ILO Home page

Sectoral Activities Programme

See text links
below

public service report

Human resource development
in the public service
in the context of structural
adjustment and transition

Report for discussion at the Joint Meeting on Human Resource Development in the Public Service in the Context of Structural Adjustment
and Transition

Geneva, 14-18 December 1998

International Labour Office   Geneva           Cover photographs: ILO/J. Maillard

Copyright ® 1998 International Labour Organization (ILO)     To purchase this document, click here

Preface

This report has been prepared by the International Labour Office as the basis for discussions at the Joint Meeting on Human Resource Development in the Public Service in the Context of Structural Adjustment and Transition. It reviews the role of human resources in reform processes, and the impact of these processes of human resource development (HRD) in the public service. The report analyses the interaction between HRD and employment, pay, labour relations, working conditions and terms of employment.

Background to the Meeting

The Meeting is part of the ILO's Sectoral Activities Programme, the purpose of which is to facilitate the exchange of information between constituents on labour and social developments relevant to particular economic sectors, complemented by practically oriented research on topical sectoral issues. This objective has traditionally been pursued by holding international tripartite sectoral meetings for the exchange of ideas and experiences with a view to: fostering a broader understanding of sector-specific issues and problems; promoting an international tripartite consensus on sectoral concerns and providing guidance for national and international policies and measures to deal with related issues and problems; promoting the harmonization of all ILO activities of a sectoral character and acting as focal point between the Office and its constituents; and providing technical advice, practical assistance and support for the latter to facilitate the application of international labour standards in various economic sectors.

At its 262nd Session (March-April 1995), the Governing Body of the ILO decided that a meeting on human resource development in the public service in the context of structural adjustment and transition would be included in the programme of sectoral activities meetings for 1996-97. At its 268th Session (March 1997) the Governing Body decided that this Meeting should be included in the programme of sectoral meetings for 1998-99 and that it should be bipartite (governments as employers and workers' representatives). It was decided to invite the following 28 countries: Algeria, Bahamas, Benin, Bulgaria, Canada, Chile, China, Colombia, Croatia, Cyprus, Egypt, Germany, Hungary, India, Republic of Korea, Netherlands, Panama, Peru, Philippines, Poland, Russian Federation, Slovakia, South Africa, Suriname, Sweden, Thailand, Trinidad and Tobago, Zambia. A number of countries were included in the reserve list from which further invitees would be drawn in the event that a government in the first list declined the invitation. Furthermore, 28 workers' representatives were invited. The Governing Body decided that the purpose of the Meeting would be to discuss the research findings and to adopt conclusions, containing guidelines on human resource development of the public service in the context of structural adjustment and transition, and a report on the discussion.

Background to the report

Faced with the challenges of a globalized economy, structural adjustment and transition to market economies, States, regions and industrial centres are competing with each other to expand -- or at least maintain -- their economic capacity. The efficiency of the public service is an important element in this competition. After many years during which the image of the public service personnel has been on the decline, it is now being acknowledged that without qualified, motivated and committed staff, the State cannot play the role assigned to it in a rapidly changing and globalized economy. The time is over when public service personnel were considered only to be a cost factor in public budgets which had to be cut; it has become evident that the participation of these persons and human resource development are vital to the reform process. Reducing the public service will achieve little in terms of quality and effectiveness if attention is not paid to the development of human resources -- in terms of skills, working conditions, career possibilities and motivation.

Public service reform is an essential component of the processes of structural adjustment and transition and obviously involves human resource development of the staff concerned. However, there has only been scanty analysis in the past of the way in which the various factors contributing to successful HRD are linked and interact. But it is precisely the way in which these factors are integrated into the overall process of public service reform which determine the improvement of productivity and efficiency of the public service.

In seven chapters, this report outlines the changes brought about through public service reforms and highlights the relevance of the ILO's activities to the management of change in partnership with the workforce. Chapter 1 describes the various trends which influence public service reforms, concepts of HRD which go beyond education and training, and the impact of structural change and transition on public employment and the outlook of the public service. Chapter 2 briefly outlines different instruments and activities through which the ILO facilitates social dialogue in the public service and its human resource development. Chapter 3 analyses training as a specific condition for the management of change, the role of the different actors involved and the practical implementation of training activities in different parts of the world. Chapter 4 gives an overview of the impact of working conditions, such as pay, work organization, new technologies, occupational safety and health and ethical considerations on the enhancement and limitations of HRD. The various sections of Chapter 5 focus on the interaction between HRD and terms of employment and examines how changes in the legal status and contract arrangements are of particular relevance to the public service. Chapter 6 attempts to identify alternatives for retrenched public service workers, and Chapter 7 summarizes trends in labour relations in the public service, including the outlook of unionization and alliances with civil society. The report concludes with a list of suggested points for discussion which may also serve as a framework for guidelines on human resource development in the public service in the context of structural adjustment and transition.

Contents

Acknowledgements

The information on which the report is based is derived from a variety of sources, although it should be noted that it was sometimes difficult to obtain comparable data on public service reforms and HRD in the various countries undergoing structural change. Extensive use was made of various publications as well as articles from the press. The report also draws extensively on materials and data published by the World Bank, the IMF and the OECD.

The report was prepared by the Salaried Employees and Professional Workers Branch and is published under the authority of the International Labour Office. Contributions to the report were provided by external specialists (Professor Joachim Jens Hesse, European Centre for Comparative Government and Public Policy; Professor Franz Thedieck, Public Administration Promotion Centre (DSE/ZÖV), Berlin; and Mr. Brendan Martin, Public World, London).

Introduction

It goes without saying that any process of structural change is the result of human action. And as in other sectors of the economy, changes in the public service are contingent upon the human resources available to design and carry them through. Human resources in the public service may be defined as the total human potential at the disposal of the public service. This potential is determined by individual experience and knowledge (competence), willingness (motivation) and ability. Human resource development (HRD) goes beyond education and training -- and indeed beyond human resource management. It involves issues such as education and training, recruitment, staffing, performance and career development, pay, working conditions the environment and terms of employment -- all of which may be influenced by human resource management. But HRD also includes such areas as the interdependency between individuals and an institution's policies and structures, which may be related to issues such as information, awareness, ethics, motivation and behaviour and the strategic capacity for developing and linking these issues. An analysis should therefore be made of the way in which these various aspects of HRD interact and of their practical consequences for public service reforms.

The ILO has long considered that human resource development is of vital importance to the public service and to the other sectors of the economy. The Human Resources Development Convention (No. 142) and its accompanying Recommendation (No. 150), adopted by the International Labour Conference in 1975, refer to "vocational guidance" and "vocational training" as being closely linked to employment. They provide for comprehensive and coordinated policies and programmes which "... shall be designed to improve the ability of the individual to understand and, individually or collectively, to influence the working and social environment".

Subsequent rapid developments in the public and private sectors and the critical role of human resources in economy and society clearly suggested that the scope of HRD had been extended. It was therefore in keeping with this trend that the International Labour Conference, at its 79th Session in 1992, adopted a resolution and conclusions concerning adjustment and human resources development. This resolution endorsed the significance of comprehensive human resource development policies in times of structural adjustment and transition, emphasizing that education and training constituted "an essential element in a virtuous circle consisting of training and skill development, higher work motivation, higher productivity, continuous adjustment of enterprises and workers to change, higher employment and increased incomes and well-being". It further stressed that human resources policies "... should be formulated and implemented within the framework of adherence to democratic principles, tripartism and consultation between the government, the social partners and community groups". Specific emphasis was laid on the equality of access to training to all groups of the population, including disadvantaged ethnic minorities and marginalized groups of persons.

More recently, in 1995, the Joint Meeting on the Impact of Structural Adjustment in the Public Services (Efficiency, Quality Improvement and Working Conditions) concluded that public sector reforms were most likely to achieve their objectives of delivering efficient, effective and high-quality services when planned and implemented with full participation of public sector workers, their unions and consumers of public services at all stages of the decision-making process. The need for training was also stressed: "Governments should make adequate investment to maintain and improve the quality of the public sector workforce on an ongoing basis. Continuous staff training is critical to adapt skills for future organizational needs, improve individual job satisfaction, redeploy staff, enhance career and employment prospects and take advantage of technological progress, thereby realizing the objectives of efficient and effective delivery of quality services to meet citizens' expectations".

