o - e c on o mi c and s t r u c t u r a l a n a l y s e s . An e x t e n d e d r e c o r d i n g i n t h e n a t i o n a l a c c o u n t s o f s e r v i c e s pr oduced i n t h e p u b l i c s e c t o r would a f f e c t t h e i n p u t - o u t p u t t a b l e s . The p u b l i c s e c t o r would t h e n , i n p r i n c i p l e , be t r e a t e d i n t h e t a b l e s i n t h e same way a s t h e o t h e r i n d u s t r i e s . The d i s c u s s i o n above can be summarized a s f ol l ows : - The r u l e - o f - t h u m b o f t h e p r o j e c t i s t h a t t h e e s t i m a t i o n o f t h e p u b l i c s e r v i c e s s h o u l d be made i n t h e same way as i t would have been made i n t h e n a t i o n a l a c c o u n t s , i f t h e s e r v i c e s had been pr od u c ed i n t h e p riv a te sector.

37

- As a s uppl ement t o t h e n a t i o n a l a c c o u n t s , t h e s e r v i c e s pr oduced i n t h e p u b l i c s e c t o r a r e t o be c a l c u l a t e d d i r e c t l y i n s t e a d o f be i n g e s t i m a t e d on t h e b a s i s o f t h e r e s o u r c e i n p u t . - T h i s i s t o be a c c omp l i s he d t h r o u g h p r o d u c t i v i t y c a l c u l a t i o n s i n o r d e r t o re place the zero p r i n c i p l e in t he p r e se n t national accounts. - T h i s would a l s o f a c i l i t a t e t h e c a l c u l a t i o n o f more d i f f e r e n t i a t e d d i s tr ib u tio n p ro f ile s fo r the public services. Below we s h a l l f i r s t d i s c u s s t h e p r o d u c t i v i t y c o n c e p t a s used i n t he n a t i o n a l a c c o u n t s and i n o u r p r o j e c t , and t h e n go on t o t h e q u e s t i o n o f how t o v a l u e t h e s e r v i c e s i n t h e a b s e n c e o f ma r k e t p r i c e s .

1.3

P r o d u c t i v i t y and v a l u a t i o n o f s e r v i c e s

The p r o d u c t i v i t y c o n c e p t i s o f t e n u s e d i n c o n n e c t i o n w i t h o r as an a l t e r n a t i v e t o t h e e f f e c t i v e n e s s c once pt i n t h e p r oduc ti on of p u b li c s e r v i c e s . Both imply a v a l u a t i o n , and i t i s t h e r e f o r e n e c e s s a r y t o gi ve a d e f i n i t i o n o f them i n t h e s p e c i f i c c o n t e x t s where t h e y a p p e a r . There a r e numerous a l t e r n a t i v e s , dependi ng on t h e s i t u a t i o n . They a r e u s u a l l y regarded as d i f f e r e n t concepts, a freq ue nt d i s t i n c t i o n being t h a t p r o d u c t i v i t y concerns 'd oi ng t h i n g s t h e r i g h t wa y', wh il e e f f e c t i v e n e s s p e r t a i n s t o ' g e t t i n g t h e r i g h t t h i n g s d o n e ' . Th i s has been o u r main p r i n c i p l e as w e l l . Thus t h e p r o d u c t i v i t y c o n c e p t i s r e l a t e d t o t h e a c t u a l p r o d u c t i o n p r o c e s s , i n o t h e r words t o t h e c a p a c i t y o f t r a n s f o r m i n g t h e i n p u t o f r e s o u r c e s i n t o an o u t p u t o f p r o d u c t s , u s u a l l y i n t h e form o f s e r v i c e s . The e n t i r e p r o d u c t i o n p r o c e s s i s i n v o l v e d , i n c l u d i n g o r g a n i z a t i o n a l and t e c h n i c a l s o l u t i o n s . T h i s view has formed t h e ba ckgr ound o f o u r macro­ p r o j e c t s t u d i e s on p r o d u c t i v i t y t r e n d s , where t h e p r o d u c t i v i t y has been c a l c u l a t e d as t h e r a t i o between t h e s e r v i c e s ( o u t p u t ) and t h e c o n sumpt i on o f r e s o u r c e s ( i n p u t ) . Even i f t h e p r o d u c t i v i t y i n one f i e l d can be measur ed w i t h o u t b e i n g r e l a t e d t o t h a t o f a n o t h e r , t h e measur e has no s i g n i f i c a n c e i n an a b s o l u t e s e n s e . I t i s o f p r a c t i c a l con s e q uen c e on l y i n c o mp a r a t i v e s t u d i e s . Fo r some t y p e s o f a c t i v i t i e s i t i s p o s s i b l e t o make

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c o mpa r i s on s between d i f f e r e n t u n i t s engaged i n t h e same t y p e o f pr o d­ u c t i o n , which o f t e n means between d i f f e r e n t g e o g r a p h i ca l a r e a s - a compar i s on o v e r s p a c e . F r e q u e n t l y , however, i t i s t h e p r o d u c t i v i t y t r e n d t h a t i s measur ed - a compar i son o v e r t i m e . The l a t t e r t yp e o f c o mp a r i s o ns have been t h e ones most o f t e n made i n o u r s t u d i e s . E f f e c t i v e n e s s as a c o n c e p t goes one s t e p f u r t h e r i n t h e p r o c e s s . I t a l s o i n v o l v e s t h e e f f e c t s o f t h e p r o d u c t i o n , e . g . t h e a t t a i n m e n t o f t he d e s i r e d o b j e c t i v e s . In t h e n a t i o n a l a cc o u n t s i t i s t h e s a t i s f a c t i o n o f t h e consumers t h a t i s t h e g o v e r n i n g f a c t o r by means o f t h e p r i c e s t o whi ch t h e consumers have a d j u s t e d t h e i r demands - ' t h e p r o d u c t mix i s a d j u s t e d t o t h e wi sh e s o f t h e c o n s u m e r s ' . T h e r e f o r e , i f o u r s t u d i e s wer e t o i n c l u d e an e f f e c t i v e n e s s measure c onf or mi ng t o t h e n a t i o n a l a c c o u n t s , we would i n p r i n c i p l e have t o r e c o r d t h e consumers' valuations. The n a t i o n a l a cc o u n t s measur e t h e e f f e c t i v e n e s s t r e n d s p r i m a r i l y by means o f consumer v a l u a t i o n s . Ac c o r d i n g l y , i f s u b s i d i e s and i n d i r e c t t a x a t i o n d i d n ot e x i s t , and t h e n a t i o n a l economy were a t an e q u i l i b ­ r i um, t h e n a t i o n a l a c c o u n t s would d i r e c t l y i l l u s t r a t e t h e t r e n d s i n t he ma r k e t s e c t o r i n r e s p e c t t o bo t h p r o d u c t i v i t y and e f f e c t i v e n e s s .

How shou l d t h e s e r v i c e s be v a l u e d ? T h e o r e t i c a l l y , a m a r k e t economy i s gover ned by consumer v a l u a t i o n s . The q u e s t i o n t h e n i s w h e t h e r such v a l u a t i o n s a r e a p p l i c a b l e t o t h e p u b l i c sector. The p u b l i c s e r v i c e s a r e someti mes a s s o c i a t e d w i t h p r i c e s i n t h e form o f f e e s f o r t h e consumers o f t h e s e r v i c e . Such f e e s may c ov e r more o r l e s s o f t h e c o s t s f o r p r o d u c i n g t h e s e r v i c e . To u s e t h e s e f e e s i n a m a r k e t economy model would i n p r i n c i p l e be p o s s i b l e , w i t h i n c e r t a i n l i m i t s . We have h e r e , iii f a c t , a s o r t o f no-man' s l a n d between t h e mar ke t economy and t h e government economy. Wi t hi n t h e domain of t h e n a t i o n a l a c c o u n t s , i . e . t h e ma r ke t economy, t h e government o f t e n p r o v i d e s s u b s i d i e s o r a d d s i n d i r e c t t a x e s on goods and s e r v i c e s . The consumers a d j u s t t h e i r demands and t h e i r p u r c h a s e s t o t h e c o n s e q u e n t p r i c e s . In Sweden,

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a g r i c u l t u r a l p r o d u c t s and h o u s i n g c o n s t i t u t e two a r e a s where t h e p r i c e s ha ve become f a r removed from t h e c o n d i t i o n s o f a pur e m a r k e t economy, a f a c t t h a t i s now g e n e r a l l y a c c e p t e d i n t h e n a t i o n a l a c c o u n t s . At t he same t i m e t h e r e a r e f e e s , i . e . a k i n d o f p r i c e s , f o r more o r l e s s subsidized public se rvices. An I n t e r e s t i n g o b s e r v a t i o n i s t h a t i n t h e p r i c e i n d i c e s and e s t i m a t e s o f p r i v a t e consumpt i on u s e d i n t h e n a t i o n a l a c c o u n t s , t h e p u r c h a s e s of med i c al s e r v i c e s a r e e n t e r e d a t p r i c e s c o r r e s p o n d i n g t o t h e p a t i e n t s ' f e e s a t t h e h o s p i t a l s . I t woul d be p a t e n t l y a b s u r d t o e n t e r on l y t h e s e d a t a f o r t h e medi cal s e r v i c e s , and t h e i r o t h e r c o s t s - a f t e r t h e f e e s have been d e d u c t ed - have a c c o r d i n g l y been e n t e r e d a s p u b l i c consumpt ­ i o n . Dent al s e r v i c e s a r e s i m i l a r l y t r e a t e d .

The above d i s c u s s i o n s e r v e s t o u n d e r l i n e t h a t t h e r e e x i s t s a common z one bet ween t h e p r i v a t e and t h e p u b l i c s e c t o r s . The q u e s t i o n t h e n i s w h e t h e r t h e f e e s s h o u l d be more f r e q u e n t l y used a s a measur e o f v a l u ­ a t i o n o f p u b l i c s e r v i c e s . T h i s woul d g i v e us a sys t e m c o p i e d on t he m a r k e t economy i n t h e n a t i o n a l a c c o u n t s . We have n o t p e n e t r a t e d t h e q u e s t i o n o f how f a r t h i s a p pr o ac h would c a r r y u s , nor have we s t u d i e d t h e consequences i n v a r i o u s a p p l i c a t i o n s . An o t h e r method c l o s e l y r e l a t e d t o t h e market-economy model i s t o t r y t o s e t 'shadow p r i c e s ' t o be u s e d i n t h e c a l c u l a t i o n s . These would i n some s e n s e r e p r e s e n t t h e w i l l i n g n e s s o f t h e consumer s t o pay f o r t h e p u b l i c s e r v i c e s . Some e c o n o m i s t s have e x p e r i me n t e d wi t h s i m u l a t e d o r r e a l s i t ­ u a t i o n s , where a r e a l i z e d w i l l i n g n e s s t o pay has been assumed i n a h y p o t h e t i c a l o r r e a l ma r k e t s i t u a t i o n . We have n o t s p e n t much t i me on t h i s method; i t would be e x t r e me l y c o m p l i c a t e d and d i f f i c u l t t o i n t e r p r e t e w i t h t h e wi de r a n g e o f s e r v i c e s i n v o l v e d . Consumer v a l u a t i o n s woul d t h e r e f o r e h a r d l y seem t o c o n s t i t u t e a p r a c t ­ i c a l way o f v a l u i n g p u b l i c s e r v i c e s , n e i t h e r d i r e c t l y no r i n d i r e c t l y . Her e t h e n a t i o n a l a c c o u n t s c a n n o t p r o v i d e any g u i d e l i n e s .

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On t h e o t h e r hand t h e n a t i o n a l a c c o u n t s o f f e r a n o t h e r s e t o f v a l u a t i o n s i n t h e form o f p r o d u c t i o n c o s t s . In t h i s s e t , as a l r e a d y men t i on ed, t h e p r i c e s have been r e d u c e d f o r i n d i r e c t t a x e s and i n c r e a s e d f o r s u b s i d ­ i e s . Thes e d a t a a r e mai nl y u s e d i n a n a l y s e s from t h e p r o d u c t i o n s i d e . We can e s t a b l i s h a c o n n e c t i o n w i t h t h e n a t i o n a l a c c o u n t s i n o u r p r o d ­ u c t i v i t y c a l c u l a t i o n s by t h e u s e o f c o s t s as u n i t v a l u e s . T h i s a l s o a s s o c i a t e s t o p o l i t i c a l e v a l u a t i o n s , a s i t i s t he c o s t ( t h e i n t e r m e d ­ i a t e cons u mp t i o n ) t h a t g u i d e s t h e a l l o c a t i o n o f r e s o u r c e s t o v a r i o u s purposes in the public s e c to r .

In Swedish p o l i t i c a l e v a l u a t i o n s , t h e

equal d i s t r i b u t i o n o f w e l f a r e forms an i m p o r t a n t e l e m e n t . T h i s s e c t i o n can be summarized as f ol l o ws : -

A c o m p a r a t i v e l y narrow p r o d u c t i v i t y measur e i s us e d a t t h i s s t a g e o f t h e p r o j e c t - o u t p u t i n r e l a t i o n t o t h e c onsumpt i on o f r e s o u r c e s .

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The measur ement s r e f e r t o p r o d u c t i v i t y changes o v e r t i me . In t h e we i g h t e d e s t i m a t e o f t h e q u a n t i t y t r e n d s o f v a r i o u s s e r v i c e s , t h e p r i c e component i n t h e n a t i o n a l a c c o u n t s i s r e p l a c e d by t h e c o s t f o r producing a c e r t a i n se rv ic e

-

C o s t s which measur e t h e i n t e r m e d i a t e consumpt i on a r e c l o s e l y r e l a t e d t o the natio na l accounts aggregated c o s t concept ( f a c t o r c o s t )

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The us e o f t h e c o s t a s a p r i c e u n i t i s t o some e x t e n t a s s o c i a t e d w i t h t he p o l i t i c a l e v a l u a t i o n s behind t h e a l l o c a t i o n of r e s o ur ce s to various a c t i v i t i e s in the public se c to r.

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Due t o o u r p r e s e n t i n a b i l i t y t o o b t a i n r e l a t i v e consumer v a l u a t i o n s o f t h e s e r v i c e s , o u r c a l c u l a t i o n s do n o t conform w i t h t h e p r i n c i p a l c o n c e p t o f t h e n a t i o n a l a c c o u n t s , which can be s a i d t o g i ve a mea sur e o f t h e e f f e c t i v e n e s s t r e n d s from t h e consumer s ' v i e w p o i n t .

1.4

E s t i m a t i o n methods

The s e r v i c e s The f undament al e n t i t y i n t h e c a l c u l a t i o n o f p r o d u c t i v i t y t r e n d s i n t h e p u b l i c s e c t o r i s t h e s e r v i c e p r oduc ed i n t h e p r o c e s s . T h i s s h o u l d be

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measur ed when t r a n s f e r r e d from t h e p r o d u c e r t o t h e consumer ( t h e f i n a l p r o d u c t ) , i n t h e form and w i t h t h e c h a r a c t e r i s t i c s i t has a t t h a t moment. A d i s t i n c t i o n ha s t o be made between p r o d u c t i o n ( i n t h e economic s e n s e ) and non-economic a c t i v i t y . Economic p r o d u c t i o n i s c o n s i d e r e d t o have been c omp l e t e d, when t h e s e r v i c e i s s o l d o r d e l i v e r e d t o a n o t h e r sub­ ject.

I t i s a l s o n e c e s s a r y t o s p e c i f y what t h e u s e r has r e c e i v e d when

t h e s e r v i c e becomes a v a i l a b l e t o him. T h i s must n o t be c o n f u s e d wi t h h i s mo t i v e s f o r u s i n g t h e s e r v i c e , nor w i t h t h e b e n e f i t s he hopes t o ge t out of i t .

In o t h e r wo r d s , we a r e t o measure t h e s e r v i c e , n o t i t s

e f f e c t s , which a r e o f i mp o r t a n c e i n e f f e c t i v e n e s s e s t i m a t i o n s . The measurement o f t h e s e r v i c e s i s made by means o f one o r s e v e r a l q u a n t i t y i n d i c a t o r s . In many c a s e s t h e i n d i c a t o r i s s i mp l e and s e l f e v i d e n t , e . g . t h e number o f p a s s p o r t s i s s u e d .

In o t h e r i n s t a n c e s , t h e

m a t t e r may be more complex and t h e i n d i c a t o r r e f e r t o a s e r v i c e con­ s i s t i n g o f a g r e a t number o f component s, a s when t h e number o f a dmi t t e d p a t i e n t s i s u s e d as a q u a n t i t y i n d i c a t o r f o r medi cal s e r v i c e s . The q u a n t i t y i n d i c a t o r s can be d i s c u s s e d from two p o i n t s o f view. F i r s t , an i n d i c a t o r may c o v e r s e v e r a l t y p e s o f s e r v i c e s . To u s e t h e same example a s above, t h e s e r v i c e s o f t h e e n t i r e i n - p a t i e n t m e d i c a l c a r e sys t e m mi g ht be measur ed by t h e number o f a d m i t t e d p a t i e n t s . Changes i n t h e i n d i c a t o r v a l u e s may t h e n be due t o changes i n t h e comp­ o s itio n of treatments a t d i f f e r e n t co sts. If the indicator i s instead b r o k e n down i n t o component i n d i c a t o r s , each o f t h e s e may remain more s t a b l e i n c o mp o s i t i o n o v e r t i m e . Such a breakdown ha s been made i n our p r o j e c t , where t h e measur e ' a d m i t t e d p a t i e n t s ' has been s p l i t up by a g r e a t number o f d e p a r t me n t s a t v a r i o u s h o s p i t a l s . However, t h e i n d i c ­ ators s t i ll

p e r t a i n t o t h e t r a n s f e r from p r o d u c t i o n t o cons u mp t i o n , and

t h e breakdown o f t h e s e r v i c e s can t h e r e f o r e be s a i d t o be ' h o r i z o n t a l ' . Sometimes t h e p r o d u c t i o n p r o c e s s i s i n s t e a d br oken down by t h e f u n c t ­ i o n s i n v o l v e d , which may p e r m i t t h e i d e n t i f i c a t i o n o f s e l f - e v i d e n t i n d i c a t o r s f o r t h e pr oduced s e r v i c e s .

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C l e r i c a l , mes s e n g er , l i b r a r y and s i m i l a r s e r v i c e s c a n be t r e a t e d s e p a r ­ a t e l y . T h i s g i v e s a ' v e r t i c a l ' breakdown o f t h e s e r v i c e s by sub­ products.

In t h i s a l t e r n a t i v e , t h e o u t p u t o f t h e e n t i r e p r o c e s s i s more

o r l e s s o b s c u r e d , and t h e p r o d u c t i v i t y e f f e c t s o f combi ni ng t h e v a r i o u s functions are lo s t. A breakdown by component i n d i c a t o r s c a l l s f o r an e x t e n s i v e d a t a c o l l ­ e c t i o n , and p o se s t h e q u e s t i o n o f wh e t h e r i t would be f e a s i b l e t o draw a sample from t h e s e i n d i c a t o r s . As w i t h c o m p l i c a t e d p r o d u c t s i n t h e n a t i o n a l a c c o u n t s , t h e i d e a would be t o s e l e c t a number o f r e p r e s e n t ­ a t i v e s e r v i c e s t h a t a r e t e c h n i c a l l y e as y t o h a n d l e . In such a c a s e , we must be a b l e t o assume a c o r r e l a t i o n between t h e q u a n t i t y i n d i c a t o r s f o r t h e s e l e c t e d s e r v i c e s on t h e one hand, and t h e e n t i r e group o f s e r ­ v i c e s t h e y r e p r e s e n t on t h e o t h e r . From t h e c o s t p o i n t o f view i t would be an a d v a n t a g e t o f i n d i n d i c a t o r m a t e r i a l s u f f i c i e n t l y e x t e n s i v e t o p e r m i t a random sa mpl i ng p r o c e d u r e . I f onl y one t yp e o f s e r v i c e i n a p a r t i c u l a r f i e l d i s o f i n t e r e s t , and i t can be r e p r e s e n t e d by a q u a n t i t y i n d i c a t o r , t hen t h e c a l c u l a t i o n o f o u t p u t and t r e n d s p r e s e n t s no g r e a t probl em. Dat a f o r management and c o n t r o l p u r p o s e s a r e someti mes o f t h i s t y p e . In soc i o - e c o n o mi c a n a l y s e s i t i s u s u a l l y n e c e s s a r y t o a g g r e g a t e t h e t r e n d s i n s e v e r a l f i e l d s . Th i s implies the use of w e i g h ts . The us e o f w e i g h t s c a l c u l a t e d from t h e c o s t s i d e emphasi zes t h e p r o d ­ u c t i o n n a t u r e o f t h e measur e. As p r e v i o u s l y ment i oned, t h i s c o r r e s p o n d s r a t h e r wel l t o such a l t e r n a t i v e measur es a s GNP a t f a c t o r c o s t i n t h e t r a d i t i o n a l national accounts. E s t i m a t e s and e x p e r i me n t s d e s c r i b e d i n t h e a v a i l a b l e l i t e r a t u r e i n d i c a t e t h a t t h e sys t e m o f w e i g h t s can v a r y s u b s t a n t i a l l y w i t h o u t h a v i n g any n o t i c e a b l e e f f e c t on t h e a n a l y s i s .

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The c onsumpt i on o f r e s o u r c e s - t h e second p a r t o f t h e p r o d u c t i v i t y calcul a tio ns The se c ond e n t i t y i n t h e p r o d u c t i v i t y c a l c u l a t i o n s a r e t h e r e s o u r c e s expended t o a t t a i n t h e r e s u l t . In c o mp a r i s o ns o v e r t i m e , t h e consumpt ­ i o n o f r e s o u r c e s ( t h e i n p u t ) s h o u l d be c a l c u l a t e d i n r e a l t er ms o r a t f i x e d p r i c e s . In t h e p r o d u c t i o n o f p u b l i c s e r v i c e s , t h e i n p u t c o n s i s t s of labour, real c a p i t a l

(cap ital s e r v ic e s ), m aterials etc.

