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LANDMARK REPORT False economies | Definitions of efficiency - Centre for Policy Development
Three kinds of efficiency Definitions from False economies: decoding efficiency The field of economics has developed a thorough understanding of the concept of efficiency. Unfortunately, this knowledge is generally expressed in the jargon of the field and has not tended to inform the public debate on efficiency of the public sector. This is a shame because the concepts are readily expressible in plain English. One kind of efficiency is doing the work you are doing with the fewest possible resources, getting ‘more for less’ or ‘value for money’. This means producing each item and delivering each service with the least expenditure of time, money, materials, etc. Taking a quicker route to work, shopping at a supermarket that is cheaper and just as close, and printing documents double-sided, are all examples of increased technical efficiency. Another kind of efficiency is about doing the right work, by allocating resources to produce and provide items and services of the highest total value. Value is often thought of as the amount of money someone is willing to pay, but this is not always reliable for all circumstances. Also important is best meeting needs in a wide range of circumstances, whether or not...