Civil Service Reform in Developing Countries: Why Is It Going Badly? Geoffrey Shepherd 11th International Anti-Corruption Conference Seoul, Korea Panel: Depoliticizing the Civil Service, Tuesday 27 May, 2003
The issue: the consensus model for civil-service reform has not taken root in developing countries • Large, underpaid, politicized civil services in developing countries. • Hence inefficient and corrupt service delivery. • Consensus in the development community on a merit model for civil-service reform (the model used by today’s advanced countries). • This model has not taken root because politics militates against it. • The challenge: getting realistic by getting merit and politics to live together.
Outline of the argument • The merit model promotes competence and protects the civil service from political interference. • But it largely fails in developing countries • The evidence of history shows the conditions under which merit reforms come about and subsequently develop. • Merit-based reform in developing countries is stymied by politics and by large government. • What can be done? • We can improve the way we think about the problem: de-politicizing the civil service is unrealistic, re-politicizing the debate is realistic. • We should eschew comprehensive merit reforms and look for selective reform opportunities that acknowledge political realities. • Brazil: an example of a judicial mix of merit, politics, and pragmatism.
The universal model of merit-based reform: the basics • Entrance to the service based on competitive exams. • Protection of civil servants from arbitrary removal. • Protection of their political neutrality. • Policing of these rules by an independent body.
The universal model of merit-based reform: other features • Common features: • positions are established centrally and classified according to rank; • bureaucrats are paid a salary and pension that is determined by their rank, rather than the work that they do; • there are often impediments to external lateral entry at senior grades; • there are few points of entry, with most entering at a young age and most senior positions filled by promotion. • Divergent feature: the amount and depth of political, as opposed to merit, appointments: • the US system allows large numbers of political appointments.
Merit reform in developing countries • Merit principles are often written into constitutions and laws. • But these principles are not respected in practice. • Civil-service reform has proven among the most difficult of developmental reforms to sustain, and there is little evidence that nationally- or donor-inspired reform efforts have met with much success. • The Example of World Bank Projects: the Bank’s own analyses have admitted that success has been limited.
Civil-service reform: six propositions from history (1) • Patronage systems are not a universal evil: they fund political competition • the US in the 19th Century. • Merit reforms only come to fruition when they are moved by powerful external forces. • Overwhelming political demands for more efficiency and less corruption in the US and UK in the 19th Century. • The French revolution and the demand for protection against the state in the 19th Century. • In spite of different paths and conditions, reforms have closely converged on a similar merit model. This is no accident
Civil-service reform: six propositions from history (2) • Reforms took a long time to be fully implemented. • Merit reforms have also made the civil service into a powerful public-sector institution and interest group in its own right. • Merit reforms create new tensions: • They alleviate problems of political interference and of hierarchical control • But they create incentives that reduce the efficiency and political responsiveness of civil servants. • As a result, there is a continuing tension between merit-based principles and “managerialist” principles that lead to greater flexibility, but also often open the way to greater politicization.
Why reform is difficult in developing countries: three propositions (1) • New interests with the need and the power to promote a more efficient and honest public administration are weak in many countries. • Some of these are characterized by spoils systems that provide the currency of political competition. • Others are characterized by the continuing vigor of traditional systems (kinship ties, for instance) which frustrate reform movements.
Why reform is difficul in developing countries: three propositions (2) • Governments are significantly larger than in the past • This is the result of modern ideological approaches to development, as well as the improved capacity of populations to articulate political demands. • This has led to large civil services, often characterized by public welfare employment, whereby public jobs are provided to a large part of the population as a means of ensuring their political support. • It has proven very difficult to reduce such high levels of employment, while these have led to fiscal crisis and personnel performance problems. • Many of these large civil services have emerged as strong interest groups capable of challenging reform efforts.
What next? 1. changing the mindset • Recognize reform failures more openly. • Develop a more balanced view of the relative advantages and disadvantages of merit and patronage systems. • Incorporate politics into analysis and solutions, rather than ignoring or denying it. • Avoid the “merit trap”: half-finished merit reforms create a political and fiscal burden, but do little for performance. • Rethink the issue of lifetime tenure for civil servants. • Assemble better evidence: history, politics, and contemporary cases of successful reform.
What next? 2. alternative reform approaches outside the public administration • The long-term solution: economic and political development. • Treat excess employment (public welfare employment) as a social-security problem. • Find alternative methods of funding politics?
What next? 3. selective reform approaches inside the public administration • Hybrid senior appointments: enlarge the scope for patronage employment at senior levels, but apply merit rules and controls. • Brazil as an example. • Agency “graduation”: key agencies graduate within a universal set of merit and modernization rules. • Enclaves: key agencies are modernized within an ad hoc set of merit and modernization rules.
Brazil: mixing civil service and political appointments • The Career system: • Has rigorous merit entry, strong esprit de corps. • Favors “elite” careers in key ministries. (e.g. tax administration, public finances, audit, trade). • Has weak performance/efficiency incentives. • Political appointments (DAS): • System has legislated ceiling on numbers and covers six levels below Minister. • Ministries propose and Presidency vets. • No tenure, no pension. • Permanent civil servants can become DAS, then return to old jobs. • At top 3 levels half of DAS are civil service, half are private. • Patronage at the Federal level is limited.
Brazil: a long and evolutionary process • Civil-service regime created as a rigid Weberian system in 1930s. • Dilution of rigid hierarchy from 1967 onwards (military government) in favor of decentralization to autonomous agencies for greater managerial flexibility. • This led to perceived abuses, loss of central control. • Hence new rigidities in 1988 Constitution (return to civilian rule): • Extension of tenure and pension obligations. • 1995 onwards: Cardoso government rebuilds the civil service: • selective development of specific careers • measures to ensure a strong regime of political appointments. • 1995-98: Cardoso government’s attempt to introduce executive agencies: • Proposal to remove tenure from public employees in Executive Agencies. • Limited results due to perceptions of loss of central fiscal control, public unions’ resistance to proposed changes in labor regime.
Brazil: some conclusions • Brazil is well served today by competent, honest, and accountable public servants. • Professionalization (capacity building + attaining political independence) has been a long process (70 years). • Brazil has a large reservoir of capable people • Changing rules was not enough: continuity and competence: • 1930s to 1980s: the authoritarian developmental state pushed professionalization. • Since 1988: growth of popular demand for honest and effective civil servants. • The importance of competent organizations. • A sensible approach to mixing merit and politics: • A hybrid and deep system of political appointments. • Selective approach to Careers. • There is a constant, never-fully-resolved tension of political protection versus efficiency. • The bad rigidities: tenure combined with the pay/pension trap. • The more bearable rigidities: weak incentives for efficiency.