The World Bank and Public Sector Management: Where do you come out?

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ImageThe World Bank is updating its approach to public sector management. The aim is better World Bank support for governments seeking to improve public sector results: results needed for citizens' today through improved health, education, agriculture and transport services; and the less obvious but equally critical results such as fiscal stability which maximize the prospects that those results will still be delivered tomorrow. 

Most can agree that how the public sector is managed matters. It seems clear that public services will be higher quality, or at least less expensive, if senior staff are recruited on merit, if political interference is constrained in day to day operations, and if the budget agreed by the legislature is published and then followed in practice. But the specifics of successful reform are more elusive:

• Mexico is one of the few countries on track to meet the health Millennium Development Goals – but it has massive disparities in health outcomes across population groups. What are the best management arrangements for Mexico's rapidly expanding public health care system?
• In the vast public bureaucracy of India, how can the government ensure that its many diverse state level computer applications can "talk" to each other?
• Following the late 1990s fiscal meltdown, officials in the Russian Ministry of Finance decided to manage public finance flows centrally. Were they right to then try to impose tighter central controls over individual transactions, or was this a step too far in this large and diverse country?
• In post-conflict Sierra Leone, with limited government focus and attention, what was the priority for rebuilding the public administration – central finance functions or local service delivery? Should one be tried without the other?
• How can the new civil service law in Tajikistan, with its requirements for competitive selection of candidates and new systems for job classification and performance appraisal, be given "life" so that it does not remain a paper exercise?
• Is it possible that Tunisia had good public sector management but poor governance? Is there a difference between the vehicle of the public bureaucracy, and where it is being driven?

If the general principles are clear, why is it so difficult to agree on what should be done in a particular case?

Beyond making superficial changes in the formal rules of the game, effective public management change requires that many thousands of public agents alter their behavior, much of which is hidden from view. Well-intended reforms may only be partially introduced. There are political risks. Politicians often need to balance service delivery to citizens with the pressures to serve powerful vested interests – public sector unions or influential elites who are part of a delicate political equilibrium. In some situations, reforms may be undertaken for reform's sake in a hunt for credit for being seen to reform. And lurking in the background, there are challenges in technical design. Much uncertainty remains about what works and why in public sector management reform in different contexts, and while practitioners have developed a strong body of tacit or "craft" knowledge, explicit codified evidence about what works in public sector management remains in short supply.

The Bank is a significant player in the field. Since 1995, the World Bank has approved over 1,500 lending projects with significant public sector components. Last year, it committed nearly $3.6 billion for lending for public sector management reforms in low and middle income countries. Getting the approach right means that we can do more with these resources in helping governments improve their public sector management. 

The draft World Bank Approach to Public Sector Management 2011-2020 is proposing some practical ways forward.  Are these over-ambitious or too cautious? Are they unduly inward-looking or hubristic in their view on the degree to which the Bank can influence global trends?

The draft Approach sees the Bank as a thought leader in improving public sector management. It asserts that the Bank can help move past hand-wringing about the difficulty of these issues, towards a clearer assessment of when the risks of failure are outweighed by the potential returns from success. It proposes that we strengthen the Bank’s own capability to diagnose functional problems and binding constraints, with a "good fit" rather than "best practice" approach.

The draft Approach sees the Bank as a major development actor, and argues that it can use its large and influential portfolio to obtain greater impact. It proposes using flexible approaches (including a proposed new Bank "Program for Results" lending instrument) that adjust to the nature of public sector management reform trajectories which are often incremental and require room for experimentation and constant adaptation.

The draft Approach also sees the Bank as a knowledge-generator. It proposes a significant scaling up in learning about what drives results in public sector reform, improving the evidence-base for understanding what works, when and why, in public sector reform. Similar to the catalytic role the Bank played for growth research in the 1990s, the Bank needs to create a "sputnik moment" for filling this knowledge gap. It proposes improved country-level tracking of institutional reform impact, learning more from Bank projects through treating them as natural experiments, and a multi agency research agenda that inform practical support strategies for future public sector reforms.

Finally, the draft Approach sees the Bank as a disciplinary integrator. It notes that many specialists and advisors work on public sector management, even when this is not in their job titles. The Bank can mobilize collaboration between these different sector specialists (education, transport, public administration etc.).

Early consultations suggest where opinions diverge:
• Defining what the Bank does vs. focusing on how it does it. There are those who consider that the Bank should distinguish more clearly between areas where the knowledge base is more secure and the track record more robust (assisting in revenue administration reforms, designing Financial Management Information Systems, etc.), and those areas where success rates are much more mixed (civil service reforms). Others consider that the Bank will always respond to requests as best as it can and so should not rule anything out however daunting.
Narrow focus vs. broad leadership. There are those who argue that the Bank should focus on the quality of its own projects and research work. Others argue that the Bank has a strong global leadership role; it should consciously set an example of good support to governments and take an active lead in a new international research agenda.

Where do you come out, and why?


Nick Manning

Retired Head, Governance & Public Sector Management group World Bank and former Head of the Public Sector Management and Performance Division at the OECD

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