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Evaluation of Donor-Supported Reform Projects

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The following text is from the Executive Summary of the OED Report (No. 19599) "Civil Service Reform: A Review of World Bank Assistance," authored by Navin Girishankar, et. al. (1999).

1.     Over the past two decades, Bank support for civil service reforms (CSRs) has served as a primary vehicle for removing institutional impediments to market-led development in client countries. Despite its growing importance, CSR continues to suffer from definitional, strategic, and operational ambiguities. In an attempt to clarify these issues, this OED review "unbundles" Bank assistance, evaluates its relevance and efficacy, and makes recommendations based on the findings.

2.     The study sample comprises 124 loans approved in 32 client countries, as well as economic and sector work (ESW) from a subsample of 11 countries, over the 1980–97 period. For relevance, the review evaluated substantive issues as well as upstream processes (ESW, SARs, and diagnostic assessments) that shaped Bank-client responses to bureaucratic dysfunction. For efficacy, it examined substantive and process-related downstream factors (supervision, project management, and evaluation) that influenced implementation.

Combating bureaucratic dysfunction: Bank support, 1980–97

3.     Between 1980 and 1997, the Bank diagnosed three stylized forms of bureaucratic dysfunction that undermined the ability of governments to secure the fundamentals of adjustment and development. First, endemic overstaffing accompanied by unsustainable wage bills was identified from the early 1980s onward. Second, a combination of misaligned organizational structures, poor human resources, and inadequate incentives weakened administrative capacity to carry out core government functions. Finally, by the early 1990s, the Bank found that the credibility and accountability of state institutions strained under the weight of cumbersome CS rules, political interference, and cultures of nonperformance.

4.     In the first decade of support, the Bank’s strategy to combat bureaucratic dysfunction turned on the notion that governments could "do more with less." It supported downsizing measures to limit and cut CS size, while imposing hard budget constraints on wage expenditures. These cutbacks were typically complemented by capacity building initiatives designed to help governments "do more"—that is, implement difficult adjustment programs. By the early 1990s, the Bank added a third class of measures—institutional reforms such as intra–public sector regulatory reform and external checks and balances—in order to make governments "more transparent and accountable," in addition to being more efficient.

Relevance of Bank strategy                                          

5.     Given the conventional wisdom on the role of the state in the early 1980s, the Bank’s strategy of "doing more with less" broke new ground. It pioneered the notion that governments in developing countries could simultaneously limit CS growth and improve policymaking capacity and operational efficiency. For the first time, the Bank subjected questions of bureaucratic quality to the test of fiscal performance, thereby providing the impetus for borrowing governments to improve the allocative and technical efficiency of personnel expenditures. A key instrument in this early strategy, Bank ESW significantly enhanced knowledge of public administration in developing countries.

6.     The relevance of this strategy was hampered, however, by erratic assessment of bureaucratic dysfunction and insufficient emphasis on performance incentives. The objectives of lending operations did not adequately stress either the removal of wage disincentives or the strengthening of linkages between wages and basic performance criteria. Interventions seldom sought to influence nonwage incentives such as organizational culture. Moreover, the Bank has been slow in mainstreaming the new thinking about institutions and the role of the state, which gained prominence in the past decade.

Efficacy of Bank support                                                

7.     On average, only 33 percent of closed CSR interventions and 38 percent of ongoing efforts achieved satisfactory outcomes. Even when desirable, outcomes were often not sustainable. Downsizing and capacity building initiatives failed to produce permanent reductions in CS size and to overcome capacity constraints in economic management and service delivery. There was no evidence that civil servants began to "own" and follow formal rules such as codes of ethics in any meaningful way. As a result, institutional reforms could not substantially limit arbitrary action by bureaucrats or politicians.

8.     Four factors undermined the efficacy of Bank-supported interventions: (i) the poor quality of information on CSR performance, (ii) the limited role afforded to strategic management and cultural change, (iii) the absence of checks and balances on arbitrary action, and (iv) a failure to appreciate key contextual constraints. The significance of these factors in explaining outcomes illustrates how the Bank’s approach to CSR has been largely "technocratic." Rather than engaging CSs as dynamic systems that are influenced by multiple stakeholders, Bank operations relied on small groups of interlocutors within core ministries to design and implement one-size-fits-all CSR blueprints in diverse country settings.

