Promoting Performance - Using Indicators to Enhance the Effectiveness of Sub-Central Spending

On average, one-third of public expenditures in OECD countries occur at the sub-central level, a figure that has risen slightly over time. This is due, in part, to the decentralisation of competences for public services in many OECD countries. Not surprisingly, the efficiency and effectiveness of spending for public services are a concern for both central and sub-central governments. Various mechanisms are used to affect the efficiency and improve the effectiveness of sub-central spending. This report examines one tool that aims to do so: indicator systems for measuring and monitoring sub-central service delivery. Specifically, the report aims to assess if and how central governments use such systems, the critical choices they face when designing and implementing them, and the constraints under which the systems operate.