Distortion of indicators of achievement

There are real difficulties in devising targets that measure efficiency in the public sector corresponding to profit under competitive market conditions. Most such endeavours encourage what amounts to point-scoring. It is extremely difficult to describe any product or service so precisely that a supplier cannot cut corners on quality.

A study of Soviet planning revealed examples such as the following: when metal goods were planned in tons, excess weight was (unintentionally) rewarded but economy in metal was penalized; rewarding transport undertakings for fulfilling plans in ton-kilometres resulted in the avoidance of short hauls in favour of distribution of the heaviest loads for the longest distances; when window glass was planned in tons, it tended to be too thick, but when it was planned in square metres, it tended to be too thin; plans expressed financially encouraged more costly inputs; academics penalized for failing to reach a target rate of student passes, ensured that very few failed under any circumstances. Similar difficulties have been noted elsewhere, notably with respect to the evaluation of police performance. If the criteria is crime reduction, then a police chief may simply encourage officers to arrest fewer people thus distorting the statistics. The stress on economy rather than purpose may result in prisoners escaping during transport because more economic methods were used.

The trend of inflation in the UK looks very different when different measures or indices are used, to the extent that change in "the" inflation rate may reflect not recent events but those of a year ago -- or as one commentator remarked like a driver judging his current speed by observing that he has travelled 50 miles in the past hour. The period over which inflation is measured may distort "official" figures by more than 100%, depending on whether it is a 12-moth (or year-on-year) rate, or a month-on- month change expressed at an annual rate, or a three-month moving average, or a "smoothed" rate, or some other.