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The Productivity of the Public Sector: A Classical View

We define public administrations (PAs) as productive units, and analyze the recent trends in PAs’ productivity applying Sylos Labini’s productivity function model. At the microeconomic level, we propose a model of government action for the production of public goods. At the macroeconomic level, we underline the relevance of distinguishing the public and the private sectors in growth accounting exercises, and show that both sectors can fruitfully contribute to economic growth. A preliminary application of the model to the estimation of the impact of e-Government processes highlights a significant relationship between e-Government and PAs’ productivity growth in a number of OECD countries.