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Public Management Reform in the OECD countries

Public Management Reform in the OECD countries. Nick Manning Manager Sector PREM - Latin America and Caribbean – Public Sector unit September 10 th , 2008. Reforming Public Management in OECD countries. General Government Expenditure as Percent of GDP in OECD, 1870-2005. Thailand: 19.78.

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Public Management Reform in the OECD countries

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  1. Public Management Reform in the OECD countries Nick Manning Manager Sector PREM - Latin America and Caribbean – Public Sector unit September 10th, 2008

  2. Reforming Public Management in OECD countries General Government Expenditure as Percent of GDP in OECD, 1870-2005 Thailand: 19.78 Source: 1870-1990: (World Bank: 1997), Figures 1 and 1.2; 1995-2005: OECD.Stat - National Accounts, and Clements, Faircloth, and Verhoeven: 2007, Figure 2; IMF, Governemnt Finalcial Statistics: 2008.

  3. Reforming Public Management in OECD countries Confidence in the Civil Service in OECD countries Confidence in the civil service (%) Source: CD-Rom; ICPSR 2790, World Values Surveys and European Values Surveys, 1981-1984, 1990-1993, and 1995-1997, 1st ICPSR version, February, 2000

  4. Reforming Public Management in OECD countries GDP p.c. in US$ (purchasing-power-parity) in 28 OECD Countries, 2005 Source: World Bank data

  5. Reforming Public Management in OECD countries The Deepening Basis for the Legitimacy of the Public Service Progress Tensions 1990s – Performance • Concern to make promises and deliver on them • Measurement of results and the use of measurements for planning or accountability purposes 1970s - Responsiveness to elected officials and political priorities • Frustration with political neutrality • Concern that the public service is an obstacle to political objectives 1950s - Equal access and equal treatment • Impartiality • Concern that employment in the public sector should be representative of society 19th century - Due process and institutional continuity • Driven by the law • Administration as a "separate world" Source: Authors

  6. Responsiveness and Performance A responsive public sector is one that reduces the time lag between political priorities and public policy actions. A performance orientation in the public sector is one that establishes explicit linkages between measured results and planning for future services or accountability for past deliverables. Source: Authors

  7. 5 technical dimensions of reform Public expenditure management and financial accountability Demand-side reforms Human Resources Management 5 technical dimensions of reform Alternative Service Delivery The structure of public sector Source: Authors

  8. Reform Patterns in the OECD 1. Public expenditure and financial accountability reforms Area of Reform Reform Patterns Budget rules • Input-oriented line item budget, incrementalist • Input-oriented line item budget, non-incrementalist • Input-oriented line item budget, plus some performance information • Budget procedures and timing based around performance reporting • Some accruals budgeting Accounting • Cash-based • Double-entry bookkeeping • Accruals accounting with extended cost calculation supported by • performance measurement system Audit • Traditional financial and compliance audit • Compliance focus with elements of performance and evaluation • Institutionalized financial, compliance and performance auditing Source: Joumard et al: 2004; OECD: 2005b, c, 2007b; Pollitt et al: 2004a.

  9. Reform Patterns in the OECD 2. Human resource management reforms Area of Reform Reform Patterns Workforce size and composition • Incentives for workforce reduction • Greater use of lateral entry – particularly for senior staff Compensation and careers • Moves towards position-based system (or even towards use of general • labor law) • Promotion by performance • Decentralization of the employer function • Limited introduction of performance-related pay – associated with • targets or quasi-contracts for agencies • Moves towards defined contribution pension schemes Source: Joumard et al: 2004; OECD: 2005b, c, 2007b; Pollitt et al: 2004a.

  10. Reform Patterns in the OECD Proportion of Fixed-Term and Open-Term Contracts or Lifelong Guaranteed Employment in the Civil Service at the National/Federal Level in 2004/05 in Selected OECD Countries Source: OECD, 2006.

  11. Reform Patterns in the OECD General Government wage bill as % of GDP (1995 and 2004) Source: National Accounts, OECD.

  12. Reform Patterns in the OECD 3. Structure of the public sector reforms Area of Reform Reform Patterns Regulatory management • Growth in independent regulators • Creation of central bodies for regulatory management Inter- governmental decentralization • Some functional and fiscal decentralization to sub-national • governments Organizational diversification • Unbundling – (possible) creation of more "arms-length" agencies • Delegation of managerial authority within central ministries and • departments Source: Joumard et al: 2004; OECD: 2005b, c, 2007b; Pollitt et al: 2004a.

  13. Reform Patterns in the OECD Increasing Numbers of Independent Regulatory Authorities in OECD Countries Source: (Malyshev: 2006, p.291)

  14. Reform Patterns in the OECD Revenues Balanced decentralization Decentralized expenditures Centralization Expenditures Evolution of revenue and expenditure decentralization in OECD countries, 1995-2003 (% age change) Source: National Accounts, in (Blöchliger et al: 2006)

  15. Reform Patterns in the OECD 4. Alternative service delivery Area of Reform Reform Patterns Outsourcing • Increased out-sourcing Public Private Partnerships • Greater use of "public private partnerships" Source: Joumard et al: 2004; OECD: 2005b, c, 2007b; Pollitt et al: 2004a.

  16. Reform Patterns in the OECD 5. Demand side reforms Area of Reform Reform Patterns Market-type mechanisms • Market-based approaches to delivering public services (including the • introduction of user charges and some use of vouchers) • Market-based approaches to delivering internal government services • Market-based approaches to setting regulatory standards or prices Participation • Diverse pilot activities of increasing user participation in management • and planning. Open government • Provision of information about services and entitlements through • charters • Freedom of Information legislation • Extension of offices of ombudsman E-government • Provision of information about services and entitlements through • e-government • E-government infrastructure and legal framework Source: Joumard et al: 2004; OECD: 2005b, c, 2007b; Pollitt et al: 2004a.

  17. Conclusion: some achievement and some risks Achievements • Productivity and quality improvements the public sectors of OECD countries in the • last three decades. These improvements are due: • measure to the quantum leap in human capacity within the public sector; • ICT investments; • managerial reforms. • The contribution of performance-based approaches has undoubtedly been significant. Risks and Unintended consequences • Reforms may have been more costly than anticipated - and they may also have had • unintended consequences. • Unintended consequences: • The erosion of value in the public service; • Managing the political-administrative boundary; • Emerging risks (Could there be too many reforms?); • Performance approaches bring with them a significant risk of "gaming“. Source: Authors

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