Models of public investment in human services in Australia: issues of economic efficiency

Abstract

Since the 1980s, public sector reforms that reflect the desire to improve the efficiency of the human service sector and improve service outcomes have effected a significant change in the delivery of human services in Australia. There is an increasing recognition that market mechanisms should influence both the production and distribution of most services, if not all. Parallel to this move towards dependency on markets, a new wave of human services reforms has emerged in different States and Territories in Australia in the form of contracting, provision through non-government organisations and partnership with local governments. An important part of this reform is the emphasis on efficient resource allocation. This paper briefly describes the resultant models of government investment in human service delivery in Australia, describes methods for economic evaluation appropriate to human services, documents the existing literature on the application of economic evaluation and comments on progress to date in using economic evaluation for resource allocation.