A number o f t e c h n i c a l q u e s t i o n s a r i s e i n t h e c a l c u l a t i o n o f o u t p u t i n r e l a t i o n t o t h e i n t e r m e d i a t e cons u mpt i on . The wage/ s a l a r y i n d i c e s n e c e s s a r y t o r e c a l c u l a t e t h e l a b o u r i n p u t a r e d i f f i c u l t t o o b t a i n . The pr obl em c a n n o t be b y - p a s s e d by l e t t i n g t h e r e s o u r c e i n p u t be r e p r e s ­ e n t e d by t h e number o f ho u r s worked, f o r t h e s e have t o be br oken down by o c c u p a t i o n a l and o t h e r c h a r a c t e r i s t i c s . Consumpt ion o f c a p i t a l r e p r e s e n t s a pr obl em a l s o e n c o u n t e r e d e l s e w h e r e i n t h e n a t i o n a l a c c o u n t s . The l a r g e p u b l i c i n v e s t m e n t s i n p u b l i c u t i l i t y s e r v i c e s a r e i n c l u d e d i n t h e p r i v a t e s e c t o r . The p u b l i c s e c t o r c o v e r s r o a d s , b r i d g e s , p o r t s , r e a l e s t a t e and o t h e r i n f r a - s t r u c t u r e i t e m s us e d i n p u b l i c s e r v i c e s . Some t y p e s o f c a p i t a l goods a r e d i r e c t l y c l a s s i f i e d a s c onsumpt i on ( p u b l i c c o n s u m p t i o n ) . P r o d u c t i v i t y c a l c u l a t i o n s i n v o l v e a c h o i c e a s t o whi ch i n t e r m e d i a t e c o nsumpt i on i t e ms t o i n c l u d e . I f t h e o u t p u t i s r e l a t e d t o a l l t h e r e s o u r c e s consumed, we g e t a ' t o t a l p r o d u c t i v i t y ' mea s u r e . T h i s i s t h e n a t i o n a l a c c o u n t s measur e o f t h e f i n a l o u t p u t and i s t er med p u b l i c con­ s u mp t i o n . I f i n s t e a d t h e o u t p u t i s r e l a t e d on l y t o t h e l a b o u r i n p u t , we g e t ' l a b o u r p r o d u c t i v i t y 1. A t h i r d c o n c e p t i s ' c a p i t a l p r o d u c t i v i t y ' . I n t h e t o t a l p r o d u c t i v i t y me a s u r e , t h e o u t p u t i s r e l a t e d t o t h e e n t i r e e x p e n d i t u r e o f r e s o u r c e s and d e s c r i b e s wha t s o c i e t y g e t s 1n exchange f o r some s p e c i f i c i n p u t . A d e c l i n i n g p r o d u c t i v i t y r a t e means t h a t t he re so u rc e ex penditure - i n r e s p e c t to s t a f f , premises, e l e c t r i c i t y , s t a t i o n e r y , machi ner y e t c . - becomes h i g h e r f o r a s p e c i f i c o u t p u t , i . e . i t becomes more e x p e n s i v e f o r s o c i e t y t o p r o v i d e . A r i s i n g p r o d u c t i v i t y r a t e , c o r r e s p o n d i n g l y , means a l owe r r e s o u r c e e x p e n d i t u r e f o r each p r o d u c e d u n i t , which t h e n becomes l e s s e x p e n s i v e .

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Q u a l i t y c hange s a f f e c t t h e p r o d u c t i v i t y c a l c u l a t i o n s T h e r e r e ma i ns a t h i r d group o f pr o bl e ms , which co nce r n q u a l i t y changes d u r i n g t h e measurement p e r i o d , bo t h i n r e s p e c t t o t h e pr o du c ed s e r v i c e s and t o t h e i n p u t o f r e s o u r c e s . P e r so n s who view p r o d u c t i v i t y c a l c u l a t ­ ions with a c e r t a i n scepti cis m, often r a i s e the question of the q u a li ty o f t h e o b j e c t t o be measur ed. T h i s i s i n d e e d an i mp o r t a n t m a t t e r , e s p e c i a l l y i n t h e e s t i m a t i o n o f q u a n t i t a t i v e t r e n d s f o r complex s e r v ­ i c e s . However, i t i s n o t t h e a b s o l u t e q u a l i t y , b u t t h e changes d u r i n g t h e p e r i o d t h a t a r e o f i n t e r e s t . These can be b ot h p o s i t i v e and negative. In Sweden, q u a l i t y c han ge s i n r e p r e s e n t a t i v e commodi ti es have l ong been c o n s i d e r e d i n p r i c e i n d e x c a l c u l a t i o n s . A p r e v i o u s l y men t i o ned example a r e t h e changes i n t h e d i f f e r e n t y e a r s ' model s o f c a r s i n c l u d e d among t h e r e p r e s e n t a t i v e commodi t i es i n t h e consumer p r i c e i nd e x . The c a l c u l ­ a t i o n s a r e a d j u s t e d f o r c hange s i n t h e q u a l i t y o f t h e c a r s . The v a l u ­ a t i o n o f t h e s e c h a n g e s , which i n p r i n c i p l e s h o ul d be made from t h e c o n s umer s ' p o i n t o f vi ew, i s made by an e x p e r t p a n e l . The s u b s e q u e n t a d j u s t m e n t o f t h e p r i c e s a f f e c t s t h e f i x e d - p r i c e c a l c u l a t i o n s made by means o f t he p r i c e s e r i e s . F o r q u a l i t y as we l l a s f o r p r o d u c t i v i t y q u e s t i o n s g e n e r a l l y , t h e c a l c u l a t i o n s conform t o t h e common p r a c t i c e o f t h e n a t i o n a l a c c o u n t s . Changes i n t h e q u a l i t y o f t h e measured s e r v i c e s between two p o i n t s i n t i m e s h o u l d >e t a k e n i n t o c o n s i d e r a t i o n t o t h e same e x t e n t a s t he y a r e i n t h e n a t i o n a l a c c o u n t s . One d i f f i c u l t y i s t h a t s o f a r q u a l i t y changes i n s e r v i c e s have n o t been g i v e n t h e same a t t e n t i o n a s i n commo di t i e s . However, s i m i l a r p r i n c i p l e s s h o u l d be a p p l i e d . T h i s means t h a t t h e p r o d u c t i v i t y c a l c u l a t i o n s s h o u l d be mo d i f i e d a c c ­ o r d i n g t o t h e q u a l i t y c h ang e s i n t h e pr od u c ed s e r v i c e d u r i n g t h e p e r ­ i o d . T h i s i n t u r n makes i t n e c e s s a r y t o de v e l o p and d e f i n e a number o f q u a l i t y i n d i c a t o r s . I d e a l l y , t h e consumer s ' v a l u a t i o n s o f t h e q u a l i t y change - t h e i r w i l l i n g n e s s t o pay - s h o u l d be r e c o r d e d , and t h e change s u b s e q u e n t l y i n c l u d e d i n t h e p r o d u c t i v i t y e s t i m a t i o n s . The s i m p l e s t way t o do t h i s i s t o b a l a n c e t h e change a g a i n s t t h e a s s o c i a t e d c o s t s , and

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assume t h a t t h e consumers a r e w i l l i n g t o pay a t l e a s t t h e p r i c e o f t h a t c o s t t o g e t t h e q u a l i t y improvement . However, t h i s would be a g a i n s t t he p r i n c i p l e s o f i nd e p e n d e n t p r o d u c t i v i t y e s t i m a t i o n s , f o r i t would mean t h a t t h e o u t p u t a g a i n would be measured by means o f t h e c o s t , and t h a t t h e p r o d u c t i v i t y change would become z e r o . The a d j u s t m e n t f o r q u a l i t y c hange s has two a s p e c t s . The f i r s t i s t o f i n d t h e change o f t h e q u a l i t y i n d i c a t o r , and t h e se c ond t o d e c i d e how t h i s change i s t o be i n c l u d e d i n t h e b a s i c c a l c u l a t i o n s o f o u t p u t t r e n d s , which a r e made w i t h o u t r e g a r d t o q u a l i t y c h a n g e s . As a gener al p r i n c i p l e , t h e change o f t h e q u a l i t y i n d i c a t o r s h o u l d be c a l c u l a t e d i n d e p e n d e n t l y o f t h e c o s t . F o r exampl e, i f a s e r v i c e w i t h t h e v a l u e 100 i n 1 9 7 0 wer e t o i n c r e a s e i n q u a n t i t y by 10 p e r c e n t up t o 1 9 8 0 , wh i l e t h e q u a l i t y (by i n d e p e n d e n t e s t i m a t i o n s ) were f ound t o have improved by 3 p e r c e n t d u r i n g t h e same p e r i o d , t h e n t h e q u a n t i t y i n d i c a t o r i n 1980 woul d be 1 1 3 . I t s h o u l d be emphasi zed once a g a i n t h a t t h e measurement s do n o t p e r t a i n t o t h e consumer s' us e o f t h e s e r v i c e s . An example w i l l i l l u s t r a t e t h i s : In t h e e d u c a t i o n a l s ys t e m, t h e main p r i n c i p l e f o r t h e measurement of t h e s e r v i c e s i s t h a t t h e measur e s ho u l d r e f l e c t t h e q u a n t i t y o f educ­ a t i o n made a v a i l a b l e t o and u s e d by t h e c onsumer s , i . e . The u l t i m a t e g o a l ,

t he s t u d e n t s .

‘t o e d u c a t e t h e p o p u l a t i o n ' , i s a f u n c t i o n o f many

v a r i a b l e s , one o f which i s t h e pe r f o r ma n ce o f t h e e d u c a t i o n a l s e c t o r . Some o t h e r s a r e - i n a d d i t i o n t o t h e s t u d e n t s ' p e r s e v e r a n c e and d e d i c ­ a t i o n - o p p o r t u n i t i e s t o s t u d y o u t s i d e t h e e d u c a t i o n a l s ys t e m, o n - t h e j o b t r a i n i n g , wor ki ng e x p e r i e n c e , mass media e t c . I t s h o u l d be remembered t h a t a l t h o u g h t h e e d u c a t i o n a l e s t a b l i s h m e n t s c a n be r e g a r d e d a s p l a c e s where t e a c h e r s and s t u d e n t s work t o g e t h e r t o w a r d s a common end, o nl y t h e t e a c h i n g s t a f f i s t o be i n c l u d e d among t h e p r od uc ti on f a c t o r s i n accordance wi th t h e g u i d e l i n e s o f e . g . the n a t i o n a l a c c o u n t s . To c l a s s i f y t h e s t u d e n t s a s l a b o u r would be i n a p p r o ­ p r i a t e t o many o f t h e a n a l y t i c a l p u r p o s e s f o r which t h e n a t i o n a l a c c o u n t s syst em i s d e s i g n e d . In t h i s c o n t e x t , t h e s t u d e n t s have t o be r e g a r d e d a s consumers o f e d u c a t i o n a l s e r v i c e s , n o t a s c o n t r i b u t i n g f a c t o r s in the production.

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A c c o r d i n g l y , t h e most p e r t i n e n t measure o f t h e e d u c a t i o n a l s e r v i c e s woul d be t h e number o f ' s t u d e n t - h o u r s ' . The number o f t e a c h e r s o r t e a c h i n g - h o u r s would be l e s s a p p r o p r i a t e , f o r t h e same r ea s o n t h a t ' c a r - k i l o m e t r e s ' i s a l e s s s u i t a b l e q u a n t i t y i n d i c a t o r than ' pa ss en ge rk i l o m e t r e s ' i n t h e measurement o f p a s s e n g e r t r a n s p o r t . A f a c t o r t h a t s h o u l d be t a k e n i n t o a c c o u n t i s over cr o wd i n g , f o r t h e e d u c a t i o n a l r e s u l t s mi ght wel l be o f l ower q u a l i t y i n a b i g t h a n i n a small c l a s s . Q u a l i t y changes s h o u l d be c o n s i d e r e d n o t onl y i n t h e pr oduced s e r v i c e s . S i m i l a r probl ems a r e e n c o u n t e r e d i n t h e i n p u t , where t h e q u a n t i t a t i v e t r e n d s a l s o mi ght be a f f e c t e d by c hanges i n t h e q u a l i t y o f t h e u t i l i z e d commodi t i es and s e r v i c e s . A change i n t h e q u a l i t y o f t h e i n p u t r e s o u r c e s i s n o t e q u i v a l e n t t o a change i n t h e q u a l i t y o f t h e o u t p u t . F o r exampl e, an i n c r e a s e d r e l a t i v e number o f s t a f f i s no c r i t e r i o n o f a b e t t e r q u a l i t y o f t he f i n a l p r od ­ u c t . The i n p u t o f r e s o u r c e s may have i n c r e a s e d , b u t w h e t he r and how much t h i s a f f e c t s t h e q u a l i t y o f t h e pr oduced s e r v i c e i s a m a t t e r o f consumer o p i n i o n . The v a l u a t i o n o f changes i n t h e q u a l i t y o f t h e i n p u t , on t h e o t h e r hand, s h o u l d r a t h e r be made by t h e p r o d u c e r . The whole q u e s t i o n o f q u a l i t y changes i s very i m p o r t a n t i n p r o d u c t i v i t y c a l c u l a t i o n s , and i n our p r o j e c t some s p e c i a l s t u d i e s have been i n i t i ­ a t e d t o p e n e t r a t e t h e m e t h o d o l o g i c a l probl ems of q u a l i t y measur ement s. Medi cal s e r v i c e s and s o c i a l w e l f a r e a r e b e i n g s t u d i e d , t h e l a t t e r by one wor ki ng group f o r c h i l d - c a r e and one f o r t he c a r e o f o l d p e o p l e . The d i s c u s s i o n o f p r o d u c t i v i t y c a l c u l a t i o n methods can be summarized as f o l lows: - The s e r v i c e s h o u l d be measured when t r a n s f e r r e d from p r o d u c e r t o consumer and w i t h t h e c h a r a c t e r i s t i c s i t has a t t h a t moment - The s e r v i c e s h o u l d c o n s t i t u t e t h e f i n a l o u t p u t from t h e p r o d uc i ng sector - The o u t p u t t r e n d s h o u l d be measured by one o r s e v e r a l q u a n t i t y i n d i c a t o r s , which o u g h t t o c o v a r i a t e w i t h t h e s e r v i c e

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Q u a n t i t y changes ( p o s i t i v e o r n e g a t i v e ) i n t h e s e r v i c e ( i n t h e q u a n t i t y i n d i c a t o r ) s h o u l d as f a r a s p o s s i b l e be i n c l u d e d i n t h e quantity calculations The r e l a t i v e c o s t s d u r i n g a b a s e y e a r s h o u l d be u s e d a s w e i g h t s i n t h e we i gh t e d e s t i m a t e o f t h e o u t p u t t r e n d i n a p a r t i c u l a r f i e l d A breakdown o f complex s e r v i c e s by s u b - s e r v i c e s ( a t t h e f i n a l o u t p u t lev el) is desirable The c hange s i n t h e consumpt i on o f r e s o u r c e s o v e r t i me s h o u l d be c a l ­ c ulated a t base-year prices (fix ed -p rice calcu latio n s) The r e s o u r c e s s h o u l d , i f p o s s i b l e , be br oken down by t he v a r i o u s services The consumpt i on o f r e s o u r c e s a t f i x e d p r i c e s mi ght a l s o have t o be a d j u s t e d i n r e s p e c t t o q u a l i t y changes The c a l c u l a t i o n s i n c l u d e t r a d i t i o n a l i n d e x and sa mpl i ng p r ob l e ms .

■

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APPENDIX 2 PRODUCTIVITY STUDIES The f i r s t s t a g e o f o u r p r o j e c t has i n c l u d e d a number o f s t u d i e s o f t he p r o d u c t i v i t y t r e n d s i n t h e v a r i o u s p a r t s o f t h e p u b l i c s e c t o r . The s t u d i e s have c o n s i s t e d o f d e s c r i p t i o n s o f t h e o p e r a t i o n s and t e n t a t i v e c a l c u l a t i o n s of the p r o d u c ti v i ty r a t e in th e following f i e l d s : public h e a l t h and medi cal c a r e , s o c i a l w e l f a r e , e d u c a t i o n , p u b l i c r o a d s , pub­ l i c l i b r a r i e s , t h e n a t i o n a l d e f e n c e , and an a g g r e g a t e o f t w e l v e f i e l d s o f c e n t r a l government a d m i n i s t r a t i o n . On t h e i n s t r u c t i o n o f t h e E x p e r t Gr oup, s t u d i e s have p r e v i o u s l y been made on p r i v a t e and p u b l i c d e n t a l c a r e , t h e g e n e r a l c o u r t s o f j u s t i c e , and t h e N a t i o n a l P a t e n t and Reg­ i s t r a t i o n O f f i c e . T h i s a pp end i x g i v e s a b r i e f p r e s e n t a t i o n o f t h e p i l o t s t u d i e s now c o r p l e t e d and d e s c r i b e s t h e m e t ho d o l o g i c a l pr obl ems and t he f i n d i n g s . Some common t e n d e n c i e s have been no t e d t h a t t e n t a t i v e l y might p r o v i d e a b a s i s f o r f u r t h e r d i s c u s s i o n s a s wel l a s g u i d e l i n e s f o r more detailed calculations. The c o n c e p t on which t h e s t u d i e s have been f o c u s e d i s t h e a v e r a g e t o t a l p r o d u c t i v i t y , o r r a t h e r i t s c h a n g e s , d u r i n g t h e p e r i o d 1 9 60 - 19 80 . T h i s means t h a t t h e c h ang e s i n t h e o u t p u t a r e r e l a t e d t o t h e changes i n t h e t o t a l consumpt i on o f r e s o u r c e s . In some c a s e s t h e m a t e r i a l has onl y p e r m i t t e d t h e p e r i o d 1 9 7 0 - 1980 t o be s t u d i e d . The emphasi s has been on e s t i m a t i o n and c a l c u l a t i o n met hods. Some a n a l y s e s o f t he f i n d i n g s ha ve been made, b u t t h e s e have n o t c o v e r e d a l l t h e m a t e r i a l and have been r a t h e r s u p e r f i c i a l . In p r i n c i p l e , t h e s t u d i e s a l s o o u g h t t o i n c l u d e s u p e r v i s o r y and c o ­ o r d i n a t i n g a g e n c i e s w i t h o u t f i n a l p r o d u c t s o f t h e i r own. However, t h e s e k i n d o f a g e n c i e s have been t r e a t e d somewhat d i f f e r e n t l y i n t h e s t u d i e s conpleted sofar. I n t h e m a t t e r o f p r o d u c t i v i t y c ha ng e s o v e r t i m e , we have p r e v i o u s l y n o t e d t h r e e main p o i n t s :

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- The o u t p u t o f s e r v i c e s i s t o be measur ed by means o f one o r more q u a n t i t y i n d i c a t o r s . I f t h e r e a r e more t h a n o ne , w e i g h t s a r e r e q u i r e d f o r t h e i r aggregation - The i n p u t o f r e s o u r c e s i s t o be gi v e n by a t o t a l mea s u r e . The d i f f ­ i c u l t i e s mai nl y c o n s i s t o f o b t a i n i n g mea s u r e s o f t h e r e a l c h a n g e s . I f c o s t s a t c u r r e n t p r i c e s a re used, r e - c a l c u l a t i o n s with r e l e v a n t p r i c e i n d e x nu n b e r s a r e r e q u i r e d - I f s i g n i f i c a n t q u a l i t y c h a n g e s have o c c u r r e d i n t h e measur ed s e r v ­ i c e s , a d j u s t m e n t s s h o u l d a s f a r as p o s s i b l e be made. As a ge n e r a l p r i n c i p l e , c o n s i d e r a t i o n s h o u l d be g i v e n t o a l l q u a l i t y i mpr ovement s/ / d e t e r i o r a t i o n s , which would have been r e f l e c t e d i n h i g h e r / l o w e r m a r k e t p r i c e s , had such p r i c e s e x i s t e d . Thus t h e o b j e c t i v e o f t h e s t u d i e s has been t o t r y t o measur e t h e o u t p u t and p r o d u c t i v i t y t r e n d s i n t h e p u b l i c s e c t o r , i n a manner t h a t as f a r a s p o s s i b l e conf orms w i t h t h a t o f t h e n a t i o n a l a c c o u n t s f o r t h e p r i v a t e s e c t o r . The f e a s i b i l i t y o f t h i s o b j e c t i v e depends on t h e a v a i l a b i l i t y o f p e r t i n e n t d a t a on o u t p u t and c o s t s .

2.1

P u b l i c h e a l t h and medi cal c a r e

The aim o f t h e s t ud y on p u b l i c h e a l t h and medi cal c a r e has been t o c a l c u l a t e t h e c h a n g e s 1n t h e a v e r a g e t o t a l p r o d u c t i v i t y d u r i n g t h e p e r i o d 1 9 6 0 - 1 9 8 0 1) .

1) P r o d u k t i o n s - k o s t n a d s - och p r o d u k t i v l t e t s u t v e c k l i n g inom o f f e n t l i g t b e d r i v e n h a l s o - och s j u k v S r d 1 9 6 0 - 1 9 8 0 . R a p p o r t t i l l f o r s t u d i e r i o f f e n t l i g ekonomi

expertgruppen

( O u t p u t , C o s t and P r o d u c t i v i t y Tr ends

i n P u b l i c H e a l t h and Medi cal Ca r e 1 9 60 - 1 9 8 0 . R e p o r t t o t h e E x p e r t Group on P u b l i c F i n a n c e ) . Ds Fi 1 9 8 5 : 3 . The r e p o r t ha s been p r e p a r e d by P r o f e s s o r Bj o r n L i n d g r e n and Mr P o n t us Roos, bot h o f t h e Swedish I n s t i t u t e f o r H e a l t h Economi cs, Lund.

51

In r e g a r d t o t h e c o v e r a g e o f t h e s t u d i e d f i e l d , i t s h o u l d be p o i n t e d o u t t h a t t h e s t u d y r e f e r s t o t h e p u b l i c h e a l t h and medi cal c a r e sys t em a s d e f i n e d i n t h e Swedish n a t i o n a l a c c o u n t s . I t does n ot i n c l u d e h e a l t h a nd medi cal s e r v i c e s a t p l a c e s o f work, a t s c h o o l s o r i n t h e n a t i o n a l d e f e n c e . Some medi cal s e r v i c e s ( u s u a l l y l o n g - t e r m medi cal c a r e ) a r e t h e r e s p o n s i b i l i t y o f t h e s o c i a l w e l f a r e a u t h o r i t i e s and a r e c l a s s i f i e d a s s o c i a l s e r v i c e s and n o t a s medi cal c a r e . Agenci es w i t h g e n e r a l o v e r a l l r e s p o n s i b i l i t i e s a re not included. The c a l c u l a t i o n s have c e n t e r e d on h o s p i t a l - r e l a t e d medi cal c a r e , both i n - p a t i e n t and o u t - p a t i e n t , and i n c l u d i n g p s y c h i a t r i c d e p a r t m e n t s . I t h a s n o t been p o s s i b l e t o i n c l u d e a l l h o s p i t a l s , and t h o s e s e l e c t e d c o n s t i t u t e a p p r o x i m a t e l y o n e - t h i r d o f t h e t o t a l number o f h o s p i t a l s i n Sweden. The s e l e c t i o n ha s n o t been made by random samp l i n g, b u t wi t h r e g a r d t o g e o g r a p h i c a l l o c a t i o n and h o s p i t a l c a t e g o r y ; r e g i o n a l h o s p i t ­ a l s , co un t y h o s p i t a l s , and h o s p i t a l s s e r v i n g s m a l l e r a d m i n i s t r a t i v e a r e a s . The r e g i o n a l h o s p i t a l s , where t h e most co mpr e h ens i v e and most s p e c i a l i z e d c a r e i s f ound, a r e o v e r r e p r e s e n t e d . The h o s p i t a l - r e l a t e d medi cal s e r v i c e s r e p r e s e n t 56 p e r c e n t o f t h e t o t a l c o s t o f t h e Swedish p u b l i c h e a l t h and medi cal c a r e sy s t e m, and f o r t h e s e s e r v i c e s t h e a v a i l a b l e d a t a a r e f a r more d e t a i l e d and r e l i ­ a b l e t h a n f o r t h e r ema i n i n g 4 4 p e r c e n t . The l a t t e r c an n o t a p r i o r i be assumed t o have de v e l o p e d i n a s i m i l a r way. An a t t e m p t ha s been made t o s t u d y t h e p r o d u c t i v i t y and c o s t t r e n d s i n t h e s e o t h e r s e r v i c e s a s w e l l , a l t h o u g h w i t h l e s s p r e c i s e m e a s u r e s . Thus, s t u d i e s have been made of t h e special p s y c h i a t r i c h o s p i t a l s , the care of the mentally re tarded, t h e non-hospital o u t - p a t i e n t c a r e , th e long-term ca re a t publ ic nursing homes, and t h e n a t i o n a l d e n t a l s e r v i c e .

