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Public sector management

One of the most distinctive phenomena in developing countries during the last three decades has been the growth and dominance of the state. The world recession in the early 1970s, coupled with the deepening international debt crisis in the early 1980s, brought tremendous public scrutiny on the growing size and role of the state in both industrialized and developing countries. The economic mismanagement, inefficiencies and public criticisms of public services ushered in an era of “structural adjustment” in the 1980s. The goal under adjustment was to “roll back the state” by transforming it from a direct provider of services into a regulator of socio-economic activities. But after a decade of experience with adjustment, several limitations pertaining to Structural Adjustment Programmes (SAP) have come to the fore.

The success of SAPs has been constrained by weak state institutions in developing countries. In many countries, particularly those of Africa, insufficient private investment has blunted privatization programmes. Third, governments have tended to ignore the needs and contributions of the non-governmental and social /community sectors. This has given rise to new approaches which take a participatory view of PSM.

New Approach to Public Sector Management

The effectiveness and efficiency of public services are important, but they are enhanced through better and transparent channels of communication, inclusive and consensual decision-making processes, and popular consent and participation. Giving voice to disadvantaged groups (women, poor people) and minorities is of particular significance. While the “traditional” approach to PSM justifies responsiveness and accountability according to fixed and pre-established goals, here the goals are themselves subject to negotiation. The focus rests not merely on “doing things right”, but on “doing the right things”, not merely on the “what” (the ends and the technical/administrative means of reaching them) but also on the “how” (the procedures and political processes) of things. The identification and content of particular policies and resource allocations are subject to as wide and open a decision-making process as possible. Emphasis is therefore placed on such elements as skills and capacity enhancement in the public sector, “social learning” and the exchange and coordination of information, and the establishment of legal and socio-economic environments that empower people and communities

Issues covered under Public Sector Management

Public sector management (PSM) is concerned with the management and organization of public sector institutions. The principal dimensions of PSM are personnel, institutional and regulatory reform; privatization; fiscal reform; accountability; public participation; and corruption. Some of the issues like regulatory reform, personnel management have been covered elsewhere on this web site.

Privatization

This includes moves to reform parastatal enterprises through change of ownership and/ or management control from Government to private investors.. Policies and legal framework has have be put in place for creating an enabling environment for attracting private investers. Transparent procedures need to be defined for carrying out dis-investment plans by Governments through special ministries/ commissions. Privatisation has been hampered by the lack of regulatory agencies – a topic that has been covered under Institutional Development.

Fiscal Reform

In developing countries, as in the industrialized world, governments have moved towards the reduction of public spending. While this trend has partly meant the cutting of socio-economic programmes (health, education, food or business subsidies, etc.) altogether, there has also been a move to improve the efficiency and effectiveness of public spending by privatizing or charging user fees on expensive public services (infrastructure and social programmes, in particular). Another way to reduce public spending is to reduce military spending, which, in many developing countries, takes place at the expense of social and other expenditures.

Institutional/Administrative Competence and Accountability

This cover improvements in the following types of management and administrative systems and procedures

Financial management: To remain financially solvent and stable, governments require the capacity to raise and administer tax and customs revenue. A modern accounting system can help improve the budgetary process, while an independent/external audit system can strengthen expenditure controls and expose misspending and corruption.

Strategic management: In the face of rising public demands/expectations and reduced
availability of public resources, the ability of policy managers to make informed, balanced and strategic choices is crucial.

Administrative management: Systematic data collection, computerization and analysis can enhance government information systems. Clearly defined rules and responsibilities will improve administrative accountability, and a reduction in red tape will allow for greater delegation, flexibility and risk-taking by managers. Performance agreements between various levels of managers within the bureaucracy, whereby managers are held responsible for meeting mutually agreed-upon targets, are increasingly being used with positive effects on public service efficiency and effectiveness.

Strengthening procurement and bidding procedures: Helps in reducing abuses and
making procurement systems more transparent and accessible to the public.

Administrative decentralization: A well-functioning local and regional government helps strengthen the competence and transparency of government as a whole, takes account of local considerations and needs, and alleviates the overloading of the central government.

Political Accountability and Public Participation

While administrative accountability is concerned with establishing consistent rules and systems within the public service and ensuring responsible use of public resources, political accountability concerns the public sector’s responsiveness to civil society. A participatory process can decrease the risk of public sector mistakes; increase a country’s overall capacity to govern; permit the representation of a plurality of interests (cultural, economic, social and political; business, labour, community or media) within civil society.

Corruption

Corruption leads to the misuse of public resources and can undermine the legitimacy of government. Yet, it is sometimes quite pervasive in the public sector. Several factors contribute to this pervasiveness. Low public sector salaries can frequently breed fraudulent behaviour. The lack of government accountability and transparency, moreover, can lead to a failure to separate the public from the private and result in the appropriation of public resources for personal gain. And weak anti-corruption laws, coupled with the lack of public participation in government, mean that corruption tends to be treated with impunity. Different approaches to combating corruption in the public sector have been propounded.

Efficient delivery of public services:

A large body of microeconomic literature on households and firms suggests that delivery of public services is important for reducing poverty and stimulating private sector growth. These are services provided to the citizens by the local administration, such as transport system; access to drinking water supply, health services; proper roads etc. Effective delivery of these services is one of the important areas of public sector management. Service delivery can be improved by better management of organizations delivering these services. Other ways to improve include: making institutions accountable for their work and bringing about transparency in execution of work. As has been discussed elsewhere, eGovernment can be an important tool for transparency.

Web resources on Public Sector Management

We have attempted to identify several web resources which could be useful for analysts and planners working in the areas related to Public service management. Different types of institutions are engaged in work related to Public service management. These have been classified as:

1. Vendors/consulting companies who often publish brief cases of work done by them, results of surveys carried out and description of their products/technologies and services.

2. Multilateral institutions and aid agencies which publish material that will be helpful to their managers in supporting public sector management in client countries

3. Federal/State/Local Governments which have implemented public sector management applications/on-line portals. Such sites discuss public sector management strategy followed by the institutions

4. Academic/research institutions that publish papers on methodologies for development and evaluation, critical success factors in implementation and impact on society.

5. Others: These websites are initiatives that are engaged in knowledge dissemination in areas related to public sector management

Click on Information Sources for a selection of these sites and brief descriptions of their content.