Increasing attention has also been paid in recent years to the development of human resources at the national and international levels. In 1996 the United Nations General Assembly recognized the important role of HRD in public administration and the OECD pointed out, on the basis of country surveys, that more effective management of people would lead to more efficient and effective public service organizations.(1) In 1997, the World Bank clearly indicated that "whether making policy, delivering services or administrating contracts, capable and motivated staff are the lifeblood of an effective state".(2)

In times of structural adjustment and transition, any attempt to make international comparisons of the public service becomes even more complex than before. Furthermore, given the different historical, cultural and social background of each country, the status of public sector employees has always varied considerably. But now the boundaries between the public and private sectors are blurring as a result of "contracting out", internal markets and other forms of partial privatization.

In a number of countries the term "public service personnel" is understood to cover not only those employed in public administration but also those working in services in "the public or general interest" which have to be provided to all population groups and geographical areas. This term warrants further explanation. Services of this kind cover those services which the public authorities consider to be of general interest and are subject to specific public service obligations. The term "universal services" is intended to ensure that everyone has access to certain services of high quality and at prices that they can afford. In Europe, for instance, the aim of these services is to serve the public while protecting the environment, enhancing economic and social cohesion and promoting consumer interests. The basic operating principles of such services are: continuity, equal access and universality.(3) They mostly include: education, social and health services; water supply, electricity and gas services; postal and telecommunication services and, to a certain extent, transport. For the purposes of this report, "public service personnel" refers to persons employed by various public authorities or bodies, whether central, federal, regional, provincial or local. The term covers both public servants, i.e. persons with recognized official status to whom special regulations apply, and public employees, i.e. persons employed on a contractual basis who do not have recognized official status as public servants.

This report refers to all geographical areas undergoing structural change and transition and is not limited to countries which have introduced structural adjustment programmes drawn up by the International Monetary Fund and the World Bank for developing countries or central and eastern European countries in transition. On the basis of the findings of the above-mentioned Joint Meeting, it considers that structural adjustment is part of a process of global restructuring may be defined as increased reliance on market forces and a reduced role of the State in economic management. The process began in the industrialized countries in the 1970s and spread to the developing countries shortly thereafter, leading to reduced public structures and functions; this in turn entailed cuts in public employment. Similar strategies and effects were also observed in economies in transition from centrally planned to market economies, although the context was politically, economically and socially different. This global process of restructuring is still under way and affecting the public service and its human resources.

An attempt is made in this report to describe and analyse the main issues of human resource development in varying situations of the public service in the context of structural adjustment and transition. However, it is extremely difficult to obtain specific information on the performance of the public service and to compare it over time and across countries, as there are hardly any indicators on measures within public agencies or on measures of their outcome.(4) It is even more problematic to gather evidence in relation to human resource development, since most reforms and adjustments are not subject to systematic monitoring and assessed in terms of human resources. This situation might be attributed to the difficulties of developing appropriate indicators and to an increasing decentralization of data collection. Anecdotal evidence is often the only way of identifying common trends. More detailed examples are given to illustrate how changes have been implemented and to try and gauge which conditions have led to success or failure. Although these conditions are unique for each situation and cannot merely be replicated, the report tries to outline a set of elements which may be taken into consideration when trying to introduce changes to human resource development.

1. Trends, concepts and policies

Before setting out to ascertain the significance of HRD in the public service, an attempt must first be made to identify common trends in public service reforms and the ways in which they affect this service. This will not only facilitate analysis of a given national situation with a view to establishing a conceptual basis upon which to draw up HRD policies, but also pave the way for a systematic implementation of these policies.

1.1.  Development trends in public service reforms

This section merely sets out to describe the main features of common trends in the public service reform and does not intend pre-empting any judgement as to their appropriateness for a given situation. The list is not exhaustive.

1.1.1.  Globalization

Public service reforms are not restricted to developing regions or countries undergoing transition. Since the reform movements in the 1970s, the public administration in continental Europe has also been experiencing organizational change. An early example was the territorial reform -- with focus on the local level (Gebietsreform) -- in Western Germany. These early developments were followed by a general tendency to adopt private sector management models which have resulted in a higher degree of delegation in many countries.(5) Originating in the United Kingdom, the United States and New Zealand, a wave of reform in the public service, known as New Public Management (NPM), swept throughout the world in the 1980s.(6)

Globalization processes have developed in the fields of goods production, transport, communication and financial transactions and obviously have repercussions on economic development. States, regions and industrial centres compete with each other in an attempt to expand -- or merely maintain their economic capacity. The effectiveness and efficiency of the public service is an important element in this competition.(7) Economic prosperity and social development therefore depend more than ever on competitive public administration performance.

National administration is being streamlined, especially by means of privatization, contracting out or restructuring former public services linked with entrepreneurial activities. These measures cut costs in public administration and strengthen civil society. The new role of the State consists of establishing favourable conditions for the private sector and non-governmental players who are motivated to prepare for a society with a higher degree of self-regulation. Instead of implementing only public policy, public administration facilitates and encourages public-private partnership. In this scenario, the State concentrates on core functions: policy-making, public planning and budgeting, international relations, defence, public security, justice and social security. These core functions may differ from country to country.
 

New Public Management (NPM)

In the 1980s, the United Kingdom, New Zealand and Australia underwent wide-sweeping changes in the public administration; in the United Kingdom, emphasis was laid on privatization and deregulation, whereas in Australia and New Zealand enhancing management effectivity -- e.g. by lean management elements -- was the order of the day. These reform concepts subsequently developed into what is now known as New Public Management (NPM). In a nutshell, NPM consists of straight economic restructuring -- or economization -- of the public sector, with an attempt to transform it into public management and bring it closer to organizational methods used in private enterprises.

What exactly constitutes the NPM approach? First of all, its components are not really new; what is new is that each single reform element is integrated into one overall concept -- and it is this that has stimulated discussion and facilitated its implementation. NPM is based on a clear separation of political and managerial competencies. At the political level, general strategies, political priorities, quality standards and the allocation of resources are merely defined, while the administrative management is responsible for the implementation of the political objectives, laid down in an annual contract between the political and managerial levels (contract management).

In this way, politicians steer and leave the "rowing" to their personnel. The main contract is broken down into further contracts between the administrative manager and the various decentralized organizational units, with a view to combining corresponding tasks, areas of competence and resources (decentralized resource management). Administration is no longer controlled by input regulation, but steered by output orientation. The loss of input control elements is compensated by output controlling, an overall monitoring system that reports on major deviations from the agreed objectives. Furthermore, the accountability system used by public administration is streamlined according to private sector methods. By directing its orientation to the citizen as its user and client, the public service becomes an institution which produces public goods according to an external market demand. to match well the market situation, even competition is organized when necessary by benchmarking with the offer of other public or private services. A second quality-producing element is a performance-related remuneration system.

However, it is relevant to recall the hazards involved in importing structural models characteristic of the private sector into the public service. There must therefore be a balance as institutional traditions interact -- and this balance is unlikely to be achieved if management change is based on an uncritical adoption of approaches developed for the private sector.*

*J. Steward and K. Walsh: "Change in the management of public services", in Public Administration (Oxford, Blackwell), Vol. 70, Winter 1992, p. 511.

At the same time, decentralization programmes -- in the form of devolution -- have a significant impact on state performance. As central governments find their problem-solving capacity increasingly diminished, decision-making is transferred to decentralized bodies; and the active participation of a grass-roots civil society can be positive in so far as its stimulates local organizations to come up with better solutions -- thus offsetting political shortcomings at the national level. It is for this reason that many States have begun to introduce decentralization policies.

But there is also an inverse trend which curtails the influence of national governments: the regionalization of supra-national bodies. The North American Free Trade Agreement (NAFTA) and the Common Market of the Southern Cone (MERCOSUR) are examples of this. The European Union also bears witness to the fact that national States on a European scale are less and less able to cope effectively with the challenges of globalization.