Ou t p ut As a l r e a d y men t i o ned , t h e i n d i c a t o r c hose n f o r me a s u r i ng t h e q u a n t i t ­ a t i v e t r e n d o f t h e s e r v i c e s s h o u l d r e p r e s e n t t h e s e r v i c e a t t h e moment when t h i s i s t r a n s f e r r e d from t h e p r o d u c e r t o t h e p a t i e n t . The i n d i c ­ a t o r s h o u l d be a s homogeneous a s p o s s i b l e , so a s t o p r e v e n t t he

52

q u a n t i t a t i v e t r e n d s from b e i n g t o o much a f f e c t e d by s h i f t s i n t he content of the service. F o r I n - p a t i e n t medi cal c a r e , t h e number o f a d m i t t e d p a t i e n t s has been u s e d a s t h e q u a n t i t y i n d i c a t o r . The d a t a have been drawn from t h e h o s p i t a l s ' annual r e p o r t s . The r e a s o n f o r n o t c h o s l n g t h e number o f b e d - d a y s i s mai nl y t h a t t h e t r e a t m e n t g i v e n d u r i n g a s p e c i f i c h o s p i t ­ a l i z a t i o n p e r i o d mi g h t v a r y s t r o n g l y from one day t o t h e n e x t . However, t h e number o f p a t i e n t s a d m i t t e d a t t h e h o s p i t a l s i s a ve r y i n a d e q u a t e measur e o f t h e t o t a l o u t p u t . I t t a k e s f o r g r a n t e d t h a t each p a t i e n t a t each d e p a r t m e n t o r t y p e o f h o s p i t a l r e q u i r e s t h e same amount o f r e s o u r c e s . A breakdown by v a r i o u s t y p e s o f d i a g n o s e s would o b v i o u s l y be t h e b e s t a p p r o a c h , b u t a t p r e s e n t t h i s 1s n o t p r a c t i c a b l e . I n s t e a d , t h e o u t p u t o f each d e p a r t m e n t has been c a l c u l a t e d s e p a r a t e l y . To o b t a i n a t o t a l e s t i m a t e , t h e 1 9 8 0 a v e r a g e c o s t p e r p a t i e n t a t e ach d e p a r t me n t h a s been u s e d a s a w e i g h t . F o r a l l t h e h o s p i t a l s i n c l u d e d i n t h e s a mp l e , a t o t a l o f 3 1 2 d e p a r t m e n t s have had t h e i r o u t p u t v a l u e d i n 1 9 8 0 p r i c e s . I n a d d i t i o n t o t h i s main a l t e r n a t i v e , a c o u p l e o f o t h e r w e i g h t ­ i n g p r i n c i p l e s have been t e s t e d w i t h s i m i l a r r e s u l t s . In t h e m a t t e r o f l o n g - t e r m medi cal c a r e , t h e number o f b e d - d a y s has b e e n c o n s i d e r e d a more a d e q u a t e mea sur e t h a n t h e number o f a d m i s s i o n s , a s t h e t r e a t m e n t c h a n g e s ve r y l i t t l e from day t o day, w h i l e t h e t o t a l t i m e r e q u i r e d 1n e ac h c a s e v a r i e s c o n s i d e r a b l y f o r d i f f e r e n t p a t i e n t s . F o r o u t - p a t i e n t medi cal s e r v i c e s a t t h e h o s p i t a l s , t h e number o f v i s i t s t o a p h y s i c i a n ha s been u s e d a s t h e q u a n t i t y i n d i c a t o r . The number o f v i s i t s t o e ac h d e p a r t m e n t ha s been a g g r e g a t e d by means o f w e i g h t s i n 1 9 8 0 p r i c e s . T h i s , however , does n o t p r o v i d e a t r e n d mar ke dl y d i f f e r e n t f r om t h e one o b t a i n e d , i f t h e t o t a l number o f v i s i t s t o a h o s p i t a l ph y si c ia n 1s used in th e c a l c u l a t i o n s . F o r o u t - p a t i e n t medi cal s e r v i c e s o u t s i d e t h e h o s p i t a l s , t h e I n d i c a t o r h a s been t h e number o f v i s i t s t o a p h y s i c i a n ( f o r 1 9 6 0 and 1 9 6 5 t h e number h a s been e s t i m a t e d by means o f t h e number o f e s t a b l i s h e d p h y s ­ i c i a n ' s p o s t s ) , and i n t h e n a t i o n a l d e n t a l s e r v i c e I t ha s been t h e

53

number o f p a t i e n t s w i t h c o mpl e t e d t r e a t m e n t s . For t h e c a r e o f t h e ment­ a l l y r e t a r d e d , t h e I n d i c a t o r has been t h e a v e r a g e number o f a d m i t t e d p a t i e n t s a t h o s p i t a l s and n u r s i n g homes and t h e number o f m e n t a l l y r e t ­ a r d e d r e g i s t e r e d a t s h e l t e r e d wor ks hops. Q u a n t i t y i n d i c a t o r s f o r t h e s e r v i c e s o f p s y c h i a t r i c h o s p i t a l s has been t h e number o f a d m i s s i o n s . F o r t h e v a r i o u s t y p e s o f n u r s i n g homes, t h e number o f b e d - da y s has been cho s e n .

Cost The c u r r e n t e x p e n d i t u r e o f t h e h o s p i t a l s i s r e p o r t e d i n t h e i r r e p o r t s and b a l a n c e - s h e e t s . R e g r e t t a b l y , t h e r e i s no breakdown i n - p a t i e n t and o u t - p a t i e n t c o s t s by de p a r t me n t u n t i l t h e b e g i n n i n g o f t h e 1 9 7 0 ' s . The breakdown o f t h e c o s t s by t y p e o f c a r e has t h e r e f o r e been b a s e d on t he production c o s t s of 1980. The c u r r e n t e x p e n d i t u r e c a l c u l a t e d i n t h i s manner f o r v a r i o u s h o s p i t a l s and medi cal s e r v i c e s has been r e c a l c u l a t e d i n t o r e a l t er ms by d i v i d i n g t h e c o s t by t h e p r i c e r e c a l c u l a t i o n f a c t o r f o r p u b l i c consumpt i on i n t h e n a t i o n a l a c c o u n t s . T h i s i s a measur e o f t h e p r i c e devel opment , s i n c e i n t h e n a t i o n a l a c c o u n t s t h e p u b l i c s e c t o r e s t i m a t e s a r e always made from t h e c o s t s i d e . Dat a on c o s t s f o r n o n - h o s p i t a l medi cal c a r e a r e more u n c e r t a i n . They have been drawn from v a r i o u s s o u r c e s .

Productivity trends To g e t a measur e o f t h e p r o d u c t i v i t y c hange s d u r i n g t h e p e r i o d 1 9 6 0 1 9 8 0 , t h e ou v pu t and c o s t c hange s o f t h e v a r i o u s t y p e s o f h o s p i t a l s and medi cal s e r v i c e s have been c a l c u l a t e d . The annual p e r c e n t a g e change i n r e s p e c t t o o u t p u t and c o s t has been c a l c u l a t e d f o r each f i v e - y e a r p e r i o d ( 1 9 6 0 - 6 5 , 19 6 5 - 70 , 1 9 7 0 - 7 5 , 19 7 5 - 8 0 ) . The p r o d u c t i v i t y t r e n d ha s been c a l c u l a t e d a s t h e d i f f e r e n c e between t h e f i g u r e s obtained.

In t h e c a l c u l a t i o n o f t h e measure p e r t a i n i n g t o a l l p u b l i c

med i c al s e r v i c e s , t h e p r o p o r t i o n s o f t h e t o t a l c u r r e n t e x p e n d i t u r e t h a t

54

c o r r e s p o n d t o t h e v a r i o u s t y p e s o f medi cal s e r v i c e s have been used as w e i g h t s . An example o f t h e r e s u l t s i s shown i n T a b l e 2 . 1 . Table 2.1

P r o d u c t i v i t y t r e n d s f o r p u b l i c medi cal s e r v i c e s 1 9 6 0 - 19 80 . Annual p e r c e n t a g e changes 1960-65

1965-70

1970-75

1975-80

-4.6

-4.0

-1.4

-2.4

-3.0

-7.0

-4.4

-2.3

-2.0

-3.9

-7.4

-4.9

-2.2

-2.1

-4.0

-6.1

-9.5

- .9

-2.4

-4.7

1960-8C

Total p r o d u c t i v i t y change f o r p u b l i c medi cal s e r v i c e s Thereof: In -p atien t short-term medi cal c a r e Hospital o u t - p a t i e n t medi cal c a r e O u t - p a t i e n t medi cal c a r e outside hospitals Long-t er m medi cal c a r e a t n u r s i n g homes

-8.1

-5.0

-4.6

- .4

-4.5

P s y ch ia tr ic care

+5. 0

- .7

+3.7

-2.9

+1. 3

The t a b l e i n d i c a t e s an a v e r a g e p r o d u c t i v i t y drop o f 3 p e r c e n t a y e a r f o r t h e whole p e r i o d .

I t a l s o shows t h a t t h i s drop u s u a l l y was l a r g e r

d u r i n g t h e p e r i o d o f heavy e x p a n s i o n i n t h e 1 9 5 0 ' s t h a n d u r i n g t he 1 9 7 0 ' s . The one e x c e p t i o n a r e t h e p s y c h i a t r i c h o s p i t a l s , which a l s o l o s t i n r e l a t i v e i mp o r t a n c e d u r i n g t h e p e r i o d . A r e s u l t y i e l d e d by t he more d e t a i l e d m a t e r i a l i s t h a t t h e r e i s a g r e a t v a r i a t i o n i n p r o d u c t ­ i v i t y t r e n d s , even w i t h i n t h e v a r i o u s h o s p i t a l c a t e g o r i e s .

Q u a l i t y c hange s

Ad j u s t me n t s s h o u l d be made f o r such q u a l i t y changes t h a t a r e n ot c o v e r ­ ed by t h e c hose n o u t p u t me a s u r e s , b u t which r e s u l t i n an i n c r e a s e d con­ sumpt i on o f r e s o u r c e s and l owe r ed p r o d u c t i v i t y f i g u r e s , o r v i c e v e r s a .

55

D i r e c t measur ement s o f such q u a l i t y changes a r e d i f f i c u l t t o make, b ut some a t t e m p t s a r e d e s c r i b e d i n t h e s t u d y . They a r e t o be r e g a r d e d prim­ a r i l y a s numer i cal ex amp l es . A d i s t i n c t i o n i s made between c hange s p e r ­ t a ining to 'service'

t o t h e p a t i e n t s and c hange s i n r e s p e c t t o improved

/ r e d u c e d r e s u l t s o f a s p e c i f i c t r e a t m e n t . An example o f t h e f o r mer t yp e a r e c hange s i n r o o m - s i z e and w a r d - sp a c e p e r p a t i e n t . I f t h e v a l u e o f such a change i s t o be e s t i m a t e d by t h e c o s t , t h e n umer i cal example shows t h a t t h e p r o d u c t i v i t y t r e n d would have t o be a d j u s t e d upwards by . 1 p e r c e n t a n n u a l l y . Some exampl es o f i mproved met hods o f t r e a t m e n t a r e a l s o g i v e n . A new method o f h i p - j o i n t s u r g e r y woul d g i v e a q u a l i t y improvement c o r r e s p o n d i n g t o a p r o d u c t i v i t y i n c r e a s e o f . 0 5 p e r c e n t a n n u a l l y f o r t h e e n t i r e m e d i c a l - c a r e syst em. On t h e o t h e r hand, t h e i mp o r t a n c e o f q u a l i t y changes s h o u l d n o t be e x a g g e r a t e d . I f t h e e n t i r e 3 p e r c e n t annual d e c r e a s e i n t h e p r o d u c t ­ i v i t y r a t e f o r t h e p e r i o d 1 9 6 0 - 1 9 80 wer e t o be compensat ed f o r , t he q u a l i t y o f an a v e r a g e s e r v i c e i n 1 9 8 0 woul d have t o be v a l u e d t wi c e as high as in 1960.

2.2

Soc i al w e l f a r e

The s t u d y on p r o d u c t i v i t y t r e n d s i n t h e f i e l d o f s o c i a l w e l f a r e

has

on l y c o v e r e d t h e 1 9 7 0 ' s , owing t o t h e d i f f i c u l t i e s i n o b t a i n i n g compar­ a b l e d a t a f o r e a r l i e r p e r i o d s . I t ha s a l s o been d i f f i c u l t t o f i n d mat ­ e r i a l f o r t h e 1 9 7 0 ' s t h a t can be a d a p t e d t o t h e c hose n s t r u c t u r e . On 1 J a n u a r y , 1 9 8 2 , t h e p r e v i o u s s o c i a l w e l f a r e l e g i s l a t i o n was r e p l a c e d by t h e p r e s e n t S o c i al We l f a r e Ac t . To f a c i l i t a t e f u t u r e work t h e s t u d y

1) P r o d u k t i o n s - , k o s t n a d s - och p r o d u k t i v i t e t s u t v e c k l l n g inom den s o c i a l a s e k t o r n 1 9 7 0 - 1 9 8 0 . Ra pp o r t t i l l e x p e r t g r u p p e n f o r s t u d i e r 1 o f f e n t l i g ekonomi ( O u t p u t , C o s t and P r o d u c t i v i t y Tr ends i n S o c i al Wel f ar e 1 9 7 0 - 1 9 8 0 . R e p o r t t o t h e E x p e r t Group on P u b l i c F i n a n c e ) . Ds Fi 1 9 8 5 : 4 . The r e p o r t ha s been p r e p a r e d by Mr J a n E k l o f , Ms C a t h r i n a Fe r r mar k- Hanno and Mr Hans P e t t e r s s o n , a l l o f S t a t i s t i c s Sweden, St ockhol m.

56

ha s a d h e r e d t o t h e c l a s s i f i c a t i o n p r i n c i p l e s o f t h e new Ac t , wi t h a breakdown by - g e n e r a l mea s u r e s f o r c h i l d r e n and y o u t h s , - g e n e r a l mea s u r e s f o r o l d and d i s a b l e d p e r s o n s , and - s p e c i a l measur es p e r t a i n i n g t o i n d i v i d u a l s . The r e s p o n s i b i l i t y f o r t h e d i f f e r e n t a c t i v i t i e s i n t h e s o c i a l w e l f a r e s e c t o r i s most l y h e l d by l o c a l government a u t h o r i t i e s . The c a l c u l a t i o n s o f t h e s t ud y p e r t a i n t o t h e t o t a l p r o d u c t i v i t y , i . e . t h e o u t p u t i s r e l a t e d t o t h e e n t i r e i n p u t o f r e s o u r c e s . The y e a r s c h o s e n a r e 1 9 7 0 , 19 7 5 and 1 9 8 0 , b u t t o mini mize t h e e f f e c t s o f t empor ­ a r y f l u c t u a t i o n s , t h e e s t i m a t e s have been made a s t h r e e - y e a r a v e r a g e s f o r 1 9 6 9 - 7 1 , 1 9 7 4 - 7 6 and 1 9 7 9 - 8 1 . The a r e a s c o v e r e d by t h e c a l c u l a t i o n s c o r r e s p o n d t o 9 0 p e r c e n t o f t h e whol e s o c i a l w e l f a r e s e c t o r . C e n t r a l gover nment a g e n c i e s and r e s e a r c h i n s t i t u t i o n s have n ot been i n c l u d e d .

Ou t p ut Q u a n t i t y i n d i c a t o r s f o r t h e s e r v i c e s have been o b t a i n e d w i t h o u t d i f f ­ i c u l t i e s . The s t a t i s t i c s a r e wel l e s t a b l i s h e d s i n c e many y e a r s , and t he d a t a c o l l e c t i o n i s made a c c o r d i n g t o t h e same r u l e s i n a l l t h e mu n i c i p ­ a l i t i e s . Non-random e r r o r s , i f any, a r e assumed t o be c o n s t a n t o v e r t i m e . The i n d i c a t o r s c hose n a r e e . g . t h e number o f c h i l d r e n i n da y c a r e c e n t r e s , n u r s e r y s c h o o l s e t c . , t h e number o f b e d - d a y s i n s e r v i c e houses f o r o l d and d i s a b l e d p e r s o n s and i n c h i l d r e n ' s homes and r e f o r ma t o r y s c h o o l s , t h e number o f h o u r s worked i n d o m e s t i c - h e l p s e r v i c e s , t he number o f t r a n s p o r t s i n t h e mun i c i pal t r a n s p o r t s e r v i c e , t h e number of p e r s o n s r e q u i r i n g s o c i a l a s s i s t a n c e e t c . A measur e o f t h e t o t a l o u t p u t i n each s e c t i o n has been o b t a i n e d by u s i n g t h e u n i t c o s t s i n 19 8 0 p r i c e s a s w e i g h t s i n t h e summation o f t h e v a r i o u s q u a n t i t y i n d i c a t o r s .

57

Co s t The c o s t t r e n d c a l c u l a t i o n s have p r e s e n t e d a more d i f f i c u l t problem. The d a t a have been drawn from t h e a c c o u n t i n g r e c o r d s s u b m i t t e d a n n u a l l y t o S t a t i s t i c s Sweden by t h e m u n i c i p a l i t i e s . Book- keepi ng p r a c t i c e s v a r y , which a f f e c t s t h e p r e c i s i o n o f t h e a g g r e g a t e d d a t a . N e v e r t h e l e s s , i t can be assumed t h a t t h e d i f f e r e n c e s have r emai ned r e a s o n a b l y con­ s t a n t d u r i n g t h e p e r i o d o f o b s e r v a t i o n , which r e d u c e s t h e u n c e r t a i n t y i n t h e change e s t i m a t e s . The c o s t s a t f i x e d p r i c e s have been o b t a i n e d by means o f a t r a n s f o r m ­ a t i o n f a c t o r c a l c u l a t e d on t h e b a s i s o f t h e n a t i o n a l a c c o u n t s d a t a on t o t a l c o s t s f o r s o c i a l w e l f a r e . A l t e r n a t i v e c a l c u l a t i o n s have been made t o f i n d o u t how t h e r e s u l t s a r e a f f e c t e d by v a r i o u s a s s u m p t i o n s .

Productivity trends Some p r o d u c t i v i t y t r e n d s i n t h e f i e l d o f s o c i a l w e l f a r e a r e shown i n T a b l e 2 . 2 . Dur i ng t h e 1 9 7 0 ' s t h e r e was an annual d e c r e a s e i n t h e pr od­ u c t i v i t y r a t e by 1 . 6 p e r c e n t . The d e c l i n e was s t r o n g e s t d u r i n g t h e f i r s t h a l f o f t h e de ca de. The r e s u l t s a r e s i m i l a r , wh e t h e r o r n o t t he g e n e r a l a d m i n i s t r a t i v e u n i t s a r e i n c l u d e d . The a l t e r n a t i v e c a l c u l a t i o n s me n t i o ne d above g i ve a s t r o n g e r d e c r e a s e , 4 and 3 p e r c e n t p e r y e a r , respectively. The f i n d i n g s d i f f e r f o r d i f f e r e n t s e c t i o n s o f t h e s o c i a l w e l f a r e s y s t ­ em. Gener al mea s ur e s f o r c h i l d r e n and y o u t h s show a p o s i t i v e p r o d u c t ­ i v i t y t r e n d d u r i n g t h e e n t i r e p e r i o d , d e s p i t e an i n c r e a s e i n t h e r e l a t ­ i v e number o f p e r s o n n e l . T h i s mi ght be due t o t h e r e d u c t i o n 1n t h e r e l a t i v e number o f I n f a n t s a t da y c a r e c e n t r e s ( t h e c o s t f o r i n f a n t s a t d a y c a r e c e n t r e s a r e h i g h e r t h a n f o r o l d e r c h i l d r e n ) , which i n t u r n m i g h t be a r e s u l t o f improved t er ms i n t h e n a t i o n a l f a mi l y i n s u r a n c e scheme. Some o t h e r f a c t o r s t h a t mi ght have c o n t r i b u t e d t o t h e p r o d u c t ­ i v i t y i n c r e a s e a r e d e l i v e r i e s o f meal s from c e n t r a l k i t c h e n s and c h e a p e r p r e mi s e s ( d a y c a r e c e n t r e s i n c o n v e r t e d f l a t s ) .

58

Tabl e 2 . 2

P r o d u c t i v i t y t r e n d s f o r s o c i a l w e l f a r e 1970 - 19 80 . Annual p e r c e n t a g e changes a c c o r d i n g t o t h e main a l t e r n a t i v e

1970-75

1975-80

1 9 7 0 - 80

General measur es f o r c h i l d r e n and y o u t h s

+1. 3

+ .5

+ .9

-2.9

-1.7

-2.3

-3.1

-1.1

-2.1

-2.5

- .9

-1.6

General measur es f o r o l d and disa b le d persons S p e c i a l measur es p e r t a i n i n g t o individuals T o t a l , i n c l . general a d m i n i s t r a t i v e units

Gener al measur es f o r o l d and d i s a b l e d p e r s o n s i s a s e c t i o n which shows r a t h e r a s t r o n g p r o d u c t i v i t y d e c r e a s e d u r i n g t h e f i r s t h a l f o f t he 1 9 7 0 ' s . T h i s i s e n t i r e l y due t o t h e ver y c o n s i d e r a b l e r i s e i n t h e c o s t s f o r do me s t i c h e l p and mun i c i p al t r a n s p o r t s e r v i c e d u r i n g t h e p e r i o d , w h i l e t h e i n c r e a s e i n t h e s e r v i c e volume r emai ns much s m a l l e r . The c o n t e n t o f t he s p e c i a l measur es p e r t a i n i n g t o i n d i v i d u a l s have changed a g r e a t deal d u r i n g t h e p e r i o d , which makes t he f i n d i n g s d i f f i c u l t t o i n t e r p r e t e . However, a s t h e volume o f t h e s e measur es i s much s m a l l e r t h a n t h a t o f t h e ge ne r a l me a s u r e s , t h e e f f e c t on t h e t o t a l re s u l t is rather limited.

Qu a l i t y changes In t h e s o c i a i w e l f a r e s e c t o r t o o , t h e r e have been c hanges i n t h e q u a l i t y o f t h e s e r v i c e s , b u t i t has n o t been p o s s i b l e t o make any n umer i cal e s t i m a t e s .

