Middle Income Trap: An Alternative Perspective on Result-Based Management in the Asian Context By

1. Middle Income Trap: An Alternative Perspective on Result-Based Management in the Asian Context By Professor M. Shamsul Haque Department of Political Science National University of Singapore 10 Kent Ridge, Singapore 119260 Tel:+65-6874-3982 Fax:+65-6779-6815 E-mail Address: polhaque@nus.edu.sg Regional Forum : Journey to and From the Middle Income Status – The Challenges for Public Sector Managers, 22-25 April, 2014 Shanghai, PRC (Shanghai National Accounting Institute)

2. Discussion Outline • Introduction • Relevance of Result-Based Management (RBM) to Middle Income Trap (MIT • MIT – meaning, causes, remedies • RBM –origin, framework, ingredients • Use of RBM for MIT Issue (possible?) • RBM – Asian adoption: (a) overall, (b) performance/result measure • Analysis and Critical Views: RBM for MIT (?) • Must begin with original agenda - rethinking MIT itself • Inherent limits of RBM to deal with mega-complex puzzles • De-contextualization of performance/result principles • Understanding contexts, recognizing multiple views • Conclusion

3. Introduction • Common tendencies - critical barriers to human progress portrayed as economic stagnation, poverty trap, unemployment trap, and low-income trap … • Similar economic pessimism – Middle Income Trap (MIT) – stagnant economies (Latin America), warning signs to fast-growing economies in Asia about ) economic impasse • Hardly any consensus – indicator s of mid-income, number of years a country experiences a stagnant to be an example of MIT • Divergent explanations and recommendations with regard to the causes, implications, and remedies of MIT • Suggested preventive measures appear to be less specific and robust - in the Asian context, the role of public management is very crucial in relation to the remedies or proactive initiatives

4. Middle Income Trap (MIT) • Controversies among various studies and reports about the identity of “middle income” • Which MICs have fallen or are likely to fall into the economic stagnation? • Turning points of growth slowdowns – covering several decades and look for statistically significant breaks in time series of GDP growth rates and downturns – (Aiyal et al. 2013:8-9) • Unlike Latin America where several mid-income economies are allegedly already in Middle Income Trap, in Asia, middle-income countries are yet in this Trap, but some of them are at risk of falling into long-term economic stagnation (Tho, 2013; Egawa, 2013). • The countries with this risk of growth slowdown include China, Indonesia, Malaysia, Philippines, Thailand, and Vietnam.

5. Middle Income Trap (MIT) • Causes behind the emergence of MIT – diverse explanations – Aiyar et al. (2013), Kharas and Kohli (2011), Tho (2013), Chinn and Ito (2006), Egawa (2013) • Egawa (2013) presents a systematic explanations of the causes of MIT – categorizing them into: • Causes which trigger the MIT (excessive public investment, regional economic disparity, and income inequality). • Causes constrain countries to overcome MIT (lack of innovation, insufficient higher education, inefficient use of the infrastructures, state monopoly of main industries, poor governance, excessive corruption, income inequality, and failure of increase domestic demand) • What can public management (result-based management) do? – remaining presentation deals with this performance/result-based public management

6. Performance / Result-based Public Management Growing significance worldwide • Language/ vocabulary of everyday government activities – now centred on “performance”, “result” • Proliferation of literature – books, journals, conferences, reports on performance-related themes Origins of result-driven public administration • Reinvention movement/model; New Public Management (NPM); and post-NPM models – these new models have inherent rationale of narrow managerial performance Operational ingredients and processes of RBM • Generation, collection, analysis, reporting and utilisation of data related to the inputs, outputs, outcomes, and impacts of public organizations and programs (Thomas, 2006). • Farzana Ahmed  result-based : planning, budgeting, implementation, monitoring, and evaluation … … …

7. Performance / Result-based Public Management Reasons for Rising Performance/Result Concern • Administrative inefficiency, irresponsiveness • Changing nature of public policy – towards more specific, empirical, quantifiable, and instrumental policies • Public demand for responsive and efficient service delivery • Political agenda – (a) having more control over bureaucracy through performance assessment; (b) eroded public trust in government institutions – to be revived through performance rhetoric But Performance/Result-based Management Remains Crucial • To maintain public sector accountability – account for performance – vital for democracy • To comply with administrative codes of conduct – specific obligations as part of performance • To ensure organizational fairness – reward and punishment based on performance

8. Performance / Result-based Public Management: NPM in Asia

9. Performance/Result-Based Management in Asian Countries

10. Analysis: Limits of Performance/Result-based Management Limits of RBM – how far can it do? • RBM covers many tools enabling public management – implementation part of policy • Policy priority, policy making involves politics – political leaders, citizens, workers • If policies made wrong, undesirable – their effective implementation by RBM? Worse? • MIT concern is too huge – requiring involvement of multiple stakeholders, multi-dimensional issues, and multiple levels of engagement

11. Analysis: Limits of Performance/Result-based Management Questioning and re-examining of MIT itself • It presupposes some degree of stagnation – but that is hardly the reality • Without increasing economic growth – nations can move towards greater income equality; greater democratization and empowerment; reduction in corruption; greater gender and class equality; improved health and literacy • Alternative index – happiness index, quality of life index . . . • It is too reductionist, too economistic: UNDP Report 1996had interesting terms like “jobless growth”, “ruthless growth”, “voiceless growth”, “rootless growth”, “futureless growth” • Severe environmental cost of economic growth in the Asia-Pacific: UNDP (2012). UNDP Asia-Pacific Human Development Report: One Planet to Share.

12. Analysis: Limits of Performance/Result-based Management Inherent limits of performance/result based management • Dilemma in means-end relationship (input-output-outcome-impact)  end is political/social, not managerial • De-contextualization of performance/outcome measures (neo-managerial) – claim to universalism – one-best-way, one-size-fits all  best practices, entrepreneurial governance, performance-based management • Explore the underpinnings of performance management – the normative foundations – to deconstruct “best practices” models • Deconstructing the universalism claims of performance/result – examining social-normative bases of performance

13. Analysis: Limits of Performance/Result-based Manage Normative Bases of Performance: Eastvs. West • Western (Rational) Performance requires • Division of labour / differentiation/ specialization • Individualism – guided by individual self interest • Impersonality (organization-person detachment) • Achievement orientation – competition mentality • Non-western Traditional Contexts • Relative absence of differentiation/ formalistic specializatiom • Collectivism (community-, family-based) values more dominant • Impersonal-rational norms subordinated to personalism (patron-client relationship) • Ascriptivenorms (heredity, family background, social status) still dominate the politics-administration sphere)

14. Analysis: Limits of Performance/Result-based Manage Within Western Context – normative bases of performance • Traditional Bureaucratic Model: Impersonality, competence, specialization .. • Development Administration: Decentralization, participation, modernization; nation-building • New Public Admin: Equity, Responsiveness, Ethics, Justice, Welfare, Public Interest • New Public Management: Efficiency, Economy, Effectiveness, Value for money, Result Orientation … Overall: There is no universal set of rules/criteria of performance or result in public management – these are contingent upon the context

15. Conclusion • Re-examine the principles and premises of public sector performance or result, based on a context-driven approach – in order to make it more effective and society/people-centred. • MIT – question its criteria, reliability, and consequence – greater recognition to be given towards a holistic view of development beyond economic growth – including social, political, cultural, and ecological considerations. THANK YOU