Reforming Public Services in India: Drawing Lessons from Success

1. Reforming Public Services in India: Drawing Lessons from Success Vikram K. Chand The World Bank May 9, 2006

2. Objectives of the Report • The report documents 25 cases of success in improving public services across sectors/states. • Cases were chosen on the basis of three criteria: (a) Substantial institutional reforms introduced, (b) Documented success in improving outcomes through user surveys, objective indicators, and external recognition, and (c) initiatives in existence for at least two years. • The main objective was to draw lessons on how to improve public service delivery across sectors.

3. Success in a Difficult Environment • These reforms took hold, despite serious systemic obstacles to improving public delivery systems. • These systemic obstacles include: • Overstaffing. • Frequent transfers of public servants. • Weak anti-corruption enforcement mechanisms. • The need for electoral financing reform. • Decentralization was only one element in a complex mix of instruments to improve delivery

4. The Enabling Environment

5. The Role of Political Leadership • Vision Counts: The political leadership influenced the kinds of reforms pursued in several states, like AP, MP, and Karnataka. • Bipartisan consensus across party lines facilitated reforms to improve program delivery in Tamil Nadu. • Electoral incentives motivated political leaders to support change in Tamil Nadu and Madhya Pradesh.

6. An Empowered Civil Service • Stability of tenure crucial to empowering civil servants spearheading reform initiatives. • Managerial autonomy for decision-making. • Political support and signaling. Civil Servants when empowered by political leaders can be an effective instrument for innovation in service delivery.

7. Activating Civic Pressures for Change • The Importance of Institutional Design • Access to information laws work best when appeals processes are simple and pressure from below encourage their use. • BATF institutionalized citizen participation in urban governance. • Public Interest Litigation • NGO’s appeal to one part of the state (the judiciary) to hold another accountable (the executive). • Creating Stakes for Participation: • The Political Economy of Hospital Autonomy in MP • Using the Media for Effect: • Anti-corruption Institutions need to focus more on corruption in service delivery; the media can be an important ally when prosecution is difficult. • BATF and the Surat Municipal Corporation use the media as an ally.

8. INSTRUMENTS FOR REFORMING PUBLIC SERVICE DELIVERY

9. Promoting Competition: Cases and Lessons Cases: • Telecom Reform in India, 1980-2004. • Opening up Rural Marketing in MP. Lessons: • Conventional wisdom borne out: Competition benefited consumers in telecom and farmers in MP. • Rent-seeking by vested interests curbed. • Strong action at highest-levels needed to push reform • PMO push reform in the Telecom case. • MP government amend Mandi laws to allow for greater private participation.

10. Simplifying Transactions: Cases • Report examined several cases using e-governance to simplify transactions. • One-stop-shops: E-Sewa and Friends • Government Certificates: Bhoomi • Rural Card in Andhra Pradesh • Computerizing Inter-state Check-posts in Gujarat.

11. Simplifying Transactions: Lessons • High-level political support key to overcoming resistance. • Stability of tenure for administrative champions necessary. • Importance of Public-Private Partnerships in E-Governance • Low levels of citizen awareness in rural areas an obstacle to change. • No jobs lost in any of these initiatives: Win-Win Reforms.

12. Restructuring Agency Processes: Cases • State-Wide Agencies • Maharashtra’s Registration Department • The Karnataka State and Road Transport Corporation. • City-Wide Agencies • Transforming City Agencies in Bangalore • Reforms in the Surat Municipal Corporation • Making the Hyderabad Water Supply and Sewerage Board more responsive.

13. Restructuring Agency Processes: Key Lessons • Business process re-engineering needs to accompany computerization. • Centralized monitoring systems can empower senior management in relation to front-line staff and junior management. • Inter-agency coordination needed to break down silos. • Restoring Performance Incentives in Agencies. • More Effective Linkages with Civil Society Needed.

14. Decentralization: Cases and Lessons Cases: • Surat After the Plague, 1994-2005. • Decentralizing Teacher Management in MP. Lessons: • Decentralization in Surat freed the municipal commissioner to focus on policy issues and empowered zonal commissioners, on the ground, to deal with a fast-changing situation. • Decentralizing teacher control to PRIs in MP lowered teacher absenteeism and reinforced accountability. • Use of para-teachers made it possible to extend a decentralized model of teacher management in MP that boosted school enrollment in a fiscally-constrained setting.

