1. Civil Service Modeling: Simplifying the Complexities of Civil Service Pay and Employment

2. Why Model?

3. Two Dominant Approaches to Civil Service Pay and Employment Reform 1. Macro-Analysis: The Meat-Axe Approach? 2. Micro-Review: The Bean-Counting Perspective

4. Macro-Analysis to determine appropriate size and cost of civil service How it works oGross criteria to gauge nature and extent of reform needed o(Wage bill/GDP; government employment per capita; salary compression ratios, public-private wage relativities) Pros and Cons oBroad-brush reform guidance but over- simplified basis for government policy and lending terms and conditions

5. Micro-Reviews (Functional Analysis) to determine staffing and incentive levels How it works oBottom-up scrutiny of individual organizational units ’ objectives, tasks, and resource requirements Pros and Cons oAccurate picture of on-the-ground reality oInconsistent methodology – wide variability in quality oHard to do – takes forever oDifficult to sum up parts: challenge to build coherent civil service strategy for whole based on micro- unit-based details

6. Both approaches left big problems un- addressed Low government policymaking capacity for CSR CSR-P&E reality hopelessly complex oCompeting sectoral considerations oNew wrinkles: decentralization oConflicting government objectives (social welfare vs. fiscal prudence) Flimsy empirical basis to donor-country dialogue (discussion often on different pages)

7. What is the CS-P&E Model? Civil service modeling as middle-range analytic tool to bridge gap in existing approaches Uses country customized data to render the key attributes of current P&E situation oPay and grading arrangements oCS employment numbers oSectoral/ministerial geographical particulars Establishes reform objectives and parameters – “ Five-year CSR vision ” oWage bill envelope oCompression ratio and salary levels oPublic-private relativities

8. What is the CS-P&E Model? Civil service modeling as middle-range analytic tool to bridge gap in existing approaches Simulates reform options – calculating and demonstrating costs of alternative policy measures oAssumptions about timing and extent of retrenchment or retirements oImplications of different levels of pay raises oAltering sectoral employment levels (teachers, health workers)

9. The Joys of the Model Provides governments with hands-on tool for plotting realistic reform strategy with concrete targets Sorts out wheat from chaff – focus on big picture Raises level of dialogue with donors (and donor understanding of issues) Helps policy makers combat special pleading of sectoral interests

10. The Woes of the Model Cannot (should not) render all detailed characteristics of individual country CS reality (Trade-off between simplicity/clarity and accuracy) Garbage in-Garbage Out (Poor data mean targets may be off) Cannot make hard decisions for policy makers Haven ’ t dealt with some critical issues (pensions variables hard to incorporate) Cannot replace good establishment management systems (HR database, tight payroll controls, etc.) Cannot provide detailed information for reform implementation (for retrenchment; severance package design, etc. – consultancy needed)

11. East Asia Experience Pilots in 6 Countries: Cambodia - Timor Leste - Philippines Mongolia - Indonesia - Thailand Capacity building grant from ASEM to assist countries in using modeling tools to develop civil service pay and employment reform strategies Development of robust and user friendly modeling tool for region

12. Why Model in East Asia? Wake of financial crisis in 1990s led to fiscal constraints, raising profile of wage bill Crisis revealed shortcomings in government effectiveness and efficiency; civil service reform became a priority Modeling reform options could help countries formulate strategy

13. Different Countries, Different Entry Points Cambodia –IMF pressure on government to reduce CS wage bill and employment resulted in stalemate –Bank entered with model to provide empirical footing to dialogue Thailand –Reducing civil service employment part of public sector reform program supported by Bank in aftermath of financial crisis. –Support to Office of the Civil Service Commission included modeling reform options

14. Different Countries, Different Entry Points Philippines –Bloated wage bill and surplus CS employment aggravated by fiscal strain during crisis –With a history of failed reform efforts, govt. agreed to try modeling to develop strategy Indonesia –Civil service seen as corrupt, poor performer when growth rates screeched to a halt in crisis and beyond –Decentralization about to transform nature of civil service –Modeling intended to provide a starting point for thinking about modernizing CS, but timing was off, given general state of flux

15. Different Countries, Different Entry Points Timor-Leste –New state with no parameters for civil service pay and employment –Model intended to work out relativities for new government Mongolia –Fund pressure to reduce wage bill –Government clueless on where to start – model first step in roadmap to reform

16. Results in EAP Improved, more focused dialogue with country and other donors on CS pay and employment Country counterparts at technical level gained modeling capacity Still limited engagement by higher level decision makers From spreadsheet to GameBoy –Marked improvement in modeling mechanics through trial and error evolution –User-friendly customized models –Whizzy generic model available on website