1.1.2.  Democratization of the State and its administration

Democratic elections are a basic indicator for measuring democratic progress. The number of democratically elected governments has increased sharply in recent decades. In 1974 only 39 countries -- one every four worldwide -- were democratic. In 1997, 117 countries -- nearly two in three -- used open elections to choose their national leadership, and two-thirds of the adult population in developing countries were eligible to participate in national elections.

Until recently, highly centralized States have been the norm in most parts of the world. As the most important objective of decentralization consists in "bringing the State close to the people" and cannot be obtained without a strong participation of local actors, it is closely bound up with the whole process of democratization. Local governance and local responsiveness pave the way for local accountability. Modern public administration involves much more than mere efficiency; and the concept of grass-roots democracy extends beyond NPM.(8) Indeed, local government allows local inclusion in the sense of co-production between users and providers of public goods -- a revolutionary democratic vision of our res publicae.

This trend towards democratization also influences public administration because, by its very nature, it is supposed to be in the interest of the citizens. Client orientation is not only an important performance indicator for service delivery; it constitutes and requires a democratic basis for public administration. Experience has also shown that the integration of the citizen in the implementation of public administration is a prerequisite for success. A case in point is Zimbabwe where the creation of wildlife parks led to conflicts with local farmers which almost undermined the whole project. Only by integrating these farmers into the decision-making process and giving them a share in the economic benefits of the so-called "campfire programme" was the project able to be implemented.

Trade unions are supporting the modernization of public administration: for instance, the German Public Services, Transport and Traffic Union (ÖTV) is promoting some features of NPM. As a general rule, trade unions try to instil a responsibility in citizens which extends beyond traditional bargaining for improved working conditions. They realize that public administration reforms require a democratic component and are only sustainable if citizens are actively involved; and this takes the form of political alliances between trade unions, churches and citizen groups whose targets are to change and restructure the public service.

1.1.3.  Good governance

The concept of governance goes back to the late 1980s, when the World Bank used this term in order to characterize the poor performance of the sub-Saharan States and public administrations in promoting economic development.(9) Governance was referred to as "the exercise of political power to manage a nation's affairs". During the following international discussion the notion was streamline to imply:

"Good governance" has now become a positive concept in development politics and aims at the effectiveness of public management. It cannot be related to exaggerated downsizing or public sector expansion programmes; it aims at right-sizing. Although the definition is still blurred, the "good governance" concept is clearly linked to NPM; its "steering instead of rowing" philosophy believes in concentrating the public sector on core competencies able to promote a dynamic and prosperous private sector. It is in contrast to the traditional Weberian bureaucratic model of public administration: markets replace organizations; customer replace subjects; participation replaces hierarchy, etc. Good governance implies a holistic view of the State; it tries to bring together sectors which have been fragmented as a result of the division of labour. It aims for an overall product of public service in favour of human society. In this sense governance means institutional steering.(11) Nonetheless, there are pitfalls inherent in this concept of governance. Two examples which may be cited are: the public sector feels less and less responsible for socially marginalized people; and poverty levels increase under conditions of neo-liberal market economies.

1.1.4.  Technological change

Development of technology is accelerating exponentially and the time span during which traditional knowledge has to be recycled is constantly being reduced. Technological change may therefore only advance public service reform if it is closely linked to organizational change; and this can be best illustrated by the example of information technology. This is not only valid for developing countries(12) but also for the public service of industrialized countries. Nevertheless, modern information technology and citizens' access to it -- e.g. via the Internet -- provides new opportunities for participation in democracy and establishes new forms of public services to respond better to citizens' needs. In the area of human resources development, information technology offers a whole range of possibilities -- the full potential of which has not yet been tapped. Fields of application range from distance learning within in-service training to management information systems in personnel management.

The rapid pace of technological development also results in the automation of traditional labour processes, which naturally has repercussions on management in both the public and private sectors. Although new technologies undoubtedly increase productivity, they threaten the survival of low-skilled workplaces; what is more, technologically-induced unemployment is increasingly affecting higher skilled jobs. In order to be successful, the introduction of new technologies must have the support of the staff and be accompanied by the necessary training and retraining.

1.1.5.  Demographic change

People are living longer and are increasingly mobile. All industrialized countries are having to deal with a situation in which there is an increasing proportion of retired to working people -- and this obviously has repercussions on the relationship between the supply and demand of public resources and the relative demands on various branches of the public service and social security systems. Migration between countries -- although this varies depending upon country or region -- also makes demands on the public services and employment.

1.2.  Human resource development (HRD) in the public service -- A concept beyond education and training

Although human resource development is still often understood to be synonymous with training, it extends far beyond this and implies the development of the capabilities for work of all persons. Indeed, this was clearly spelled out in the Human Resources Development Convention, 1975 (No. 142), and its accompanying Recommendation (No. 150): "... policies and programmes shall encourage and enable all persons, on an equal basis and without any discrimination whatsoever, to develop and use their capabilities for work in their own best interests and in accordance with their own aspirations, account being taken of the needs of society".

As already mentioned in the Introduction, HRD involves a very wide range of issues -- all of which may be influenced by human resource management. But it also includes such areas as the interdependency between individuals and an institution's policies and structures, which may be related to issues such as information, awareness, ethics, motivation and behaviour and the strategic capacity for developing and linking these issues. The following paragraphs outline the concepts of these elements in the public service and examine the way in which they interact. Subsequent sections of the report will provide more insight into the form they assume in the public service in specific situations of structural adjustment and transition.

Any reform implies an aspect of behavioural change which may, once it has been identified, be channelled and integrated into the whole process by means of training. Indeed, training programmes make it possible, in the long run, for the staff concerned to identify with the reforms.

Three various forms of training for the public service can usually be identified:

Problems and deficits in training

Both training and career prospects influence the public service's capacity to attract, recruit, retain and allocate human resources to jobs (staffing). The need for quality improvement and greater efficiency increases the competition for human resources between the public and private sectors. Moreover, in times of downsizing, joint management training for both sectors may facilitate the mobility of laid-off public sector employees to the private sector. Separate systems for education and training of management staff in the private and public sectors could be integrated in order to enhance mutual understanding and cooperation between the public service and private management and facilitate the personnel's mobility between the two sectors.

Before any individual or public investment in training can be made, there must be an assumption that career structures -- with possibilities for advancement built into them -- have been designed on the basis of reliable, objective and established criteria. In regard to in-service training, the overall system of career prospects must provide incentives for the staff to take part in training. Individual persons must be able to see the long-term benefits of training on their career, pay and other aspects of their terms of employment, which is closely related to their employment security.

In order to enhance productivity of the public service, any improvements in individual performance should be reflected in the overall performance of the public service -- which should, in turn, be monitored and assessed by the public, clients and social partners; it should also be tangible on a day-to-day basis. In this way, an improvement of individual performance is part and parcel of institutional development.

The competence of individuals has to be supplemented by motivation which may arise from a number of reasons, either of a material or immaterial nature. For instance, public esteem for professions in the public service may play a vital role. In the context of structural adjustment and transition, the State has to strengthen its relation to the civil society. On the one hand, the public service is expected to be more user-oriented; on the other, it has to be more accountable for the way in which public money is spent. The behaviour of public service personnel is decisive in this regard. The strengthening of ethics and motivation and the firm exclusion of corruption are considered critical issues. In this context, the quality of management in public institutions is particularly crucial. The impact of HRD on these issues is difficult to identify; however, lessons may be learned from human resource management and training in the private sector, where ethics in management has become a social and an economic necessity. It goes without saying that these issues are also closely linked to pay, career systems and employment security.

Equal opportunity and treatment of all population groups in the public service is vital -- and this not only applies to the staff but is important in view of the fact that public service users come from all strata of society. As stipulated in the Discrimination (Employment and Occupation) Convention, 1958 (No. 111), the notion of equal opportunity and treatment not only covers gender issues but also extends to different ethnic and religious groups and minorities as well as political opinion. Nevertheless, equal opportunity and treatment between men and women is often the first aspect of this concept which springs to mind. The fact remains that women's opportunities for entering, advancing and remaining in the public service are still unequally distributed. This may be attributed partly to their roles in society but also to the possibilities offered to them by HRD. The systematic monitoring and evaluation of these issues in the public service have only just begun.

