The Performance Paradox in the Public Sector

Administrative reform has led to a strong increase in the use of performance assessment instruments in the public sector. However, this has also led to several unintended consequences, such as the performance paradox, tunnel vision, and “analysis paralysis.” These unintended consequences can reduce the quality of the knowledge about actual levels of performance or even negatively affect performance. Examples can be found in all policy sectors. The authors argue that certain characteristics of the public sector–such as ambiguous policy objectives, discretionary authority of street–level bureaucrats, simultaneous production and consumption of services, and the disjunction of costs and revenues–increase the risk of a performance paradox, either unintentionally or deliberately. Performance assessment should therefore take the special characteristics of the public sector into account and develop systems that can handle contested and multiple performance indicators, striking a balance in the degree of “measure pressure” and minimizing dysfunctional effects.