I t i s no t e d i n t h e s t ud y t h a t t h e q u a l i t y changes

a r e u n l i k e l y t o have had any d e c i s i v e e f f e c t on t h e f i n d i n g s .

59

2. 3

Education

The p r o d u c t i v i t y st udy i n t h e e d u c a t i o n a l f i e l d 1)

covers the period

1 9 6 0 - 19 80 . Dur i ng t h e s e y e a r s t h e Swedish e d u c a t i o n a l s y s t e m changed r a d i c a l l y . The c o mpr e hens i ve sc hool and t h e i n t e g r a t e d u p p e r se c o n dar y s c h o ol were e s t a b l i s h e d , o l d e r t y p e s o f s e c on d a r y s c h o o l s c ea s e d t o e x i s t , and t h e h i g h e r - e d u c a t i o n s y s t e m was r e o r g a n i z e d . The g r e a t e s t c h a n g e s took p l a c e i n t h e 1 9 6 0 ' s , and t h e c a l c u l a t i o n s can t h e r e f o r e be c o n s i d e r e d more r e l i a b l e f o r t h e t i me a f t e r 19 70 . N e v e r t h e l e s s , e s t i m a t e s have been made f o r t h e y e a r s 1 9 6 0 , 1 9 6 5 , 1 9 7 0 , 1 9 7 5 and 1 9 8 0 , and have c o v e r e d o u t p u t and I n p u t o f r e s o u r c e s i n t h e c o mp r e h e n s i v e s c h o o l , t h e u p p e r s e c o nd a r y school and t h e p o s t - s e c o n d a r y e d u c a t i o n a l system.

Out put Dur i n g t h e p e r i o d a number o f new a c t i v i t i e s have been i n t r o d u c e d i n t h e school work i n a d d i t i o n t o t h e r e g u l a r c u r r i c u l a . F o r t h e s a k e of c o m p a r a b i l i t y , t h e s e new i t e ms have n o t been i n c l u d e d i n t h e o u t p u t e s t i m a t e . The a mb i t i o n i n t h e s t ud y has been t o u s e t h e c o n c e p t ' l e a r n i n g hours' as t he p r i n c i p a l q u a nt it y i n d i c a t o r . F o r t h e c ompr ehens i ve school and t h e up p e r s e c o nd a r y s c h o o l , t h e a v e r ­ a g e number o f h ou r s p e r week a c c o r d i n g t o t h e c u r r i c u l a o f t h e v a r i o u s s t a g e s has been m u l t i p l i e d by t h e number o f p u p i l s 1n t h e c o r r e s p o n d i n g s t a g e s a t t h e t ime o f t h e measur ement . In a d d i t i o n , t h e number o f ' p u p l l - h o u r s ' p e r week has been c a l c u l a t e d . Both a l t e r n a t i v e s have been reported.

1) P r o d u k t i o n s - , k o s t n a d s - och p r o d u k t l v i t e t s u t v e c k l I n g e n inom den o f f e n t H g t f i n a n s i e r a d e u t b l l d n l n g s s e k t o r n 1 9 6 0 - 1 9 8 0 . Ra p p o r t t i l l e x p e r t g r u p p e n f o r s t u d i e r i o f f e n t l i g ekonomi ( O u t p u t , C o s t and Pr od­ u c t i v i t y Tr ends i n P u b l i c E d u c a t i o n 1 9 6 0 - 1 9 8 0 . R e p o r t t o t h e E x p e r t Group on P u b l i c F i n a n c e ) . Ds FI 1 9 8 6 : 1 7 . The r e p o r t ha s been p r e p a r e d by Dr. P e t e r S t e n k u l a o f t h e U n i v e r s i t y o f Lund.

60

The measurement o f t h e o u t p u t i n t h e p o s t - s e c o n d a r y e d u c a t i o n a l s y s t e m h a s p r e s e n t e d one o f t h e most d i f f i c u l t pr obl ems i n t h e s t u d i e s . Lack­ i n g any b e t t e r q u a n t i t y i n d i c a t o r , t h e number o f s t u d e n t s has been used a s a measur e o f t h e o u t p u t . In o r d e r t o p r e v e n t d o u b l e - c o u n t i n g , o n l y s t u d e n t s who commenced new s u b j e c t s d u r i n g t h e y e a r have been i n c l u d e d . As p a r t - t i m e s t u d i e s have i n c r e a s e d g r e a t l y d u r i n g t h e p e r i o d , t h e number o f p a r t - t i m e s t u d e n t s has been r e c a l c u l a t e d t o t h e e q u i v a l e n t number o f f u l l - t i m e s t u d e n t s , which g i v e s a b e t t e r c o m p a r a b i l i t y b etween t h e y e a r s . S t u d e n t s t a k i n g c o u r s e s t h a t have been newly i n t r o d ­ u c ed d u r i n g t h e p e r i o d have been e x c l ud e d . An a l t e r n a t i v e o u t p u t mea sur e has been t h e number o f d e g r e e s awarded.

Co s t The n a t i o n a l a c c o u n t s i n c l u d e d a t a on t h e e x p e n d i t u r e o f r e s o u r c e s i n t h e e d u c a t i o n a l s ys t e m, a t f i x e d p r i c e s . These d a t a have been u t i l i z e d i n t h e s t u d y , br oke n down by c o mpr e hens i ve school and up p e r s e c on d a r y sc hool on t h e b a s i s o f t h e r e l a t i v e number o f p u p i l s i n each t yp e o f s c h o o l . For p o s t - s e c o n d a r y e d u c a t i o n , s e p a r a t e c a l c u l a t i o n s o f t h e c u r r e n t e x p e n d i t u r e have been made f o r u n d e r g r a d u a t e e d u c a t i o n , p o s t ­ g r a d u a t e e d u c a t i o n and r e s e a r c h . A r e c a l c u l a t i o n a t f i x e d p r i c e s has be en made a c c o r d i n g t o t h e n a t i o n a l a c c o u n t s .

Productivity trends The r a t i o between o u t p u t and c o s t t r e n d s g i v e s a measur e o f t h e p r o d ­ u c t i v i t y t r e n d i n t h e e d u c a t i o n a l s e c t o r . T a b l e 2 . 3 shows some r e s u l t s f o r t h e c omp r e h e n s i v e and u p p e r s e c o n da r y s c h o o l s ( t h e d a t a a r e based on t h e number o f ' p u p i l - h o u r s ' p e r we e k ) . The r e s u l t s p e r t a i n i n g t o t h e f i r s t p e r i o d i n t h e t a b l e must be c o n s i d e r e d ve r y u n c e r t a i n . The n a t i o n a l a c c o u n t s do n o t c o v e r t h e y e a r s 1 9 6 0 - 6 3 , and i n a d d i t i o n t h e r e wer e g r e a t c hange s i n t h e s t r u c t u r e o f

61 Ta b l e 2 . 3

P r o d u c t i v i t y t r e n d s f o r e d u c a t i o n 1 9 60 - 19 80 . Annual p e r c e n t a g e changes 1960-65

1965-70

1970-75

1975-80

-5.8

-6.5

+1. 5

-4.8

-2.8

s e c o n d a r y school

-8.5

-6.5

-5.5

+2.2

-3.3

To t a l

-6.3

-6.5

+ .5

-3.8

-3.2

1965-8C

Comprehensi ve school I n t e g r a t e d up p e r

t h e e d u c a t i o n a l syst em d u r i n g t h o s e y e a r s . Thus t h e c o mpr e h ens i v e school d a t a i n c l u d e t h e t h e n l o we r se c o nd ar y school and g i r l s '

se c ond­

a r y school a s w e l 1. Fo r t h e f i v e - y e a r p e r i o d s a f t e r 1 9 6 5 , t h e r e i s a c o v a r i a t i o n between t h e number o f p u p i l s and t h e p r o d u c t i v i t y t r e n d . In t h e compr ehens i ve sc hool t h e i n c r e a s e i n t h e number o f p u p i l s was c o n c e n t r a t e d t o 19 7 0 7 5 , and i n t h e u p p e r s e c o nd a r y school t o 1 9 75 - 8 0 . The c o v a r i a t i o n s u g g e s t s an o v e r c a p a c i t y which c ou l d be drawn upon a t a t empor ar y i n c r e a s e i n +he number o f p u p i l s , a s wel l as a sl owne ss i n a d a p t i n g t h e r e s o u r c e s t o a s h r i n k i n g number o f p u p i l s . Fo r t h e compr e hens i ve school t h e s t ud y i n c l u d e s some a l t e r n a t i v e pr od­ u c t i v i t y c a l c u l a t i o n s . In a d d i t i o n t o t h e o u t p u t / c o s t r a t i o p e r p u p i l , c o r r e s p o n d i n g c omp a r i s on s have been made p e r form. T h i s g i v e s t he f o l l o w i n g p r o d u c t i v i t y t r e n d ( a nnua l p e r c e n t a g e c h a n g e s ) :

Comprehensi ve school

1960-65

1965-70

1970-75

1975-80

1965-80

-2.5

-5.3

- .4

- .9

-1.7

Compared w i t h t h e p u p i l - r a t i o d a t a , t h e s e f i g u r e s i n d i c a t e t h a t t h e r i s i n g number o f p u p i l s were a d m i t t e d w i t h o u t an e q u i v a l e n t i n c r e a s e i n t h e number o f f or ms. T h i s i mpr oves t h e p r o d u c t i v i t y t r e n d b u t mi ght have a f f e c t e d t h e q u a l i t y o f t h e e d u c a t i o n .

62

Fo r t h e p o s t - s e c o n d a r y e d u c a t i o n t h e f i r s t f i v e - y e a r p e r i o d has been o m i t t e d , owing t o t h e e s t i m a t i o n d i f f i c u l t i e s . For t h e s u b s e qu e n t p e r i o d s t h e f o l l o w i n g p r o d u c t i v i t y t r e n d has been f ound ( annual percentage ch an g e s) :

Post-secondary education

1965-70

1970-75

1975-80

1965-80

-13.0

-2.1

+ .7

-4.5

The e x c e p t i o n a l p r o d u c t i v i t y d e c r e a s e i n 1 9 65 - 70 was due t o an e x p a n s i o n o f t h e r e s o u r c e s , e . g . t h e new sys t e m o f b r a nch i n s t i t u t i o n s a f f i l i a t e d t o t h e u n i v e r s i t i e s s e t up i n n o n - u n i v e r s i t y towns. E n t i r e l y d i f f e r e n t t r e n d s a r e o b t a i n e d i f t h e o u t p u t i s i n s t e a d meas­ u r e d by t h e number o f d e g r ee s awarded. F o r exampl e, d u r i n g 1975 - 80 t h e p r o d u c t i v i t y r o s e i n r e s p e c t t o t h e number o f b a s i c d e g r e e s , b u t f e l l i n r e g a r d t o t h e number o f d o c t o r a l d e g r e e s . The s t u d y has a l s o i n c l u d e d an e s t i m a t i o n o f t h e p r o d u c t i v i t y t r e n d i n t h e e n t i r e e d u c a t i o n a l s e c t o r . The consumpt i on o f r e s o u r c e s has been u s e d as w e i g h t s . The f o l l o w i n g f i g u r e s were o b t a i n e d ( a nnua l p e r c e n t a g e changes):

Total educational s e c t o r

1965-70

1970-75

1975-80

1965-80

-7.2

+ .3

-2.7

-3.8

Q u a l i t y changes No measurement s o f q u a l i t y c hange s have been made i n t h i s s t u d y . The e d u c a t i o n a l methods have a l t e r e d c o n s i d e r a b l y d u r i n g t h e p e r i o d o f o b s e r v a t i o n , b u t t h e e f f e c t s on t h e s e r v i c e s p e r s e have n o t been p o s s ­ i b l e t o e s t i m a t e . Some novel a c t i v i t i e s have been e x c l u d e d and r e p o r t e d s e p a r a t e l y . Whether t h e number o f p u p i l s p e r form ha s an e f f e c t on t h e q u a l i t y o f t h e e d u c a t i o n i s t o some e x t e n t i l l u s t r a t e d i n t h e a l t e r n a t i v e c a l c u l a t i o n s r e p o r t e d above.

63

2. 4

Public roads

P r o d u c t iv i t y c a l c u l a t i o n s f o r pub lic roads'^

a r e c o m p l i c a t e d by t h e

d i f f i c u l t i e s t o d e f i n e t h e f i e l d t o be c o v e r e d by t h e s t u d y . Se ve r a l a l t e r n a t i v e s have been c o n s i d e r e d . The c o n c e p t c o u l d c o v e r t h e a c t i v ­ i t i e s o f t h e N a t i o n a l Road A d m i n i s t r a t i o n , o r i n c l u d e t h e e n t i r e public-roads fie ld .

I t c o u l d even i n c l u d e t h e p r o d u c t i o n o f c e r t a i n

r o a d s e r v i c e s from t h e p r i v a t e s e c t o r .

In t h e s t u d y , t h e c a l c u l a t i o n s

ha ve l a r g e l y c o v e r e d t h e s e r v i c e s and c o s t o f t h e p u b l i c - r o a d s f i e l d , a s we l l as more d e t a i l e d m a t e r i a l on t h e a c t i v i t i e s o f t h e N a t i o n a l Road A d m i n i s t r a t i o n .

Ou t pu t The q u a n t i t y i n d i c a t o r c hosen f o r p u b l i c r o a d s t o t a l l y has been t h e t r a f f i c volume, a l t e r n a t i v e l y t h e t r a n s p o r t volume. The t r a f f i c volume i s measur ed by t h e number o f v e h i c l e - k l l o m e t r e s o r a x l e - p a i r - k i l o m e t r e s p e r a v e r a g e annual 2 4 h o u r s . The t r a n s p o r t volume c o n c e r n s t h e number o f p a s s e n g e r - k i l o m e t r e s and, f o r g o ods, t h e number o f t o n - k i l o m e t r e s . The measur ement s p r i m a r i l y r e f e r t o t h e s t a t e r oa d n e t wor k, f o r which d a t a on t h e t r a f f i c volume a r e r e g u l a r l y c o l l e c t e d . E s t i m a t i o n s o f c ha n g e s c a n , however, be made f o r t h e r e ma i n i n g p a r t o f t h e p u b l i c - r o a d s y s t e m a s w e l l . For t e c h n i c a l r e a s o n s t h e s t ud y goes back o n l y t o 19 63 . I t has n o t been p o s s i b l e t o s t ud y t h e t r a f f i c volume i n d e t a i l by v a r i o u s c a t e g o r i e s o f v e h i c l e s f o r l o n g p e r i o d s o f t i m e . The ma j o r p a r t o f t h e v e h i c l e s I n Sweden a r e p a s s e n g e r c a r s ( 8 8 p e r c e n t i n 1 9 8 0 ) , and t h e s t ud y g i v e s no i n d i c a t i o n t h a t an e s t i m a t e we i g h t e d by v e h i c l e c a t e g o r y would d i f f e r s i g n i f i c a n t l y from an unwei ght ed a v e r a g e . The t r a n s p o r t volume, on t h e o t h e r hand, ha s been br oke n down by p a s s e n g e r k i l o m e t r e s and t o n - k i l o m e t r e s .

1) P r o d u k t i o n s - , k o s t n a d s - och p r o d u k t i v l t e t s u t v e c k l i n g inom v a g s e k t o r n . R a p p o r t t i l l e x p e r t g r u p p e n f o r s t u d i e r 1 o f f e n t l i g ekonomi ( O u t p u t , C o s t and P r o d u c t i v i t y T r e n d s 1n P u b l i c Roads. R e p o r t t o t h e E x p e r t Group on P u b l i c F i n a n c e ) . Ds Fi 1 9 8 5 : 9 . The r e p o r t has been p r e p a r e d by Mr J a n - E r i k N i l s s o n , o f t h e Na t i o n a l Road A d m i n i s t r a t i o n .

64

Co s t Data on p u b l i c - r o a d c o s t s have been drawn from v a r i o u s s o u r c e s : The n a t i o n a l a c c o u n t s , t h e N a t i o n a l Road A d m i n i s t r a t i o n a c c o u n t s , s t a t i s t ­ i c s s u b m i t t e d t o S t a t i s t i c s Sweden by m u n i c i p a l i t i e s e t c . The p r i n c i p a l i t e ms c o v e r i n v e s t m e n t s and i n t e r m e d i a t e consumpt i on p e r t a i n i n g t o t h e s t a t e , mun i c i pal and p r i v a t e r oa d n e t wor k , i . e . t h e domain o f t h e N a t i o n a l Road A d m i n i s t r a t i o n and r e l e v a n t p a r t s o f t h e o p e r a t i o n s o f t h e p o l i c e and t h e Na t i o n a l Road S a f e t y O f f i c e . In a d d i t i o n t o t h e r e s o u r c e consumpt i on i n t h e p u b l i c s e c t o r , t h e t o t a l n a t i o n a l c o s t s f o r t r a f f i c and t r a n s p o r t a t i o n a l s o i n c l u d e t h e p r i v a t e c onsumpt i on o f r e s o u r c e s . No n umer i cal c a l c u l a t i o n s have been made i n t h e s t u d y , b u t t h e r e i s some d i s c u s s i o n o f t h e p r i v a t e c o s t s , bot h t h o s e t h a t p e r t a i n t o t h e v e h i c l e s t h e m s e l v e s and t h o s e t h a t depend on the distance of tr a v e l, including the t r a v e ll e r s '

i np ut of resources in

t h e form o f t ime and e x p o s u r e t o t h e h a z a r d s o f t r a f f i c . The r e c a l c u l a t i o n s o f t h e c o s t s e r i e s t o r e a l r e s o u r c e c onsumpt i on have been made by means o f t h e consumer p r i c e i n d e x and t h e Na t i on a l Road A d m i n i s t r a t i o n r o a d i nde x. The l a t t e r r e f e r s t o r o a d c o n s t r u c t i o n c o s t s , but probably unde restimates the p r i c e tr en ds .

Productivity trends The most r e l i a b l e o u t p u t measur e i s r e l a t e d t o t h e t r a f f i c volume on t h e s t a t e r oa d n e t wo r k , f o r whi ch t h e t r e n d i s shown below ( a v e r a g e annual c h a n g e s ) :

T r a f f i c volume

1963-70

1970-73

1973-78

1978-81

1963-81

+6.5

+5. 2

+3.4

- .6

+4.5

A v a i l a b l e measur ement s f o r t h e mu ni c i p al r o a d network a r e more u n c er t ai n but i n d i c a t e a s i m i l a r tren d.

65

In r e g a r d t o t r a n s p o r t volume, t h e number o f p a s s e n g e r - k i l o m e t r e s shows a s l i g h t l y s m a l l e r i n c r e a s e , w i t h an a v e r a g e r i s e f o r t h e whole p e r i o d o f 3 . 3 p e r c e n t f o r p a s s e n g e r - c a r s and 3 . 6 p e r c e n t f o r b u s e s . Thus t h e r e l a t i v e number o f p a s s e n g e r s i n t h e c a r s has dr opped. Fo r goods, t h e t o n - k i l o m e t r e i n c r e a s e has been s t r o n g e r , wi t h an a v e r a g e r i s e o f a b ou t 5 per cent.

In t h e 1 9 7 0 ' s , t h e growth r a t e was mar kedly l ower t h a n i n

the 1960's. The d a t a on r e a l r e s o u r c e c onsumpt i on v a r y somewhat, de pendi ng on t h e s o u r c e from which t h e y a r e drawn and t h e p r i c e r e c a l c u l a t i o n method empl oyed. F o r p u b l i c r o a d s , t h e c a l c u l a t i o n s show an a v e r a g e growth r a t e f o r t h e whole p e r i o d o f between 0 and +1.1 p e r c e n t . The 1 9 6 0 ' s b r o u g h t a r e a l i n c r e a s e o f r e s o u r c e cons u mpt i on , w h i l e t h e 1 9 7 0 ' s saw a d e c r e a s e . F o r t h e whol e p e r i o d ,

.6 p e r c e n t has been c hosen a s t he

b e s t e s t i m a t e o f t h e a v e r a g e annual i n c r e a s e o f t h e r e s o u r c e consump­ tion. The p r o d u c t i v i t y i n c r e a s e f o r p u b l i c r o a d s f a l l s i n t h e i n t e r v a l 3 . 4 4 . 5 p e r c e n t , where 4 p e r c e n t ha s been chosen a s t h e b e s t e s t i m a t e of t h e a v e r a g e annual c hange . The d i s c u s s i o n s on t h e p r i v a t e c o s t s have f a i l e d t o y i e l d any d e f i n i t e c o n c l u s i o n s 1 l

Q u a l i t y changes The s t ud y i n c l u d e s a d i s c u s s i o n on q u a l i t y c hanges d u r i n g t h e p e r i o d . Some f a c t o r s t h a t mi g h t be e x p e r i e n c e d as n e g a t i v e by t h e r o a d - u s e r s a r e t h e r e s t r i c t i o n s imposed by t h e a u t h o r i t i e s t o i mprove t r a f f i c s a f e t y , while the p o s i t i v e f a c t o r s include s h o r t e r average t r a v e l l i n g t i m e s , r e d uc e d t r a f f i c h a z a r d s and a g e n e r a l improvement o f t h e road q u a l i t y . No q u a n t i t a t i v e c o n c l u s i o n s have been drawn, b u t t h e main view seems t o be t h a t no downwards a d j u s t m e n t f o r t h e i d e n t i f i e d q u a l i t y cha ng e s seems j u s t i f i e d .

1) Nor s h o u l d t h e s e c o s t s , i n p r i n c i p l e , be i n c l u d e d i n t h e p r o d u c t i v i t y me a s ur e s o f t h e p u b l i c s e c t o r .

66

2. 5

Twelve selected f i el d s of central government administration

The p r o d u c t i v i t y t r e n d i n t h e c e n t r a l government d u r i n g 1 9 60 - 1 9 8 0 has been s t u d i e d by t h e Swedish Agency f o r A d m i n i s t r a t i v e De ve l op me nt V The s t ud y has c o ve r e d a s e l e c t i o n o f government a u t h o r i t i e s 2 ^ which t o g e t h e r r e p r e s e n t some 30 p e r c e n t o f t h e e n t i r e c e n t r a l government administration.

I t does n o t i n c l u d e a c t i v i t i e s c o v e r e d by t h e o t h e r

p r o j e c t s t u d i e s . The c hose n a u t h o r i t i e s a r e n o t n e c e s s a r i l y r e p r e s e n t ­ a t i v e , a s t h e y have d e v el op ed c o n s i d e r a b l y f a s t e r t h a n t h e c e n t r a l gover nment a s a whol e. C a l c u l a t i o n s have been made f o r t h e f i v e - y e a r p e r i o d s 1 9 60 - 6 5 , 19 6 5 7 0 , 1 9 70 - 75 and 19 7 5 - 8 0 . In some c a s e s t h e f i r s t p e r i o d has n o t been i n c l u d e d . The c a l c u l a t i o n s p r i m a r i l y r e f e r t o t h e t o t a l p r o d u c t ­ i v i t y ( c o s t p r o d u c t i v i t y ) b u t t h e s t u d y ha s a l s o y i e l d e d some p r o d u c t ­ i v i t y d a t a p e r t a i n i n g t o l a b o u r and t o v a l u e added.

