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The public sector poses particularly challenging problems of control. Almost by definition, there are no competitive markets for its products, and it is not subjected to the traditional discipline of financial markets. Instead strategic control must be secured through political processes, which can take many forms. With the rapid reduction in the cost of data collection, governments are increasingly relying on various types of performance indicator to inform the political process, and thereby secure control of public sector management. The purpose of this chapter is to examine the implications of the use of performance indicators (PIs) for managerial control of public sector resources.
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