15. Strengthening Provider Autonomy Case: Rogi Kalyan Samitis in MP. • Hospitals set up as RKS societies with autonomy to charge user fees and deploy them for purchase of equipment and maintenance. • RKS societies representative of local society. • Results: • Productivity of salary expenditures improved • Doctor enthusiasm increased with better equipment • Patient satisfaction ratings increased significantly.

16. Building Political Support for Program Delivery Comparing HD Outcomes in Tamil Nadu and Karnataka. • Both States possess similar human development outcomes in 1981; By 2001, Tamil Nadu had jumped to third place while Karnataka remained in seventh place, despite similar rates of economic growth. • Gap is now narrowing, but the question remains why TN was a superior performer in the 1980’s and 1990’s on the whole. • Key difference is the role of the Tamil Nadu government in fashioning a set of public policies and interventions to boost human development beyond what might have been expected by growth alone.

17. Welfarism and Politics in Tamil Nadu • DMK and AIDMK share similar ideology rooted in the thought of ‘Periyar’ E.V. Ramaswamy. • Food crisis in the late 1960’s led to the end of the Congress hegemony in Tamil Nadu: Both DMK and AIDMK learned early on the importance of social programs for electoral success. • Both parties engage in one-upmanship to extend social programs, including the adoption of a universal PDS system, a midday meal scheme in 1982, effective family planning and nutritional interventions.

18. Political Support Spurred Tamil Nadu’s Civil Service into Action • Programs effectively implemented by Tamil Nadu’s civil service. • Collector in TN a senior officer unlike many states; TN also have no divisional commissioner system to dilute the collectors’ power; and Secretaries possess tradition of autonomy in implementation in the state. • Karnataka lacked an entrenched welfarist ideology to push social programs: Mid-day meal scheme in the state, for example, not launched until 2002; northern Karnataka remains behind the rest of the state.

19. Tamil Nadu’s PDS • PDS in Tamil Nadu rated as best in the country in terms of usage, quality and access. • Strong administrative monitoring; involvement of consumer cooperatives and SHG’s; access to information; extensive network of godowns; electronic weighing, and political support for universal access to cheap rice key reasons. • Low diversion rate given extremely low prices for rice indicate efficiency of system • But annual cost high Rs. 1,500 crore annually.

20. Strengthening Accountability Mechanisms: Cases • Reducing Frequent Transfers in Karnataka. • Report Cards in Bangalore, 1994-2004. • Right to Information: Rajasthan and Delhi. • Strengthening Anti-Corruption Institutions • The Central Vigilance Commission • The Karnataka Lok Ayukta • Public Interest Litigation and the Courts.

21. Strengthening Accountability Mechanisms: Premature Transfers • Karnataka reduced premature transfers through quantitative caps, computerized counseling in education, and public reporting of transfer numbers. • New approaches might involve the creation of statutory civil services boards to restrict transfers, legal minimum tenures, and a stability index to track transfers.

22. Aggregate Transfers, Karnataka, 2000-05

23. Strengthening Accountability Mechanisms: Report Cards Report cards prod agency heads into action, and mobilize public pressure for change.

24. Karnataka’s Lok Ayukta: Focus on Service Delivery • Investigates corruption/maladministration; budget U.S.$1.6 million; five hundred officers; activist judge appointed in 2001 • Investigations: • Drug adulteration • Public hospitals (absenteeism, exploitation) • Transport and registration departments. • Corruption in municipal government • Volume of complaints triple in one year. Wide publicity may be the best way to check corruption when courts don’t work.

25. Lok Ayukta In Action

26. Strengthening Accountability Mechanisms: Other Lessons • Access to information laws work best when appeals processes are simple and pressure from below encourage their use. • The role of the Courts in improving delivery has been positive Need to guard against risk of supplanting administrative initiatives to reform services.

27. Tactics of Reform • Justifying reform by invoking past traditions • Dealing with employees (e.g. accommodating potential spoilers, guaranteeing no job losses upfront, improving working conditions). • Activating constituencies that gain from reform against opponents of the process • Sequencing is critical for Success All reforms were incremental in nature; the big bang approach in the rare cases where it was tried did not deliver results. Vested interests were overcome in many cases.

28. Sustaining Reforms • Popular reforms usually survived political transitions. • Bipartisan consensus helped sustainability. • Grounding reforms in law made them harder to reverse. • Sound revenue models facilitated sustainability.

29. Transplanting Reforms • Not a mechanical process; reforms are often highly context-bound. • Competition between agencies, cities, and states help spread of ideas/innovations. • NGO networks facilitate transmission of knowledge about good practices. • GoI can play an important role in facilitating cross-state/agency interactions; establishing an overarching monitoring system; and structuring incentives for reform.