- Laura Wallace
- Published Date:
- January 1999
Uganda’s overall performance has been remarkable. Indeed, it is one of the African countries that has achieved a reasonably good measure of policy soundness and has been growing quickly for a fairly extended period of time. During the period 1986–96, per capita GDP grew tremendously, by about 40 percent. From 1992 to 1997, the growth rate of per capita GDP has been quite high, slightly over 4 percent, with inflation at a reasonably low level, about 8 percent.
Uganda’s capacity building program is a comprehensive one, having the right focus and all the right objectives: economic policy analysis within the government, legal and judicial reforms, manpower planning, and retaining skilled Ugandans. As Emmanuel Tumusiime Mutebile noted in his paper, the program is informed by the policy framework that has come out of a recent initiative by the African Governors through the Executive Directors in the World Bank. This is the Partnership for Capacity Building in Africa.
In terms of design, there is really nothing on which we can fault Uganda’s program. But there are some operational pitfalls, which I would like to comment on, because we tried some of these initiatives in Ghana. In fact, we pioneered some of these initiatives, such as the program to attract skilled people back to Ghana from abroad through a World Bank program. In other words, I would like to comment on the reality of implementation as opposed to mere statements of intention.
It’s in the Doing
One key area of capacity building in Africa over the past decade and more has been civil service reform. There were many weaknesses in this area in the early World Bank and donor-assisted civil service reform programs. In particular, they mostly started with a presumptive decision to downsize to a given level, often without a real job evaluation. These were the days when downsizing was close to dogma, and it was pursued much more ardently than it is today. Rather than determining what new functions the state should perform in the context of reform, or redirecting the state in the context of liberalization, and then deciding what its size should be, the approach was just to reduce the numbers by 10 or 15 percent.
Policymakers also wanted to provide better incentives in the civil service, especially for higher management. In practice, this meant trying to stretch the ratios between the top and the bottom levels. But given budget constraints and the generally low level of incomes—which prompted unions and civil service associations to push for higher pay—there was often very little room for maneuvering. Thus, good intentions apart, these programs failed to provide any real incentives for the top levels, and very soon after, cynicism and frustration set in, with little being achieved. This was our experience, and I suspect it was Uganda’s as well.
In the area of skills mobilization, Mutebile talked about retention of skilled Ugandans. We tried that in Ghana, too. After all, it makes no sense to talk about building new capacity if you cannot retain the best individuals that you have. We received donor and World Bank funds for this purpose, as did Uganda. These funds included the cost of repatriation plus a lump-sum settlement, after which the repatriated nationals began to receive normal civil service pay.
The program was very useful initially, at least in Ghana, and I suspect in Uganda, too. But the program ran into difficulties for two reasons—lack of funds to sustain the program indefinitely, and moral hazard. Those who stayed in the country often felt a little aggrieved that we were suddenly finding all this money to repatriate people who, in their view, had fled the country when times were rough, for greener pastures. Those who stayed asked why the country should spend $10,000 to resettle each national, when they were languishing.
The program, therefore, created a lot of political and moral problems that were difficult to resolve. In the end, we decided that there were certain skills that were in such desperately short supply that we would live with this moral hazard and just bring a few people in. But operationally, the program creates problems unless it is carried out in the context of a general improvement in salary and living conditions for public servants as a whole.
Another area is decentralization. We often approach the task by decentralizing where we think the localities have the greatest stake in ensuring that expenditures are better used. In Ghana, the constitution actually stipulates that a given percentage of government revenues goes to the districts. But often this decentralization occurs before steps are taken to ensure that the political structures at the local level are well established so that people can express themselves and are empowered enough to take charge of what happens in their assemblies.
Policymakers must also ensure there are sound fiscal systems at the local level before decentralizing. What happened in Ghana was that we had a list of contractors who had been banned from the ministry of finance because we knew them to be rogues. A few months after decentralizing, I noticed that these individuals were not coming to the ministry of finance anymore, and I was pleased, thinking that they had finally left the system. But to my dismay, I discovered that they were doing a thriving business in the district councils—either no one was watching them, because the district assemblies were not functioning properly, or where the assemblies were functioning, they had quickly made friends with the leaders in the assemblies.
