Public Sector Reform (Lessons Learned and Conclusions) (Dr. Christopher Gan)

Public Sector Reform Questions What is public sector reform? Why public sector reform is critical? What types of public sector reform should be undertaken? When should public sector reform be implemented? Who gain and who lose from public sector reform?

Course Topics Impact of Globalization on GMS Public Sector Overview of GMS Public Sector Reform Financial Crisis on Reform Program Country Situation Analysis on Public Sector Reform Introduction to Public Sector Reform : What, Why and How Public Administration Reform Multiple Functions of Government Agencies Decentralization and Enablement in Public Sector

Course Topics Importance of Good Governance in Public Sector Reform Field Visit Khon Kaen Public Administration Organization Corporatization of SOE Restructuring of SOEs Field Visit Provincial Electricity Authority Privatization Leadership in Public Sector Reform

Lessons Learned There is no one best way of administrative reform, even though the public administrations of GMS states are getting more similar E-government is now becoming the most important driver for administrative reform, helping to attain goals of “good governance” A good management of change is crucial for reform success (Source: Klaus Lenk, UNIDEM CAMPUS Seminar on “Civil Service: the Authority Serving the Public or the Public Serving the Authority”, Trieste, Germany, November 2004)

Lessons Learned Efficiency is the dominant goal of Public Management Good Governance criteria suggest a wider range of goals: Democratic decision-making about public affairs Effectiveness in executing the political will Transparency to enhance legitimacy Accountability Capacity building for providing resilience and efficiency (Source: Klaus Lenk, UNIDEM CAMPUS Seminar on “Civil Service: the Authority Serving the Public or the Public Serving the Authority”, Trieste, Germany, November 2004)

No Single Best Way or Margic Formula OECD Policy Brief on Public Sector Modernisation, October 2003, p.6: The mistaken perception that countries share a common problem is often accompanied by the idea that there is a [range] of solutions available, any or all of which will be beneficial. This misconception, peddled under the label of “best practice”, has had tragic consequences in some developing countries

Lessons Learned Start from where you stand Build a vision Promote cooperation among all actors concerned Take contextual factors into account when making choices Assess the costs of reform steps

Lessons Learned - Visions Visions are the outcome of long processes of strategic reflection Strategic thinking was generally absent in reform countries which hoped to adopt blueprints from abroad National experiences are important for finding the right way, even if reform goals are identical to those of other countries

Lessons Learned - Cooperation New innovative networks of reform-minded people will have to emerge, if reform is not to remain static and ineffective Protecting one’s “territory” is an understandable reaction, especially in times of momentous change But this reaction is extremely dangerous for reform success Promoting cooperation requires cultural changes which take time The role of consultants from outside can be very beneficial here

Lessons Learned – Costs of Reform The costs of reform are often difficult to assess, and they frequently outrun initial estimations New technical devices and new organisational arrangements can be assessed fairly well. But the costs of providing training to the staff are difficult to assess (Source: Klaus Lenk, UNIDEM CAMPUS Seminar on “Civil Service: the Authority Serving the Public or the Public Serving the Authority”, Trieste, Germany, November 2004)

Two Waves of Reform (Source: David Osborne, “The Five Strategies for Reinventing Government,” The Public Strategies Group, The challenge in the GMS: Creating a professional and honest public service, free of political manipulation and patronage hiring Improving service and access by: Transforming bureaucratic public services into flexible, innovative, Information Age organizations

Strategies to Avoid Problems Establishing the rule of law Creating an independent, honest judiciary Prosecuting corruption Establishing transparent budgeting, procurement, & contracting Creating an effective audit system Creating a professional, well-trained, adequately paid civil service Barring civil servants from involvement in political campaigns

One Cannot Command the System to Change You have to find levers that change the internal dynamics The goal a system in which every organization and every employee wants to improve performance… and is empowered to do so

Basic Steps in Budgeting for Outcomes 1.Set the price of government: How much will we spend? 2. Set the priorities of government: What outcomes matter most to our citizens? 3.Set the price of each priority: How much should we spend to achieve each outcome? 4.Develop a purchasing plan for each priority: What strategies have the most impact?

Basic Steps in Budgeting for Outcomes 5. Require programs to compete for funding, based on their ability to deliver the desired results 6. Rank the offers based on their cost effectiveness, send the rankings out and ask for better offers 7. Rank the final offers and draw a line where the money runs out 8. Negotiate performance agreements with the chosen providers

The Ultimate Align spending with priorities Buy results, not costs Low-value spending is forced out of the budget Important new investments go to the front of the queue Performance accountability Continuous reform/ improvement “Common Sense” communications

Service to Citizens and to the Economy One-stop “single-window“ administration is possible in many ways Often, the wrong priorities have been set in “advanced“ countries Rankings do not always measure true success, since specific national factors are not taken into account (Source: Klaus Lenk, UNIDEM CAMPUS Seminar on “Civil Service: the Authority Serving the Public or the Public Serving the Authority”, Trieste, Germany, November 2004)

Integrated e-Government An emerging architecture of e-Public Services: Spatial and organisational separation of service production and delivery Service delivery in Front Offices (both virtual and physical) Service production in Back Offices Seamless connections allowing “single-window“ service Enrichment of Front Offices with additional functions (commercial services, e-Democracy) (Source: Klaus Lenk, UNIDEM CAMPUS Seminar on “Civil Service: the Authority Serving the Public or the Public Serving the Authority”, Trieste, Germany, November 2004)

Culture Strategy: Changing Habits, Hearts, and Minds Five Strategies to Reinvent Bureaucratic Government Core Consequences Customer Control Culture C x C x C x C x C = Transformation

Conclusions Training of administrators and inducing cultural change with empathy are particularly important Senior managers and politicians need to acquire knowledge about strategies and tools for reform, including e- government recurring pitfalls and “stumbling stones” of innovation processes in the public sector the contextual factors which decide about success and failure in their respective countries

Better access to and capacity to take advantage of improved agricultural services Better access and capacity to take advantage of opportunities for rural non-farm employment, enterprise development Better access to and capacity to take advantage of transparent markets Better access to natural resources and capacity to manage them sustainably Improved rural livelihoods and pathways out of poverty