Creating Public Value

By John O’Dea*

Public value is defined as “using government assets to produce a good and just society”. The term was first mooted in 1995 by Mark H. Moore – Hauser Professor of Non-Profit Organisations at the Harvard Kennedy School of Government – in his book Creating Public Value (Harvard University Press).

Public value in public sector management is the equivalent of shareholder value in private sector organisations. Shareholder value is a business term which implies that the ultimate measure of a company’s success is the extent to which it enriches its shareholders (owners) by paying dividends and/or causing the price of its stock to increase in value. By the same token, the ultimate measure of a government’s success is the extent to which it enriches society as a whole. The difference between public and private entities is that in the former, citizens are both the shareholders (as taxpayers) and the clients (as recipients of public services). Public services are distinctive because they are characterised by claims of rights by citizens that have been authorised and funded through a democratic process.

One of the unique characteristics and basic tenets of a democracy is that its citizens get to vote for their representatives in parliament and that all citizen are entitled to live life as they choose and to be able to say and do what they want within the limits of the Law of the land.

A democracy is a form of government that is “of the people, by the people and for the people”. “Of the people” means that government consists of ordinary citizens who choose to run for public office; “by the people” means that government is elected by its citizens; “for the people” means that the sole purpose of government is to act in ways that benefit the citizens.

The democratic process is the way citizens make this happen. We the people, make “of the people” happen by running for public office; we make “by the people” happen by voting those whom we believe to be the best to govern us to public office; we make the “for the people” happen by keeping abreast of current issues, keeping elected officials aware of our points of view and that enforce our laws.

Public services are authorised and funded through a democratic process when a policy (such as a budget) is presented by government to parliament and duly discussed and amended as necessary to achieve the best results for the country and its citizens.

Public value is about achieving social outcomes – not just end client satisfaction. It should also be about treating individuals fairly. Public value is designed to get public managers (both in central and local government) thinking about what is most valuable in the service that they administer, how effectively and efficiently they are using public assets and how effective management can make such service the best that it can be. Moreover, the public must be involved in the process of deciding what these objectives should be.

Specifically, the public value approach requires us to draw a clear distinction between the ends (the goals we seek) and means (the tools we use to achieve these ends). What matters in public value strategies is what works to produce outcomes, satisfy clients, and treat them with respect and fairness. There are reasons to believe that we can improve performance on all three of these dimensions simultaneously. To do so, we have to be willing to experiment and search for better methods than we now use. There is no single right way — but there is a right outcome.

* John O’Dea is president of PRIMO Malta and board member and secretary general of PRIMO Europe. PRIMO (Public Risk Management Organisation) is an international non-profit association established under Belgian Law with the aim of advancing the knowledge and use of risk management within the local governmental sector, as well as the public sector at large, in Europe and to establish risk management as a natural and integral part of good public governance. PRIMO is a pan-European umbrella organization of independent PRIMO national chapters and other organizations within the public sector in 16 European countries, embracing 16.000 city managers and C.E.O.