So the bottom line is to ensure that the political and fiscal systems at the local levels are strengthened, or you risk simply replicating the malfeasance that was present at the national level at the local level.
Mutebile also talks about the legal structure and the creation of a legal framework for private sector development. There have been a number of initiatives in Uganda, as elsewhere, setting up private enterprise foundations to facilitate a dialogue between the public and private sectors. This is very helpful indeed. The problem, however, is that these initiatives often concentrate only on improving the workings of two offices—the attorney general’s office and the solicitor general’s office—the latter often provides legal opinions for World Bank agreements. The reality is that unless the entire legal machinery is improved, contract enforcement or expedition of the legal process will not take place.
The legal reform program that Uganda has been following is strikingly similar to what other countries have undertaken. I suspect that at the operational and implementation levels, it is bound to have been bedeviled by some of the same difficulties.
It’s in the Design
Why do countries run into so many problems when it comes to implementing capacity building programs? I think at the macro level, the basic problem is one of a singular lack of ownership of these programs. This, in turn, gives rise to a number of other problems.
First, there is undue reliance on foreign consultants—a situation that has improved only marginally in recent years. Foreigners simply do not have sufficient knowledge of what goes on in the country, nor do they have the needed commitment. And frankly, in a large number of cases, at least in my experience, they were not the most competent people.
Second, many of the programs are project driven, particularly those with the World Bank. They come as part of a project. There might be a telecommunications project, a transport project, and a project implementation unit. Suddenly you have these islands of pseudo-excellence but they are islands of people who are highly paid, implementing projects in a general environment where people are poorly paid.
Now, sometimes, this is inevitable. When you have a $300 million project, you have an obligation to ensure that it works. But such large pay differentials between foreigners and nationals must be acknowledged as a short-term phenomenon, and steps taken to ensure that it does not continue after the project is over. Better yet, the project should be undertaken in a general framework, in which the public sector system, as a whole, is improving.
Third, the reforms tend not to reflect local realities. As a result—and I think this is the saddest commentary on capacity building in Africa—over the past 15 years or so, close to $5 billion a year has been spent and there is very little to show for it. I am happy to note that the World Bank itself recently conducted a thorough review of its technical assistance programs, and some efforts are being made to correct the imbalances.
In contrast, I have to say that a lot of countries speak quite favorably of technical assistance programs coming through the IMF and the United Nations Development Program. Indeed, this was one of the findings of a recent external evaluation—which I participated in—of the IMF’s concessional lending facility, the ESAF.1 The technical assistance programs had often been requested by the countries themselves, and the IMF and the United Nations Development Program, often acting in concert, had responded to these requests. The right people were found, they came to do given tasks, and then they left. Many countries found these programs to be much more effective than the general, project-related technical assistance programs that they find themselves saddled with.
Fourth, the long-term capacity building that the country must engage in, basically through its education system, has tended to suffer from what I consider to be a false tension between basic education and tertiary education. It is almost as if outlays for tertiary education are considered to be a waste of funds. This is very troubling indeed. The only problem with public resources for tertiary education is if they are used to provide subsidies, especially for students who can afford it. After all, tertiary education helps create the manpower to meet the country’s professional needs.
Fifth, the multiple technical assistance programs coming from different donors leads to fragmentation and a lack of transparency on outlays. Very often, donors are reluctant to reveal the time spent on consultants, making it difficult to determine the efficiency of the end use of these resources.
What Can be Done?
What can be done to improve the situation? I think that, especially now that the reform effort has been going on for so long, no African country lacks a general acceptance of the need for reform or the types of reforms needed. One good thing about the reform experience, whatever else is wrong with it, is that in no time at all, if you are a government minister or a senior official in a ministry, you realize that you need to step up your capacity just to manage and monitor the implementation of these programs.
So the conviction is there, and I think we must repose some trust in the governments to be able to determine their own capacity buildings needs. The starting point must be a nationally driven, coordinated program of capacity building that acknowledges both the long- and short-term project management implications.
The role of aid must be a partnership with governments to respond to the national needs. I am pleased to report that there is some progress on this front.