This list of aspects of HRD is not exhaustive; it does not follow any logical sequence and was chosen at random. An analysis should therefore be made of the way in which these various aspects interact, and of their practical consequences for public service reforms. Possibilities for integrating them into these reforms should also be examined. Indeed, problems have occurred when reforms in the area of human resources have been implemented without linking them to the wider reform goals of the public service and taking into account the underlying systemic difficulties.

As stressed in the conclusions of the Joint Meeting in 1995, any successful public service reform requires the participation of the staff at the design, implementation and evaluation stages. It cannot be imposed against their will. This participation not only enables public servants to identify with the objectives, contents and instruments of the reform, but also encourages them to be more creative and comprehend that change is a prerequisite for its success.

Public service reforms also require support from citizens. This presupposes that any reform programme must be relevant to the local situation and not imported from elsewhere. First and foremost, the general public has to understand and agree with the vital components of the reform. Second, the staff concerned have to be made familiar with the reform concept and convinced of its advantages. HRD can be crucial in this respect.

1.3.  Public employment and size of the public service

The report to the Joint Meeting on the Impact of Structural Adjustment in the Public Service in 1995(13) made a thorough analysis of policies and measures designed to establish optimal staffing levels for the public service. The approaches to this matter varied between developing and industrialized countries. The report noted that it was widely accepted that public service employment was a more important part of total wage employment in most developing countries than in most industrialized countries. Furthermore, the former centrally planned economies obviously found it more difficult to absorb laid-off workers into the private sector which was only in its initial stages at the time. In many cases, the only alternative for this workforce was self-employment or the informal sector.

Despite frequent statements to the effect that the primary objective of public service reforms is not downsizing, measures to reduce the size of -- or at least to right-size -- the public sector workforce are generally taken, throughout the world, to be an aspect of "human resource management". Downsizing is particularly widespread in countries in transition or undergoing structural adjustment. Downsizing policies usually highlight the tensions that may exist between social expectations regarding job security, "safety nets" for outplaced workers (e.g. proactive job search programmes, training, paid leave) and budgetary restrictions that may limit the range of services or the size of the "safety nets" governments decide to offer those workers.

It is widely recognized that there is no ideal size for a country's public service. There are no generally accepted scientific methods to calculate the number of posts which should be cut. The actual size of the public service is more the result of an empirical, political process, dictated by macroeconomic realities, including the availability of public finance and the need for fiscal adjustment. Nevertheless, there are recommendations for a reasonable mix of salaries expenditure and capital investment desirable for a government budget.(14) Although it is argued that there is still scope to downsize further, it must also be stressed that cutting the size of the public service will achieve little in terms of quality and effectiveness if attention is not paid to HRD. And in view of the employment trends in the public service, a climate of uncertainty will undoubtedly affect the potential for training, motivation and ethics, improved productivity and performance. In situations of downsizing, where flexibility concerns take precedence over employment security, employees cannot be expected to demonstrate the same sort of loyalty which traditionally characterized the public service. Even those most in favour of further downsizing believe that the process should involve greater differentiation. Sectoral and performance-related indicators help identify those groups of jobs and persons whose contribution to the delivery of public services is limited.(15)

Data available for the report of the Joint Meeting in 1995 showed a clear-cut trend to downsize; however, statistics since that time would seem to suggest that the tendency is no longer so uniform. Nevertheless, the trend is very apparent in countries in transition to market economies, as may be seen in table 1.1, which reports a 45 per cent reduction of public employment in the Russian Federation and a 41 per cent cut in the Czech Republic. But it must be stressed that the figures on the development of public employment as compared to total employment refer not only to the public service as defined for the purposes of this report, but also to employment in public enterprises.

In sub-Saharan Africa, the ratio of public service employment to population has fallen -- but this is also due to rapid population growth. By 1996, less than 1 per cent of the population was on an average employed in the public service, compared to about 3 per cent in other developing countries.(16)

In Africa as a whole, cuts in employment have often been linked to structural adjustment programmes which are attached to the International Monetary Fund. Policy initiatives to reduce the public service have included: compulsory redundancies (Cameroon, Congo, Côte d'Ivoire, Uganda); voluntary early retirement schemes (Kenya, Zimbabwe); and the elimination of "ghost workers" (Benin, Guinea, Malawi).

In South Africa, the Three-Year Conditions of Service Adjustment Package (1996-97 to 1998-99) provides for the "right-sizing" of the public service which has already affected the size and structure of the public service. Since February 1996 the number of the national and provincial level government employees has decreased by about 124,000.

Table 1.1. Total and public employment in 1990 and 1995 (selected countries)
 

Country

Total employment

Public employment

Number (thousands)

Increases/decreases

Number (thousands)

Increases/decreases

As % of total employment

1990 *

1995 **

Number (thousands)

Average % (annual)

1990 *

1995 **

Number (thousands)

Average % (annual)