Out put The q u a n t i t y i n d i c a t o r s c hosen t o measur e t h e o u t p u t o b v i o u s l y have t o be d i f f e r e n t f o r t h e d i f f e r e n t a u t h o r i t i e s , b u t t h e p r i n c i p l e a d h e r e d t o t h r o u g h o u t has been t o measure o n l y t h e f i n a l o u t p u t . G e n e r a l l y 1) S t a t l i g t j a n s t e p r o d u k t i o n . P r o d u k t i v i t e t s u t v e c k l i n g e n 1 9 60 - 19 80 . Huv u dr a p p or t ( C e n t r a l Government S e r v i c e P r o d u c t i o n . P r o d u c t i v i t y Tr ends 1 9 60 - 1 9 8 0 . Main r e p o r t ) . Swedish Agency f o r A d m i s t r a t i v e Devel opment , R e p o r t No 1 9 8 5 : 1 5 . The r e p o r t has been p r e p a r e d by a p r o j e c t gr oup headed by Dr Ri c h a r d Murray.

2) The l a b o u r m a r k e t a d m i n i s t r a t i o n , t h e h o u s i n g a d m i n i s t r a t i o n , t h e j u d i c i a r y s e r v i c e , t h e c o r r e c t i o n a l s e r v i c e , t h e e n f o r c e me n t s e r v i c e , t h e a g r i c u l t u r a l a d m i n i s t r a t i o n , the land survey a d m i n i s t r a t i o n , the police service, the social

insurance s e r v i c e , the tax a d m in istratio n ,

t h e Swedish M e t e o r o l o g i ca l and H y d r o l o g i c a l I n s t i t u t e , and t h e c ust oms s e r v i c e .

67

s p e a k i n g , t h e measur es r e f e r t o such e n t i t l e s a s t h e number o f p r o c e e d ­ i n g s o r c a s e s , o r 1n some i n s t a n c e s t h e number o f u t i l i z e d p l a c e s i n c a r e o r e d u c a t i o n . O t h e r exampl es a r e t h e number o f du t y h o u r s i n t h e c ust oms and p o l i c e s e r v i c e s . I n one c a s e onl y - t h e employment exchange s e r v i c e - has i t been n e c e s s a r y t o r e s o r t t o w o r k - l o a d i n s t e a d o f o u t p u t a s a measur e. In each f i e l d o f a d m i n i s t r a t i o n , e s t i m a t e s have been made f o r s e v e r a l t y p e s o f s e r v i c e s . These have been a g g r e g a t e d i n s l i g h t l y d i f f e r e n t ways, dep en d i n g on t h e a v a i l a b l e m a t e r i a l . A s e n s i t i v i t y a n a l y s i s i n d i c a t e s t h a t t h e p r o d u c t i v i t y t r e n d e s t i m a t e s r emain r a t h e r u n a f f e c t ­ ed even by l a r g e c hange s i n t h e w e i g h t s . The a g g r e g a t i o n o f t h e o u t p u t volumes from t h e v a r i o u s a u t h o r i t i e s t o a t o t a l measur e ha s been made by means o f c o s t p e r s e r v i c e u n i t i n 1 9 8 0 p r i c e s . A s i m i l a r p r oc e d u r e ha s been used w i t h i n each a u t h o r i t y .

Co s t F o r t h e y e a r s 1 9 7 0 / 7 1 - 1 9 8 0 / 8 1 , c o s t d a t a a t c u r r e n t p r i c e s have been c o l l e c t e d from t h e c e n t r a l gover nment c o mp u t e r i z e d a c c o u n t i n g syst em. F o r t h e p r e c e d i n g y e a r s , manual c o m p i l a t i o n s made by t h e N a t i o n a l A u d i t Bureau have been us e d. Some a d j u s t m e n t s have been n e c e s s a r y t o make t h e c o s t s compa tib le wi t h t h e s e r v i c e s used a s q u a n t i t y i n d i c a t o r s . In t h e r e c a l c u l a t i o n a t f i x e d p r i c e s , t h e n a t i o n a l a c c o u n t s i n c l u d e an i m p l i c i t p r i c e i n d e x s e r i e s f o r t h e a v e r a g e c onsumpt i on o f r e s o u r c e s i n t h e c e n t r a l gover nment a d m i n i s t r a t i o n . However, t h e a u t h o r i t i e s s e l e c t ­ e d i n t h e s t ud y d i f f e r from t h e a v e r a g e i n r e s p e c t t o t h e r e l a t i v e s i z e o f v a r i o u s c o s t i t e m s . Fo r i n s t a n c e , t h e p a y r o l l o f t h e s e a u t h o r i t i e s form a l a r g e r p a r t o f t h e t o t a l c o s t t h a n i n t h e c e n t r a l a d m i n i s t r a t i o n a s a wh o l e . S e p a r a t e r e c a l c u l a t i o n s have t h e r e f o r e been made i n t h e s t u d y f o r t h e v a r i o u s t y p e s o f c o s t s - w a g e s / s a l a r i e s , p a y r o l l i ncr em­ e n t s , c u r r e n t c o n s umpt i on , c a p i t a l consumpt i on and r e n t s .

68

Productivity trends The t a b l e below shows t h e t r e n d s i n r e s p e c t t o o u t p u t , r e s o u r c e consumpt i on and p r o d u c t i v i t y f o r t h e s e l e c t e d a u t h o r i t i e s ( annual percentage c h a n g e s): 1960-65

1965-70

1970-75

1975-80

Ou t p ut

+2. 4

+3. 4

+1.1

+4. 4

Consumption o f r e s o u r c e s

+4. 5

+7. 0

+6. 5

+1. 8

Productivity

-2.0

-3.3

-5.2

+2. 5

____

Both o u t p u t and c onsumpt i on o f r e s o u r c e s i n c r e a s e d d u r i n g t h e p e r i o d as a whol e. Up u n t i l

1975 o u t p u t i n c r e a s e d s l owe r t h a n r e s o u r c e consump­

t i o n , which meant a d e c r e a s e i n t h e p r o d u c t i v i t y r a t e . Dur i ng t h e l a s t f i v e y e a r s , o u t p u t i n s t e a d grew f a s t e r , and t h e p r o d u c t i v i t y t r e n d became p o s i t i v e . A compar i s on o f t h e a u t h o r i t i e s y i e l d s ve r y s i m i l a r p r o d u c t i v i t y t r e n d s ( T a b l e 2 . 4 ) . The change from a n e g a t i v e t o a p o s i t i v e devel opment which t ook p l a c e a r o u nd 1975 can be n o t ed p r a c t i c a l l y t h r o u g h o u t . The onl y e x c e p t i o n i s t h e h o u s i n g a d m i n i s t r a t i o n , which b o a s t s t h e s t r o n g e s t p r o d u c ti v i ty in c re a s e of a l l

( + 3 . 2 p e r c e n t a s an a v e r a g e f o r t h e whole

twenty-year period). As p r e v i o u s l y men t i o ned , e s t i m a t i o n s have been made n o t on l y o f t h e t o t a l p r o d u c t i v i t y c h a n g e , b u t a l s o o f t h e c hange s i n r e s p e c t t o l a b o u r and v a l u e added. The d i f f e r e n c e s a r e i n s i g n i f i c a n t i f t h e whole p e r i o d i s c o n s i d e r e d . The p a t t e r n o v e r t h e y e a r s i s a l s o s i m i l a r . The annual p e r c e n t a g e c hange s d u r i n g 1 9 6 0 - 1 9 30 a r e shown below: Total p r o d u c t i v i t y

-2.1

Labour p r o d u c t i v i t y

-1.8

Va l u e - a d de d p r o d u c t i v i t y

-2.0

69

Table 2 . 4

P r o d u c t i v i t y t r e n d s f o r some c e n t r a l gover nment a u t h o r i t i e s 1 9 6 0 - 1 9 8 0 . Annual p e r c e n t a g e changes

1960-65

1965-70

1970-75

1975-80

1960-80

Labour mar ket administration ^

-1.9

-7.4

-3.5

+1.9

-2.8

Housing a d m i n i s t r a t i o n

+5. 0

- .6

+6. 6

+2. 0

+3. 2

- .9

+1. 3

+2.8

- .6

Judiciary service

-5.4

Correctional service

-5.6

-6.0

-11.0

+ .3

-5.6

Enf or ce me nt s e r v i c e

—

-4.1

-4.9

+3.1

-2.0

-5.0

-1.6

+ .6

+1.1

-1.3

-4.0

+ .3

-2.9

+2. 5

-1.1

-1.8

-6.2

+ 3. 6

-1.5

Agr i c ul t u r a l administration Land sur v e y admi ni s t r a t i on Police service

—

S o c i al i n s u r a n c e service

- 1 . 0 3*

-2.6

-4.8

- .2

-2.4

Tax a d m i n i s t r a t i o n

-2.9

-7.1

-6.4

+5.1

-2.9

Customs a d m i n i s t r a t i o n

+5. 0

+5. 2

-4.3

+4.1

+2. 4

-3.1

+4. 2

-3.7

+4. 7

+ .5

-4.3

-3.2

-3.7

-5.2

+2.5

-2.0

The Swedish Me t e o r o l o g­ i c a l and H y d r o l o g i c a l Institute The P a t e n t and R e g i s t it) ra tio n Office Total

(e x cl. the

l a s t two b o d i e s )

-2.0

-3.3

1 ) I n c l u d i n g l a b o u r e x c h a n g e s , l a b o u r mar ke t i n s t i t u t e s and l a b o u r market t r a i n i n g f a c i l i t i e s 2 ) 1 9 65 - 80 3)

1963 - 65

4 ) Ds Fi 1 9 8 3 : 1 8 5 ) 1 9 70 - 80

70 Q u a l i t y c hanges In t h e s t u d y , a t t e m p t s have been made t o c o n s i d e r c e r t a i n q u a l i t y c han ge s by - a d j u s t i n g t h e s e r v i c e i n d i c a t o r s on t h e b a s i s o f t h e h i g h e r o r l o we r c o st s assoc iated with c e r t a i n q u a l i t i e s - s e p a r a t i n g s e r v i c e s o f d i f f e r e n t q u a l i t i e s and a s s i g n i n g them we i g ht s according to t h e i r r e l a t i v e c o st - making q u a l i t y c o n t r o l s i n t h e form o f a n a l y s e s o f a t t a i n e d g o a l s / effects. A ge n e r a l o b s e r v a t i o n i s t h a t i f t h e s e r v i c e s a r e br oken down t o a s u f f i c i e n t l y d e t a i l e d l e v e l , t h e q u a l i t y changes o f t h e i n d i v i d u a l s e r v i c e s o f t e n pr o ve t o be mi nor .

2.6

Public l i b r a r i e s

A s p e c i a l st udy has been made o f t he p r o d u c t i v i t y o f t h e p u b l i c l i b r a r i e s 1 ^ . The q u a n t i t y i n d i c a t o r f o r t h e o u t p u t has been t h e number o f l e n t books, p e r i o d i c a l s , c a s s e t t e s e t c . Dur i ng t h e p e r i o d o t h e r a c t i v i t i e s a t t h e l i b r a r i e s have grown c o n s i d e r a b l y , b u t i n t h e st udy th e s e are c l a s s i f i e d as a n c i l l a r y se rv ic e s or support f o r the fin al p r o d u c t - t h e l e n d i n g s e r v i c e . No w e i g h t s f o r d i f f e r e n t t y p e s o f l e n d ­ i n g have been a p p l i e d i n t h e e s t i m a t i o n p r o c e s s . The consumpti on o f r e s o u r c e s has been measur ed by t h e t o t a l c u r r e n t expendi tu re of the publ ic l i b r a r i e s according to t h e i r b a la nc e - sh e et s. The e x p e n d i t u r e ha s been br oken down by book p u r c h a s e s , p a y r o l l s , r e n t s and i n c i d e n t a l s . R e c a l c u l a t i o n a t f i x e d p r i c e s f o r t h e media c o s t s has been made by means o f t h e c o r r e s p o n d i n g i n d e x s e r i e s i n t h e consumer p r i c e i n d e x , and f o r p a y r o l l s and i n c i d e n t a l s by t h e c o r r e s p o n d i n g 1)

To be p u b l i s h e d i n 1 9 8 7 by t h e E x p e r t Group on P u b l i c Fi n a n c e .

71

i n d e x s e r i e s f o r government con s ump t i o n. F o r r e n t s , a we i gh t e d i ndex s e r i e s f o r h o u s i n g , f u e l and e l e c t r i c i t y from t h e consumer p r i c e i nd ex h a s been used. Bot h t o t a l and l a b o u r p r o d u c t i v i t y t r e n d s have been c a l c u l a t e d , and t h e a n n ual p e r c e n t a g e c h a n ge s a r e gi v e n below: 1970-75

1975-BO

1960-80

Total p r o d u c ti v i ty

1960-65 -5.4

1965-70 +6.4

+ .7

-5.5

-1.1

Lab ou r p r o d u c t i v i t y

-3.5

+3.3

-1.3

-2.8

-1.1

The c a l c u l a t i o n s do n o t c o v e r t h e many newly i n t r o d u c e d a c t i v i t i e s a t t h e l i b r a r i e s which a r e n o t d i r e c t l y a s s o c i a t e d w i t h l e n d i n g . A s e n s i ­ t i v i t y s t u dy was made t o f i n d o u t how t h e s e a c t i v i t i e s a f f e c t t h e pr od­ u c t i v i t y e s t i m a t e s . The s t ud y was b a s e d on two ass u mp t i o ns : 1 ) The new a c t i v i t i e s d i d n ot e x i s t b e f o r e 1 9 6 0 . 2 ) In 1 9 80 t h e c o s t s o f t h e s e a c t i v i t i e s amounted t o 3 p e r c e n t o f t h e t o t a l r e s o u r c e consumpt i on o f t h e p u b l i c l i b r a r i e s ( t h e p e r c e n t a g e f i g u r e o b t a i n e d a t one l i b r a r y wher e t h e s e c o s t s had been s p e c i f i c a l l y c a l c u l a t e d ) . On t h e s e assump­ t i o n s , t h e p r o d u c t i v i t y d e c r e a s e d u r i n g 1 9 6 0 - 80 becomes

.92 per ce nt

i n s t e a d o f 1 . 0 7 i n t h e main a l t e r n a t i v e , i . e . t h e d i f f e r e n c e i s 1nsignificant.

2.7

The n a t i o n a l d e f e n c e

P r o d u c t i v i t y r a t e s f o r t h e armed f o r c e s have been e s t i m a t e d f o r each b u d g e t y e a r d u r i n g t h e p e r i o d 1 9 7 2 / 7 3 - 1 9 8 2 / 8 3 by t h e Swedish Na t i o n a l Def enc e Re s e ar c h I n s t i t u t e 1 ) . Owing t o t h e i n t r o d u c t i o n o f a new

1) P r o d u k t l o n s - , k o s t n a d s - och p r o d u k t i v i t e t s u t v e c k l i n g inom armen och f ly gv ap ne t 1972 - 1982. Rapport t i l l

expertgruppen f o r s t u d i e r i

o f f e n t l i g ekonomi ( O u t p u t , C o s t and P r o d u c t i v i t y Tr ends 1n t h e Army a nd t h e A i r Fo r c e 1 9 7 2 - 1 9 8 2 . Re p o r t t o t h e E x p e r t Group on P u b l i c F i n a n c e ) . Ds F1 1 9 8 6 : 1 . The r e p o r t has been p r e p a r e d a t t h e Na t i o na l De f enc e R e s e ar c h I n s t i t u t e u n d e r t h e d i r e c t i o n o f Mr J a n F o g h e l i n .

72

a c c o u n t i n g sys t e m i n 1 9 7 2 / 7 3 , i t d i d n o t seem f e a s i b l e t o c a r r y t h e s t u d y f u r t h e r back t h a n t h a t y e a r . Al s o, as t h e d a t a f o r t h e Navy p r o v e d d i f f i c u l t t o h a n d l e , t h e s t udy was c o n f i n e d t o t h e Army and t h e Ai r Fo r c e .

The Army

Among a l l t h o a c t i v i t i e s o f t h e Army, t h e q u a n t i t y i n d i c a t o r c hosen r e f e r s t o t h e n a t i o n a l s e r v i c e t r a i n i n g . The o u t p u t measur e has been t h e number o f days o f b a s i c t r a i n i n g and r e f r e s h e r c o u r s e s , a l t e r n a t i v ­ e l y t h e t o t a l number o f c o n s c r i p t s t r a i n e d d u r i n g t h e y e a r . The t r e n d seems a b o u t t h e same i n bo t h a l t e r n a t i v e s . Changes i n t h e q u a l i t y o f t h e t r a i n i n g have n o t been p o s s i b l e t o r e c o r d . Da t a on r e s o u r c e consumpt i on have been drawn from t h e Army annual a c c o u n t s , w i t h a breakdown by v a r i o u s t y p e s o f c o s t s . R e c a l c u l a t i o n s a t f i x e d p r i c e s have been made by means o f a s p e c i a l f a c t o r f o r each t yp e of cost.

The r e s u l t s f o r t h e whol e p e r i o d o f o b s e r v a t i o n i n d i c a t e s i m i l a r o u t p u t and c o s t s i t u a t i o n s d u r i n g t h e f i r s t and t h e l a s t y e a r s , wi t h v a r i a ­ t i o n s i n t h e mi ddl e o f t h e p e r i o d . When t h e number o f c o n s c r i p t s has been u n u s u a l l y h i g h , t h e a v e r a g e c o s t s have been low, which i l l u s t r a t e s t h a t t h e Army ha s ve r y h i gh o ve r h e a d c o s t s . The p r o d u c t i v i t y , as d e f i n ­ ed i n t h e s t u d i e s , has t h e r e f o r e f i r s t dr opped w i t h t h e l ower number o f c o n s c r i p t s , ? nd t h e n r i s e n a s t h e number o f c o n s c r i p t s has i n c r e a s e d . E s t i m a t e s o f t h e annual p e r c e n t a g e c hange s i n p r o d u c t i v i t y f o r t h e Army a r e g i v e n below:

Q u a n t i t y i n d i c a t o r ___________ 1 9 7 2 / 7 3 - 7 7 / 7 8 Number o f t r a i n i n g days

-1.6

Nuirtber o f c o n s c r i p t s ________________ - 1 . 2 ______

1977/78 - 82/83 +1.6 +2. 3

73

The Ai r Force The o u t p u t measur e f o r t h e A i r Fo r c e has been t h e number o f f l y i n g h o u r s . The v a s t d i f f e r e n c e between v a r i o u s t y p e s o f a i r c r a f t has made i t n e c e s s a r y t o a s s i g n w e i g h t s t o t h e s e h o u r s , and a c c o r d i n g t o t h e main e s t i m a t e t h e f l y i n g h o u r s have become f e wer i n number d u r i n g t h e p e r i o d . The c o s t s a s r e c a l c u l a t e d by means o f a s p e c i f i c A i r Fo r c e i n d e x have gone up and down. The c o s t p e r f l y i n g h o u r - and i n v e r s e l y t h e p r o d u c t i v i t y r a t e - ha s v a r i e d d u r i n g t h e p e r i o d b u t i s r oughl y t he same d u r i n g t h e f i r s t and t h e l a s t y e a r s . T h e annual p e r c e n t a g e p r o d u c t i v i t y c hange s f o r t h e A i r Fo r c e a r e shown below: 19 72/73 - 77/78

+4. 7

1977/78 - 81/82

-4.9

2.8

Housing and c ommunity pl an n i n g

T o g e t h e r , t h e s t u d i e s d e s c r i b e d i n t h e p r e v i o u s s e c t i o n s c o v e r a maj or p a r t o f t he Swedish p u b l i c s e r v i c e p r o d u c t i o n . To e x t e n d t h e c o v e r a g e e v e n f u r t h e r , summary c a l c u l a t i o n s ba s e d on t h e n a t i o n a l a c c o u n t s have b e e n made by S t a t i s t i c s Sweden i n t h e f i e l d s o f ho u s i n g and community p l a n n i n g f o r t h e p e r i o d 1 9 7 0 - 19 8 0

.

In t h e n a t i o n a l a c c o u n t s , hous i n g a t t h e c e n t r a l government l e v e l i n c l u d e s t h e a d m i n i s t r a t i v e c o s t s o f t h e M i n i s t r y o f Housing, t h e N a t i o n a l Housing Board and t h e r e g i o n a l h o u s i ng b o a r d s . At t h e l o c a l gover nment l e v e l , i t c o v e r s c o n s t r u c t i o n and c l e a r a n c e o f hou s i n g e s t a t e s , as we l l a s o t h e r h o us i n g m e a s u r e s . Community p l a n n i n g i n t he c e n t r a l government c o r r e s p o n d s mai nl y t o t h e c o s t s o f t h e N a t i o n a l Boar d o f P h y s i c a l P l a n n i n g and B u i l d i n g , w h i l e i n l o c a l government i t i n c l u d e s c o s t s r e l a t e d t o p h y s i c a l p l a n n i n g and l an d u t i l i z a t i o n .

1) PM med o v e r s l a g s m a s s i g a b e r a k n i n g a r o v e r p r od u kt i on s vo l y m och k o s t n a d e r f o r b o s t a d s p o l i t i k och s a m h a l l s p l a n e r i n g (Memorandum wi t h summary e s t i m a t e s o f o u t p u t and c o s t s i n t h e f i e l d s o f h o u s i n g and comnuni t y p l a n n i n g ) . P r e p a r e d by S t a t i s t i c s Sweden, NR-PM 1 9 8 4 : 2 9 .

74

The o u t p u t i n t h e h o u s i n g f i e l d has been assumed t o c o - v a r y wi t h t h e h o u s i n g c o n s t r u c t i o n volume a s e s t i m a t e d i n t h e n a t i o n a l a c c o u n t s . Th i s means t h a t c e r t a i n q u a l i t y c h a r a c t e r i s t i c s have been t a k e n i n t o c o n s i d ­ eration.

In community p l a n n i n g , c o r r e l a t i o n wi t h t h e t o t a l volume o f

c o n s t r u c t i o n has been assumed. The q u a n t i t y i n d i c a t o r has been new i n v e s t m e n t s i n b u i l d i n g s and i n s t a l l a t i o n s a c c o r d i n g t o t h e n a t i o n a l accounts es tim a te s. C°s t d a t a have been drawn d i r e c t l y from t h e n a t i o n a l a c c o u n t s t a b l e s a t f i x e d p r i c e s , s u b s e q u e n t t o c e r t a i n a d j u s t m e n t s due t o a r e s t r u c t u r i n g o f t h e muni ci pal a c c o u n t s . The r e s u l t s o f t h e summary c a l c u l a t i o n s f o r t h e two f i e l d s t aken t o g e t h e r a r e shown below ( a nnua l p e r c e n t a g e c h a n g e s ) :

1970-75

1975-80

1970-80

Out p u t

-1.6

- .7

-1.2

Cost

-1.8

+2. 7

+ .5

Productivity

+ .2

-3.3

-1.7

C o n t r a r y t o most o f t h e t we l v e s e l e c t e d f i e l d s s t u d i e d i n s e c t i o n 2 . 5 , t h e s e two f i e l d s d i s p l a y c o n s i d e r a b l y more n e g a t i v e p r o d u c t i v i t y t r e n d s d u r i n g t h e s econd h a l f o f t h e 1 9 7 0 ' s t h a n d u r i n g t h e f i r s t . One e x p l a n ­ a t i o n mi ght be t h a t c o n s t r u c t i o n was c u r t a i l e d d u r i n g t h a t p e r i o d .