- A number of people have been trained—and are still being trained—in economic management and policy analysis through the African Capacity Building Foundation, which the World Bank established a few years ago with a number of bilaterals.
- A number of policy analysis centers have been created, which after a long trial period, have begun to undertake independent analyses. When these centers first started, many people, including myself, were highly critical. We thought that we should have started at the other end—improving the government’s capacity for policy analysis—before we created independent units. But in the end, the centers were created, and they have begun to make a contribution in many countries.
- Africa’s capacity for networking in economic research has improved significantly, through the auspices of the African Economic Research Consortium.
- An umbrella group for a coordinated, nationally driven capacity building effort has been launched in the form of the Partnership for African Capacity Building, as I mentioned earlier. It has done an excellent job of appraising what has gone wrong in prior initiatives, and it has proposed a new $200 million trust fund to pilot nationally driven programs in a number of countries. The hope is that, over time, many of the donors, including the World Bank, will collapse their own capacity building initiatives into this framework. The program has run into some difficulties, however, with questions being asked about the chances of such a program succeeding and whether African countries can be trusted to use this $200 million, when in fact $5 billion is already being spent on capacity building. These are all very interesting questions indeed. But happily, they are being addressed, and I am confident that in the framework of this new initiative, we will begin to see a more viable effort on capacity building.
Finally, on the matter of good governance, which is why we talk about capacity building at all, Mutebile dwells on that at length. I would just like to quickly say that clearly, corruption is not a peculiarly African disease. It comes with the environment and the overall context of deterioration that often precedes these reforms—although I agree it is not a matter of pay alone. The idea is to strengthen the public institutions that are charged with seeing to the efficient and transparent use of public resources, so that these institutions can fight corruption in an ongoing way. I am happy to see that in Uganda this is being done, as indeed, it is in a number of countries.
As for the role of civil society, I think that civil society in most African countries is beginning to wake up to its responsibilities. There are, of course, some problems with nongovernmental organizations such as what exactly are they and to whom are they accountable? But that aside, I think there is a certain revival of interest in civil society organizations and civil society in general, and they, together with elected parliamentarians, are perfectly capable in Africa, as elsewhere, of maintaining the kind of oversight that is required to ensure that public funds are used sensibly. I do believe that this is the best approach, rather than launching witch hunts against this or that public official.
I would like to comment from the donor’s perspective on our role in supporting capacity building in government and public administration, with the objective of integration in mind. After all, the Maastricht Treaty dedicates the European Union to the objective of working for better integration of developing countries into the world economy.
Successful integration into the world economy—through beneficial trade, investment, and an exchange of information—calls for a focused, effective, and efficient government that provides conditions of stability for the private sector, inspires the confidence of investors, and creates the conditions for human development and poverty reduction. In other words, governments must practice good governance, which in the technical sense (as opposed to the political and legal senses) means the efficient and effective fulfilment of governments’ tasks and roles.
There is not much debate about the tasks of government. The core functions include: managing the macroeconomy, including the budget; delivering public services, chiefly through programs of public expenditure; and maintaining civil peace and justice, and a good environment for the private sector by regulating, arbitrating, sanctioning, and ensuring the conditions for the fair and efficient functioning of markets.
But these tasks cannot be done in a vacuum. They require knowledge and policy capability—which means understanding conditions and changing circumstances, identifying and weighing options, taking and applying decisions, publicizing decisions, and convincing skeptics.
One way to look at good governance is to see it as a hierarchy of building blocks that, in ascending order, are the following:
- staff—their capabilities and individual competencies;
- systems—the way staff carry out the tasks of government;
- ethos—the spirit within which government functions are fulfilled, plus controls and incentives to prevent dysfunctions; and
- leadership—a sense of vision, purpose, and objectives.
Of course, capacity building problems arise at each level, so I would like to examine these levels one at a time, focusing on what roles we can expect African governments to fulfill.
Let us start with the bottom rung of this hierarchy—staff. The individual capacity of staff depends on sound recruitment, training, career planning, supportive staff management, manpower budgeting, and remuneration structures.
Where do donors fit in? They can help with training programs, training for trainers, and support for staff colleges. They can also help by introducing innovation, new curricula, and best practice in staff-training methods.