1990

1995

Change

1

2

3

4

5

6

7

8

9

10

11

12

Algeria

4 159.6

4 403.0

243.4

2.0

2 333.1

2 421.0

87.9

1.3

56.1

55.0

1.1

Belarus

5 150.8

4 409.6

741.2

2.9

3 805.9

2 636.9

1 169.0

6.1

73.9

59.8

14.1

Botswana

198.5

231.4

32.9

3.3

74.3

98.8

24.5

6.6

37.4

42.7

5.3

Bulgaria

4 096.8

3 282.2

814.6

4.0

3 846.3

1 910.2

1 936.1

10.1

93.9

58.2

35.7

Canada

12 129.0

13 422.0

1 293.0

2.7

2 119.0

2 114.0

-5.0

0.1

17.5

15.8

1.7

China 1

639 090.0

688 500.0

49 410.0

1.5

196 110.0

247 520.0

51 410.0

5.2

30.7

36.0

5.3

Colombia

4 772.5

5 461.2

688.7

2.9

511.6

429.0

82.6

4.0

10.7

7.9

2.9

Croatia 2

1 568.0

1 196.0

372.0

4.7

59.0

50.0

9.0

3.1

3.8

4.2

0.4

Cyprus

257.2

285.1

27.9

2.2

41.1

47.0

5.9

2.9

16.0

16.5

0.5

Czech Republic

5 387.1

4 939.7

447.4

1.7

4 288.9

1 873.9

2 415.0

11.3

79.6

37.9

41.7

Egypt 3

…

1 687.2

…

…

…

1 206.3

…

…

…

71.5

…

Finland

2 467.0

2 068.0

399.0

3.2

705.0

621.0

-84.0

2.4

28.6

30.0

1.5

Germany 4

37 445.0

36 048.0

1 397.0

0.7

6 737.8

5 371.0

1 366.8

5.1

18.0

14.9

3.1

India 5

26 353.0

27 525.0

1 172.0

0.9

18 771.0

19 467.0

696.0

0.7

71.2

70.7

0.5

Ireland

1 134.0

1 248.0

114.0

2.0

287.0

294.0

7.0

0.5

25.3

23.6

1.8

Korea, Rep. of

20 377.0

18 085.0

2 292.0

2.2

905.4

818.1

-87.3

1.9

4.4

4.5

0.1

Latvia

1 345.0

1 189.0

156.0

3.9

839.0

464.0

375.0

14.9

62.4

39.0

23.4

Mexico

25 957.7

27 366.7

1 409.0

1.1

4 683.1

4 595.2

87.9

0.4

18.0

16.8

1.3

Morocco

…

4 033.9

…

…

…

855.2

…

…

…

21.2

…

New Zealand

726.0

772.5

46.5

1.3

153.2

110.6

42.6

5.6

21.1

14.3

6.8

Norway

2 030.0

2 079.0

49.0

0.5

690.0

705.0

15.0

0.4

34.0

33.9

0.1

Philippines

22 212.0

25 677.0

3 465.0

3.1

1 258.0

1 228.0

30.0

0.5

5.7

4.8

0.9

Poland

9 575.1

9 360.0

215.1

0.7

4 691.7

4 024.8

666.9

4.7

49.0

43.0

6.0

Romania

6 627.4

6 048.0

579.4

2.9

6 174.2

4 864.0

1 310.2

7.1

93.2

80.4

12.7

Russian Federation 6

75 325.0

67 100.0

8 225.0

2.2

62 218.5

25 229.6

36 988.9

11.9

82.6

37.6

45.0

Seychelles

23.2

25.7

2.5

2.2

8.9

9.5

0.6

1.3

38.4

37.0

1.4

South Africa

5 396.1

5 255.6

140.5

0.9

556.3

436.8

119.5

7.2

10.3

8.3

2.0

Sweden

4 074.0

3 540.0

534.0

2.6

1 652.0

1 368.0

284.0

3.4

40.5

38.6

1.9

United Kingdom

26 935.4

25 972.7

812.0

0.7

6 053.0

5 241.0

812.0

2.7

22.5

20.2

2.3

United States

118 793.0

124 900.0

593.0

1.0

17 769.0

18 362.0

593.0

0.7

15.0

14.7

0.3

Notes: * Algeria: for 1990, data 1989; Canada: for 1990, data 1991; Colombia: for 1990, data 1991; Germany: for 1990, data 1991; Latvia: for 1990, data 1992; Poland: for 1990, data 1992; Romania: for 1990, data 1992; South Africa: for 1990, data 1994. ** Algeria: for 1995, data 1992; Egypt: for 1995, data 1994; Morocco: for 1995, data 1996; South Africa: for 1995, data 1997. 1 Only state-owned units and township and village enterprises. 2 Only central and local government bodies, funds, associations and organizations. 3 Excluding employees in private establishments <10 employees. 4 Whole country. 5 Only public sector and private non-agriculture sector >10 employees. 6 Only State and state and municipal enterprises and organizations.
Source: National Statistical Offices - Bureau of Statistics (ILO).

While these examples undoubtedly reflect African -- and, probably, global -- trends, there are exceptions. For example, since the independence of Namibia in 1990, public service jobs have almost doubled and now number 77,000. Since this had led to a payroll increase accounting for 55.4 percent of all government expenditure, it might well be unsustainable. Namibia might well go the way of other African countries.

Serious though they are, African figures are much lower, in absolute terms, than those in the more populated countries of Asia. India's Pay Commission is calling for some drastic surgery and demanding a 30 per cent reduction in employees over the next ten years. In many cases, although there might be a consensus on the need for reforms to reduce the size of the public sector and cut administrative running costs, no specific measures have been taken to implement these reforms. In India, for example, attempts to reduce the size of the public sector have been thwarted by resistance from public employees, who obtained a 40 per cent increase in salaries in 1997.

In China, proposed reforms would result in the suppression by the year 2000 of 11 ministries or state commissions (the number of which would fall from 40 to 29) through mergers or the transformation of administrations into public enterprises in sectors exposed to competition. This "institutional restructuring" would in particular concern the State Planning Commission (renamed as the Ministry of Development), where staff would be cut by one-quarter. Similarly, the Ministry of Foreign Affairs was instructed in 1998 to cut its staff by 46 per cent. Most of this downsizing is likely to be carried out among support staff in canteens, garages and maintenance and other activities. Ministry personnel seeking jobs are said to have approached executives from several foreign companies in Beijing. Industrial ministries, such as those responsible for chemical production or metallurgy, would disappear and become holding companies and eventually self-financed joint stock enterprises. Two new bodies will also be created in response to the needs arising from the faster pace of reform: a Ministry of Social Security for the public employees laid off (l2 million in 1997 and an expected 11 million in 1998), and a Ministry of Financial Affairs, which will launch a reform of the banking system and prepare the economy for the convertibility of the yuan. State enterprises should be privatized shortly. There are more than 100 million manual workers in this sector who are likely to see the nature of their jobs change, almost half of whom are directly threatened with unemployment. The approximately 110,000 state enterprises concerned are unproductive, in deficit and in debt. The restructuring of these state enterprises will be achieved through the privatization of the small enterprises or by declaring them bankrupt and the transformation of the large and medium-sized enterprises into limited or limited liability companies.

Administrative reforms in Viet Nam in recent years have also resulted in cuts in the public service.

Examples from Latin America also show that the number of public service staff has been cut, in some cases rather drastically, as in Argentina, where public sector employment fell from 19.3 per cent of total employment in 1990 to just 13.2 per cent in 1996 (ILO World Employment Report 1998-99).

In the former centrally planned economies, staff cuts in the public sector will be even more drastic, given that up to over 90 per cent of wage employment was previously in the public sector. The Russian Government for instance, plans to dismiss more than 200,000 state employees as part of a radical austerity programme aimed at bolstering the country's shaky public finances. The drastic job cuts, including 68,000 teachers and 22,000 medical staff, are part of a sweeping plan to dismiss 10 to 15 per cent of the federal government's employees. The redundancies are part of a programme agreed with the International Monetary Fund, known as the Kudrin-Fischer plan, to reduce government expenditure. These cuts may contribute to lower the social tension by ensuring that the government has enough cash to pay the employees who remain on its payroll.

In Hungary the restructuring of society which began in the middle of the economic crisis has, since the end of the 1980s, modified the socio-occupational structure. In 1989, out of an active population of 5.1 million persons, 4.5 million depended financially on the State. In the summer of 1995, out of a total of 3.6 million employees, barely more than 1 million lived directly or indirectly from salaries and emoluments paid by the State: of these, 300,000 were employees of state enterprises or local authorities, 250,000 were employed in national education and around 200,000 in health or social services. Staff levels continue to fall each year, along with the real value of salaries.

OECD countries have also experienced their share of job losses in the public sector. The Canadian Government has stated that downsizing of the public service workforce is one of its main concerns. And in the United Kingdom, 70,000 local government jobs have been lost as a result of compulsory competitive tendering in local government alone. However, some of these will have been offset by an increasing number of jobs in the private sector through contracting-out.

1.4.  Structural adjustment and transition -- Impact on the public service

The ILO dealt extensively with the impact of structural adjustment in the public service in its sectoral meeting in 1995. The report at that time focused on questions of efficiency, quality improvement and working conditions(17) and the Meeting itself adopted a number of important conclusions on how to cope with the employment and other labour problems posed by structural adjustment in the public service. Since then, a number of developments have been noted in relation to the role of the State and to structural adjustment programmes -- and to public service reforms in particular. The following sections will analyse developments and shifts of approaches to structural change in recent years and their impact on public service reforms.

1.4.1.  General overview and terms

As mentioned earlier in the text, structural adjustment is part of a process of global restructuring which began in the industrialized countries in the 1970s and spread to developing countries shortly thereafter -- with ensuing cuts in public employment. This strategy was contested by those who argued that public expenditure sustained rather than drained the private sector. When the international financial institutions launched adjustment programmes in developing countries, little attention was paid to the employment effects of public sector cuts. Similar observations could be made with respect to economies in transition, although the context was politically, economically and socially different.

The ILO responded to these challenges by drawing attention to the links between unemployment and poverty and focusing on the social dimension of this process and a range of employment issues in both the public and the private sector.

The impetus for restructuring in the public service has come from internal and external sources: internally, the need to reduce costs and improve the functioning of the public service; externally, a climate of privatization and deregulation which required the public service to reduce its own role. Reforms which have been more inward-looking have approached and coped with organizational problems by means of rationalization, decentralization and other efficiency-oriented strategies -- without changing the goals of the public service. Outward-looking reforms have evolved because reorganization has been unsatisfactory -- and the goals have been changed as a result.

Upheavals in the political and economic environment worldwide have also changed perceptions about the role of the State and given rise to reforms of the state machinery and administration. Public service reform (PSR) programmes on a scale hitherto unknown were implemented in many industrialized and African countries during the 1980s, followed by similar reforms in the Middle and Eastern Europe after the fall of the Berlin Wall.

