Measuring Return-on-Investment in Government: Issues and Procedures

Abstract

During recent years, the application of business concepts and practices to the federal government has grown in popularity. The trend has been fueled by national reinvention initiatives and has led to a demand for government agencies to become more accountable in their performance. As a result, many federal agencies are faced with a need for sound methods by which to measure results and demonstrate fiscal responsibility. One method shown to be effective at assessing the value of agency programs has been the return-on-investment (ROI) process. This article examines the basic issues of ROI and its applicability in government.