2.9

Co n c l u s i o n s o f t h e p i l o t s t u d i e s

The s t u d i e s b r i e f l y d e s c r i b e d i n t h e p r e v i o u s s e c t i o n s s h ou l d be r e g a r d e d a s a f i r s t a t t e m p t t o make a s y s t e m a t i c r e vi e w o f t h e v a r i o u s f i e l d s o f t h e Swedish p u b l i c s e c t o r i n o r d e r t o i l l u s t r a t e c u r r e n t p r o ­ d u c t i v i t y t r e n d s . Al t hough t h e s t u d i e s have been gover ned by t h e same t er ms o f r e f e r e n c e , t h e y have been c on d uct ed a l o n g r a t h e r d i f f e r e n t l i n e s , due t o t h e s p e c i f i c f e a t u r e s o f t h e v a r i o u s f i e l d s and t h e con­ s t r a i n t s of the a v a i l a b l e m ate rial.

75

The aim o f t h e s t u d i e s has been b o t h r e s u l t - and m e t h o d - o r i e n t e d . By p r o v i d i n g d a t a on t h e p r o d u c t i v i t y t r e n d s - though t e n t a t i v e - t h e s t u d i e s o f f e r a b a s i s f o r a c r i t i c a l e v a l u a t i o n o f t h e i m p l i c i t assump­ t i o n of the national accounts, v iz. t h a t the p r o d u c ti v ity of the public s e c t o r does n o t change o v e r t i m e . They a l s o p r o v i d e m a t e r i a l f o r f u r t h e r and more d e t a i l e d d i s c u s s i o n s . As t h e e s t i m a t i o n pr obl ems have been t a c k l e d i n v a r i o u s wa ys, t h e s t u d i e s a l s o p r o v i d e a c o l l e c t i o n o f c o n c e i v a b l e met hods and mea s ur e s . The d i f f e r e n t a p p r o a c h e s mi gh t be u s e f u l i n a p p r a i s a l s o f t h e s t a t i s t ­ i c a l m a t e r i a l s used and l e a d t o s u g g e s t i o n s f o r i mpr ovement s. I n a c o u p l e o f f i e l d s ( medi cal s e r v i c e s and e d u c a t i o n ) , t h e E x p e r t Group has had summary e s t i m a t e s o f t h e p r o d u c t i v i t y t r e n d s made t o s ee how we l l t h e s e a g r e e w i t h t h e f i n d i n g s o f t h e s t u d i e s . The m a t e r i a l has mai nl y been drawn from t h e n a t i o n a l a c c o u n t s f o r t h e p e r i o d 1 9 7 0 1980. F o r medi cal s e r v i c e s t h e e s t i m a t e s i n d i c a t e an unchanged p r o d u c t i v i t y d u r i n g 1 9 7 0 - 1975 ( a s compared w i t h a d e c r e a s e by 1 . 4 p e r c e n t i n t h e s t u d y ) , and an annual d e c r e a s e by 3 p e r c e n t d u r i n g 1 9 7 5 - 1 9 80 ( 2 . 4 p e r c e n t i n t h e s t u d y ) . In t h e e d u c a t i o n a l f i e l d t h e r e s u l t s show a p r o d u c t i v i t y d e c r e a s e by 1 . 6 p e r c e n t d u r i n g 19 7 0 - 1975 ( a s compared w i t h an i n c r e a s e by

. 3 p e r c e n t i n t h e s t u d y ) , and a d e c r e a s e by 1 . 5

p e r c e n t d u r i n g 1.975 - 1 9 80 ( 2 . 7 p e r c e n t i n t h e s t u d y ) . For t h e whole p e r i o d 1 9 7 0 - 1 9 8 0 , t h e summary e s t i m a t e s t h e r e f o r e a g r e e r e a s o n a b l y we l l w i t h t h e f i n d i n g s o f t h e s t u d i e s .

Findings The f i n d i n g s o f most o f t h e s t u d i e s have some f e a t u r e s i n common. F o r t h e whole p e r i o d o f o b s e r v a t i o n , t h e s t u d i e s i n d i c a t e a n e g a t i v e p r o d u c t i v i t y t r e n d o r no change a t a l l f o r a l l f i e l d s e x c e p t p u b l i c r o a d s and sone o f t h e t we l ve s e l e c t e d c e n t r a l government a u t h o r i t i e s i n s e c t i o n 2 . 5 . In t h o s e c a s e s wher e e s t i m a t i o n s have been made f o r bot h t h e 1 9 6 0 ' s and t h e 1 9 7 0 ' s , t h e d evel opment has p r ov e d somewhat b e t t e r during the l a t t e r period.

76

An o t h e r ge n e r a l o b s e r v a t i o n i s t h a t t h e p r o d u c t i v i t y goes down when t h e r e s o u r c e s i n c r e a s e s t r o n g l y , and r i s e s when t h e r e s o u r c e s d e c r e a s e . T h i s i n d i c a t e s t h a t i t i s e a s i e r t o keep up t h e p r o d u c t i o n i n s p i t e o f d i m i n i s h i n g r e s o u r c e s t h a n t o improve i t a t t h e same r a t e a s t he r e s o u r c e s i n c r e a s e . Ther e i s , i n o t h e r wor ds , a l a c k o f f l e x i b i l i t y i n t h e p u b l i c s e c t o r , a l t h o u g h a t l e a s t p a r t l y e x p l a i n a b l e by such f a c t o r s a s o v e r h ea d c o s t s , p e r s o n n e l p o l i c y e t c . The s p e c i a l s t u d y made o f t h e Na t i o na l P a t e n t and R e g i s t r a t i o n O f f i c e i s a p o i n t i n c a s e . When t h e number o f s u b m i t t e d a p p l i c a t i o n s f o r f or mi ng a l i m i t e d company dr opped r a d i c a l l y due t o s t r i c t e r r u l e s (minimum c a p i t a l r a i s e d from SEK 5 0 0 0 t o 50 0 0 0 ) , a p r o d u c t i v i t y d e c r e a s e by 4 p e r c e n t a n n u a l l y was n o t e d . An example i n t h e o t h e r d i r e c t i o n i s gi v en by t h e s t ud y o f t h e g e n e r a l c o u r t s o f j u s t i c e , which e x p e r i e n c e d an annual p r o d u c t i v i t y i n c r e a s e by a l m o s t 4 p e r c e n t from 1 9 75 t o 19 81 . A p r o b a b l e e x p l a n a t i o n i s t h a t t h e g r e a t e r wor kl o a d o f t h e c o u r t s was c o u n t e r e d by a more f l e x i b l e d i s t r i ­ b u t i o n o f t h e t a s k s , b ot h i n r e s p e c t t o t y p e o f d u t i e s and c a t e g o r y o f s t a f f . The i n c r e a s e d amount o f work d i d n o t n e c e s s i t a t e an e q u i v a l e n t increase of resources. The f i n d i n g s mi gh t a l s o be r e l a t e d t o t h e growi ng a d m i n i s t r a t i v e s u p e r ­ s t r u c t u r e o f t h e p u b l i c s e c t o r . The p r o d u c t i v i t y t r e n d s r e p o r t e d a r e due n o t o nl y t o t h e p r o d u c t i o n p r o c e s s i t s e l f , b u t a l s o t o v a r i o u s a d m i n i s t r a t i v e mea s u r e s t a k e n a t a l l

l e v e l s , from P a r l i a m e n t and down­

wards i n t h e h i e r a r c h y . The heavy e x p a n s i o n o f t h e Swedish p u b l i c s e c t o r may have had a d e l a y ­ i n g e f f e c t on t h e p r o d u c t i v i t y d e vel opment . I t has t a k e n some t i m e t o g e t a l l i n n o v a t i o n s n e a t l y f i t t e d i n t o t h e syst em. T h i s h y p o t h e s i s would a c c o r d w i t h t h e l owe r r a t e o f d e c l i n e i n p r o d u c t i v i t y t owar ds t h e end o f t h e 1 9 7 0 ' s , and t h e change t o wa r d s a p o s i t i v e t r e n d i n some f i e l d s of the publ ic ad m i n i st r at i o n .

D e f i n i t i o n s and s a mpl i ng p r i n c i p l e s The p r i n c i p l e s f o r e s t i m a t i n g t h e p r o d u c t i v i t y i n t h e p u b l i c s e c t o r ha ve been d e s c r i b e d i n Appendix 1, s e c t i o n 4 . In t h e p r a c t i c a l a p p l i c ­ a t i o n s t h e s e p r i n c i p l e s have been f o l l o w e d a s f a r a s p o s s i b l e , a l t h o u g h w i t h d i f f e r e n t e mphasi s i n t h e d i f f e r e n t s t u d i e s .

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The e s t i m a t e s were a s f a r as p o s s i b l e t o a p pl y t o t h e e n t i r e s t u d i e d f i e l d . T h i s has been f e a s i b l e i n some c a s e s , p a r t i c u l a r l y where t h e p r o d u c t i o n was measured by a s i n g l e , r e l a t i v e l y s i mp l e and homogeneous q u a n t i t y i n d i c a t o r . Some exampl es a r e e d u c a t i o n (number o f l e a r n i n g h o u r s ) , p u b l i c r oa ds ( t r a f f i c volume, t r a n s p o r t v o l ume ) , and t h e n a t i o n a l de f e n c e (number o f t r a i n i n g d a y s , number o f f l y i n g h o u r s ) . In o t h e r i n s t a n c e s i t has been n e c e s s a r y t o r e s o r t t o a s a mpl i ng p r o ­ c e d u r e . When t h e s e r v i c e s c a n n o t be a d e q u a t e l y r e p r e s e n t e d by one s i m p l e i n d i c a t o r b u t have t o be measured by more d e t a i l e d component i n d i c a t o r s t o g e t meani ngful e s t i m a t e s , , i t may become t oo c o m p l i c a t e d o r t o o e x p e n s i v e t o c o v e r t h e e n t i r e f i e l d . P u b l i c h e a l t h and medi cal c a r e form one exampl e. The emphasi s was p l a c e d on h o s p i t a l - r e l a t e d medi cal c a r e , p a r t i c u l a r l y i n - p a t i e n t c a r e . The c hosen q u a n t i t y i n d i c ­ a t o r was i nd e e d q u i t e s i mp l e - t h e number o f p a t i e n t s a d m i t t e d - b ut i t s c o n t e n t was c o n s i d e r e d t o d i f f e r so much between v a r i o u s d e p a r t ­ men t s t h a t t h e e s t i m a t e s were made p e r d e p a r t me n t . T h i s made i t n e c e s s ­ a r y t o c o n f i n e t h e s t u d y t o a s a mpl e , c o v e r i n g s l i g h t l y l e s s t h a n onet h i r d o f a l l h o s p i t a l s w i t h emergency d e p a r t me n t s and s t r u c t u r e d so as t o make i t a s r e p r e s e n t a t i v e as p o s s i b l e . The sample i n c l u d e d h o s p i t a l s f r om bot h d e n s e l y p o p u l a t e d and r u r a l a r e a s , as wel l as h o s p i t a l s of v a r i o u s s i z e s . Ther e i s no e v i d e n c e o f b i a s due t o t h e s a mpl i ng method, b u t o t h e r t y p e s o f samples a r e o f c o u r s e c o n c e i v a b l e . A d i f f e r e n t t y p e o f sa mp l i n g was made i n t h e s t u d y o f t h e t we l v e s e l ­ e c t e d f i e l d s p r e s e n t e d i n s e c t i o n 2 . 5 . T h i s s t ud y was n o t t o i n c l u d e a u t h o r i t i e s c o v e r e d by t h e o t h e r s t u d i e s i n t h e p r o j e c t , i . e . apr oxi ma t e l y 50 p e r c e n t o f t h e c e n t r a l government s e c t o r . The s e l e c t i o n made among t h e r e ma i n i ng a u t h o r i t i e s r e p r e s e n t s some 7 0 p e r c e n t o f t h e i r r e s o u r c e c o nsumpt i on, and f o c u s e s on a d m i n i s t r a t i v e f i e l d s i n which t he f i n a l o u t p u t can be e a s i l y measur ed. I t i s u n c e r t a i n w h e t h e r t h e p r o d ­ u c t i v i t y t r e n d s o f t h e sample a r e c h a r a c t e r i s t i c o f t h e r e ma i n i ng f i e l d s a s w e l l , s i n c e t h e r e s o u r c e devel opment i n t h e sample was more r a p i d t h a n i n t h e c e n t r a l government a s a whol e. Owing t o t h e t en d e n cy p r e v i o u s l y ment i oned, v i z . t h a t i n c r e a s i n g r e s o u r c e s l e a d t o a d e c l i n e in p r o d u c ti v i ty , i t i s not u n lik ely t h a t the findings exaggerate the p r o d u c t i v i t y d e c r e a s e i n t h e c e n t r a l gover nment.

78

Out put measur es The fundamental c o n c e p t i n t h e p r o d u c t i v i t y e s t i m a t i o n s i s t h e o u t p u t measur e. To c ov e r a l l a c t i v i t i e s i n t h e p u b l i c s e r v i c e s i s o f c o u r s e i m p o s s i b l e , and i t i s t h e r e f o r e n e c e s s a r y t o f i n d q u a n t i t y i n d i c a t o r s whi ch can r e p r e s e n t t h e v a r i o u s s e r v i c e s . T h i s pr obl em was s o l v e d i n v a r i o u s ways i n t h e s t u d i e s . In s e v e r a l f i e l d s s i mp l e and homogeneous i n d i c a t o r s were a v a i l a b l e , which i s an obv i o u s ad v an t age p r ov i de d t h e d evel opment o f t h e s e i n d i c a t o r s r e a l l y i s c h a r a c t e r i s t i c o f t h e whole f i e l d during the e n t i r e period of observation. The e d u c a t i o n a l f i e l d can be t a k e n as an exampl e. The s t ud y used ' l e a r n i n g h o u r s ' a s a s i mpl e q u a n t i t y i n d i c a t o r , measured by t h e number o f ' p u p i l h o u r s p e r w e e k ' . However, d u r i n g t h e o b s e r v a t i o n p e r i o d a number o f i n n o v a t i o n s were i n t r o d u c e d , such a s s p e c i a l t u i t i o n , home l an g u a g e t u i t i o n f o r i mm i g r a n t s, f r e e m e a l s, and v a r i o u s s o c i a l - w e l f a r e me a s ur e s f o r s t u d e n t s . A s p e c i a l s t ud y s h ou l d be made o f t h e s e activities. P u b l i c l i b r a r i e s i s a l s o a f i e l d where a s i mpl e q u a n t i t y i n d i c a t o r was u s e d , v i z . t h e number o f l e n t p u b l i c a t i o n s and c a s s e t t e s . However, p a r t i c u l a r l y d u r i n g t h e 1 9 7 0 ' s t h e r e was an i n c r e a s e i n o t h e r c u l t u r a l a c t i v i t i e s , such a s e x h i b i t i o n s , l e c t u r e s , c o n c e r t s and s p e c i a l a r r a n g ­ ement s f o r c h i l d r e n and y o u t h s . These a r e n o t c ov e r e d by t h e o u t p u t me a s ur e , b u t s p e c i a l e s t i m a t i o n s i n d i c a t e t h a t t h e i r e f f e c t on t h e productivity rate is insignificant. Examples o f t h e o p p o s i t e t y p e a r e t h e s t u d y o f t h e t we l ve c e n t r a l gover nment f i e l d s and, t o some e x t e n t , t h e s t u d i e s o f medi cal s e r v i c e s and s o c i a l w e l f a r e .

In t h e s e s t u d i e s a g r e a t number o f o u t p u t measur es

wer e us e d , which g i v e s b e t t e r e s t i m a t e s f o r each component f i e l d b u t i n s t e a d i n v o l v e s t h e pr obl em o f c o n s t r u c t i n g a we i gh t e d e s t i m a t e f o r t h e whole f i e l d .

79

Weights As men t i o ned i n Appendi x 1 , s e c t i o n 4 , t h e w e i g h t s u s e d t o a g g r e g a t e v a r i o u s t y p e s o f s e r v i c e s s h o u l d i d e a l l y be b a s e d on t h e u s e r s

valua­

t i o n s , a s i n t h e p r i v a t e s e c t o r where t h e y a r e r e f l e c t e d by t h e p r i c e s . Due t o t h e a b s e n c e o f p r i c e f o r m a t i o n i n t h e p u b l i c s e c t o r , c o s t d a t a ha d t o be us e d i n s t e a d , most f r e q u e n t l y t h e u n i t c o s t o f t h e c hosen q u a n t i t y i n d i c a t o r i n 1 9 8 0 p r i c e s . To g e t a t o t a l e s t i m a t e o f t h e med­ ica l services, the percentages of the to tal current expenditure a t t r i b ­ u t a b l e t o t h e v a r i o u s t y p e s o f c a r e a t t h e t i me o f t h e measurement were u s e d as w e i g h t s . Wi t hi n each s e p a r a t e t y p e o f c a r e , on t h e o t h e r hand, 1 9 8 0 p r i c e s were us e d. To g e t an i d e a o f t h e s i g n i f i c a n c e o f t h e w e i g h t s f o r t h e r e s u l t s , e s t i m a t e s were made u s i n g f i r s t t h e a v e r a g e c o s t o f each d e p a r t me n t , s e c o nd l y an a v e r a g e o f d e p a r t me n t s o f t h e same t y p e , and t h i r d l y t h e l o w e s t / h i g h e s t a v e r a g e c o s t . The c o n c l u s i o n i s t h a t t h e v a r i o u s t y p e s o f w e i g h t s a f f e c t t h e t o t a l p r o d u c t i v i t y growth by onl y one o r two p e r mi l i e . A s i m i l a r c o n c l u s i o n can be drawn from t h e s t ud y o f t h e t we l v e s e l e c t e d c e n t r a l gover nment a u t h o r i t i e s . Th e r e t h e w e i g h t s were c a l c u l a t e d i n v a r i o u s ways, dependi ng on t h e a v a i l a b l e m a t e r i a l .

In a d d i t i o n t o t h e

a v e r a g e c o s t i n 1 9 8 0 , such mea s ur e s were u s e d a s t i me e x p e n d i t u r e , wo r k l oa d p o i n t s e t c .

In a s e n s i t i v i t y a n a l y s i s t he w e i g h t s were c o n s i d ­

e r a b l y m o d i f i e d , b u t t h e e f f e c t s on t h e f i n a l r e s u l t pr ove d s u r p r i s i n g ­ l y small .

Capacity In many p u b l i c s e r v i c e s t h e r e i s a c a p a c i t y a s p e c t t o c o n s i d e r . The p r o d u c t i o n c o s t s a r e h a r d l y a f f e c t e d by an i n c r e a s e i n t h e p r o d u c t i o n up t o c a p a c i t y . In such c a s e s t h e q u a n t i t y i n d i c a t o r s h o u l d r e f l e c t t he e x t e n t t o which t h e c a p a c i t y i s u s e d , and i n f a c t t h i s a s p e c t was c on­ s i d e r e d i n some o f t h e s t u d i e s . In e d u c a t i o n an a l t e r n a t i v e o u t p u t mea s u r e p e r form was e s t i m a t e d i n a d d i t i o n t o t h e measur e p e r p u p i l , whi ch had a n o t i c e a b l e e f f e c t on t h e p r o d u c t i v i t y r a t e . C a p a c i t y 1s a l s o d i s c u s s e d i n some o t h e r s t u d i e s , e . g . t h e one a b o u t c o r r e c t i o n a l s e r v i c e s , b u t t h e r e i t i s r a t h e r c o n s i d er e d as a q u a l i t y a s p e c t . This w i l l be f u r t h e r d i s c u s s e d below.

80

Co s t To e s t i m a t e t h e r e s o u r c e c onsumpt i on a t c u r r e n t p r i c e s f o r a l l t h e a c t i v i t i e s i n t h e s t u d i e d f i e l d s d i d n o t n or mal l y c a u s e any g r e a t difficulties.

In some c a s e s i t was p o s s i b l e t o u t i l i z e d a t a from t h e

n a t i o n a l a c c o u n t s , i n o t h e r s m a t e r i a l was drawn from annual r e p o r t s , b a l a n c e - s h e e t s , mu n i c i p al a cc o u n t s e t c . Someti mes, however, i t was d i f f i c u l t t o g e t d a t a on r e s o u r c e consumpt i on compar abl e w i t h t h e o u t ­ p u t me a s u r e s . The f i n e r t h e breakdown, t h e more d i f f i c u l t t o o b t a i n t h e c o r r e s p o n d i n g c o s t s . Ther e a r e two a l t e r n a t i v e t y p e s o f a p p r o x i m a t i o n s . In t h e f i r s t , t h e t r e n d s f o r t h e whole r e s o u r c e c onsumpt i on a r e s t u d i e d ( i n which c a s e t h e r e s o u r c e s f o r t h e s p e c i f i c s e r v i c e s i n c l u d e d i n t h e e s t i m a t i o n s a r e assumed t o f o l l o w t h e same t r e n d ) .

In t h e second,

a t t e m p t s a r e made t o i s o l a t e t h e c o s t s a s s o c i a t e d w i t h t h e s e r v i c e s c o v e r e d by t h e e s t i m a t i o n s . The a s s u mp t i o n i n t h i s c a s e i s t h a t t he p r o d u c tiv ity trends f o r the included serv ices are re p re se n tativ e of the whol e f i e l d . The se c ond a l t e r n a t i v e was t h e one most f r e q u e n t l y chosen i n t h e s t u d i e s . T h i s made i t p o s s i b l e t o a v o i d e r r o r s o r i g i n a t i n g from i n c l u d i n g newly i n t r o d u c e d a c t i v i t i e s i n t h e r e s o u r c e consumpti on d a t a b u t not in the out put da ta.

