Transcript Sin título de diapositiva

Constraints to public sector
performance
How do we overcome those constraints?
Castries, St. Lucia, Nov 2 2009
Nick Manning
Manager
Public Sector & Governance Unit
Latin America and the Caribbean
Summary
Some perspective – not bad performers
Part 1: Public sector wide challenges
Foundations for a stronger performance orientation are there - underused
Part 2: Organizational challenges
Centralization is striking
Part 3: Staff management challenges
Selection, retention and motivation
Part 4: Conclusion
Decentralize probably
Just start – there’s a chance of a virtuous circle
Important to maintain some perspective
Health services performance and expenditures are similar to similar countries’ standards
Births attended by skilled health staff (%)
Improved sanitation facilities (%)
Non low-birthweight babies (%)
Health expenditure (% GDP)
12.0
100.0
90.0
10.0
80.0
MORE
SPENDING
70.0
Health Expenditure (% GDP)
8.0
60.0
6.0
50.0
40.0
4.0
30.0
20.0
2.0
10.0
0.0
0.0
OECD
Upper middle income
Latin America
OECS
Source: World Development Indicators (2009). Data circa 2006-07.
Small Caribbean
States
WORSE
SERVICES
Same story for education services
Higher spending levels than other upper middle income countries, higher performance
Pupil-teacher ratio, primary (amount below OECD Benchmark)
Repetition rate, primary (% below OECD Benchmark)
Public spending on education (% GDP)
8.0
6.0
4.0
MORE
SPENDING
2.0
0.0
OECD
BENCHMARK
VALUES
-2.0
-4.0
WORSE
SERVICES
-6.0
-8.0
-10.0
-12.0
OECD
Upper middle income
Latin America
OECS
Source: World Development Indicators (2009). Data circa 2006-07.
Small Caribbean States
Part 1: Public sector-wide challenges
•OECS countries have the foundations and are taking some early steps
•But could do more
Foundations and early steps to improve performance
But could do more: public management could look like this
Planning and
Approval stage
• Budget is rewarding programs that have performance monitoring arrangements
• Budget approvers (ie legislature) get adequate amount of information (just enough,
relevant, not overwhelming).
Implementation
stage
• Adequate information to inform managers' decisions during budget execution,
accompanied by an accounting and costing system that assigns costs to program
outputs and activities
• Modest delegation arrangements to key managers to assume responsibility for
program priorities
• Over-arching high-level set of performance measures
Audit and
Evaluation
stage
• Ensure confidence in the accuracy and the validity of performance information
• Performance evaluations that provide ex-post information on deliveries to inform
budget and managerial decision-making
• Staff appraisals for senior staff - consistent with the high level measures for the
organization
Source: World Bank (2009). Global Experts Team Note: Improving Performance.
Part 2: Organizational challenges
1. Strongly centralized managerial decision-making
2. Even more centralized Human Resources Management
Strongly centralized managerial decision-making
Government level which is approached by Senior Civil Servants when a government action is needed…
Extent of Political Micro-management
Source: World Bank (2001). OECS Institutional and Capacity Review.
Strongly centralized HRM
• The role and powers of autonomous Civil Service Commissions
(staffing, promotions & discipline, pay levels) are constitutionally
entrenched in most Commonwealth countries since independence
• Amending the constitution has proved very a high hurdle to clear for
small countries (Singapore and Malta made progress)
• Changing the Commission perspective by appointing more
managerialist commissioners has been helpful
• Further corporatization and agency creation
• Delegation has been very limited, so far.
Part 3: Staff management challenges
1. Attraction of required human capital
2. Retaining good staff
3. Motivation
Selection
• Do we overstate the need to avoid political involvement?
• Political micro-management or favoritism clearly disastrous –
but trust in senior appointments is key
• Political involvement in senior appointments in the OECD is
tightly circumscribed – but is more than is usually conceded.
Source: OECD (2007). Performance-based arrangements for senior civil servants.
Retention
•
•
Retaining good staff is the single largest driver of performance
within the public sector.
Retention is affected by:
 Predictability in remuneration: encourages competent staff
to remain in a secure position
(OECD: base salary and benefits are 95% of total compensation)

Adequate compensation, terms and conditions vis-à-vis
market levels for similar positions
In decentralized hiring, agencies can use their specialized knowledge
to better “adequate” labor conditions for new openings.

Other drivers: job security, prestige, reputation.
Source: OECD (2007). Performance-based arrangements for senior civil servants.
Motivation
•
•
•
•
Keep targets simple
Contracts are psychological and not legal devices
• Limited usefulness
• Some emerging ingenuity in using time-limited
“mandates”
Performance pay is a very modest contributor to
performance
Challenge: implementing effective staff performance
appraisal systems in small states
Source: OECD (2007). Performance-based arrangements for senior civil servants.
Part 4: Conclusion
1. Some decentralization to units and to managers is
essential
2. The best way to improve performance is to start
Some decentralization to units and to managers is essential
•
Centralization of HRM decisions to Public Service Commissions leaves
little room for effciency1:
 Slow recruitment processes on which managers have little control
prevent them from:
• Hiring staff quickly when they need
• Staff appointed by the PSCs not matching unit’s needs
 Centralized promotions and most disciplinary system: 2001 survey
shown that this system is perceived as “cumbersome and ineffective”.
•
PSCs embody a critical constitutional principle of merit
•
But they provide a paradox:2:
 When weak, “they fail to protect political interference”
 When strong, “they tend to undermine managerial duties of senior public
officers”
.
Sources:
(1) World Bank, 2001. OECS: Institutional and Capacity Review of the Core Public Sector. Report 21844.
(2) CARICAD, 2008. Report on the 1st Regional Conference of Public Service Commissions and
Commonwealth Secretariat, 1996. Redrawing the Lines.
The OECD has gained little trust from public sector performance
improvements
•
•
An unimpressed public - little return in terms of increased trust from all the
OECD effort expended on improving service delivery
Why didn’t it work? – Theories:
 This might be a consequence of the growth of entitlement cultures
within the OECD
 Or might be a corollary of managerialism/new public management
o Erosion of values?
o Unsettled political/administrative boundaries?
o Too much change – continual revolution?
o Low public servant morale?
o Undermining of confidence in official statistics?
o A loss of personality?
The OECS is at a different point on the trust/distrust curve to the OECD
•
•
•
Performance improvements may have a bigger political bang for the buck
in the OECS than in the OECD:
 OECS citizens have not experienced the same increase in the
coverage and quality of public service provision - and so have not
acquired a sense of entitlement.
 Managerialism is less damaging as the public service was a less
respected institution
 Marginal improvements in performance in OECS are more noticeable
to citizens
Consequently, increasing performance in OECS might have a distinct
political pay-off
An initial step to increasing performance is having reliable mechanisms to
measure changes in performance
OECS governments might gain more trust from performance
improvements than the OECD did
•
•
•
More trust in government means tougher decisions can be taken
Short term performance gains can allow deeper reforms that lead to
longer term performance improvements
Succesful public sector reforms have been incremental, giving small but
firm steps
The big prize – the virtuous circle
Difficult
decisions
more
possible
Improved
public sector
management
Improved
trust in
government
Improved
public sector
performance
We know that governments can create a temporary improvement in
popularity
Can they produce a longer term improvement in trust in government?