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Machinery of Government

The structure of government and allocation of functions to Departments and Ministries are often collectively referred to as "machinery of government."  International practice provides a range of approaches.  While detailed structures vary, an  implicit set of criteria seem to have been applied in many settings:
  1. Mandates, responsibilities and accountabilities should be clearly allocated, grouping like activities while avoiding ambiguity, duplication and overlap.
  2. The structure should be simple and robust. Principles on which the structure is based should be clear to all sets of stakeholders. In most cases, the key is that each Minister’s set of portfolios should be related in some important way.
  3. The structure should provide Ministers with an appropriate span of control. 
  4. Strategic policy coordination should be centralized within a few central agencies, with sectoral policy formulation shifted to Ministers, supported by small line ministries and responsible for broad policy portfolios rather than narrow tasks
  5. The structure should promote a strong client orientation, and be based on a rough delineation between policy formulation and implementation responsibilities.  
  6. The structure should seek to avoid potential conflicts of interest.
  7. Ministries are not intended to last indefinitely, and at any one time the structure should reflect priority issues facing the country and facilitate achievement of the government’s key medium-term priorities.
  8. The structure should provide for maximum possible decentralization of service delivery responsibilities to regions and local governments; but decentralization is set within an appropriate and robust accountability framework.

The following are examples of country structures and portfolio allocations:

Agencies, reporting lines, and performance contracting within the executive                                                            

Ministries are in a legal or constitutional sense indistinguishable from the state.  They often have no specific legislative basis and their assets are the general property of the state. Their functions and objectives are multi-purpose, complex tasks, traditionally defined by legislation (Continental European traditions) or determined incrementally by Cabinet (UK and other Anglophone traditions). Their source of funding is almost entirely the state budget and they usually have nil or very minor revenue earnings. As they have no corporate or legal identity separate from the state, they have generally no legal competence to enter into corporate contractual relationships with suppliers.

Generally, ministries provide policy advice, analysis and evaluation. There is an implicit assumption that ministries are best suited to:

  • manage sensitive policy areas prone to sudden reversals
  • deliver services in which there is no realistic market (non-contestable) and which are hard to specify
  • at the cost of some operational efficiency, they provide a margin of safety against service failure for very politically sensitive services
  • "forgive" unpredictable funding for operational activities, since the secure employment of their staff makes staff more prepared to judge government behavior over the longer term.

The term autonomous agencies can be quite confusing because it may refer to two very different things: "executing agencies" and "statutory commissions and independent regulators":

Executing agencies reporting to Ministries (or reporting to Ministers but under the day-to-day supervision of a Ministry) are often indistinguishable from the state in the legal or constitutional sense. However, the relevant Minister generally defines their objectives (perhaps in a framework agreement) and their source of funding can include some revenue earnings. Executing agencies also rarely have legal competence to enter into contractual relationships with suppliers.

Executing agencies deliver services where the public sector has a comparative advantage, but need to be placed in a clear accountability framework to a particular Ministry. Executing agencies tend to be vehicle of choice for:

  • policy areas prone to adjustment but not dramatic reversals – for example foreign affairs responsibilities are rarely located in an agency, while social security often is
  • delivering services in which there is no market (non-contestable) but where the output required is relatively specifiable.

Some agencies are "statutory commissions" in that they have a separate legislative existence. Their objectives are often enshrined in a charter, and their functions are defined by legislation in addition to any powers of direction held by the Minister. They may also be non-asset owning (legally distinct but unable to own assets) or asset owning. They can be budget dependent (subvented) or collect significant revenue earnings. They can also have legal competence to enter into contractual relationships. Such bodies tend to be established for regulatory purposes, although in some presidential systems they can also be service providers.

Statutory commissions provide arms length arrangements when checks and balances are required. Generally, these commissions:

  • presuppose a stable policy environment
  • manage politically sensitive regulatory services.

Countries have encountered particular difficulties with executing agencies and statutory commissions. See "Difficulties with Autonomous Agencies"  for a discussion of these issues and some work in progress.  You may also click here to view a list of questions and concerns that should be addressed when considering the establishment of an autonomous agency.

Trading bodies also have a separate legislative existence. If established under commercial law, then their charter and functions are defined by articles of association. They can be budget dependent, subsidized, and/or enjoy significant revenue earnings. Trading bodies generally have full legal competence to enter into contractual relationships – they can assume corporate liability and can be sued.  Trading bodies provide services that can be operated following private sector models.  In time, they may be candidates for privatization. They:

  • presuppose a stable policy environment
  • can raise significant revenue from fees and charges.

Policy and implementation – together or separate?     

In searching for efficiency improvements in service delivery, experience tells us that policy-making can frequently be separated from implementation with significant results. However, it is dogma that insists that it must be. John Stewart makes the point that "(t)he separation of policy-making and implementation will not prove the elixir that will resolve many of the problems of public management. It should be seen as one approach rather than the approach" (Stewart 1996).

Click here for a discussion of this point.

Recommended readings:                                                   

Recommended websites:                                                     

 

This page was developed by Neil Parison and Nick Manning of the World Bank.  It was submitted on 6/19/00.

 




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