The purpose of this chapter 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 framework of the Danish museums and we define a Data Envelopment Analysis (DEA) model for each BSC perspective, in order to compute museum DEA efficiency scores for each perspective. In the second stage, we define a further DEA model that 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 allocation of the resources to each of them. The dataset used for the analyses is represented by the official museum data, that are collected and made available by the Danish Agency for Culture and Palaces. The results are highly relevant in the actual political context in Denmark, where there is a general interest in understanding the efficiency of museums.
