PAR and Institutional reform processes in periods of transition Case study Afghanistan

1. Seminar on Capacity Development, Bratislava PAR and Institutional reform processes in periods of transition Case study Afghanistan Stephan Massing & Abdul Bari, UNDP Afghanistan

2. Capacity in the Afghan public sector Major systemic problems: • Fragmented government structure with overlapping functions • Outdated, cumbersome work processes & procedures • Highly centralized state & limited presence at subnational level • Inadequate pay and grading structure -> “twin civil service” • Absence of merit-based recruitment; patronage & nepotism • Aging civil service & unbalanced gender relations Human resource problems: • Ineffective Human Resources Planning • Unskilled & untrained civil service; low capacity in policy development, project implementation, service delivery • Lack of work ethic, morale, motivation and integrity

3. The ARTF and its role in systemic & institutional capacity development • ARTF: World Bank administered multi-donor trust fund; two funding mechanisms: “recurrent” & “investment window” • Set up of ARTF has not been linked to the development of the PAR programme -> minor role for institutional reform process • Projects funded under investment window have no clear focus; CD initiatives have been designed and implemented at project level -> limited role for programmatic CD But, critical role in: • Coordinating & channelling donor funding to recurrent costs • Ensuring functioning of the administration & providing resources needed to deliver basic services -> stability • Strengthening GoA’s public finance management system

4. The Public Administration Reform Programme and the IARCSC PAR comprises six components: • civil service legal framework • personnel management • institutional streamlining & development • policy management & machinery of government • administrative efficiency • physical infrastructure improvement IARCSC structure: • CS Management Department: HRD&M, legal & regulatory framework, determination of a new salary structure • Appointments & Appeals Board: merit-based recruitment • Administrative Reform Secretariat: coordination of PAR

5. The Public Administration Reform Programme and the IARCSC Constraints for implementation of PAR: • PAR programme overambitious and too centralised given low capacity of IARCSC; some components outside IARCSC • No strategic plan for IARCSC -> No sequencing, prioritization of PAR programme • No structured approach to strengthening IARCSC capacity prior to implementing the PAR • Lack of oversight by Cabinet & poor communication and briefings -> no political & public support for PAR & IARCSC • Slow, insufficient, uncoordinated & overlapping donor support

6. Institutional & Organisational CD: Priority Reform & Restructuring Priority Reform & Restructuring (PRR): • Main element of PAR for admin reforms and restructuring of ministries or departments • Allows staff performing critical functions to be placed on an elevated pay scale in exchange for reform and restructuring • Conceived as tool for civil service reform but also as pragmatic measure to attract & retain capacity in government • PRR salary scales as an interim solution to existing compressed pay scale and unconstrained wage increases • Recruitment for PRR position on merit

7. Institutional & Organisational CD: Priority Reform & Restructuring Failures & Lessons Learnt from PRR: • PRR shifted from narrow & strategic approach (key functions) to comprehensive reform programme (whole government) • Expansion resulted in loss of quality of the process & concerns about fiscal sustainability & ignored lack of capacity in ministries to introduce reforms & in IARCSC to support PRR • PRR primarily seen as means of increasing salaries rather than part of institutional reform process • Little or no formal restructuring has taken place after PRR approval due to inadequate support at ministry level • Significant delays in appointment process due to lack of capacity in IARCSC and ministries • Reluctance of ministries to deal with surplus staff in the absence of a policy on retrenchment

8. Short-term capacity injection and its contribution to institutional CD • Due to limited capacity in the civil service, great need to attract short-term capacity from outside the civil service • Afghan Expatriate Prog. (AEP) & Lateral Entry Prog. (LEP) are recruiting Afghan expertise not available in the public sector Preliminary findings & lessons learnt: • AEP & LEP contribute to institutional CD in so far as they regulate salaries and incentives by a common set of rules • AEP advisors have acted as catalysts for change & had significant impact on the reform agenda of their agencies • Concerns about limited impact of “expensive” AEP/LEP advisors in dysfunctional ministries (chicken & egg problem) • Concerns about insufficient skills transfer & sustainability of CD • High salaries for AEP advisors has resulted in political resistance

9. Short-term capacity injection and its contribution to institutional CD • Due to low existing capacity & limited supply of expertise, GoA has heavily relied on international technical assistance • Some TA channelled through a facility (TAFSU) but its performance considered poor (weak capacity of TAFSU) • TA in general has come under growing criticism: • TA under pressure to deliver specific outputs at the expense of developing government capacity (capacity substitution) • TA hired for technical skills not for ability to transfer skills • TOR often poorly formulated and performance not tracked • Bad management of TA by the GoA: lack of counterparts, oversight and coordination • Benefit of TA for institutional CD mixed (trade off between short- and long term CD)

10. Capacity injection through staffing support: PMUs and institutional CD • PMU as pragmatic solution as immediate development & reconstruction activities had more urgent priority than CD • As external units PMU’s operate outside the structure of gov. and do not strengthen institutional capacity of ministries • PMU’s result in weak ownership, can generate resentment among staff & can blur lines of accountability • After project completion dissolved PMU’s usually leave little capacity & institutional memory behind

11. Capacity injection through staffing support: PMUs and institutional CD Recommendations & lessons learnt • Build programme mgmt. functions rather than PMU’s • Elaborate phase-out plans and exit strategies for PMU’s and link them with a CD plan (permanent transfer of skills) • Make use of existing incentive framework to fill staff gaps instead of using project staff to fill senior line positions • Focus project support on programme mgmt. rather than project mgmt. so that staff are engaged in a range of projects • Train managers & staff to operate in a matrix mgmt. structure