Administrative and Civil Service Reform

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:

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.