Benchmarking applications in public sector principal‐agent relationships

Purpose – The purpose of this paper is to explore the range of benchmarking applications that can be used in a principal‐agent relationship setting often found in the public sector. Design/methodology/approach – Collection and critical analysis of secondary data from relevant publications addressing applications of benchmarking in the public sector. Extraction of knowledge from several research projects where the authors have been involved in studying and developing benchmarking approaches for different public sector organizations. Induction of new theory about the use of benchmarking in principal‐agent relationships in the public sector, grounded through empirical evidence from case studies. Findings – A number of new approaches to benchmarking in the public sector have been identified and described, some of which are already used in real life cases, others which need further development before being implemented. All of these can introduce benefits to both principals and agents involved in such benchmarking efforts. Research limitations/implications – The paper explores benchmarking applications that are almost exclusively relevant in a public sector setting, although some of them might be adapted to certain private sector conditions. Originality/value – Whereas most work on benchmarking in the public sector tend to view only improvement‐oriented, voluntary benchmarking as relevant and useful, this paper demonstrates how many different imposed benchmarking schemes with other purposes can be useful.