What donors should not do is to create special units of highly paid staff—such as project implementation units, which Kwesi Botchwey just referred to—or provide salary supplements to key personnel. Doing so may have short-run attractions in terms of donor objectives, but it has negative spillover effects on institutional functioning and might even create perverse incentives. The European Commission (EC) fully supports this stance, which has also been endorsed by the World Bank’s Special Program of Assistance for Africa, that groups donor organizations in a common approach in support of adjustment and reforms in low-income and indebted sub-Saharan African countries.
Next Rung—Systems and Institutions
The very effectiveness of staff on the ground, however, depends crucially on the nature and functioning of the institutional environment in which they work—that is, the systems and institutions—which brings us to the next rung on the hierarchy.
If institutions are ineffective or dysfunctional, or if they lack clear missions and purposes—as is often the case—the design and implementation of institutional change becomes a priority task. The much discussed “second generation” of structural adjustment reforms on which many African countries are embarking is, in fact, an agenda of institutional change and development.
Institutional change and development are huge, multifaceted topics. We are talking about the definition of institutional purposes and structures, including those of the government and public sector as a whole. We are talking about systems of financial planning, management, control, and audit. We are talking about systems of staff recruitment, promotion, remuneration, and personnel management. We are talking about systems for diffusing information, internally and externally. We are talking about systems of institutional self-examination and self-improvement, including internal and external staff inspections, performance assessments, and audits. And we are talking about systems for ensuring policy and administrative coherence, including policy reviews and the setting and enforcing of priorities—which are vital if different parts of the government are not to be going off in their own directions.
Of course, institutional development can be a minefield for donors. They are often working with sociopolitical realities that they understand only imperfectly. Formal organigrams and reporting structures are often misleading about the way institutions actually operate and about how decisions are taken. The real systems may be based on unseen loyalties and rewards. Nepotism and sectional interests can capture institutional agendas and vitiate attempts to introduce good managerial practice.
So where do we start? Despite what has been said here today about the problems with external consultants, I believe that management consultancy is a standard way of diagnosing problems in public administration and introducing institutional change. For example, the United Kingdom has actually been through various periods in which institutional change in central and local government has been brought about through the use of outside management consultants. So I do not believe that there is anything particularly demeaning about suggesting that African governments might want to put themselves through the same hoop.
Management by objectives—setting and measuring output and performance measures, and basing rewards on their achievement—is the most common technique for ensuring effectiveness at the individual and institutional levels. Preconditions for the success of management reform in government are a political commitment to the ends and means, and an acceptance of change by a broad section of the staff concerned, which might combine internal commitment and temporary external stimulus.
What can donors do to help? If political commitment is assured, donors can mobilize advisory resources that bring diagnostic skills and adapt international best practices to local needs and circumstances. To date, they have done this most successfully in three key ways:
- technical assistance, which primarily supports the central management and control functions of government—such as ministries of finance, tax authorities, accounts and audit departments, central banks—and is often associated with support for structural adjustment;
- financial support for retrenchment programs; and
- financial and technical support for sectorwide development programs, based on local policy ownership and an open dialogue on implementation.
This is part of a recent effort by donors to avoid some of the pitfalls that Botchwey just referred to that arise with the traditional project support. Through the sectorwide approach, donors have contributed to policy coherence and efficient resource allocation.
I think donors have made the biggest inroads in the less culturally specific aspects of systems and institutional development including: tax and tax administration reform; public expenditure planning and review; public expenditure management, control, and audit; and public sector retrenchment programs.
Success, to date, however, has been more partial in long gestation “second generation” reforms and where local political interests are more offended by reforms. These include:
- Deeper civil service reforms—many countries have not achieved the salary cost savings combined with higher administrative effectiveness that staff redeployment, salary decompression, and better personnel and career management were supposed to bring about.
- Bank restructuring and financial market supervision—financial sector liberalization and banking and supervision reforms have not always produced the sound financial institutions needed to provide the private sector with a wide range of competitively priced financial services.
- Privatization and the contracting out of public services to private operators—in fact, privatization has still only made modest headway in Africa, with a certain lack of transparency giving privatization a bad name in some spots; and governments have yet to build a substantial base for the transparent design and management of contracting out for services.
