The problems encountered by governments in trying to achieve ‘ efficient’ delivery of goods and services which are inputs to their non-marketed output are clearly formidable. Governments may not define efficiency purely in economic terms, i.e. by reference to allocative efficiency and technical efficiency, because purchasing policies may be used to achieve a range of policy objectives (see Section 5.2.2). However, even if governments wish to concentrate purely on economic efficiency, they face two problems in achieving it. The first is that the organization of their own agencies concerned with this objective may not offer the necessary motivation. The second is that even if the motivation is there, the market may not generate sufficient information for the agencies to be able to specify and monitor contracts with private suppliers which will make economic efficiency achievable. This raises two important questions which we will attempt to answer in other parts of this Course. The first concerns the organization of bureaucracy within government (Module 7) and the second concerns the government's alternative to take over itself the production of goods and services which are otherwise supplied by the private sector (Modules 8 and 9).
