Performance failure in the public sector: Misfortune or mismanagement?

Central government in the UK has introduced procedures for assessing and categorizing the performance of public organizations. These procedures assume that performance is attributable to organizational decisions rather than external circumstances. This implies that mismanagement, rather than misfortune, is the primary cause of public service failure. We test this argument by developing a statistical model of the impact of internal characteristics and external constraints on service standards, using data from a range of secondary sources and a multiple informant survey in 120 English local authorities. We then apply this model to the results of the comprehensive performance assessment in English local government. The evidence shows that organizational failure is to some extent attributable to difficult circumstances (such as diverse service needs and poverty) and management characteristics (such as weak leadership and poor performance management). Thus performance failure is associated with both misfortune and mismanagement.