Public sector performance and decentralization of decision rights

In recent years, governments have introduced several reforms, often adopting management mechanisms traditionally associated with the private sector. This article looks specifically at the impact of decision-rights decentralization, along with accountability mechanisms, on performance. Twenty public sector organizations, experiencing a shift from rule-based to outcome-based control mechanisms and benefiting from different levels of autonomy and decision margins, were studied. Results show a link between the degree of power delegation and increased organizational performance. The units benefiting from greater freedom with respect to financial and human resources decisions experienced the greatest margin of performance increase. These findings underline the importance of considering the level at which measures are defined and the elements included in the measurement mechanisms (outcomes or rules).