Efficiency of Danish Museums and State Funding Allocation

The purpose of this paper is to measure the efficiency of Danish state recognized museums and to propose an allocation model for state funding to the museums based on the results of such analysis. We draw on a quantitative model which provides a tool that measures the museums performance with a balanced approach which is able to take into consideration the efficiency of different aspects of the museum activities. We apply a two-stage DEA-BSC approach. In the first stage we set a Balanced Scorecard (BSC) scheme specifically devised for the situation of the Danish museums, then we define a DEA model for each BSC perspective and compute the DEA efficiency score for every perspective. In the second stage we define a further DEA model which combines the efficiency scores of the various BSC perspectives into an overall performance indicator. Furthermore, the two-stage model is used to propose a brand-new allocation model for state funding to the museums to guide the decision on the resources to be allocated to each of them. The dataset used for the analyses are the official data for museums collected and made available by the Danish Agency for Culture and Palaces. The results a highly relevant in the actual political context in Denmark, and it has general interest in understanding the efficiency of museums.