Factor I: Growing Recognition of the Scope and Magnitude of Government Inefficiencies

The first factor that facilitated the development of performance measurement in the public sector was the growing recognition of the scope and magnitude of the inefficiencies that were present in the public sector—these inefficiencies had emerged during the industrial revolution (1820–1870). This recognition provided a fertile setting to gain support for the proliferation of reforms aimed at systematically identifying and revealing government waste. To get a sense of the magnitude of the inefficiencies that were present at this time, you may want to visit the Wikipedia page on William Tweed, also known as "Boss Tweed." In 1877, Tweed was convicted for stealing between $25 million and $45 million from New York City taxpayers.

The creation of the aforementioned New York Bureau of Municipal Research in 1907 was a direct response to the presence of the widespread corruption and inefficiencies that were present in the public sector. This bureau had one principal goal: to study and expose the political process that allowed for corruption and government inefficiency. Consistent with this goal, the Bureau’s 1907 certificate of incorporation specifies the following four important reasons it was created:

• to promote efficient and economical government;
• to promote the adoption of scientific methods of accounting and reporting the details of municipal business, with a view to facilitating the work of public officials;
• to publish facts as to the administration of municipal government; and
• to secure constructive publicity in matters pertaining to municipal problems.

It is important to note that the need for combatting government waste and corruption was not limited to New York. It was recognized in a number of other major cities across the United States, including but not limited to Philadelphia, Cincinnati, Memphis, Boston, Buffalo, Chicago, Hoboken, Indianapolis, Los Angeles, Milwaukee, Rochester, San Francisco, and Seattle. These cities established bureaus of municipal research similar to the one in New York.