Incorporating managed preferences in the evaluation of public organizations efficiency: a DEA approach

Abstract

Classical Data Envelopment Analysis (DEA) models have often been used to evaluate the public organizations effectiveness. However, such models, by ignoring the managers preferences, can classify as efficient organizations that, in fact, are not. Based on this motivation, the objective of this paper was to evaluate, through a DEA model that incorporates managerial preferences, the efficiency of the 25 superintendencies of the National Department of Mineral Production (DNPM), an autarchy linked to the Ministry of Mines and Energy. For this purpose, the number of servers in the middle and end areas and, as outputs, the number of mining titles granted in 2016 was considered as input. Manager preferences regarding outputs were incorporated into classical DEA models using the assurance region method. The results showed that when management preferences were incorporated into classic DEA models, the DNPM superintendencies number that showed maximum operational efficiency was reduced from eight to five. For superintendencies classified as inefficient, the benchmarks and performance targets were identified, which is useful, since they can support the action planning aimed at reducing the high liabilities pending processes for analysis by the municipality. This would reduce DNPM's slowness in granting mining bonds, which would stimulate investments in the mineral sector, which is of paramount importance to the Brazilian economy. It should be emphasized that the methods used in this research can be applied in the evaluation of the organizations efficiency whose managers have different preferences on inputs and outputs.