The efficiency score as an indicator of the appropriateness of public spending. A pilot study in Italian Metropolitan Cities.

Abstract

The management of economic and financial resources is a topic of great interest within public administrations. Measuring the efficiency of public resource utilization is complex because the analysis of processes through planning, programming, and control systems varies depending on the diverse needs of the community. Recently, the concept of public value has led to the testing of measurement systems aimed at achieving synthetic values capable of guiding decision governance towards the optimal use of resources. The criterion of efficiency in public administrations is more problematic than it may appear because efficiency has become synonymous with cost minimization. It is known that such an example does not represent efficiency because what sense would it make to minimize costs in the production of a service for something that is not desired? The notion of efficiency requires a relationship between means (inputs) and ends (outputs/outcomes). The goal of this work is to identify the relationships between means and ends to introduce synthetic indicators, "efficiency scores," of public spending based on the budget data of Italian "metropolitan cities" over the period 2019-2022. The results represent a new evaluation metric to support decision-makers in achieving strategic objectives over time