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Administrative and Civil Service Reform

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An effective state is crucial to provide quality public services for economic growth, poverty reduction and social protection. This is a key message of the 1997 and 2003 World Development Reports, as well as the landmark study Voices of the Poor. How can the quantity and quality of public services be improved without placing an undue strain on limited public resources? Administrative and civil service reform comprises a range of activities that can improve the professionalism and capacity of the state. The prescription will vary in accordance with the specific deficiencies of a given public administration. Potential reform areas include:

  • civil service law and employment regimes;
  • establishment control and public sector pay scales;
  • merit recruitment and promotion;
  • individual and/or collective performance management;
  • career paths and training;
  • machinery of government (the structure of government and the allocation of functions to departments and ministries);
  • subnational/local government and appropriate administrative arrangements for decentralization.

What the World Bank is doing in this area

The World Bank financed a growing number of stand-alone civil service reform projects from the late 1980s through the 1990s. Increasingly, however, civil service reforms appear as components of larger lending operations (see PREM Note No. 71, July 2002 in PDF format). A recent extension of that trend is the explicit addition of personnel management issues (e.g., selection, compensation, performance management, career management) in the design of several health and education sector projects.

In Latin America and the Caribbean region, recent projects have provided technical assistance and/or investment loan support to install merit-based selection procedures, construct human resource management information systems, strengthen agencies responsible for public employee policy and oversight, and apply job classification systems to strengthen professional career paths and eliminate unwarranted pay discrepancies. Correcting fiscal imbalances remains an important stimulus for civil service reform, but reducing the number of public employees appears less often as a primary aim of reform. Instead, administrative and civil service reforms have focused ever more on improving professionalism, efficiency, and accountability – whether though traditional direct administration or through arms-length relationships between the state and service providers.

Challenges ahead

Administrative structures and public employment arrangements cannot be considered in isolation. They exist in a political environment - and serve political as well as functional requirements. The feasibility of proposed reforms must be evaluated in light of the likely winners and losers.

With administrative and civil service reform, the shift in focus from structural adjustment to improved services and accountability is sometimes associated with the New Public Management. This is a slippery label. Generally, New Public Management (NPM) describes a management culture that places heavy emphasis on accountability for results and the responsiveness of administrative actors (agents) to political principals. NPM suggests structural or organizational choices that promote decentralized control through a variety of alternative service delivery mechanisms, including quasi-markets with public and private service providers competing for public resources.

Undoubtedly, NPM ideas have strongly influenced the debate concerning administrative reforms in developed and developing countries alike. Still, there are risks in promoting NPM reforms in developing countries. The transaction costs of radical reforms to autonomize service delivery can outweigh the efficiency gains of an arms-length contractual relationship. Ironically, there also is a risk that NPM structures can reduce accountability, particularly where performance information is scare and subject to manipulation. The challenge is to understand the contingent factors that determine when NPM tools can successfully be adopted, and when they should be scrupulously avoided in others.

The World Bank has played a lead role in putting Corruption at the top of the global development agenda as one of the most important obstacles to promote sustainable economic growth and poverty reduction. Since 1996, the World Bank has supported more than 600 anticorruption programs and governance initiatives developed by its member countries. Governance and corruption often are used as synonyms but they are quite different concepts.

Public Sector Governance refers to the way the state acquires and exercises the authority to provide and manage public goods and services.

Corruption is an outcome. It is the consequence of the failure of any of a number of accountability relationships which characterize a national governance system –from failure of the citizen-politician relationship (which can lead to “state capture”) to a failure of bureaucratic and checks and balance institutions (which can lead to “administrative corruption”).

Transparency refers to the release of information by institutions, which is relevant to evaluating those institutions. The purpose for demanding transparency is to allow citizens and markets to hold institutions accountable for their policies and performance. Half a dozen countries have adopted Freedom of Information laws in the Latin America and the Caribbean region and nearly a dozen more are currently considering them. This provides a unique opportunity to strengthening accountability relationships in the region.

What is the Bank doing in the LAC region?

Countries in the region are increasingly demanding technical assistance and support in their efforts to reduce corruption and create better conditions for their social and economic development, as well as for reducing poverty.

To have a better understanding of the roots and dimensions of corruption and develop effective and sustainable ways to promote good governance, the World Bank has done extensive analytical work. Institutional Governance Reviews (IGRs), Country Financial Accountability Assessments (CFAAs), Country Procurement Assessment Reports (CPARs) and Governance diagnostics have been carried out in most countries in the region and recommendations incorporated in Country Assistance Strategies (CASs).

Given that corruption is the symptom of structural institutional weaknesses, the Bank has adopted multi-dimensional and multi-sectoral anti-corruption strategies in the region geared to:

To maximize the impact of these strategies, the Bank has been actively promoting donor coordination and civil society participation. An example of this approach is the Inter-Agency Alliance established with the Inter American Development Bank (IDB) and Transparency International (TI) to collaborate in various areas fighting against corruption and fostering accountability and transparency in Latin American countries.

Acknowledging that the enactment of a Freedom of Information (FOI) law is not enough to ensure accountability of public institutions, the Bank is assisting countries to implement FOI laws and establish public information systems to meet the new demand of information. In addition the Bank is facilitating a regional dialogue on " Access to Information, Transparency, and Good Governance” via GDLN

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