Document Library

Key Text Public Sector Reform: What Works and Why?

Author: S. Webb, C. de Asis, T. De Vaan, A. Evans et al
Date: 2008
Size: 120 pages (1.85 MB)

Access full text: available online

Summary

This World Bank Independent Evaluation Group report examines World Bank support for Public Sector Reform (PSR) between 1999 and 2006. It focuses on four areas: public financial management, administrative and civil service, revenue administration, and anticorruption and transparency. In terms of civil service reform, six factors are found to be particularly important: analytic diagnosis and advice, pragmatic opportunism in selecting reforms to support, realistic donor expectations, appropriate packages of lending instruments, tangible indicators of success, and effective donor coordination.

The effectiveness and efficiency of a country’s public sector is vital to the success of development activities. The public sector is the largest spender and employer in virtually every developing country and it sets the policy environment for the rest of the economy.

Civil service and administrative (CSA) reform involves all aspects of the management and organisation of personnel. It includes programmes to downsize the civil service and reforms to the personnel information system (including civil service censuses), career paths, pay grades (decompression), other aspects of the incentive system, and the organisation of ministries.

While a majority of countries that borrowed to support PSR experienced improved performance in some dimensions, there were shortcomings in important areas and in overall coordination. CSA performance improved in fewer than half of the borrowing countries, but improving CSA has been essential for sustaining PSR in other areas. Other findings relating to CSA include the following:

The urgent issue of affordability of a wage bill often led to emphasis on retrenchment and salary adjustments that were politically unrealistic.
Some success was achieved by focusing more on personnel management reforms, such as merit-based recruitment and promotion, to improve performance and counter patronage-based systems.
The frequent failures of CSA reform, despite continued acknowledgment of its importance, seem to reflect the lack of a coherent strategy (with isolated exceptions) and of clear diagnostic tools to address CSA issues.

The Bank needs to recognise the complexity and political nature of PSR. In terms of CSA, a better framework and indicator set is needed, plus more attention to the budget-execution phases of financial management. This will require actionable indicators for CSA performance and more links between the implementation of reforms for civil service and for financial management. CSA recommendations include the following:

Strong and coherent technical and contextual analysis: This should take account of labour market conditions, performance and accountability issues as well as affordability, and political considerations.
Taking a pragmatic and opportunistic approach to CSA reforms where the institutional environment is challenging: Ingrained systems of patronage are often at the root of problems with the civil service. Reforms can try to shift existing practice rather than advocate all-or-nothing change, and can be implemented first through pilot schemes in riskier environments.
Realistic donor expectations: CSA reforms take time to implement and to show tangible results.
Appropriate package of lending instruments: Technical assistance funded with investment loans has been a particularly important tool for encouraging civil service reform.
Tangible indicators of success: Linking CSA reforms to more concrete PFM reforms can help political leaders to see the benefits of CSA.
Effective donor coordination: In some countries, reform strategies have become joint efforts with the donor community, with positive effects.

Access full text: available online

Source: Webb, S. et al, 2008, 'Public Sector Reform: What Works and Why?', World Bank, Washington DC
Author: Steven B. Webb , stevenbwebb@comcast.net ; Anne Evans , anne[at]evansconsulting.ca
Organisation: World Bank, http://www.worldbank.org/