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Why Civil Service Reforms Do Not Work

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  • Nadeem Ul Haque

    (PIDE)

Abstract

Public sector reform (PSR) efforts in developing countries have been less than successful in the past. Motivated by budgetary considerations, they have focused on downsizing and procedural changes without radically altering the outmoded incentive system, which, in many countries, is now characterised by declining real wages, wage compression, and a non-merit promotion and reward system. Using results from the incentives literature, this paper argues that, for a reform effort to succeed, public sector human resource management (HRM) will have to be reformed at an early stage to establish productivity incentives in the public sector. These will include introducing substantial autonomy to organisations in their work, incentive schemes, and HRM along the lines of the now well-accepted concept of central bank independence. Past PSR efforts have also attempted to conduct a unified reform effort led centrally by the ministry of finance. A continuous process like PSRspread out over a considerable period and involving many different people and organisationsmight need to build in decentralisation, local leadership and local incentives, and HRM. PSR must be based on the recognition that people are at the heart of public service. As a result, managing human resources must be at the centre of any effort. The people who are at the center of this change can either be its architects and beneficiaries or its losers and therefore opponents of change. Design and implementation of reforms must, therefore, be sensitive to this important fact. It is essential that the reform is led by individuals at the organisation level who understand the vision as well as process of change. Governments must empower such leadership to guide, initiate, innovate, and manage change.

Suggested Citation

  • Nadeem Ul Haque, 2007. "Why Civil Service Reforms Do Not Work," Labor Economics Working Papers 22192, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:laborw:22192
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    References listed on IDEAS

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    More about this item

    Keywords

    Civil Services; Reforms;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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