_The institutional and organizational environment_ Many facility surveys have found considerable variation in facility performance. Yet, there are few examples of surveys that have looked beyond the facility, to collect data on the determinants of performance, including the institutional and organizational environment in which the facility is operating. In large part, this reflects the difficulty in measuring both performance and its determinants, and in establishing an empirical relationship between specific determinants and chosen measures of performance.

Performance measurement of private enterprises is relatively straightforward in most sectors. "Firm value"-i.e., the present value of the future stream of profits-provides a unified criteria which captures both efficiency and quality. In contrast, performance measurement in much of the public sector is fraught with difficulty. In part, this is due to the fact that neither input nor output prices can be assumed to reflect "market prices". But there are also deeper issues, relating to the meaning of performance in the different spheres. In the case of the health sector and many other areas there the state has a prominent role, "society" has particular distributive concerns. In consequence, performance cannot be assessed by exclusive reference to some notional "bottom line".<sup>38</sup> In practice, this often leads to the application of several parallel criteria in the assessment of health sector performance, including allocative and technical efficiency, quality of care, and equity.<sup>39</sup> An even greater difficulty arises in identifying and measuring determinants of performance. In general, there are several features of this operational environment that can be expected to be important. First, both government and private facilities are generally subject to some mechanisms for oversight and accountability. This includes issues such as the hiring and firing of staff, the allocation of decision rights between facilities and district or provincial administration, sanctioning devices against private facilities that do not comply with government regulation, and mechanisms for community participation and redress (for example through facility management committees). There are also important issues to explore in relation to financing and support systems that operate "upstream" from the facilities. Government facilities, and in some cases NGO facilities, depend on district and provincial administration to provide them with salaries and material inputs. Finally, there are a number of factors that are internal to the facility-e.g., the characteristics of the facility managerthat may be important as determinants of facility performance.

Currently, there is little systematic empirical evidence on the impact that different features of the operational environment has on facility performance.<sup>40</sup> However, some recent surveys have made inroads into this area. For example, Somanathan and others (2000) hypothesize that differences in costs across facilities in Sri Lanka are related to differences in the way that these facilities were managed. To analyze this issue, they collect data on

> 38 This is based on the idea that performance by the extent to which an agent (m this case a health facility or the health sector as a whole) fulfils the objectives assigned by the agent ("society") (Pestieau and Tulkens 1993).

> 39 Sometimes other dimnensions of performance are included, e.g., effectiveness and accessibility (see Goddard, et al. 2000). Depending on the role of private providers m the health sector, different criteria for performance may be appropriate.

> 40 There is little guidance in the literature on how to best measure different aspects of the institutional and organizational environment. Price and Mueller (1986) offer a general review of different areas of organizational measurement. Over and Watanabe (2000) propose a number of indicators for organizational environment, organizational behavior, and outcomes.

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