In a recent television interview, I was asked the question: Why can't the public sector deliver?

The studio discussion was taking place in the aftermath of the publication of the Book of Estimates and I guess what lay behind the question was the perception that improvements in the quality and scope of public services in recent years have fallen well short of the huge increase in spending that has taken place.

It's a widespread perception. Indeed, it is now taken as almost axiomatically true that money poured into public service provision is money poured down a black hole.

As far as capital projects are concerned, the reasons for the disjunction between spending and tangible results can be reasonably readily identified and have been well rehearsed in a spate of recent consultancy reports. I devoted my last article to this issue. Essentially, the vast capital spending of the last few years has converted into disappointing physical progress because of a combination of generalised construction sector inflation, escalating land acquisition costs and extensive design changes.

It is possible to reach this sort of conclusion, and go some distance towards quantifying the contribution of the factors involved, because the public investment programme contains explicit schedules and targets, which permit the measurement of performance.

The position in relation to current spending - the bulk of which goes on health, education, security and welfare services - is rather different. The perception that the public sector "is not delivering" in areas like these is based for the most part on a mixture of impressions, anecdotes and speculation. It is certainly not based on the same kind of number-crunching that informs our judgment about capital spending. The reason is that, when it comes to current spending, explicit schedules and targets are thin on the ground, and objective performance measurement is correspondingly difficult to carry out.

This is regrettable. For one thing, public discussion is much the poorer as a result. Moreover, it may well be that public servants are being traduced by ill-informed comment.

The paucity of measures with which to evaluate the capacity of the public sector to deliver current services persists despite a raft of well-intentioned initiatives to change the position. Most of these initiatives have been launched under the auspices of what is called the Strategic Management Initiative.

They include the Public Service Management Act of 1997, which requires government departments and agencies to prepare statements of strategy, setting out, among other things, key performance indicators in relation to their activities. Most departments have published up to date strategy statements and, to that extent, conform to the spirit of the legislation.

However, in terms of providing the basis for objective performance measurement, the arrangements are seriously deficient. For example, there is no requirement under the Act for progress reports, a critical element in the assessment of performance, to be published.

One gets the strong impression that there is within the public service a reluctance to engage positively with the practices of performance measurement and management. At the very least, the introduction of such systems seems to require tortuous and time-consuming negotiations with staff interests, a process that must sap the enthusiasm of even the most ardent advocates of such systems on the management side.

A recent audit of progress under the "modernisation and changes" clauses of the Programme for Prosperity and Fairness (PPF), carried out by the public service employers, conveys a flavour of the problem. In the local government sector, for example, the audit reports that there is no agreement by the unions to the implementation of a system of performance management at the level of the individual.

In relation to first and second level education, where performance management is being developed through the School Development Planning Initiative, the audit notes laconically that "further progress is required" and "consistent co-operation is required".

Of course, one doesn't have to look very far to discover the reasons why public service unions are cool towards the idea of performance management systems.

One reason is that they see such systems as the harbingers of performance-related pay, and if there is one notion more than any other that whips up the hostility of a public service trade union leader, it is the notion that pay should be performance related.

However, such evidence as exists suggests that performance-related pay does not run against the grain of their members' instincts. An interesting study of retention problems in the civil service, carried out on behalf of the Civil Service Commission by the consultants Goldsmith Fitzgerald in 1999, identified the absence of a linkage between reward and effort as one of the most powerful sources of demotivation among the grades examined, and one of the most important factors driving resignations from the civil service.

Arguably, the absence of performance-related pay is one of the biggest sources of inequity within the public service and as between the public and private sectors.

But, of course, the absence of performance-related pay is likely to have significant implications for efficiency as well. Is it really credible to propose that public service organisations can become truly performance-driven organisations if the remuneration of public service employees is not linked to their performance?

The words of one of the participants in the Goldsmith Fitzgerald study suggest a clear answer: "There is actually a disincentive to work too hard. The more work you do, the more work you get to make up for the guy who isn't doing anything, and at the end of the day, they get the same increment as you, and if they have enough seniority, they might get a promotion because of their length of service."

Jim O'Leary lectures in the Department of Economics at NUI-Maynooth. jim.oleary@may.ie