Summary Execution: The Impact of Alternative Summarization Strategies on Local Governments

Abstract

Performance management in the public sector, including local government, has become far more pervasive in recent decades. Often performance indicators are summarized into a single score to enhance understanding and ease dissemination. However, the summation of performance indicators caries a risk that the rating assigned may largely be an artefact of the summarization strategy rather than an accurate representation of municipal performance. We employ the recent evaluation of New South Wales' municipal performance to demonstrate that the performance indicator compilation strategy is indeed a major determinant of the ratings assigned to local councils. Moreover, we illustrate how ratings may exert a constitutive effect on municipalities by altering organizational behavior. A number of policy lessons are drawn from our empirical analysis, including significant methodological considerations and the need for higher levels of transparency.