Price recalculations

As t h e o u t p u t i s measur ed i n r e a l t e r m s , t h e r e s o u r c e consumpt i on has t o be r e c a l c u l a t e d a t f i x e d p r i c e s . T h i s i s a c o n s i d e r a b l e probl em, whi ch i s p a r a l l e l l e d i n t h e n a t i o n a l a c c o u n t s e s t i m a t i o n s o f t h e s e r v ­ i c e s i n t h e p r i v a t e s e c t o r . The p r e v i o u s s e c t i o n s p r e s e n t a v a r i e t y o f s o l u t i o n s . In t h e f i e l d s o f medi cal s e r v i c e s , s o c i a l w e l f a r e and educ­ a t i o n , t h e n a t i o n a l a c c o u n t s r e c a l c u l a t i o n f a c t o r was u s e d , a t l e a s t as a f i r s t a l t e r n a t i v e . F o r p u b l i c r o a d s two a l t e r n a t i v e e s t i m a t e s were made, one b a s e d on t h e S t a t i s t i c s Sweden consumer p r i c e i n d e x and t h e o t h e r on t h e Na t i o n a l Road A d m i n i s t r a t i o n r oad i nd e x . Ot h e r s t u d i e s a t t e m p t e d t o r e c a l c u l a t e s e p a r a t e t y p e s o f c o s t s by s e p a r a t e i ndex s e r i e s , i n o r d e r t o g e t maximum accommodation i n t h e f i x e d - p r i c e c a l ­ c u l a t i o n s . P a r t i c u l a r l y i n t e r e s t i n g i s t h a t some s t u d i e s , i n a d d i t i o n t o t h e i r main f i n d i n g s , r e p o r t t h e e f f e c t s o f a l t e r n a t i v e r e c a l c u l a t i o n

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principles.

In t h e s o c i a l w e l f a r e s t u d y , t h e n a t i o n a l a c c o u n t s f i x e d -

p r i c e c a l c u l a t i o n s were s uppl e me nt ed by c a l c u l a t i o n s b a s e d on an a l t ­ e r n a t i v e i n d e x composed o f t h e consumer p r i c e i nd e x and a w a g e / s a l a r y i n d e x f o r each s e c t i o n o f t h e s t u d y . The p r o d u c t i v i t y t r e n d s a c c o r d i n g t o t h i s a l t e r n a t i v e a r e n o t i c e a b l y more n e g a t i v e t h a n t h o s e o b t a i n e d i n t h e main c a l c u l a t i o n s . A l t e r n a t i v e p r i c e r e c a l c u l a t i o n s made i n t h e p u b l i c - r o a d s and n a t i o n a l d e f e n c e s t u d i e s a l s o c o n f i r m t h a t t h e c h o i c e o f p r i c e i n d e x i s ver y important in the estimation of productivity trends, in f a c t considerab­ l y more i m p o r t a n t t h a n t h e a l l o c a t i o n o f w e i g h t s t o t h e r e a l s e r v i c e s .

Productivity rates As p o i n t e d o u t i n t h e f i r s t s e c t i o n o f t h i s a p pe nd i x , t h e p r o d u c t i v i t y e s t i m a t e s o f t h e s t u d i e s p r i m a r i l y c o nc e r n t h e t o t a l p r o d u c t i v i t y , i . e . t h e r a t i o between t h e o u t p u t and t h e t o t a l consumpt i on o f r e s o u r c e s . In some o f t h e s t u d i e s , o t h e r t y p e s o f p r o d u c t i v i t y measur es were c a l c u l ­ a t e d a s w e l l . Fo r t h e p u b l i c l i b r a r i e s and t h e t we l v e s e l e c t e d c e n t r a l gover nment a u t h o r i t i e s , l a b o u r p r o d u c t i v i t y measur es were c a l c u l a t e d t o o . Fo r t h e p u b l i c l i b r a r i e s t h e r e s u l t s do n o t d i f f e r much from t h o s e p e r t a i n i n g t o t h e t o t a l p r o d u c t i v i t y , i f t h e whole p e r i o d o f o b s e r v ­ a t i o n i s i n c l u d e d . For t h e t w e l v e a u t h o r i t i e s , t h e f i n d i n g s i n d i c a t e a sm a lle r p r o d u c ti v i ty decrease in r e s p e c t t o labour than to a l l r e sou rc ­ e s . One e x p l a n a t i o n i s t h a t i n t h e t o t a l c o s t t h e s h a r e p e r t a i n i n g t o l a b o u r has become s m a l l e r , w h i l e t h e s h a r e p e r t a i n i n g t o p r e m i s e s has grown l a r g e r d u r i n g t h e p e r i o d . F o r t h e s e a u t h o r i t i e s t h e p r o d u c t i v i t y i n r e s p e c t t o v a l u e added was c a l c u l a t e d a s w e l l , b u t 1n t h a t c a s e t h e t r e n d s were ve r y s i m i l a r t o t h o s e o f t h e t o t a l p r o d u c t i v i t y . G e n e r a l l y s p e a k i n g , t h e e s t i m a t e s i n t h e s t u d i e s p e r t a i n t o changes i n p r o d u c t i v i t y . Wherever p o s s i b l e , s e p a r a t e c a l c u l a t i o n s wer e made f o r t h e f i v e - y e a r p e r i o d s 1 9 60 - 6 5 , 1 9 6 5 - 7 0 , 1 9 7 0 - 7 5 and 1975 - 8 0 . The 1 9 6 0 ' s d a t a , however, a r e o f t e n i n f e r i o r i n q u a l i t y and a r e d i f f ­ i c u l t t o compare wi t h d a t a from t h e 1 9 7 0 ' s . I t i s t h e r e f o r e recommended n o t t o draw t oo f a r - r e a c h i n g c o n c l u s i o n s from t h e d i f f e r e n c e s f ound bet ween t h e s e two de c a d e s .

82 D i f f e r e n t e s t i m a t i o n methods were employed i n t h e d i f f e r e n t s t u d i e s , b u t common t o a l l i s t h a t t h e f i n a l r e s u l t i s t h e annual p r o d u c t i v i t y chan ge d u r i n g t h e v a r i o u s p e r i o d s . In some o f t he s t u d i e s t h e o u t p u t t r e n d d u r i n g a f i v e - y e a r p e r i o d i s r e p r e s e n t e d by i n d ex numbers, wi t h c o r r e s p o n d i n g i n d e x numbers f o r t h e r e s o u r c e consumpt i on. When t he f i r s t - m e n t i o n e d s e r i e s o f i n d e x numbers i s d i v i d e d by t h e second, t he r e s u l t i s t h e p r o d u c t i v i t y t r e n d d u r i n g t h e p e r i o d . The annual change i s t h e n c a l c u l a t e d by a 'compound i n t e r e s t ' method. Examples o f t h i s p r o c e d u r e a r t f ound i n t h e s t u d i e s o f t h e s o c i a l w e l f a r e and t h e t we l ve authorities.

In t h e medi cal s e r v i c e s and e d u c a t i o n , t h e annual change

was f i r s t c a l c u l a t e d s e p a r a t e l y f o r t h e o u t p u t and f o r t h e r e s o u r c e cons u mpt i on , and t h e n t h e second change was s u b t r a c t e d from t h e f i r s t . The r e s u l t s d e r i v e d by t h e two methods d i f f e r by a few t e n t h s o f a p e r cent.

Q u a l i t y changes When o u t p u t and r e s o u r c e consumpti on r a t e s a r e c a l c u l a t e d and compared d u r i n g a p e r i o d o f some l e n g t h , one c o n d i t i o n i s r a r e l y s a t i s f i e d , v i z . t h a t t h e q u a l i t y o f t h e s e r v i c e s and t h e i n p u t remain unchanged. How­ e v e r , t h e more d e t a i l e d t h e breakdown o f t he q u a n t i t y i n d i c a t o r s and c o s t s , t h e more l i k e l y t h a t t h i s r e q u i r e m e n t i s f u l f i l l e d . When t he work i n v o l v e s complex i n d i c a t o r s , i t mi ght be n e c e s s a r y t o e s t i m a t e or a t l e a s t g i ve an o p i n i o n o f t h e q u a l i t y changes t h a t have o c c u r r e d during the period of observation . Q u a l i t y q u e s t i o n s have been d i s c u s s e d i n a l l t h e s t u d i e s , b u t q u a n t i t ­ a t i v e e s t i m a t e s o f s p e c i f i c q u a l i t y f a c t o r s a r e made i n o n l y a few. In t h e o t h e r s , t h e o b s e r v a t i o n g e n e r a l l y made i s t h a t t h e r e i s no e v i d e n c e t h a t t h e q u a l i t y c hange s have a f f e c t e d t h e f i n d i n g s t o any n o t i c e a b l e extent.

The s t u d i e s i n which some s p e c i f i c q u a l i t y e s t i m a t i o n s a r e a t t e m p t e d c o n c e r n t h e medi cal s e r v i c e s and some o f t h e t we l v e c e n t r a l government a u t h o r i t i e s . For t h e medi cal s e r v i c e s , t h e q u e s t i o n i s d i s c u s s e d i n s e c t i o n 2 . 1 . Fo r t h e t we l ve a u t h o r i t i e s v a r i o u s t y p e s o f e s t i m a t i o n s

83

wer e made. One was an a t t e m p t t o compare t h e l e n g t h o f t i me r e q u i r e d f o r p r o c e s s i n g a c a s e a t t h e b e g i n n i n g and a t t h e end o f t h e p e r i o d . In t h e e nf o r c e me n t s e r v i c e t h e r e a r e r e a s o n s t o b e l i e v e t h a t t h e number of t i me - c on s u mi n g c a s e s have i n c r e a s e d . I f t h e p r o p o r t i o n o f such c a s e s we r e t o have doubl ed from 19 6 5 t o 1 9 8 0 - an ext r e me c o n t i n g e n c y - t h e ann u al p r o d u c t i v i t y change would have been - 1 . 4 i n s t e a d o f - 2 . 0 p e r c e n t . F o r t h e c o r r e c t i o n a l s e r v i c e , a q u a l i t y a d j u s t m e n t was made i n r e s p e c t t o t h e c a p a c i t y u t i l i z e d . Ac cor di ng t o a Government s t a t e m e n t t h e b e s t c o r r e c t i o n a l e f f e c t s a r e o b t a i n e d when t h e a v a i l a b l e p l a c e s a r e us e d t o 8 5 p e r c e n t o f c a p a c i t y . To t h e e x t e n t t h a t t h i s optimum was e x ce ed e d , t h e o u t p u t volume was r e d u c e d by t h e a d d i t i o n a l c o s t s t h a t would have been r e q u i r e d t o keep an occupancy r a t e o f 8 5 p e r c e n t . A n o t h e r example o f q u a l i t y e s t i m a t i o n s a r e t h e s e n s i t i v i t y c a l c u l a t i o n s made f o r l a b o u r m a r k e t t r a i n i n g , i n which c hange s i n t h e c o n t e n t s of t h e c o u r s e s wer e t a k e n i n t o a c c o u n t . The e f f e c t was a more n e g a t i v e p r o d u c t i v i t y t r e n d . Yet a n o t h e r example c on c e r n s t h e i n c r e a s e d number o f t i m e s p e r hour t h a t t h e p o l i c e were c a l l e d o u t - which r e s u l t e d i n a s l i g h t l y improved p r o d u c t i v i t y r a t e . An i n t e r e s t i n g q u a l i t y a s p e c t i s r e l a t e d t o t h e c h ang e s c a u s e d by t h e i n t r o d u c t i o n o f c omput er s i n t h e p u b l i c s e c t o r . In a d d i t i o n t o i n t e r n a l r a t i o n a l i z a t i o n s , t h i s has r e s u l t e d i n new and improved s e r v i c e s , such a s p r e p r i n t e d forms f o r t h e t a x r e t u r n s , a u t o m a t i c n o t i f i c a t i o n s o f payment s due, and d a i l y l i s t s o f v a c a n t s i t u a t i o n s a t t h e employment e x cha ng e o f f i c e s . Such s e r v i c e i mprovement s o u g h t t o b e , b u t a r e n o t , c o v e r e d by t h e measur es us e d .

I f t h e p r o d u c t i v i t y e s t i m a t e s a r e t o be

a d j u s t e d f o r t h e s e new o r improved p r o d u c t s , t h e i r v a l u a t i o n becomes an i m p o r t a n t q u e s t i o n . The r e a s o n t h a t t h e new s e r v i c e s wer e n o t pr oduced p r e v i o u s l y i s o f c o u r s e t h a t , w i t h t h e o l d t ec h n o l o g y , t h e y would have be e n t o o e x p e n s i v e , i . e . t h e c o s t would have been much h i g h e r t h a n t h e v a l u e . They a r e now pr o du c e d , b e c a u s e t h e c o s t has become r e a s o n a b l e t h e v a l u e h a i become e q u a l t o o r h i g h e r t h a n t h e c o s t . S t i l l ,

the users

mi g h t f e e l t h a t t h e q u a l i t y ha s c hanged f o r t h e w o r s e , owing t o t h e i n c r e a s e d d i f f i c u l t i e s they e n c ou n te r i n t h e i r d i a l og u e wi th t h e authorities.

84

An ot h e r q u a l i t y a s p e c t i s a s s o c i a t e d w i t h t h e u s e r s ' o p p o r t u n i t i e s t o a v a i l t h e m s e l v e s o f t h e p u b l i c s e r v i c e s . F o r i n s t a n c e , t h e o u t p u t meas­ u r e s a r e n o t a f f e c t e d by changes i n t h e t i me o f w a i t i n g o r q ue ui ng f o r a c ertain service. S t i l l ,

such a s p e c t s a r e c e r t a i n l y i m p o r t a n t t o t h e

u s e r s o f e . g . c h i l d c a r e o r medi cal c a r e , and t h e y s houl d t h e r e f o r e lea d t o adjustments o f the p r o d u c ti v i ty e s t im a te s .

General comments

To summari ze, t h e p i l o t s t u d i e s d e s c r i b e d h e r e s h o u l d be se e n as a f i r s t s t e p t o wa r d s an e x t e n s i o n o f o u r knowledge a b o u t t h e p r o d u c t i v i t y i n t h e Swedish p u b l i c s e c t o r . They i n d i c a t e o p p o r t u n i t i e s as wel l as p r obl ems t o be c o n s i d e r e d i n t h e f u t u r e work. Some s t r a t e g i c p o i n t s a r e 1 i s t e d below:

- The c o n s i s t e n c y between o u t p u t and r e s o u r c e d a t a . I t s p a r t i c u l a r l y i m p o r t a n t t h a t t h e c o n t e n t s o f e i t h e r s e r i e s i s n o t changed t o any g r e a t e x t e n t w i t h o u t c o r r e s p o n d i n g c hange s i n t h e o t h e r . - The c a p a b i l i t y o f making r e l e v a n t f i x e d - p r i c e c a l c u l a t i o n s . The f i n d ­ i n g s have p r ov e d t o be s t r o n g l y d e p e n de n t on t h e t y p e o f r e c a l c u l ­ a t i o n method us e d.

- The c a p a b i l i t y t o c o n s i d e r q u a l i t y c hange s i n t h e s e r v i c e s . To some e x t e n t t h i s i s e q u i v a l e n t t o a f u r t h e r breakdown o f t h e o u t p u t ( and t h e r e s o u r c e c o n s u mp t i o n ) .

85

APPENDIX 3

THE TOTAL PUBLIC SECTOR In t h i s a p p en d i x t h e f i n d i n g s o f t h e s e p a r a t e p r o d u c t i v i t y s t u d i e s have b e en a g g r e g a t e d and u s e d t o e s t i m a t e t h e p r o d u c t i v i t y t r e n d f o r t he e n t i r e p u b l i c s e c t o r . F o r t h e p e r i o d between 1 9 7 0 and 1 9 8 0 t h e s t u d i e s a r e f a i r l y c o mp r e he ns i v e , b u t f u r t h e r back a few o f t h e most i m p o r t a n t s u b - s e c t o r s a r e n o t c o v e r e d . The e s t i m a t e s have t h e r e f o r e been c o n f i n e d t o the period 1970 - 1980.

3.1

Adj ust ment s

Some a d j u s t m e n t s o f t h e r e s u l t s o f t h e v a r i o u s s t u d i e s have been n e c e s s a r y t o a c h i e v e u n i f o r m i t y o f t h e v a r i o u s e s t i m a t e s . Even i f t h e e s t i m a t e s i n t h e s t u d i e s were made i n a c c o r d a n c e w i t h n a t i o n a l a c c o u n t s p r i n c i p l e s , some d i s c r e p a n c i e s have a p p e a r e d i n t h e m a t e r i a l . The most c o n s i d e r a b l e a d j u s t m e n t s have been made i n t h e p u b l i c - r o a d s s t u d y , wher e i n s t e a d o f i n c l u d i n g t h e i n v e s t m e n t e x p e n d i t u r e , a c a p i t a l c o s t was c a l c u l a t e d . The r e s u l t t h u s o b t a i n e d i n d i c a t e s a ve r y moder at e r a t h e r t han a s t r o n g p r o d u c t i v i t y i n c r e a s e i n t h i s f i e l d . 3.2

Ag gr e gat i on

The a g g r e g a t i o n o f t h e s t ud y r e s u l t s has been done i n two d i f f e r e n t ways. The f i r s t c o n s i s t s o f c a l c u l a t i n g a we i g h t e d t o t a l o f t h e r e s u l t s f r om a l l t h e s t u d i e s , u s i n g t h e s t u d i e s ' p e r c e n t a g e c o s t s i n 19 8 0 a s w e i g h t s . T h i s t o t a l ha s been t er med t h e sample p r o d u c t i v i t y t r e n d . T o g e t h e r , t h e a c t i v i t i e s i n c l u d e d i n t h e s t u d i e s r e p r e s e n t some 7 0 pe r c e n t o f t h e c o s t o f t h e e n t i r e p u b l i c s e c t o r i n 1 9 7 0 and 19 80 . The se c ond method i s b a s e d on t h e n a t i o n a l a cc o u n t s breakdown o f t h e p u b l i c consumpt i on by p u r p o s e . The s t u d i e s a r e c l a s s i f i e d a c c o r d i n g t o p u r p o s e . The c o v e r a g e i s o b v i o u s l y v a r y i n g . Two o f t h e p u r p o s e s -

86

' g e n e r a l r e s e a r c h ' and ' o u t l a y s n . e . c . ' - a r e n o t i n c l u d e d i n any of o u r s t u d i e s , w h i l e some o t h e r p u r p o s e s a r e a l mo s t c o mp l e t e l y c o v e r e d. R e g a r d l e s s o f t h e c o v e r a g e r a t e , a s t ud y i s c o n s i d e r e d t o r e p r e s e n t t h e e n t i r e a r e a o f t h e p ur p o s e i n q u e s t i o n . The two p u r p o s e s n o t r e p r e s ­ e n t e d by any s t ud y c o r r e s p o n d t o 1 . 2 p e r c e n t o f t h e p u b l i c consumpti on i n 1 9 8 0 and 1 . 3 p e r c e n t i n 1 9 7 0 . The p r o d u c t i v i t y t r e n d s o f t h e s e two p u r p o s e s have been assumed t o be t h e same as f o r t h e r e s t o f t he p u b l i c s e c t o r . The s u b s e q u e n t a g g r e g a t i o n has been made wi t h t h e c o s t p e r c e n t ­ a g e s o f t h e p u r p o s e s as w e i g h t s . Thi s e s t i m a t e has been t er med t h e representative productivity tr e n d . A c oi r pa r i s on has been made o f t h e we i gh t e d e s t i m a t e s o b t a i n e d by t he two met hods. In t h e f i r s t c a s e , t h e r e s u l t s o f t h e v a r i o u s s t u d i e s a r e si mply added, w i t h no r e g a r d t o t he p u r p o s e s t h e y r e p r e s e n t and t h e r e l a t i v e s i z e s o f t h e p u r p o s e s . The volume o f t h e a c t i v i t i e s c ov e r e d by t h e s t u d i e s i s t h e onl y f a c t o r t a k e n i n t o a c c o u n t . As t he s t u d i e s c o v e r a s much as 7 0 p e r c e n t o f t h e p u b l i c s e c t o r , i t i s a r e a s o n a b l e assump­ t i o n t h a t t h e e n t i r e s e c t o r i s wel l r e p r e s e n t e d , even i f i t c a n n o t be s a i d wi t h c e r t a i n t y t h a t t h e r e ma i n i ng 30 p e r c e n t would n o t show some di f f e r e n c e s .

In t h e second c a s e t h e e s t i m a t e i s made w i t h r e g a r d t o t he p ur p os e s r e p r e s e n t e d by t h e s t u d i e s and t h e i r r e s p e c t i v e ma g n i t u d e s . I f a c e r t ­ a i n s t ud y c o v e r s e . g . 25 p e r c e n t o f a l l t h e a c t i v i t i e s s e r v i n g a p a r t ­ i c u l a r p u r p o s e , t h e w e i g h t a s s i g n e d t o t h a t p ur po s e i s s t i l l e q u i v a l e n t t o the purpose's share of the t o t a l c o s t of the pub lic s e r v i c e s . The second method i s more a p p r o p r i a t e i f t h e s t u d i e s a r e r e p r e s e n t a t i v e o f t h e v a r i o u s p u r p o s e s , b u t i t n e c e s s i t a t e s some f u r t h e r a s s umpt i on s and m a n i p u l a t i o n s o f t h e m a t e r i a l .

I t i s t h e r e f o r e o f g r e a t i n t e r e s t t o compare t h e two we i g h t e d e s t i m a t ­ e s . As t h e sample c o v e r s such a l a r g e p r o p o r t i o n o f t h e p u b l i c s e c t o r , no g r e a t d i f f e r e n c e s h o u l d be e x p e c t e d , and as i t t u r n s o u t , t he two e s t i m a t e s f o r t h e whol e p u b l i c s e c t o r come o u t v i r t u a l l y i d e n t i c a l .

In

t h i s a p pendi x we have t h e r e f o r e c hosen t o p r e s e n t on l y t h e r e p r e s e n t a t ­ ive productivity trends.

