Performance Standards and
the Potential to Improve
James J. Heckman
Carolyn J. Heinrich
A number of recently implemented reforms to public sector incentive systems have sought to reorient them toward a focus on measuring results and inducing public agencies to become more efficient, responsive, and accountable to the public. They share at least two features. The first is a system of performance measures and standards designed to create clear expectations for government performance and to assess results. A second feature is a means for rewarding individuals, teams, or entire organizations for achievement relative to the established performance goals, primarily through budgetary allocations. By clearly defining goals and developing explicit rewards for their attainment, these systems have aimed to replicate, in a nonmarket setting, the incentive structures, competition, and resulting high performance and efficiency of private markets (Light 2005).
Among its first steps in advancing these reforms, the Obama administration has required federal agencies to identify a limited number of high-priority performance goals for which performance trends will be tracked, and through its new Open Government initiative, it will make these data publicly available and promote the use of new methods in the analysis of them. The government is also now compelling the private sector to provide more information on its performance for transparency and accountability (beyond longer-standing areas of public scrutiny such as health care and the environment), and has devised incentives for cooperation and penalties for withholding information (Cukier 2010). For example, it is now possible for the public to get sta-