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Why the World Bank Supports Retrenchment

This article explores the reasons why the World Bank supports retrenchment in the public sector, focusing on the imperatives of fiscal soundness, attracting and retaining good staff, and productive investment. It provides insights into the necessary institutional capacities, salary structures, career growth prospects, and the overall reform efforts required for successful retrenchment.

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Why the World Bank Supports Retrenchment

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  1. Why the World Bank Supports Retrenchment Gary J. Reid The World Bank May 4, 2004

  2. Three typical reasons • Fiscal soundness imperative • “Attract and retain good staff” imperative • The Bank’s legal mandate: Productive investment • http://www1.worldbank.org/publicsector/civilservice/agency.htm and http://www1.worldbank.org/publicsector/civilservice/downsizing.htm

  3. Fiscal soundness • To meet the fiscal soundness imperative, retrenchment needs to be accompanied by institutional capacity to control employment and the wage bill on an ongoing basis. • Effective establishment control • Post authorization • Hiring authorization • Effective salary-setting control • Salary structure, including all components of remuneration • Individual remuneration decisions • http://www1.worldbank.org/publicsector/civilservice/establishment.htm

  4. Attract and retain good staff • Enhance competitiveness of public sector salaries (http://www1.worldbank.org/publicsector/civilservice/agency.htm and http://www1.worldbank.org/publicsector/civilservice/downsizing.htm )

  5. Attract and retain good staff • Improve conditions of public service employment (http://www1.worldbank.org/publicsector/civilservice/career.htm ) • Depolitiziced, merit-based personnel management • Fairness in exercise of personnel management discretion • Reasonable career growth prospects • Effective redress mechanisms

  6. Attract and retain good staff • Improve intrinsic rewards of public service employment • Complementary inputs sufficient to enable public servants to be effective and productive (so that a public servant can “make a difference”) • Respected reputation of the civil service or public administration as a body. • http://www1.worldbank.org/publicsector/civilservice/individual.htm

  7. Productive investment • To meet the legal mandate, retrenchment needs to be part of a reform effort that yields a net improvement in productivity, not just of the public sector, but also of the resources released from the public sector. • http://www1.worldbank.org/publicsector/civilservice/downsizing.htm

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