- Local government reforms—many African countries are pursuing the decentralization of administration, bringing it closer to the people, but institutional capacity and accountability problems at the local level mirror those in central government.
- Parliamentary oversight of government—this involves strengthening the capacity of public accounts committees to investigate and call ministers and officials to account for their stewardship of public resources and administrative effectiveness. In a number of African countries, the institutions of accountability to parliament exist, and efforts are underway to build the capacity of auditors and parliamentary examiners, but this vital democratic function is not always as high as it might be in parliamentary priorities.
- Strengthening law enforcement agencies and the judiciary—the rule of law, whose value is universally acknowledged, not least by the signatories of the Lomé Convention, is still only imperfectly applied for reasons of institutional capacity, resources, and corruption.
How does the EC fit in with this agenda in Africa? The EC has been putting particular emphasis on budgetary and public expenditure processes, institutional reforms in the social and public works sectors, and capacity building in local government. In the future, it will also be paying more attention to legal and regulatory aspects of government that are of greatest concern to the private sector.
The philosophy of the EC is that technical assistance should not be a long-term substitute for local institutional capacity or for requisite institutional reform. On the contrary, it should be a short-term catalyst for change, provided in cases where there is a will to pursue necessary reforms and where these reforms stand a good chance of lasting success.
A prime lesson learned from experience by the EC and other donors is that governments must be proactive, committed, and intelligent customers for technical assistance to work effectively. Capacity building among staff gives poor results if the institutional environment is not supportive. Moreover, institutional reform and capacity building may be subverted in the absence of an ethos of public service and a commitment to performance.
One Rung Higher—Ethos
This brings me to the next rung in the hierarchy of the characteristics of good public administration—ethos. Public service ethos covers probity, a sense of equity, respect for the rule of law and for the views and interests of civil society, and a disinterested dedication to pursue policy objectives with efficiency and effectiveness.
Ingrained habits of secretiveness, arbitrariness, nepotism, indiscipline, and corruption can quickly undermine and render ineffective the best-laid plans for institutional reform—indeed, reducing financial and personnel management procedures to a charade. Moreover, clientelism and patrimonialism—the belief by some in the power structure that the country’s assets belong to them—can undercut reforms. These attitudes arise from a deep-seated sense of social obligation and from behavioral norms, but they frustrate the stated objectives of public institutions and stand in contradiction to the ethos of public service.
What can be done? These problems are essentially matters to be dealt with through local political, incentive, and disciplinary processes. And here I should highlight Uganda’s efforts, as brought out by Emmanuel Tumusiime Mutebile, to introduce a favorable ethos in which public administration can function.
External partners in development actually can do little to change ethos. It is true that structural reforms may remove some opportunities for corruption that are linked to economic controls. But they also introduce more opportunities, linked to privatization and contracting for the private provision of public services. What donors can do is help with the establishment of institutional checks and balances—both within and outside public administration, for example with financial control and audit systems; public procurement procedures and practices; parliamentary oversight of government; and strengthening civil society’s capacity to dialogue with the government, through support for research and policy analysis outside the government.
So the rule of law, democracy, and information—and freedom of the press—to which Lomé Convention signatories commit themselves—are necessary, but not sufficient. There must also be a political will within the government and civil society, and effective systems of enforcement and redress. The EC is keen to support the small but growing number of nongovernmental organizations and research organizations in Africa that observe, analyze, inform, and pressure governments to listen to civil society and live up to their commitments.
But when entrenched customs, practices, and social obligations stand in sharp contradiction with public service ethos, the routine political processes of democracy, the routine legal processes of the rule of law, and the routine administrative process of discipline may be insufficient to bring about ethical change. These circumstances call for committed leadership to instill the ethos of good governance.
Top Rung—Leadership and Ownership
This brings me to the top rung of the hierarchy—leadership and ownership. Leadership that is prepared unreservedly to take ownership of programs of institutional change and strengthening holds the key to successful development cooperation, particularly in cases where there are profound problems of capacity and ethos.
