Four ways to make cities more efficient;

              The Crisis in Productivity
FOUR WAYS TO MAKE CITIES MORE EFFICIENT
by E. S. SAVAS/Graduate School of Business, Columbia University
Government is big business in the United States. There
are almost 80,000 separate government entities in the
country, and together they collect taxes which amount to
one-third of the gross national product. The average
working American can be thought of as working full time
for the government from January 1 to May 2 this year;
only thereafter will he get to keep his earnings.
Contrary to popular impression, most of the money
spent by government for goods and services is spent by
state and local governments, not by the federal govern­ment.
The former spent $170 billion in 1973, compared to
$107 billion spent by the federal government.
State and local government employees number 11.5
million, about one-seventh of the civilian work force, and
the annual growth of this work force in recent years has
been greater than the total employed in the steel
industry. In fact, between 1955 and 1970 their number
doubled and the payroll more than tripled.
Given this growing number of public employees and
the taxes used to support their work, it is no wonder that
productivity has emerged as a dominant problem in man­aging
our cities. Particularly vulnerable to charges of
being inefficient are local governments, since they are in
the unenviable position of being responsible for daily de­livery
of highly visible services. The disparity between
input and output looms large in the public eye.
Faced with this pressure, local governments are begin­ning
to apply traditional methods for increasing produc­tivity—
capital investment in technology, more training,
and "tighter management." Such newer tools as systems
analysis, management science, and computers are also
being introduced, sometimes over-enthusiastically, some­times
belatedly, but increasingly with discrimination and
sophistication. Local governments may be five to 10 years
behind industry leaders in the application of these tech­niques,
but the gap is closing as the public sector begins
to compete effectively with the private sector for talent.
However, experienced and frustrated public-sector
managers no longer believe, if they ever did, that the
major obstacles to improved performance in govern­ment
are going to be overcome by technology alone. In
fact, it is becoming increasingly clear that a significant
and permanent increase in government efficiency is
going to be achieved only by recognizing the institu­tional
nature of the obstacles, designing a management
strategy to overcome them, and building the political
support to do so.
Four major problems deserve our attention: (1) mea­suring
performance; (2) municipal monopolies; (3) civil
service reform; and (4) the government structure.
Measuring Performance
The basic difficulty is that the result of a government
agency's effort is hard to measure. The business f i rm uses
profit as the ultimate measure of performance, and a
salesman prospers or fails according to his sales record.
But how does one measure the performance of a school
system, or of an individual teacher? How can one mea­sure
the performance of a parks department?
Because of the difficulty in identifying and measuring
output, the typical numbers issued by governments refer
to input. In effect, one hears a dialogue of the deaf:
Citizen: There is too much crime in this city.
City Official: You're right, we plan to increase the
police department budget by 15 percent.
But such a response is no measure of how effective the
city will be in fighting crime. What it does have is the po­litical
virtue of visibility and immediacy. It tangibly
demonstrates official concern for the issue. But it signals
intent, not achievement. Furthermore, if the 15 percent
increase is spent on higher salaries for policemen, it is
unlikely—with all due respect for the men in blue and
their sometimes hazardous occupation—that the force
will be more successful in deterring crime or catching
criminals. Even if the money goes for more policemen,
the gesture may be useless if the present force is doing a
good job of catching criminals but the courts fail to
convict them or the prisons fail to rehabilitate them.
The problem of measuring output (either performance
or effectiveness) is now finally being addressed. One
example is street-cleaning agencies. Trained observers,
each armed with a standard set of photographs depicting
different levels of street cleanliness, have gone out and
inspected city streets, grading them in accordance with
their photographic scale.
Performance measures for other city agencies are also
being developed. For police work, the "victimization
rate" has emerged as a useful measure. In a statistical
sample of citizen interviews, people are asked if they
have been the victim of a recent crime. This method
appears superior to the "reported crime rate," which is
generally lower, is subject to official distortion, and may
vary according to the expectation or apathy that the
public feels toward its police force.
In short, the emphasis is on measuring government
productivity. And it is likely that the process of measuring
it will create the impetus to improve it.
Municipal Monopolies
A city is uniquely vulnerable to strikes and slowdowns. It
does not have the options of moving to the South,
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