All experience points to the inherently political character of the reform process. This in turn underlines the need to ensure that reform strategies are adapted not only to the economic but also to the social and political realities of the environment into which they are introduced.(18) A major lesson learned in restructuring processes is that they can only be successful if they are designed and implemented in cooperation with those who will be most affected by the outcome. This was, as already stated, also one of the main conclusions of the sectoral meeting in 1995.

The following sections will summarize the results of public service reforms in regions or categories of countries which, it is hoped, will give an idea of the variety and scope of structural change and its impact on public service reforms.

1.4.2.  Experiences in Africa

It should be noted that in the context of structural adjustment programmes (SAP) implemented in Africa with the support of the World Bank, structural adjustment loans and credits (hereinafter referred to as SAL) do not include such operations as emergency reconstruction loans or programme loans, which have provided fast disbursing funds; indeed, in some countries, such as Ghana, they have preceded full-scale SALs.

The three periods and policies in structural
adjustment programmes

Despite the fact that governments had serious problems in the 1980s, the first generation of SALs (from 1980 to 1985) contained none of the direct conditionalities on retrenchment, wage bill control and public service modernization that characterize later SALs. Public service reform issues were virtually absent and there was no comprehensive effort to improve government performance. It should be noted that the early SALs were scarce and concerned only eight African countries.

The second generation of SALs (from 1986 to 1988) directly covered issues of public service reform and focused on two major remedies against economic disequilibrium: fiscal stabilization, which usually implied staff retrenchment and wage bill curtailment, and the much broader agenda of public service reform, which included public service censuses, functional reviews of line ministries, training and revamped personnel management systems. The most important of these SALs was that for Ghana, which served as model for several other SALs. Its key features consisted in a considerable reduction of the public service, the rehabilitation of major personnel management systems and institutions, the development of a competitive government system, the employment of local consultants for the government and a motivation programme in favour of key civil servants.

The third generation of SALs (from 1989 onwards) is continuing with retrenchment and public service reform action plans. But these programmes put special emphasis on local leadership and reform design including capacity-building and governance approach. During this period the number of SALs has declined: in the 1989-91 period, 15 SALs were approved; from 1992 to 1994, only five were launched. As a general rule, public service reform is less linked to SAL conditionality in the 1990s than it was in the 1980s.

Effects on the public service

The record of achievements related to public service reform issues is mixed; nonetheless some observations may be made.(19)

The public service reform component in SALs may be divided into two categories. The first category focuses mainly on short-term issues, including:

In the second category the main concern is on long-term issues dealing with:

The short-term effects in the various sub-Saharan countries have been varied. In the 1985-91 period, only ten African countries reduced their public service by 5 per cent or more -- while in eight countries the number actually increased and in five others there was no change. An important feature of the experience was that staff cuts had a negligible impact on fiscal balance, the main reason being that it was mostly low-paid employees who were laid off and considerable expenditure was earmarked for severance pay.

Among the long-term issues public service censuses are of key importance as experience has shown that without them any public service reform programme is bound to fail. Furthermore, it is indispensable to have a regular update and censuses are used to:

Functional reviews -- including job inspections, organization and method studies and budgetary analysis -- are also crucial elements of public service reform. Their major problem is that they are time-consuming and difficult to administer which makes it difficult to integrate them into a SAL context.

During the first generation of SALs the Ghana programme -- which aimed at cutting the jobs of 45,000 civil servants while also introducing a rehabilitation programme to those concerned -- served as a model for several other service reform programmes in the context of structural adjustment; however, its final results suggest that the programme failed to a great extent. The initial success in reducing staff number was not sustained because of new recruitment. Neither the development of new pay scales, nor the introduction of performance appraisal, nor the implementation of new training programmes were fully realized. The main reason for these failures lies in the fact that the reforms were externally driven.
 

The Uganda example

UNDP and ADB reports quote the Uganda case as a model of success. 1 The Uganda public service grew substantially during the 1970s and the 1980s and was increasingly underfunded. At the same time the public service lost a significant number of skilled personnel. The imbalance between revenue and needed expenditures for both salaries and operations caused a decline in morale and performance. In 1990, a reform commission was established which drafted a "White Paper" designing a wide-sweeping reform programme; this "White Paper" was cleared by the Cabinet and had the full support of President Musoveni. It recommended changes in structures, personnel and financial management -- including the payroll system -- planning processes and a shift to Results-Oriented-Management (ROM). The aim of the reform was to reduce the cumbersome bureaucracy and have fewer ministries and departments that would be better focused on more critical government functions. The 1994 SAL has expanded the public service reform objectives of former programmes, defining precisely its components. For example, it has formulated guidelines for the hiring, promoting, firing and retirement of ministry personnel.

Guided by the "White Paper", Uganda has reduced the number of its ministries from 34 to 18. The size of the public service has been cut by 44 per cent; 40,000 ghost workers have been eliminated; and the number of temporary employees has been reduced from 110,000 to 44,000. As a result, salary adjustments have been made so that the minimum government wage equals the minimum living wage. Uganda is continuing its restructuring by ministerial reviews which will reduce payroll costs, reallocate tasks more rationally, privatize appropriate functions and decentralize operational tasks to local government.

1 UNDP: UNDP experience with civil service reform in SPA countries, elaborated for SPA working group on civil service reform (CSR) in sub-Saharan Africa, 1996; African Development Bank (ADB): ADB experience in civil service reform in Africa, elaborated for SPA workshop on CSR, Paris, 15 Sep. 1994.

Although the need for economic or managerial reform in African countries has never been seriously questioned, it is clearly difficult to combine economic reform with institutional alignment. The conditions of public service reform and institutional capacity-building are not always well understood. Indeed, the nature of reform programmes requires nothing less than a cultural transformation of public administration,(20) and this is true not only for African countries but also for States with a long-standing administrative tradition.

In general, structural adjustment programmes weigh particularly heavily on the poor and marginalized population. Whenever SAPS make a reduction of the budget deficit their main concern, the human resource base is the first casualty -- and this includes the public service. A first negative social effect of retrenchment programmes is the redistribution of incentives given for voluntary retirement; these tend to attract the most skilled employees who have the best chances for advancement in the private sector but who are vital to the successful implementation of the reform. Structural adjustment programmes must therefore take account of the need to retain skilled and competent civil servants.(21)

1.4.3.  Experiences in Asia and the Pacific

The Asia and Pacific region has been undergoing such fundamental changes in the past few years that it is very difficult to find any measures of comparison. The heterogeneity of country-specific experiences precludes any attempt at generalization. Australia and New Zealand, both of which are OECD members, reacted to economic crisis and restructuring in the mid-1980s by implementing stringent reforms of the public sector and public services. Other countries, such as Malaysia, Thailand or the Republic of Korea, have only just started reforming their public sector, acting on recommendations of the IMF and/or the World Bank in connection with international loans to help those countries especially hard hit by the recent Asian currency crisis. There are also countries which are torn between different societal groups and hardly offer any public services at all -- Afghanistan being the most striking example. Last but not least, there are countries such as India and China, which comprise such a vast range of peoples, cultures, languages and even administrative structures, that it is almost impossible to make comparisons.

Administrative tradition is not reserved to modern western States. The ancient civilizations in Asia had sophisticated forms of administration, the traditions of which still remain; China is a particular case in point.

Furthermore, China and Viet Nam are undoubtedly committed to public service reform and are gradually trying to bring their public service in line with their "communist" form of market economy. They stress the need for an efficient and effective government administration, and aim at a Weberian legal-rational type of bureaucracy.(22) Reforms are centrally controlled and implemented under the leadership of central authorities -- such as the National Institute for Public Administration (NIPA) in Hanoi.

Japan has been the country the least enthusiastic about public service reform; it has introduced some efficiency measures -- alongside a modest privatization of three major public corporations. All in all, public service reform in Asia has not emerged as a result of structural adjustment programmes. The case is entirely different.

