State and Local Government Productivity Improvement:

What Is the Federal Role?

GGD-78-104: Published: Dec 6, 1978. Publicly Released: Dec 6, 1978.

Additional Materials:


Office of Public Affairs
(202) 512-4800

Productivity is defined as the relationship between resources used and results achieved. Improvement in productivity means either obtaining more and better program output from a given level of resources or using fewer resources to maintain or improve a certain quality level of output. The federal government has a vital stake in improving the productivity of state and local governments for two primary reasons: (1) the national economy is strengthened as a result of improvements in the productivity and fiscal prospects of this key sector; and (2) the effectiveness and efficiency of the multitude of federal grant and regulatory programs using state and local governments to implement federal policies are directly related to the management capacity of those governments.

The productivity in state and local governments is lower than it could be, resulting in higher costs and/or lower levels of public services. State and local government operations do not have the profit incentive to improve productivity that exists in the private sector. However, substantial fiscal and performance benefits have been achieved by innovative state and local governments which have initiated productivity improvement programs. Productivity improvement has been used as a strategy to relieve growing fiscal pressures faced by state and local governments, but most state and local governments do not have significant, comprehensive productivity improvement programs. Major barriers preventing or limiting state and local improvement programs include internal resistance, the large initial investment needed to start a program, and the limited capacity of organizational systems. The most important impact of the federal government on state and local government productivity is the federal grants system, but most federal grant programs do not reward grantees for productivity performance.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: The President should establish a focal point at the federal level with clear authority to oversee and provide stronger leadership for federal efforts assisting state and local management improvement and productivity. Congress should institute fundamental changes in the grants system by removing negative barriers and by incorporating positive incentives to reward improved productivity in grant programs. The Director of the Office of Management and Budget, with the assistance of the proposed focal point, should lead a governmentwide effort to promote increased concern for productivity in federal assistance programs.


Explore the full database of GAO's Open Recommendations »

Mar 14, 2018

Mar 13, 2018

Mar 8, 2018

Mar 7, 2018

Feb 28, 2018

Feb 27, 2018

Feb 23, 2018

Feb 16, 2018

Jan 30, 2018

Looking for more? Browse all our products here