EFFICACY, EFFECTIVENESS AND EFFICIENCY IN HUMAN-RESOURCE USE - A PRIMER ON THE 3 ES

Disputes over resource use, particularly in the public sector, often s tem from conflict over what is ''efficient. '' This paper systematizes and critiques the most frequently encountered efficiency notions, foc using on their their use and misuse in making human resource decisions . The conclusion is drawn that a triad comprising technical, cost, and allocative efficiency is the base upon which decisions ultimately mus t be founded if the aim is to obtain the most value from available res ources. A corollary is that other conceptions mislead more often than clarify. Technical efficiency requires getting the most from inputs; t here must be no way to obtain greater output from those we are using. It underpins cost efficiency, which requires using the production tech nique that sacrifices least value from other outputs foregone. Allocat ive efficiency demands that resources cannot be redirected to produce outputs of higher value and in turn has both technical and cost effici ency as necessary preconditions. Allocative efficiency is by far the m ost problematic. Few economists object to the Pareto principle, which states that resources are being misused if redeploying inputs or redis tributing outputs can yield added benefits for some members of society without harming any others. However, it is rare to find real-world ca ses that simple and even when it can be applied, the approach risks bi asing policy toward piecemeal methods when broader perspectives may be called for. The Kaldor-Hicks approach in part overcomes these limitat ions, but at a price. Since it sanctions what may be substantial incom e redistribution, willingness to accept its implications is much less certain.