PIA 2000 Introduction to Public Affairs

PIA 2000 Focus Bureaucracies, Budgets and Decision-Making- Managing Money

SOPs  Video

Decision-Making and Budgets Themes and Definitions

A View from the Right

Decision-Making Models and Spending: An Overview 1. Rational- Comprehensive 2. Standard Operating Procedures (SOPs) 3. Bureaucratic Politics 4. Group Think 5. Satisficing/Incrementalism 6. Cybernetic Theories (chaos theory)

How Purposeful?

Themes a. Budget: Recurrent vs. Capital (Development) Budgets b. Financial Management- Incrementalism and Satisficing vs. Zero Based Budgeting (Planning Systems) c. Accounting- Cost and Benefit vs. profit and loss

Zero Based Budgets

Themes d. Auditing vs. Accountability- Quantitative vs. Qualitative e. Evaluating- Assessment vs. Judgement f. Budgeting: Two themes- Reforming and Decision-making

1. Savas- Privatization and Contracting Out- Commercialization and intra- governmental competition 2. Johnson- Economic Bureaucracy, Public Sector Management: A Japanese Model? 3. Harris- End of the Third World? End of Development Budgets? Decision-Making and Financial Management [Full cites on Request]

The Asian Model Issue

Decision-Making and Financial Management 4. Heady- Imbalance- Political vs. Bureaucratic Development in the role of financial management (The Corruption Problem) 5. Armstrong-Values, money and Development Management 6. Nelson- International Organizations, NGOs and Development (Contracts vs. Grants)

The Nelson View

Decision-Making and Financial Management 8. Turner and Hulme- Private Sector Development vs. Development Management: The role of public sector financial management (Oversight) 9. Peters and Barzelay-Public Sector Reform 10. Caiden and Wildavsky- Planning vs. Budgeting 11. Janis-Is Budgeting and financial management impacted by Group Think?

Group Think?

Planning, Financial and Budgetary Management Systems in Poor Counties  Five historical periods- From a development perspective  Caiden and Wildavsky  Best Book on realities of Public Budgeting and Development

Historical Periods: Famous Five i. Until the 1950s- recurrent budgets- law and order. ii. 1950s-1960s- growth. Domestic development Funds with bilateral technical assistance =Recurrent vs. Development budgets iii. 1960s-1970s: Distribution and basic needs. World Bank and Poorest of the poor

iv. Mid-1970s to mid-1980s: Planning vs. Budgets  Planning demanded by technical assistance  Technical assistance- both grants and loans (no private loans to Africa)  Project planning "wins" over national planning and budgeting systems

German Foreign Aid

v. The Current State of Financial Management: Structural Adjustment  (Since 2001)- Structural Adjustment vs. Social Crisis vs. security threats

The Middle East

The Current State of Financial Management 1. IMF Stabilization- currency reform, auctions and trade liberalization 2. Decentralized Budgeting- Part of Governance Debate 3. World Bank and UNDP "Management" - Opposing views to SAPs

Decentralized Budgets Bottom Up Model for Health Service Delivery

The Current State of Financial Management 4. Continued Absence of recurrent budgets and loss of control in Crisis: especially re. “Terror Prone,” Collapsed and Fragile States 5. Activity (economy) driven by technical assistance projects - the only game in town 6. Bridging and sectoral loans and grants- major source of international involvement

Somalia- 2008

Conditionality- What is the future? 1. Privatization of the economy a. divestiture b. contracting out c. liquidation d. sell off public private partnership shares

INDEPTH: ECONOMY Outsourcing: Contracting out becomes big business CBC News Online | March 7, 2006 Canadian Broadcasting System Image

What is the Future? 2. Privatization (Commercialization) of the bureaucracy IN-SOURCING- Reinventing Government

Privatization Debates

Commercialization- Negatives a. Individuals work with investments and the service/commercial sector b. Departments sell their services- eg. statistics in Zaire/DRC  c. Sub-economic salaries- offices and telephones- buying soap and selling chickens

Corruption Patterns

Commercialization- Negatives d. International conditions for "good" bureaucrats, eg. World Bank in Uganda- special salaries for those on contract with the project e. Goal: Return to the recurrent budgeting process of the 1950s?

Back to the Future? New Framework: Subsidiarity and decentralized budgeting? The Hospital- Two The Hospital- Two Video

Issue: Budgets, Bureaucracy and Reform: A Developmental Perspective The Bureaucracy, Reform and International Development (Variations on a Theme?)

Overview: Stages in the Developmental State 1. Faith in the State 2. Basic Human Needs 3. New International Economic Order 4. Structural Adjustment 5. Governance and Capacity Building

The Developmental Challenge

Faith in the State- 1950s  Industrialization  Stages of economic growth  Modernization  From John Maynard Keynes to Walt Rostow

“Faith in the State”  John Maynard Keynes and his wife Lydia Lopokova  Walt Rostow

Basic Human Needs  Basic Human Needs- growth With Equity  Robert McNamara and the World Bank  Integrated Rural Development  Internal Distribution

Robert McNamara and the World Bank

New International Economic Order Mid 1970s Redistribution at the Local Level 2. Empowerment of south 3. Equity 4. Basic Human Needs vs. New International Economic Order (NIEO) part of the North-South dialogue 5. Brandt Commission

NIEO- Late 1970s  Jimmy Carter  Willy Brandt

Structural Adjustment and neo- orthodoxy: The Dividing Line: a. "We are the World" leads to Donor Fatigue b. Illness and then death of Brezhnev in Soviet Union c. Ronald Reagan and Margaret Thatcher at the height of their power d. Public Sector Reform

“We Are the World”

