Simply put, states are where today's substantive policies are crafted. Since the early 1980s, an alphabet soup of federal programs has been reduced into block grants. Waivers for state experimentation are commonplace and the Supreme Court has encouraged greater state power. The change makes state government a crucial player in the competition for businesses, labor, and capital. It also makes it more important that we measure how effectively states deliver important services.
Effective government is the sum of two components.
The first is efficiency, or how much is spent for each unit of service. The second is performance, which represents the quality of the services provided. Ratings were computed for fiscal years 1994-98. All dollar amounts in the analysis have been normalized to account for variations in the cost of living. Our analyses of six functions showed that Massachusetts ranked fourth out of the six states in overall effectiveness.