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Construction of Indicators

In order to measure institutional environment and performance, indicators were constructed to make such measurement possible.

Indicators for measuring institutional environment
Institutional environment was measured along three dimensions: rule credibility, policy credibility and resource adequacy and predictability. This is one of many possible ways of describing the institutional environment, and has been chosen because it is consistent with the analytical framework described in the conceptual framework that was used for analyzing all BNPP-funded surveys.

Officials were asked questions probing different areas of rule credibility, policy credibility and resource adequacy and predictability. Each response e.g. yes/ no, very much/ only a little was converted to numbers. Every response was converted to a number between 0 and 10. If the official considered something was the best possible, the score was 10, if it was the worst possible, the score was 0.

Rule Credibility-The strength of institutions can be gauged by their impact on expectations. If there is a rule about the management of records in the organization, or about methods of performance appraisal, then do officials expect that breaches of these rules will really be punished? Rule credibility was measured by creating an indicator covering the existence of formal rules in areas such as recruitment, training, performance appraisal, orientation, and appeal.

Policy Credibility-The nature of officials' expectations is also important in relation to policy implementation. Willingness to gear actions to support Ministerial policies is somewhat greater if officials believe that policies will remain in force for a period of time, and will not be undermined by other contradictory policies. Policy credibility was measured by creating an indicator covering four dimensions: whether policies were consistent; whether they are communicated properly; whether staff supported them; and whether there was political interference/micro- management.

Resource Adequacy and Predictability- Expectations concerning the future flow of budgetary and other resources are also significant determinants of behavior. Officials that doubt that the budget will be implemented as planned may have few reasons to implement policies vigorously and every reason to over-staff, as salaries will ultimately be paid even if program funds are reduced. Resource adequacy and predictability was measured by creating an indicator compounded from questions about the unpredictable seasonal absences of personnel, anticipates supply of necessary skills and about the anticipated flow of funds to the organization.

An overall institutional environment indicator was constructed on a scale of 0 to 10 (0= worst, 10=best) by taking the simple arithmetic mean of rule credibility, policy credibility and resource adequacy and predictability indicators.

Indicators for measuring performance

Performance was measured in terms of results focus, accountability and employee morale by asking public officials questions that probed their perceptions of these dimensions of performance. To measure how much results focus, accountability and employee morale, relevant indicators were constructed with scales which ranged from 0 to 10 - with 0 being the worst and 10 being the best.

Results-focus is prima facie evidence that public officials are striving to achieve organizational goals and clearly lies behind consideration of organizational efficiency and effectiveness. It was measured by creating an indicator covering areas such as: whether an organization's activities are geared to its objectives; whether the organization is efficient; and whether there is in place a merit-based incentive-reward and punishment system.

Accountability is performance in the distinctive sense of having adhered to the formal rules and so enabling actual behavior to be tested against mandated standards. It was measured by using questions to create an indicator covering: enforceability of regulations; delegation of responsibility to other officials; and corruption.

Employee morale was measured by creating an indicator covering adequacy and timely payments of the salaries, quality of life, and job security.

The overall performance indicator was calculated by taking the simple arithmetic mean of the results-focus, accountability, and employee morale.

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