1.4.4.  Experiences in Latin America and the Caribbean

Public sector reform in Latin America and the Caribbean has become a high priority for governments in their attempts to redefine and modernize the State. Several countries in Central America have embarked on civil service reform programmes, including Honduras, Nicaragua and Costa Rica, where a civil service census is under way. In Guatemala, where the peace agreements included specific provisions on the modernization, decentralization and deconcentration of public management, a Bill has been drafted to transform the National Civil Service Office (ONSEC) into a National Human Resources Secretariat (SENARH) responsible for establishing and regulating human resource standards applicable to all government dependencies. In El Salvador, a unit has been set up in the Ministry of Finances to create a Human Resource Management System for the public sector, and a human resource training plan has been drawn up for the period 1998-2000 which gives priority attention to management development and "leadership for change" training.(23)

PSR issues and objectives in Latin America generally resemble those of the African continent, with emphasis being placed on privatization and contracting out, defining core government functions, reducing public employment and improving government efficiency.(24) In general, the Anglo-Saxon principles of new public management and the "reinvention of government" seem to have attracted wide interest and support in Latin America.(25)

However, the social burden of structural adjustment policies in many countries of the region has been comparable to the effects visible in Africa. Honduras, for example, experienced some social unrest following the emergence of a new poor class as a result of SAP. Bolivia was the only country in the region to establish a social emergency fund to help offset the social costs of structural adjustment, and which might have served as a model for other countries with similar problems.(26)

1.4.5.  Experiences in transition countries

Given that most transition countries are in Central and Eastern Europe, this section refers mostly to this region. Both the extent and shape of the transformation processes that have so far taken place differ too much to allow for a comparison. Nevertheless, it is possible to detect a number of shared characteristics which suggest a common pattern of political and social change. The distinguishing features include: the transition of what were effectively, if not in name, systems of one-party rule -- in which the leading role of the Communist Party was firmly entrenched in all sectors of society -- to pluralist, multi-party parliamentary systems with democratically elected and accountable governments; the abandoning of the principle of "democratic centralism" in favour of a far-reaching deconcentration and decentralization of political power exercised under the rule of law; the rejection of the principle of unity between politics and the economy which involves the emergence of distinct spheres of political and economic life; and far-reaching economic reforms whose principal aims are the strengthening of private enterprise, the "denationalization" (or rather privatization) of a large share of the previously state-controlled productive capital and a substantial deregulation and liberalization of the national economy.

These attempts to replace a nationalized, centralized and planned economic system with a market economy are, in principle, similar to these being applied to the task of reorganizing or perhaps, rather, refounding the public sector. Thus, there are moves to strengthen democratic controls over state administration to increase its accountability to democratically elected bodies. Efforts are under way to decentralize the bureaucratic apparatus; and the need to bring public institutions strictly under the rule of law and to guarantee the legality of public acts is being stressed. It is also universally accepted that public efficiency, effectiveness and flexibility must be increased. All this implies that the organization of governance is subject to the same pressures for change which have already led to radical political reforms.

The limited value of a blanket transfer of "Western" models to Central and Eastern European countries is particularly obvious if it is recalled that reformers initially had to overcome understandable, but still damaging, anti-state attitudes; indeed, they had to stress the positive contribution of a modernized public sector to a functioning market economy. In such a context, the need for an "inclusive" approach at reform is acknowledged; in other words, tasks, organizational structures, administrative procedures and issues of personnel cannot be considered in isolation. It also implies that horizontal and, in particular, vertical linkages and interdependencies between different levels of government are taken into account. Although bureaucratic organizations are, of course, capable of absorbing considerable external "shocks" without having to resort to fundamental reforms, the unprecedented character of the Central and Eastern European transformation processes calls into question some of the most basic principles on which the administrative apparatus had been built. The public sector is, therefore, under tremendous pressure to adapt, being both the object and the subject of reform. As reform efforts aim at introducing stability, dependability and continuity into the administrative system, they must, at the same time, not undermine subsequent revisions and modifications, which are bound to be required as the environment continues to be transformed. Thus, stability needs to be combined with flexibility, dependability with openness, continuity with adaptability. Under such conditions, caution must be exerted in prescribing specific institutional, procedural or personnel arrangements or even an elaborate public management approach. However, it is worth recalling that in a number of countries in Central and Eastern Europe -- in those in which public service reform is well under way -- the preconditions for successful reform are already in place.

It is encouraging to see that the anti-state attitude, which prevailed for a long time in most of the countries of Central and Eastern Europe, is beginning to be replaced by a growing awareness of the need for complementary approaches to private sector development and public sector reform. Although a number of prejudices against bureaucratic organizations may still be detected, most observers agree that there cannot be a successful completion of privatization programmes without a guarantee of basic standards. This applies to such diverse issues as securing property rights, institutional responsiveness and increased social awareness. Even the representatives of the private sector have developed an interest in public sector reform and an efficient and accountable public service. They acknowledge that economically driven reforms will not succeed without a stable legal, institutional and administrative underpinning. Indeed, it seems to have been generally understood throughout all strata of society that in order to stabilize the political and social situation, create markets, secure investment and reach target groups, it is vital to have a sound and acceptable public sector.

1.4.6.  Experiences in the industrialized countries

In the industrialized countries, the approach to structural, organizational and management change in the public service appears to be shared to a great extent. There can be little doubt that all countries are faced with a set of common pressures and that there has been a significant "internationalization" of experience and advice on ways to cope with these pressures. Of course, each country has its own constitutional, structural and cultural traditions which implies a variety of contexts and starting-points in reform processes. In addition, some countries face challenges specific to them and, therefore, have correspondingly specific objectives.

Perhaps the chief variable factor between countries, however, has been the industrial relations environment. In particular, the extent to which institutions and processes of social dialogue and partnership are embedded in the public service can have a significant impact on labour. Nevertheless, some commentators have identified a tendency, of which some are critical, to implement a standard model of structural adjustment, or at least to promote such a model as being the only truly modern or effective approach.(27)

During the 1980s a number of industrialized countries, primarily those with a strong Anglo-Saxon cultural background (Australia, Canada, New Zealand and the United Kingdom but also the Netherlands), were in the forefront of public service reform. France, Germany, Italy and Spain lagged somewhat behind because their political attention was absorbed by the need for decentralization and economic stabilization and attempts to curb corruption. Reforms aimed at bringing the administrative system in line with the new perception of the State and changes in the economic and policy environment. In continental Europe it has traditionally been felt that a public servant had a job for life. This belief is now coming to an end; the general public has also changed its attitude and is considering the work of civil servants to be a "normal" job. This has turned the concept of the public service upside down and helps to explain why differences between occupations in the public and the private sectors are constantly diminishing. In addition, technological progress, with its constraints and opportunities such as personal information systems, facilitates the mobility of personnel between the private and the public sector. Performance-related pay and more decentralized bargaining have also resulted in civil servants feeling more vulnerable.

When Germany started to restructure East German public enterprises as part of its unification efforts, it embarked upon the most ambitious privatization programme ever conceived. Indeed, all public service reforms undertaken in the industrialized countries have been characterized by a reduction of the public sector to the advantage of private services and markets. But there is no doubt that the chosen approach, emphasis and motivation in each country has varied considerably, though all of them have used a similar reform language.(28)

Although this whole reform process has underlined the importance of public service training and the need for capacity development, it has also revealed a lack of knowledge as to the type of capacity needed and the best way to develop this. There is some evidence that the training of new skills should only be introduced once public service reform is under way if this training is to be sustainable; and it is likely that public servants are only motivated to take part in training after crucial reform measures have been initiated.(29) Compared with the developing countries, the industrialized countries have been in a considerably advantageous situation because despite their financial constraints and institutional shortcomings, they have been able to afford the costs of reform due to their solid tradition of economic management and available resources. Nevertheless, the path has not always been smooth.

