Private Sector Lessons for Public Sector Reform in Indonesia

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Private Sector Lessons for Public Sector Reform in Indonesia

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Ross H. McLeod ()

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Abstract

Development economists often analyse the performance of particular sectors of the economy, yet they have largely ignored that of one of the most important sectors, namely, the public sector, the performance of which is demonstrably poor. They are also continually giving recommendations to the Indonesian government as to what constitutes sound economic policy, whereas there is abundant evidence that the bureaucracy has neither the incentive nor the competence to implement such policy. Civil service reform is therefore crucial to improving Indonesia's economic performance. This paper argues that the key to such reform is the adoption of human resource management practices similar to those that can be observed in successful, large business enterprises: namely, creating an environment of open and fair competition for all positions within the organisation.

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Paper provided by Australian National University, Economics RSPAS in its series Departmental Working Papers with number 2006-02.

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Length: 15 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:pas:papers:2006-02

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Find related papers by JEL classification:
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out
M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executive Compensation
M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-02-05 (All new papers)
NEP-PBE-2006-02-05 (Public Economics)
NEP-SEA-2006-02-05 (South East Asia)

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