9.     Poor Information on CSR Performance. With the exception of fiscal data, standardized indicators of CSR performance were neither fully developed nor operationalized for monitoring and evaluation (M&E). As a result, implementation suffered from information asymmetries that prevented reforming governments from holding bureaucrats accountable to CSR objectives. For instance, managers granted accelerated promotions to raise salaries during wage freezes, which led to higher wage bills rather than savings.

10.    Limited Role for Strategic Management and Cultural Change. Capacity building efforts were based on a narrow understanding of incentives as wage enhancements. They did not envision appropriate roles for strategic management (including the reorganization of work) and cultural change in strengthening incentives to perform. M&E often failed to acknowledge the detrimental impact of conventional Bank processes—such as the use of expatriate consultants and Project Implementation Units (PIUs)—on the credibility of standard operating procedures, as well as on the morale of civil servants. On a related point, the Bank’s skepticism about promoting greater autonomy for public sector managers meant that CSRs often compelled bureaucrats in client countries to be efficient without empowering them to be innovative.

11.    Absence of Coordination Arrangements, Checks, and Balances. Efficacy and sustainability suffered as borrowing governments carried out interventions without establishing the institutional arrangements necessary for coordination between government bodies or providing checks and balances to arbitrary action. For example, poorly defined authority between budgeting and personnel departments allowed overstaffing and the proliferation of ministries to continue, even after downsizing efforts. Similarly, in the absence of external checks on political interference, CS hiring remained a primary mode of dispensing patronage. Broad groups of stakeholders such as public employees, citizens, and private firms rarely participated in the process of defining and enforcing new rules and norms governing CS activities.

12.    Failure to Appreciate Labor Market and Institutional Constraints. While all three contextual constraints—macroeconomic performance, labor market trends, and institutional endowment—significantly influenced CSR outcomes, the Bank relied mainly on budget scenarios to guide the design of CSRs. Neither ESW nor M&E used models of CS systems that adequately accounted for labor market and institutional trends (for example, projected demand for CS jobs or the level of political appointments in the CS) when elaborating reform scenarios.

Conclusions and recommendations                              

13.    The review found that Bank-supported CSRs were largely ineffective in achieving sustainable results in downsizing, capacity building, and institutional reform. This was, in part, due to significant political difficulties in implementing CSRs. Yet the relevance and ownership of reforms were also weakened by a technocratic approach that failed to mainstream institutional analysis and develop a coherent framework for intervening in administrative systems. The Bank should take the following steps to promote lasting improvements in public sector performance.

14.    For the purposes of monitoring and evaluation, the Bank should develop a system of categorizing CSR interventions in three classes based on their primary objective—downsizing, capacity building, or institutional reform. In addition, the Network should standardize performance indicators for each class of CSR in order to monitor impact.

15.    Future CSR operations should systematically link capacity building interventions to job descriptions and monitorable performance of civil servants and their respective units

16.    Bank-supported CSR interventions should be preceded by institutional assessments of administrative systems and analyses of labor market trends in addition to budget scenarios.

17.    Where the Bank supports comprehensive reform programs, interventions should be designed as stand-alone projects and supported by lending instruments that allow adequate time for implementation (such as adaptable lending). The Bank should also employ participatory processes to nurture reform constituencies in government, the private sector, and civil society.

18.    The Bank should use ongoing evaluations of CSR support by other multilateral and bilateral donors as a basis to more clearly define its strategic role in different contexts. Where it does not have a comparative advantage, the Bank should only play a supporting role.

19.    Finally, the Bank should explore the feasibility of promoting results-based management by supporting comprehensive reforms of this kind in three to five pilot countries.

Recommended readings:                                                

  • Girishankar, Navin, et. al. 1999. "Civil Service Reform: A Review of World Bank Assistance." Operations Evaluation Department, Report No. 19599, World Bank, Washington, D.C.
  • Nunberg, Barbara. 1997. "Rethinking Civil Service Reform: An Agenda for Smart  Government." Poverty and Social Policy Working Paper. World Bank, Washington, D.C.
  • Nunberg, Barbara, and John Nellis. 1995. "Civil Service Reform and the World  Bank." World Bank Discussion Paper 161. World Bank, Washington, D.C.


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