Assessing and explaining the performance of public enterprises

From a general discussion of the notion of economic performance as applied to public enterprises, we first observe that productive efficiency is the least ambiguous and most generally desirable form of performance for such firms. We then discuss the type of relation expected to hold between a firm's productive efficiency on the one hand and on the other hand characteristics pertaining to ownership, objectives, regulation, and competition. Next we review a number of empirical efficiency studies which are aimed at testing the effect of those characteristics on firms' productive efficiency. Finally, we discuss the public policy implications of efficiency measurement in public sector economics