The Productivity Commission will investigate ways to improve the delivery of public services.
The Government-initiated inquiry will focus on how to lift the productivity of public services such as social housing and employment services, which equates to 20 percent of national output.
The commission will examine traditional as well as new approaches, such as Whanau Ora, and assess their effectiveness in reaching the right people and achieving the desired outcomes.
Chairperson Murray Sherwin says there are potentially significant gains to be made.
The commission will report back to the Government by the end of June 2015.