87

3.3

P r o d u c t i v i t y t r e n d s by pu r po s e and f o r t h e e n t i r e p u b l i c s e c t o r

T a b l e 3 . 1 shows t h e r e p r e s e n t a t i v e p r o d u c t i v i t y t r e n d f o r each p u r p os e a n d f o r t h e e n t i r e p u b l i c s e c t o r . Ac cor di ng t o t h i s method t h e a v e r a g e p r o d u c t i v i t y change f o r t h e whole s e c t o r d u r i n g t h e 1 9 7 0 ' s i s - 1 . 5 p e r c e n t a n n u a l l y . T h i s i s a l m o s t t h e same r e s u l t a s t h a t o b t a i n e d by t h e f i r s t met hod, whi ch g i v e s a ve r y s l i g h t l y more n e g a t i v e t r e n d . The d i f f e r e n c e i s onl y n o t i c e a b l e i n t h e se c ond deci mal and i s mai nl y due t o t h e medi cal s e r v i c e s , f o r whi ch t h e p r o d u c t i v i t y t r e n d a p p e a r s a l i t t l e l e s s n e g a t i v e by t h e se c ond method. Ob v i ou s l y t h e i n t r o d u c t i o n o f two p u r p o s e s assumed t o f o l l o w t h e same p r o d u c t i v i t y t r e n d a s t h e r e s t o f t h e p u b l i c s e c t o r does n o t a f f e c t t h e r e s u l t s . I f we i n s t e a d assume t h a t t h e p r o d u c t i v i t y i n ' g e n e r a l r e s ­ e a r c h ' and ' o u t l a y s n . e . c . ' ha s n o t changed a t a l l , t h e t r e n d f o r t h e e n t i r e s e c t o r i s s l i g h t l y improved - h e r e t o o i n t h e s e c on d de c i ma l . As t o t h e v a l i d i t y o f t h e f i n d i n g s f o r t h e e n t i r e p u b l i c s e c t o r , we can o n l y s t a t e t h a t t h e measur ement s have c o v e r e d a s u b s t a n t i a l p a r t o f t h e s e c t o r . The r e l i a b l i t y t h e r e f o r e p r i m a r i l y depends on t h e q u a l i t y o f t h e i n d i v i d u a l s t u d i e s . The 3 0 p e r c e n t o f t h e p u b l i c s e c t o r n o t c o v e r e d by t h e measur ement s may o f c o u r s e be s u b j e c t t o d i s c u s s i o n . Of t h e s e a c t i v i t i e s , some mi g h t ve r y we l l have been i n c l u d e d i n t h e s t u d i e s , w h i l e o t h e r s would have p r e s e n t e d measurement pr obl ems o f a p r i n c i p a l n a t u r e . Does t h e n o n - i n c l u d e d group d i f f e r from t h e measured p a r t o f t h e s e c t o r i n a way t h a t woul d a f f e c t t h e f i n d i n g s ? T h e r e a r e no c l e a r i n d i c a t i o n s e i t h e r way. The i n d i v i d u a l s t u d i e s a l l show s i m i l a r t r e n d s f o r t h e p e r i o d 1 9 7 0 - 1 9 8 0 . We mi g h t sa y t h a t 1 f t h e f i n d i n g s f o r t h e 70 p e r c e n t i n c l u d e d i n t h e s t u d i e s a r e due t o s i m i l a r f a c t o r s , i t I s r e a s o n a b l e t o assume t h a t t h e same t r e n d s would h o l d t r u e f o r t h e r ema i n i n g p a r t o f t h e p u b l i c s e c t o r a s w e l l .

88

Table 3.1

P r o d u c t i v i t y t r e n d s i n t h e p u b l i c s e c t o r 1 9 7 0 - 19 80 . Annual p e r c e n t a g e a v e r a g e s 1970-75

1975-80

%

%

%

Gener al a d m i n i s t r a t i o n and e x t e r n a l a f f a i r s

-5.5

+4. 5

- .6

1970-8C

P u b l i c o r d e r and s a f e t y

-6.3

+3.1

-1.6

Def ence

- .1

-1.0

- .6

E d u c a t i on

+ .3

-3.2

-1.5

Health

-1.4

-2.2

-1.8

Social insurance

-4.8

- .2

-2.5

Social welfare

-2.8

- .4

-1.6

Hous i ng and community p l a n n i n g

+ .2

-8.9

-4.5

R e c r e a t i o n a l and c u l t u r a l s e r v i c e s

+ .7

-5.5

-2.4

Support t o p r i v a t e i n d u s t r i e s

+ .1

+ .4

+ .2

E ntire public sector

-1.4

-1.6

-1.5

3.4

Ag gr e ga t i on probl ems

The summation o f t h e r e s u l t s o f t h e v a r i o u s s t u d i e s p r e s e n t s what mi ght be t er med an a g g r e g a t i o n pr obl em. The q u e s t i o n i s t o what e x t e n t t h e o u t p u t and c o s t o f two o r more government a g e n c i e s can be a g g r e g a t e d t o obtain a j o i n t productivity trend. T h e r e i s no d i f f i c u l t y i n a d d i n g t h e c o s t s t o g e t t h e t o t a l c onsumpt i on o f r e s o u r c e s . The pr obl em i s t o a g g r e g a t e t h e s e r v i c e s . I f t h e s e r v i c e s o f one government agency a r e u t i l i z e d by a n o t h e r , i t i s t h e s e r v i c e s o f t h e second agency o n l y t h a t a r e t o be c l a s s i f i e d as f i n a l o u t p u t . Ac cor di ng t o o u r p r i n c i p l e s , t h e f i n a l o u t p u t o f t h e p u b l i c s e c t o r a r e onl y t h o s e s e r v i c e s whi ch can i n some s e n s e be r e g a r d e d a s consumed, i n v e s t e d o r u s e d a s i n p u t by some o t h e r s e c t o r , e . g . t h e p r i v a t e i n d u s t r i e s . S e r v i c e s u s e d a s i n p u t by o t h e r government a g e n c i e s a r e t o be e x c l u d e d . The q u e s t i o n t h e n > v , t o what e x t e n t t h e s e r v i c e s i n c l u d e d i n t h e s t u d i e s a r e u t i l i z e d by o t h e r government bodies.

89 Obvi ou s l y t h e more a g g r e g a t e d t h e i n d i v i d u a l s t u d i e s , t h e l e s s t h e r i s k o f t h e s e r v i c e s b e i n g d o u b l e - c o u n t e d . E d u c a t i o n , medi cal c a r e and s o c i a l w e l f a r e a r e c a s e s i n p o i n t . The s e r v i c e s i d e n t i f i e d i n each o f t h e s e s t u d i e s are d e f i n i t e l y f i n a l . For several of the s e l e c te d a g e n c i e s i n s e c t i o n 2 . 5 on t h e o t h e r hand, t h e r e i s a r i s k t h a t t h e i r s e r v i c e s w i l l be r e g a r d e d a s f i n a l p r o d u c t s , d e s p i t e t h e f a c t t h a t t h e y s h o u l d r i g h t l y be c o n s i d e r e d a s an I n p u t i n t h e p r o d u c t i o n o f some o t h e r a genc y. For i n s t a n c e , t h e e n f o r c e me n t a g e n c i e s s e r v e t h e t a x a t i o n a u t h o r i t i e s , who s e r v e t h e n a t i o n a l i n s u r a n c e o f f i c e s . Anot her example i s whe th er t h e t o t a l o u t p u t o f t h e c o u r t s , t h e p o l i c e f o r c e , t he p u b l i c p r o s e c u t o r s and t h e c o r r e c t i o n a l s y s t e m e q u a l s t h e sum o f t h e s e r v i c e s o f each body, o r w h e t he r i t would be p o s s i b l e t o i d e n t i f y a j o i n t f i n a l p r o d u c t f o r t h e f i e l d o f p u b l i c o r d e r and s a f e t y , which would more c l e a r l y i l l u s t r a t e t h e t o t a l o u t p u t , e . g . g e n e r a l o b e d i e n c e t o t h e law. The a g g r e g a t i o n probl em c o n c e r n s t h e d i s t r i b u t i o n o f t h e p u b l i c s e r v ­ i c e s on v a r i o u s c a t e g o r i e s o f u s e r s . The s e r v i c e s c l a s s i f i e d a s i n p u t o f r e s o u r c e s i n t h e p u b l i c s e c t o r s h o u l d be e l i m i n a t e d from t he c a l c u l a t i o n s o f t h e p r o d u c t i v i t y r a t e s . T h i s r e ma i ns t o be done i n t h e i n t e g r a t e d p r o d u c t i v i t y c a l c u l a t i o n s f o r t h e e n t i r e p u b l i c s e c t o r . How­ e v e r , t h e c o m p a r a t i v e l y small p r o p o r t i o n o f t h e s e r v i c e s c l a s s i f i e d a s i n p u t i n t h e p u b l i c s e c t o r i n d i c a t e s t h a t t h e pr obl em i s a mi nor one. Ano t h e r a g g r e g a t i o n pr obl em a r i s e s when t h e g r o s s n a t i o n a l p r o d u c t i s t o be a d j u s t e d i n r e s p e c t t o t h e p r o d u c t i v i t y devel opment i n t h e p u b l i c s e c t o r . The pr obl em i s due t o t h e f a c t t h a t some o f t h e p u b l i c s e r v i c e s a r e u s e d a s an i n p u t o f r e s o u r c e s i n t h e p r i v a t e s e c t o r . T h e r e f o r e , when t h e GNP i s c a l c u l a t e d a s t h e sum t o t a l o f t h e p r i v a t e and t h e p u b l i c s e c t o r o u t p u t s , a n o t h e r d o u b l e - c o u n t i n g mi g ht o c c u r . L e t us assume t h a t t h e e n t i r e o u t p u t a s s o c i a t e d w i t h t h e p u r p o s e ' s u p p o r t t o p r i v a t e i n d u s t r i e s ' c o n s t i t u t e s an i n p u t o f r e s o u r c e s i n t h e p r i v a t e s e c t o r . The o u t p u t i s a s e r v i c e from t h e p u b l i c s e c t o r and s h o u l d be i n c l u d e d i n t h i s s e c t o r ' s t o t a l o u t p u t . Yet i t i s n o t c l a s s i f i e d a s f i n a l c onsumpt i on i n t h e GNP.

90

3.5

E f f e c t s o f a s s u mp t i o n s a bo u t p u b l l c - s e c t o r p r o d u c t i v i t y

W i t h o u t f u r t h e r s p e c u l a t i o n s a b o u t t h e v a l i d i t y o f t h e f i n d i n g s , we s h a l l us e them t o i l l u s t r a t e t h e cons e q uen c es o f t h e p r o d u c t i v i t y d e vel opment r a t e i n t h e p u b l i c s e c t o r . The f i r s t q u e s t i o n i s how t h e GMP i s a f f e c t e d . With 1 9 8 0 as t he ba se y e a r , i t i s l o g i c a l t o s t a r t from t h e o f f i c i a l e s t i m a t e o f t h e GNP f o r t h a t y e a r . The v a l u a t i o n o f t h e p u b l i c c onsumpt i on i n t h e GNP i s based on i t s c o s t s i n 1 9 8 0 .

In t h e p r e s e n t n a t i o n a l a c c o u n t s i t i s assumed

t h a t t h e p r o d u c t i v i t y i n t h e p u b l i c s e c t o r i s unchanged. The v a l u e o f t h e p u b l i c consumpti on i n 1 9 7 0 can t h e n be c o n s i d e r e d equal t o i t s c o s t s f o r t h a t y e a r i n t h e p r i c e s o f 1 9 8 0 . I f , however, t h e p r o d u c t i v ­ i t y has d e c r e a s e d by 1 . 5 p e r c e n t a n n u a l l y d u r i n g t h e whole o f t he 1 9 7 0 ' s , e v e r y u n i t o f money would have y i e l d e d 16 p e r c e n t more o u t p u t i n 1 9 7 0 t h a n i n 1 9 8 0 , and t h e p u b l i c consumpti on i n 1 9 70 would have t o be r e c a l c u l a t e d a c c o r d i n g l y . T a b l e 3 . 2 shows t h e r e s u l t : Table 3. 2

P u b l i c consumpt i on and g r o s s n a t i o n a l p r o d u c t a c c o r d i n g t o two s e t s o f p r e m i s e s . MSEK i n 1 9 8 0 p r i c e s 1970

1975

1980

P r i v a t e consumpti on

2 3 0 892

25 9 903

270 049

I n v e s t me n t s

113 590

121 556

111 891

E x p o r t s , l e s s i mp o r t s

- 2 3 429

- 1 9 827

- 9 997

a ) a t unchanged p r o d u c t i v i t y

111 594

129 914

153 156

b ) a t an annual 1 . 5 % p r o d u c t i v i t y drop

129 368

140 560

153 156

a ) a t unchanged p r o d u c t i v i t y

432 647

491 546

525 099

b ) a t an annual 1 . 5 % p r o d u c t i v i t y drop

4 5 0 421

50 2 192

525 099

P u b l i c consumpt i on

T o t a l GNP

The c a l c u l a t i o n s i n d i c a t e t h a t t h e GNP i n 1 9 7 0 s h o u l d be r e c a l c u l a t e d upwards by 4 . 4 p e r c e n t , i f t h e p u b l i c - s e c t o r p r o d u c t i v i t y i n 1 9 7 0 was 16 p e r c e n t h i g h e r t h a n i n 1 9 8 0 . I f t h e p r o d u c t i v i t y i n s t e a d i s assumed t o be t h e s a ^ e i n 1 9 8 0 a s i n 1 9 7 0 , t h e GNP would have i n c r e a s e d by 2 . 0

91

p e r c e n t a n n u a l l y d u r i n g t h e 1 9 7 0 ' s . I f , on t h e o t h e r hand, t h e p r o d ­ u c t i v i t y i s assumed t o have f a l l e n by 1 . 5 p e r c e n t , t h e GNP would have r i s e n by on l y 1 . 5 p e r c e n t a n n u a l l y . T h i s would mean a r e d u c t i o n o f t h e GNP t r e n d by 2 5 p e r c e n t . A n o t h e r way o f d e s c r i b i n g t h e c on s e q ue nc e s o f a p r o d u c t i v i t y change i s t o sa y t h a t t h e p u b l i c c onsumpt i on would have i n c r e a s e d by o n l y 18 p e r c e n t between 1 9 7 0 and 1 9 8 0 , i n s t e a d o f by t h e 37 p e r c e n t r e s u l t i n g f r om t h e a s s u mp t i o n o f unchanged p r o d u c t i v i t y i n t h e p r e s e n t n a t i o n a l accounts. Count ed i n t er ms o f money, t h e v a l u e o f t h e p u b l i c c onsumpt i on between 1 9 7 0 and 1 9 8 0 i n c r e a s e d by MSEK 18 0 0 0 l e s s t h a n i t would have done a t unchanged p r o d u c t i v i t y . Or, i f t h e p r o d u c t i v i t y i n 1 9 8 0 had been t h e same a s i n 1 9 7 0 , t h e s e r v i c e s o f t h e p u b l i c s e c t o r c o u l d have been p r o d u c e d a t a c o s t o f MSEK 21 0 0 0 l e s s . The e f f e c t o f a c h a n g i n g p r o d u c t i v i t y r a t e i n t h e v a r i o u s p a r t s o f t h e p u b l i c s e c t o r can be i l l u s t r a t e d by medi cal s e r v i c e s and e d u c a t i o n . I f t h e p r o d u c t i v i t y had n o t dr opped, t h e h e a l t h s e r v i c e s c o u l d have been p r o v i d e d a t a MSEK 6 4 0 0 l ower c o s t , and t h e e d u c a t i o n a l s e r v i c e s a t a MSEK 5 50 0 l o we r c o s t . In a numer i cal example we can s e e how t h e GNP d evel opment i s a f f e c t e d i f the 'support to priv ate in d u strie s'

i s c l a s s i f i e d n o t a s p u b l i c con­

s u mpt i on b u t a s i n p u t o f r e s o u r c e s i n t h e p r i v a t e s e c t o r . I f t h e e s t i m ­ a t e d GNPs f o r 1 9 7 0 and 1 9 8 0 a r e r ed u c e d by t h e s e r v i c e s a s s o c i a t e d w i t h t h i s p u r p o s e , t h e GNP f o r 1 9 7 0 woul d become MSEK 4 4 4 4 9 6 and f o r 1 9 8 0 , MSEK 5 1 7 6 2 9 i n 1 9 8 0 p r i c e s . The GNP t r e n d would become s l i g h t l y more n e g a t i v e , b u t t h e d i f f e r e n c e would f a l l on t h e se c ond deci mal ( 1 . 5 3 a s a g ain st 1.54 per cent annually).

3.6

What do t h e f i n d i n g s t e l l u s ?

The c a l c u l a t i o n s p r e s e n t e d above may e a s i l y l e a d t o e r r o n e o u s c o n c l u s ­ i o n s . Even i f t h e y g i ve a r e a s o n a b l y c o r r e c t i l l u s t r a t i o n o f t h e p r o d ­ u c t i v i t y d evel opment i n t h e p u b l i c s e c t o r , t h e on l y q u e s t i o n t h e y can

92

answer w i t h any c e r t a i n t y i s wh e t h e r and by how much t he p r o d u c t i v i t y ha s i n c r e a s e d o r d e c r e a s e d .

In o t h e r wo r ds , t h e c a l c u l a t i o n s t e l l us

w h e t he r and by how much t h e c o s t s o f t h e s e r v i c e s , a s measured by t h e p u b l i c cons u mpt i on , have changed i n t h e e n t i r e s e c t o r o r f o r a s p e c i f i c p u r p o s e , b u t t h e y t e l l us n o t h i n g a b o u t t h e c a u s e s . Fo r t h e s e r v i c e s a s s o c i a t e d wi t h t he p u r p o s e ' g e n e r a l a d m i n i s t r a t i o n and e x t e r n a l a f f a i r s '

t h e c o s t s have become 6 . 4 p e r c e n t h i g h e r d u r i n g

a t e n - y e a r p e r i o d , i . e . t h e s e s e r v i c e s r e q u i r e 6 . 4 p e r c e n t more r e s o u r c e s - s t a f f , p r e m i s e s , e x p e n d a b l e s e t c . The r e a s o n i s n o t a p p a r ­ e n t from t h e f i n d i n g s and may r a ng e from more complex l e g i s l a t i o n and more c o m p l i c a t e d s o c i a l c o n d i t i o n s t o l e s s e f f i c i e n t a d m i n i s t r a t i o n . L e t us t a k e an exampl e. S h o r t e r wor ki ng h o u r s have no e f f e c t p e r s e , n o r have a d d i t i o n a l d a y s o f l e a v e . The r e s o u r c e consumot i on i n c l u d e s o n l y ho u r s wo r k e d , and t h e c o s t s o f t h e s e a r e i n 19 8 0 p r i c e s and a r e t h e r e f o r e unchanged. On t h e o t h e r hand, s h o r t e r ho u r s mi g h t e n t a i l a need f o r l a r g e r p r e mi se s (more e m p l o y e e s ) , which o f c o u r s e makes t he p r o d u c t i o n more e x p e n s i v e . An ot h e r example i s t h a t t h e p u b l i c s e c t o r has expanded h e a v i l y d u r i n g t h e p e r i o d , which means t h a t t h e s t a f f o f t e n i s young and i n e x p e r i e n c ­ e d. Given t i m e , bo t h t h e s t a f f and t h e o r g a n i z a t i o n w i l l mat ur e and overcome t h e i n i t i a l p r o b l ems . A s l o we r r a t e o f e xp a n s i o n mi ght l e a d t o a more p o s i t i v e p r o d u c t i v i t y d evel opment . In many f i e l d s , s o c i e t y has changed i n a way t h a t i s l i k e l y t o make t h e work more c o m p l i c a t e d , which i n t u r n may have e n t a i l e d an i n c r e a s i n g l y complex l e g i s l a t i o n , making t h e work s t i l l more d i f f i c u l t e t c . An exampl e i s t h e e x a m i n a t i o n o f i nc o m e - t a x r e t u r n s , which ha s grown more d i f f i c u l t a s t h e income s i t u a t i o n o f many t a x p a y e r s ha s become more i n t r i c a t e , c a l l i n g f o r t h even more complex t a x l e g i s l a t i o n . What p u r p o s e , t h e n , i s s e r v e d by s t u d y i n g t h e p r o d u c t i v i t y t r e n d s ? F i r s t , o f c o u r s e , t h e f i n d i n g s may s e r v e a s an a l a r m b e l l and i n d uce i n v e s t i g a t i o n s a s t o t h e c a u s e s o f t h e de v e l o p me n t , which i n t u r n may r e s u l t i n l e s s c o m p l i c a t e d r u l e s and r e g u l a t i o n s , new met hods o f work o r si mpl y more s mo ot h l y - wor k i n g o r g a n i z a t i o n s .

93

Se c o n d l y , t h e f i n d i n g s may s e r v e a s a g ui d e t o t h e de vel opment o f t he p r i c e s / c o s t s o f t h e p u b l i c s e r v i c e s . T h i s i s v a l u a b l e I n f o r m a t i o n when r e s o u r c e s a r e t o be a l l o c a t e d t o t h e v a r i o u s f i e l d s o f t h e p u b l i c s e c t ­ o r . F o r i n s t a n c e , t h e s e r v i c e s a s s o c i a t e d w i t h h o u s i n g and commununlty p l a n n i n g have become c o n s i d e r a b l y more e x p e n s i v e , w h i l e s u p p o r t t o p r i v a t e i n d u s t r i e s has become c h e a p e r . The r e l a t i v e 1p r i c e 1 c hange s o f t h e s e r v i c e s a s s o c i a t e d w i t h v a r i o u s p u r p o s e s a r e shown i n T a b l e 3 . 3 , where t h e a v e r a g e p r i c e o f t h e s e r v i c e s has been u s e d a s t h e mean v a l u e . The changes i n d i c a t e how much more o r l e s s e x p e n s i v e t h e s e r v i c e s have become, a s compared w i t h t h e average p ri ce .

Table 3. 3

R e l a t i v e p r i c e changes between 1 9 7 0 and 1 9 8 0 f o r s e r v i c e s a s s o c i a t e d w i t h v a r i o u s pu r p o s e s i n t h e p u b l i c s e c t o r . Mean v a l u e = 1 . 0

Gener al a d m i n i s t r a t i o n and e x t e r n a l a f f a i r s

.92

P u b l i c o r d e r and s a f e t y

1.02

Gener al r e s e a r c h

1.00

Def ence

. 91

E d u c a t i on

1.01

He a l t h

1.03

S o c i al i n s u r a n c e

1.11

Social welfare

1.02

Housing and community p l a n n i n g

1.36

R e c r e a t i o n a l and c u l t u r a l s e r v i c e s

1.10

Support t o p r i v a t e i n d u s t r i e s Outlays n . e . c .

.84 1.00

94

The s e r v i c e s a s s o c i a t e d w i t h ge n e r a l a d m i n i s t r a t i o n and e x t e r n a l a f f a i r s have become c h e a p e r . Every u n i t o f i n p u t has y i e l d e d 10 p e r c e n t more t h a n t e n y e a r s b e f o r e . The same a p p l i e s t o t h e n a t i o n a l d e f e n c e , and even more so t o t h e s u p p o r t t o p r i v a t e i n d u s t r i e s . E d u c a t i o n on t h e o t h e r hand, has become more e x p e n s i v e and y i e l d s 1 p e r c e n t l e s s i n 1 9 8 0 t h a n i n 1 9 7 0 . Medical s e r v i c e s y i e l d 3 p e r c e n t l e s s , s o c i a l i n s u r a n c e s 10 p e r c e n t l e s s , and h o u s i n g and community p l an n i ng 26 p e r c e n t l e s s , a l l p e r c e n t a g e s i n compar i s on w i t h t h e a v e r a g e f o r th e public s e r v ice s .

* * * * * *

L a t e l y t h e Swedish Agency f o r A d m i n i s t r a t i v e Development has b r o u g h t i t s c a l c u l a t i o n s f o r government a d m i n i s t r a t i o n up t o 1 9 8 5 , and t h e s e i n d i c a t e a p o s i t i v e p r o d u c t i v i t y t r e n d . In a f or t h c o mi n g government p u b l i c a t i o n , some c a l c u l a t i o n s p o i n t t o a p o s i t i v e t r e n d i n s o c i a l w e l f a r e and a n e g a t i v e t r e n d i n e d u c a t i o n and i n h e a l t h and medical care.

'

UNIVERSITY OF OXFORD ECONOMICS LIBRARY, SOCIAL STUDIES FACULTY CENTRE, MANOR ROAD, OXFORD E-mail: [email protected] This book is due back on or before the last date stamped below

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