Leadership means an ability and willingness to persuade and convince relevant political constituencies of the need for particular policies. In the absence of leadership, useful reforms may be temporarily imposed by external funding agencies, but there can be no confidence in their sustainability. And unsustainable reforms are not credible to private sector players, which means they are of little help in preparing countries for globalization.
To conclude, a development partnership aimed at furthering good governance and the better stewardship of public resources requires both partners to take the initiative. External partners can move up the hierarchy of good governance components, starting with developing the capacities of individual staff and advancing into the wide domain of institutional reform and institutional capacity building. They have often lost their way, however, in a mist of alternative agendas, in the absence of a clear commitment to public service on the part of their host country counterparts—the question of ethos. Indeed, development cooperation has been most successful where the host country has shown a strong spirit of public service and strong leadership.
The EC is now reflecting hard on its cooperation with the African, Caribbean, and Pacific countries after 2000, when the current Lomé Convention ends. No doubt we will see a more selective pattern of partnership emerging, with a greater concentration of effort and resources on those countries that select themselves by their commitment and their political credibility.
Reinold van Til
We are all aware of the requirements of government, including aspects of efficiency and capacity building. I have five observations.
First, on civil service reform. We know what the origin of civil service reform was, namely, the urgent need to reduce government wage bills in many African countries. In many cases wage bills were successfully lowered relative to GDP or total government expenditure, but as public employment was not reduced, pay scales were compressed and civil service wages declined in real terms. The gap between public and private sector wages has widened, which has complicated further the objective of raising productivity and efficiency in the civil service. Many would argue that the quality of civil service has deteriorated over the years.
Second, wondering why civil service reform did not succeed, one must ask the question of whether it is possible to reform the civil service from within, or is it necessary to lift certain functions outside the core civil service and to entrust them to quasi-autonomous bodies? It is noteworthy that where certain functions have been removed from the established civil service, the efficiency of government has improved—for example, in autonomous revenue authorities, privatization agencies, export promotion agencies, tourism agencies, and investment promotion centers. When these same functions have continued to be performed within the established structure of government ministries, even after reorganizations and reforms, they generally have not been executed well. This raises an important issue, namely to what extent is it desirable to have a proliferation of different remuneration and personnel management systems in government. Is this the direction civil service reform should be heading?
Third, let me say a few words about accountability and transparency. Accountability and transparency begin with good accounts and good accountants. The government’s budget is the key. It is thus remarkable how often official budget outcomes are not reported alongside budget plans, and if they are published, the delays are often so long that these outcomes have become almost irrelevant for policy formulation and budget preparation. Although offices of auditor generals and accountant generals do not lack the manpower, there is apparently little incentive to perform these functions properly and with the necessary urgency. Should government accounts and audits be lifted out of the core ministries and put in a separate agency, with a separate remuneration structure and personnel management system?
Fourth, performance-based remuneration and promotion systems are very much in fashion these days. In the discussion, these two are often not distinguished, which is unfortunate because of their different implications for public administration. It is indeed a very good idea to have a performance-based promotion and demotion system. The administrative requirements are fairly limited; it is not too difficult to distinguish between bad and good performers. The situation, however, is quite different with performance-based remuneration systems. They require much more fine-tuning, can easily overburden the administrative capacities of ministries, and can easily lead to cronyism and favoritism, because they are less visible and transparent.
My final point is technical assistance and capacity-building. I fully agree with Kwesi Botchwey on this issue, namely that the enormous resources that have been spent on technical assistance have not produced commensurate results. Certainly, technical assistance has often produced good results in terms of the product. But why has the demand for technical assistance not diminished? Apparently, the capacity-building aspect of technical assistance has been much less successful. Technical assistance has not resulted in more do-it-yourself; instead, it has been used as a substitute for tasks that should be carried out by local officials. The responsibility for this state of affairs lies with both the providers and the receivers. We often see that technical assistance is too easily accepted as a quick solution to immediate problems, instead of contributing to lasting capacity building. In the end, technical assistance can only be meaningful and successful if it establishes the capacity for self-help, and does not displace government officials.
International Monetary Fund, External Evaluation of the ESAF: Report by a Group of Independent Experts (Washington, 1998).