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Compression ratios in public sector pay reform: Time to decompress the discourse?

Willy McCourt's picture

Introduction: decompression in the development discourse
 
The US Securities and Exchange Commission is consulting on a proposal to require public companies to report the ratio of top executive compensation to the median compensation of their employees. ‘The gap in pay between chief executives and rank-and-file employees has been growing steadily, and now regulators want companies to tell investors just how wide it is,’ said the New York Times in its recent report.

Yet the essence of the SEC proposal is at odds with the way we have approached public sector pay reform in developing countries over the last twenty years or so. During that time, Bank and Fund reports have routinely focused on the ‘compression ratio’ – that is, the differential between the highest and lowest paid employees – and habitually recommended decompression. See, for instance, this IMF Technical Note which includes the compression ratio among the indicators to be used for evaluating government employment and compensation. Altering the ratio in favour of the highest earners would boost performance incentives for all, it was thought. A World Bank report for Timor Leste from 2011 is a typical example:

Is Technology Sufficient for Fiscal Transparency & Openness? Lessons from East Asia and North Africa

Tina George Karippacheril's picture

A Warli Tribal Painting by Jivya Soma MasheWe are curating a monthly series on Digital Gov. in developing countries. The series seeks fresh perspectives and insights into the policy, institutional and technical dimensions of technology and public management, in understanding how public services are modernized, organized and delivered to citizens and, in supporting openness and public accountability. In the fourth post of the series, we reflect on Fiscal Transparency and Openness in light of the upcoming Asia-Pacific Regional Open Government Partnership Conference, focusing on developments in major middle income countries in East Asia and North Africa.

Fighting Corruption: What have Ombudsmen got to do with it?

Vinay Bhargava's picture

What do Simeon Marcelo of the Philippines, Santosh Hegde of India, KPK of Indonesia. ACC of Bhutan and ACRC of South Korea have in common?  All of them are anti-corruption super heroes (click on the hyperlinks to read their stories) and beacons of hope for all people against corruption. Corrupt officials are terrified of them and they all have served independent ombudsman/anti-corruption agency functions in their country. Over the years I have admired the courageous, professional and dedicated work of these individuals and organizations and had first hand experience of visiting and working with some of them.  Based on this I can confidently say that Ombudsman can and do fight corruption successfully when they have the enabling environment and leadership (later I comment on what the success factors are in my view).

Open and exposed? - Building up support behind open government commitments

Michael Jarvis's picture

It is close to six months since the largest open government jamboree to date – the Open Government Partnership (OGP) Annual Summit in London last autumn.  Since then the membership of the OGP continues to grow – up to 63 countries.  And now a new set of regional meetings are scheduled for May through August. Open government junkies can boost their air miles accounts with a hectic world tour from Indonesia to Ireland to Costa Rica. Such gatherings should offer useful space for reflection. So what is happening on the ground?

How Kerala is using the Internet to localize delivery of public services to citizens

Tina George Karippacheril's picture

I was intrigued by Kerala's Akshaya program. Kerala is uniquely, a most decentralized state, the only one of 17 in India to enact the Right to Public Services and, to open citizen service centers called Akshaya, run under the oversight of panchayats, 3-tier local self-governments, in 14 districts set within a 2 km radius of households. Akshaya was designed in its first phase in 2003 by the Kerala IT Mission to improve e-literacy in underserved areas and, in its second phase to provide a platform for government to citizen services through a public-private partnership. Over 60% of Kerala's 33 million citizens have been served by 2070+ Akshaya centers run by private entrepreneurs who collectively earn 30 million INR a month, creating employment for over 20,000 individuals. (For more details, see Akshaya Overview and UNDP Report on Akshaya).

Making Political Economy Practical

Rachel Ort's picture

Taking politics seriously
 
The idea political incentives play a powerful role in development—creating opportunities for change in some contexts, frustrating efforts in others—is not a new one.  For many years now, academics and aid agencies have acknowledged that the uptake and impact of best practice reforms depends, in part, on the incentives of leaders and citizens, on formal and informal institutional arrangements, on historical legacies and structural drivers.  And as a result, many aid agencies have made efforts to “take politics seriously.”

Understanding the relevance of political settlements for the Bank’s work

Sakuntala Akmeemana's picture

Man and boy on grazing landThe post-conflict literature amongst practitioners (including the Bank’s WDR 2011 and the OECD’s INCAF) has increasingly focussed on the role of ‘inclusive enough’ political settlements as a precondition for political stability and economic growth.  What does this mean? Can an understanding of political settlements help mould the Bank’s responses to moments of crisis in our client countries or inform our “business as usual” operations in countries where the seeds of future violence are apparent or looming?  How do we recognize tenuous settlements, where grievances are likely to lead to an outbreak of, or return to, widespread conflict? 

The politics of service delivery

Bryn Welham's picture

Routes of accountabilityThe WDR 2004 report certainly puts politics centre stage. Ten years on, the picture remains the same: where there’s any form of accountability relationship, there is some form of politics. A key insight of the WDR 2004 report was the trio of accountability relationships for service delivery and demand for improvement involving citizens, service providers and the government.

Thinking through unorthodox ideas for governance change in difficult contexts

Tina George Karippacheril's picture
 Accountability Lab/Morgana WingardWe are curating a new monthly series on Digital Gov. in developing countries. The series seeks fresh perspectives and insights into the policy, institutional and technical dimensions of technology and public management to understand how to make services work for businesses and citizens. In the second post of the series, we reflect on unorthodox, locally adapted solutions for institutional transformation in fragile states.

Some 1.5 billion people live in fragile states, “a group of countries at the bottom that are falling behind, and often falling apart” (The Bottom Billion, Collier, 2007). These states are marked by repeated cycles of violence, and weak institutional capacity and an inability to deliver basic services to their citizens.

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