There is one trend in the industrialized countries which is striking; the undermining of the public sector has given way to a new revalorization of the State. The image and role of the State have changed: The old western and northern European model of the "welfare State" is being gradually replaced by the image of a slim and fortified State with well functioning competitive markets.(30)

Some authors argue that there are substantial differences in the development of performance management and other reforms which may be explained by variations in tradition, culture, environment, politics and managerial needs.(31) Others, meanwhile, have identified three approaches adopted by European countries. These vary according to the style, nature and timing of reform, and consist of: evolutionary and internally generated reform (Germany); reformist and negotiated reform (France and Spain); and imposed radicalism (United Kingdom).(32)

The OECD expects reforms in these categories to continue and to produce "in the decades to come", a "well-performing public sector" that "will be radically different in appearance and behaviour" and which, typically, will:

These general categories of reform may not only conceal differences between countries; they may also fail to take account of differences within these countries, again because of variable environments shaped by differing local political and industrial relations environments. In the United Kingdom, for example, local union officials made very different assessments about the initiatives of their two local authorities in the United Kingdom in response to the regime there of "compulsory competitive tendering", under which central Government took powers to force local government to open up most of their service delivery activities to competition from private contractors. Even local authorities controlled by the Labour Party (then in opposition in central Government in the United Kingdom, but in control of many local administrations) have impacted differently on personnel and on industrial relations, if the testimony of these union officials is a guide.
 

Example: UNISON and local administrations

After his members suffered pay cuts of up to £90 a week -- which were imposed without negotiation in order to win contracts in competition with private companies -- local leader of the public service workers union UNISON in the London borough of Lewisham, John Collins, commented:

The attitude now is "if you don't like it, get out". Some workers who are officially on a 35-hour week (that's for non-manual workers, it's 39 hours for the manual workers) work at least 40 as a norm, without overtime pay, and are even expected to provide cover from 7 a.m. to 7 p.m. every day. They don't complain because they are afraid for their jobs. You've only got my word for it, but it's widespread. If you go to some of members who are supposed to be on a 35-hour week and ask them if they actually do a 35-hour week, they would laugh at you. 1

This contrasts graphically with the view of Collins' counterpart in the nearby district of Braintree, also Labour-controlled, whose UNISON official David Trigg, commenting on his employer's approach to responding to the same strictures, has said:

We feel that we're involved and consulted at every important decision making process that's made throughout the council. Even if our views aren't necessarily acted upon to our liking, we have always got the opportunity to register our point … We do feel that we have got a very good relationship, on the whole, with management. 2

1 Brendan Martin, Personal interview, July 1995. 2 Brendan Martin, Personal interview, Oct. 1995.

Yet, in many respects, the technical approaches of the two local authorities' managements to the challenge of becoming and remaining competitive had much in common, drawing upon modern approaches to sound financial management, the pursuit of quality awards made by external agencies, closer and more responsive relationships with the local community served, "investing in people" and, in other ways, developing a more results-oriented culture.

1.  United Nations General Assembly resolution A/RES/50/225 and the report of the Twelfth Meeting of Experts on the United Nations Programme in Public Administration and Finance (31 July-11 August 1995); OECD: Integrating people management into public service reform (Paris, 1996), p. 15.

2.  World Bank: World Development Report 1997: The State in a changing world (New York, Oxford University Press, 1997), p. 92.

3.  European Commission: Services of general interest in Europe (Brusssels, COM(96)443, 11 Sep. 1996), p. 2.

4.  R. Klitgaard: "Cleaning up and invigorating the civil service", in Public Administration and Development (Chichester, United Kingdom), Vol. 17 (1977), p. 491.

5.  K. König: Entrepreneurial management or executive administration: The perspective of classical public administration, in W.J.M. Kickert: "Public management and administrative reform in Western Europe" (Cheltenham and Lyme, 1997), p. 217.

6.  F. Ridley: "Die Wiedererfindung des Staates. Reinventing British Government: Das Modell einer Skelettverwaltung, in Die Öffentliche Verwaltung (Baden-Baden, 1995), p. 569.

7.  World Bank: World Development Report 1997, op. cit., Ch. 2.

8.  "Reorganizing the State towards more inclusive governance", in Insights (Institute of Development Studies, Brighton, 1997), Issue 23, p. 1 f.

9.  World Bank: Sub-Saharan Africa. From crisis to sustainable growth: A long-term perspective study (Washington, DC, 1989).

10.  World Bank: Governance and Development (Washington, DC, 1992).

11.  K. König: "Governance -- as steering and value-concept for the modern administrative state", in Governance (International Institute for Administrative Science, Brussels), 1998.

12.  S.B. Peterson, "Saints, demons, wizards and systems: Why information technology reforms fail or underperform in public bureaucracies in Africa", in Public Administration and Development (Chichester, United Kingdom), Vol. 18, 1998, pp. 37-60.

13.  ILO: The impact of structural adjustment in the public service (efficiency, quality improvement and working conditions), JMPS/95 (Geneva, 1995), p. 27.

14.  I. Lienert: "Civil service reform in Africa -- Mixed results after 10 years", in IMF Finance & Development (IMF, Washington, June 1998), p. 44; J. Maggregor, S. Peterson and C. Schuftan: "Downsizing the civil service in developing countries: The golden handshake option revisited", in Public Administration and Development (Chichester, United Kingdom), Vol. 18, 1998, p. 64.

15.  ibid.

16.  ibid.

17.  ILO: Impact of structural adjustment ..., op. cit.

18.  J. Corkery: Civil service reform in the context of structural adjustment: Managerial issues (Documentation of the joint UNDP, ECDPM, DSE Conference, Berlin, November 1996), p. 6.

19.  SPA Working Group on Civil Service Reform: Interlinkages between structural adjustment loans and civil service reform in sub-Saharan Africa (Sep. 1994).

20.  J. Corkery, op. cit.

21.  Ibbo Mandaza: "Public service and accountability under the structural adjustment programmes", in Development Policy Management Network -- DPMN -- Bulletin (Addis Ababa), Vol. III, No. 2, Apr. 1996, p. 9.

22.  A.B.L. Cheung: "Understanding public sector reforms: Global trends and diverse agendas", in International Review of Administrative Science (Brussels), 1997, p. 435.

23.  Country reports presented to the Ninth Meeting of Civil Service and Staff Directors of the Cental American Isthmus, First Regional Congress on Human Resource Management, San José, Costa Rica, 1-3 Apr. 1998.

24.  M.D. Rowat: "Public sector reform in the Latin American and Caribbean region -- Issues and contrasts", in Public administration and development (Chichester, United Kingdom), 1996, p. 397.

25.  T. Pätz: "Public Management und Neue Steuerungsmodelle. Ein Pilotprojekt zur Gemeindereform in Ecuador", in Entwicklung und Zusammenarbeit (Berlin), 1995, p. 196.

26.  L. Beneria and B. Mendoza: "Structural adjustment and social emergency funds. The cases of Honduras, Mexico and Nicaragua", in European Journal of Development Research (London), 1995, p. 53.

27.  Background paper for the Presentation on Public Sector Reform in Western Europe, Conference on Comparative Civil Service Systems, School of Public and Environmental Affairs (SPEA), Indiana University, Bloomington (IN), 5-8 Apr. 1997.

28.  A.B.L. Cheung, op. cit., p. 437.

29.  C. Reichard: "Education and training for new public management", in L.R. Jones, K. Schedler and S. Wade (eds.): International perspectives of new public management (Greenwich, London, 1997), p. 329.

30.  World Bank: World Development Report 1997, op. cit.

31.  Halachmi and Buckaert (eds.): Organisational performance and measurement in the public sector: Towards service and accomplishment reporting (Quorum Books, Connecticut, 1996).

32.  V. Wright (1994): "Reshaping the State: The implications for public administration", in West-European Politics (Ilford, Essex), Vol. 17, No. 3, pp. 102-137.

 SECTOR | ABOUT SECTOR | SECTORS | MEETINGS | PUBLICATIONS | WHAT'S NEW

page top
*Contents on the reportNext Part

For further information, please contact the Sectoral Activities Department (SECTOR) at Tel: +41.22.799.7513, Fax: +41.22.799.7296 or email: sector@ilo.org
Disclaimer | Copyright © 1998 International Labour Organization (ILO) | webinfo@ilo.org
This page was created by BR/HK. It was approved by GU/BKN. It was last updated Fri, 26 Mar 1999.