Break  Ten Minutes Ten Minutes

Governance and Capacity Building  End of the Cold War  Failure of Structural Adjustment  September 11  Governance and Decentralization  New Public Management: Reinventing Government

Reinventing Government

Focus on Public Sector Reform: The challenges  Cambodia, Nicaragua, Angola, Mozambique were transitional conflicts in 1990  New "Transitional States"- CIS and Eastern Europe (later Bosnia, Kosovo)  End of History and Beginning of History  State Deconstruction

The End of History (or the end of the End) Declared: 7th - 9th October, 2005 Nottingham, UK

Public Sector Reform-2 Prologue- End of assumption- Progress is inevitable 1. Robert McNamara resigns from the World Bank, International institutions abandon basic needs approach 3. International conflict shifts from East-West Rivalry and cold war to ethnic, regional and internal conflicts

Public Sector Reform: The Debates

Critics View of Structural Adjustment  One Size Fits All

Public Sector Reform- 3  Structural Adjustment with a Human Face  A Role for NGOs  International donors as managers

The Issues 1. The state as national planner 2. How large a state: When is the state sector too big? 3. Issue of state ownership, and unfair competition (international trade) 4. Vagueness of boundaries between government and society:

The Time for Civil Society  Civil?

The Issues in Developed States 5. Hidden government: subsidies and entitlements. French Wine and Wisconsin cheese 6. Limitations of constitutions and public sectors- Decline in faith in government institutions in the 20th century 7. failure of legislative, executive structures. Loss of control 8. Anti-bureaucracy- the myth of the neutral bureaucrat

The Issue: French Wine or Wisconsin Cheese

Overall: Reform Meant Attack on Hierarchy I. Attacks on the European Mandarins- European elitist systems of administration =Permanent Secretary =Director General =State Secretary

Reforms II. Privatization of the bureaucracy a. Savas- The key to efficient and effective goods and services b. Critique: Nelson: impact of international organizations on NGOs- Distortion? c. Turner and Hulme- Are NGOs and Private sector better than Public Enterprises?

The View from Australia

Reforms-3 IV: Civil Service Reform: Picard Case Studies- South Africa, Botswana, Ghana, South Sudan Guinea-Conakry, Eritrea and Ethiopia

Reforms- 2 III: Deregulation- a. Deregulation- negative b. Competition- positive (monopolies vs. utilities) c. Regulations and Corruption: Klitgaard: Dealing with corruption and culture?

Civil Service Reforms V. Distinction- Public Sector Reform vs. Administrative reform (Civil Service Reform)  Purists go for PSR rather than CSR- latter not legitimate- oxymoron  Problem-"Bureaucrat bashing"

The Debate about Public Sector Unions

VI. Public Sector Reform  Public Enterprises vs.  Civil Services  Vs. Public Services  Vs. Local Government  Broad issue of Human Resource Development Reforming What?Reforming What? Video

Techniques: Public Sector Reform i. Budgetary and Fiscal Reforms Budgets as plans- Schroeder in Baker (tax vs. spending) ii. Personnel Reform- records base, motivation, promotion, review, retrenchment, etc. Problem: Collapsed states have no carrots iii. Structural Reforms- Excessive centralization, militarization and politicization

Centralized Authoritarian Government

VIII. Structural Reforms 1. Center-reorganizations- move or abolish 2. Decentralization- Botswana example- Transfer to local authorities or public corporations a. devolution b. deconcentration c. delegation d. privatization- what does it mean? Sell, Liquidate, commercialize, partnership or contract out

Reforms: Cutback Management- smaller, or more efficient, more effective  Cut back: percentage of civil service- Cutback the civil service.  Myth of Size- eg. Bureaucracy in Africa small  Turner and Holm: Bureaucracy and Development  Is Downsizing- "right sizing"

Downsizing or Rightsizing

Reforms 1. Redefinition- "Reinventing Government" (Osborne and Gabler)- steering rather than rowing 2. Strengthen systems of accountability: Barzelay and customer approach 3. Simplification and deregulation -Technical: Management Information Systems -Operational Strategy: Policy Success: 4. Frame Plans, projects and programs (Morgan in Baker)

Key: Human Resource Development  Training, recruitment, rewards and punishment (qualifications and salaries)  Personnel flexibility and pay for performance  Reform position classification (rank vs. position)  Return to meritocracy  Back to the Future in terms of state functions?

The Flip Chart Syndrom

Afterward- World Bank Mission (2006) GOVERNANCE IN GUINEA-CONAKRY  A Small Diversion- Local Governance and Civil Society in Guinea Conakry  Creation of a Poverty Alleviation Fund- includes Micro- Credit  Design Capacity for Service Delivery  Role For Civil Society

Guinea-Conakry

HRD Dilemma  Guinea- Councillors, Illiterate, work in indigenous language, Self Interested Bureaucracy:  Defined by Law and French  The Dilemma of Merit: (Picard and Garrity)- Command and Control

The Dilemma  Political-civil service reforms- relational, responsiveness of bureaucrats to politicians and Politicians to Bureaucrats  Common interests: privileges in organization  Rise of NGOs and multilateral: can you avoid the politicians?  Miewald: Politics- the critical factor?

Presentations: Next Week’s Discussion November 17  MPA/MPPM Group- Daniel Okrent, The Last Call  MPIA Group-Dina Rasor and Robert Bauman, Betraying Our Troops  MID Group- Louis A. Picard, A Fragile Balance

Daniel Okrent- New York Times Born 1948

Dina Rasor and Robert Bauman  Dina Rasor is the Chief Investigator of the Follow the Money Project  Robert Bauman was Criminal Investigator for the Department of Defense

Terry Buss (2010) and Louis A. Picard (and Colleagues, 1966)