Data envelopment analysis in target setting of water utilities

Past studies have linked goal difficulty, participation and acceptability to goal commitment and performance outcomes. This study pinpoints another frequently forgotten but important issue – the impact on implied technical efficiencies of decision making units (DMUs) involved in the goal setting process. The data envelopment analysis (DEA) technique is used to derive targets and technical efficiencies of 19 sub-utilities of the Uganda National Water and Sewerage Corporation and the DEA targets are compared with negotiated targets. Technical efficiencies for the two scenarios are also contrasted. The results indicate that, even if a goal setting process has incorporated tenets of participation, acceptability and goal difficulty, it may not necessarily guarantee improved technical efficiency of all DMUs.