During centuries welcomed results for society from public activities were measured on the basis of religion, philosophical and political doctrines. Economic interpretation of public value were elaborated in welfare theory and public choice literature, e.g. in net-benefit analysis. Nowadays public value describes the value that an organization contributes to society (Moore 1995). The authors discuss this definition looking for a more focused concept of value.
The public value may be based on the welfare change, on fulfilment of single or a bunch of goals of decision makers or considering a mix of activities of public and private economic units securing survival of society (Ritschl 1925, 1970). The welfare orientated public value measurement applies an individualistic welfare concept and the willingness to pay approach for evaluations.
The authors underline the requirements and preconditions of that concept, e.g. the definition of the welfare group whose public value should be determined. So-called tools of isolated welfare measurement for sub-groups are not yet developed. Moreover, the welfare group may undergo extreme changes because of migration, climate and ecological changes, the disintegration of states, new religions, revolutions, etc. Then the welfare oriented public value is not measured correctly any more. The authors debate possibilities to detect the welfare increase under such circumstances when much infrastructure becomes superfluous and its public value diminishes nearly to zero.
If public value is expressed in terms of single goals or bunches of goals in the framework of a utility analysis the problem caused by chaotic changes seems less severe. According to the kind of dominating goals one defines economic, social, political, sector specific etc. public values. Recently was proposed to turn to the core goals of the constitution for determining the public interest, public value and criteria for reducing public failure. But these goals may not apply under chaotic circumstances. A simulation with different social weights under different chaotic conditions shows variations of public value.
Ritschl defines public values in order to secure survival of society. Therefore, the authors discuss public value in the sense of enabling future generations of the existing population, keeping their culture, sustainable geographic conditions, etc. in order to avoid chaotic conditions for public and private economic units. Public values partly refer to goals and public value measurements already in use.
Other starting points for identifying public values are imaginations about a future society, e.g. multi-cultural society, which should be secured.
At least some goals and conditions relevant for any kind of human society’s survival may serve as public value basis such as basic productions, geographical conditions, climate conditions. Then the public value is relatively stable also under chaotic conditions. As an example, public values in form of investment criteria, which refer to the output of mineral resources production. They concern the maximisation of output under the constraint of cost coverage. Public value and appropriate investment criteria are derived in form of machine park and critical volume related criteria and output growth related criteria. Their appropriateness as public value measures under chaotic conditions is discussed.
H6 - Public Value – Governance mechanisms for creating public value
