Public Sector Performance Measurement and Stakeholder Support (WP-09-08)
David N. Figlio and Lawrence W. KennyOver the past several decades, there has been dramatically increased attention paid to measuring the performance of public sector and nonprofit organizations in the United States and elsewhere. Recent research has indicated that public sector and nonprofit organizations are responsive to performance measurement in both productive and unproductive ways. However, it is not yet known how stakeholders respond to this measurement. This paper makes use of a unique panel survey dataset of the population of elementary and middle schools in Florida to directly investigate this question. The authors exploit the fact that Florida changed its school grading system in 2002, and they study the degree to which private contributions to schools are responsive to the information contained in school grades. They find evidence that school grades can have substantial effects on a school's ability to obtain private contributions. They also observe that schools serving different clienteles are treated differently in response to changes in school grades.