The Role of Administrative Capacity in Complementing Performance Measurement Systems: How Hospitals and Prisons Account for Service Users

With the rise of New Public Management, regulators have increasingly turned to quantitative systems of performance measurement for assessing and monitoring public organizations. At the same time, there has been a swelling focus on service users as judges of organizational performance. As many have observed, regulatory initiatives which emphasize performance measurement and user-orientation are enacted quite differently across different countries, public sector contexts, and individual organizations. One reason for this variation is public organizations’ varying and sometimes inadequate capacities for compiling performance information and implementing new management practices. In this paper, we draw on 87 interviews and a multiple case study of German hospitals and prisons to investigate how different types of public organizations create and mobilize management practices around their respective users – patients and prisoners. We identified three approaches to accounting for users, which were consistent across cases: hospitals and prisons attempted to (i) approximate users’ views through an organizational lens, (ii) approximate users’ views through a professional lens, and (iii) trace user movements. While these modes of accounting were broadly similar, hospitals and prisons varied greatly in how they incorporated users’ views and movements into performance management practice. In order to better understand how different public organizations choose to gather, process, and act on information related to service users, we focused on the role of administrative capacity. We identified different interactions and trade-offs among technical, knowledge, managerial, and economic capacities, which shaped how users were accounted for and integrated into local management routines. Our study makes two contributions. Firstly, we advance empirical studies of performance measurement and regulation by illustrating how different organizations interpret and respond to regulatory demands. Secondly, we draw attention to the notion of administrative capacity and explore its role in shaping the behavior of regulated organizations.