Decision theory for comparing institutions.

Various forms of performance assessment are applied to public service institutions, such as hospitals, schools, police units, and local authorities. Difficulties arise in the interpretation of the results presented in some established formats because they require a good understanding and appreciation of the uncertainties involved. Usually the results have to be adapted to the perspectives of the users-managers of the assessed units, a consumer, or a central authority (a watchdog) that dispenses awards and sanctions. We present a decision-theoretical approach to these and related problems in which the perspectives are integrated in the analysis and its results are choices from a finite list of options (alternative courses of action).