Abstract

Civil service reforms have been only modestly successful in terms of meeting either macrofiscal or structural objectives. What has been especially problematic is the simultaneous achievement of both macrofiscal and structural objectives, since there may be tradeoffs between the two. For example, an overall reduction in real public sector wages may help to trim the wage bill but exacerbate difficulties in retaining skilled staff. In a similar way, there may be tradeoffs between different structural components of a civil service reform. For instance, introducing a higher pay scale in a ministry or department and protecting it from political interference may attract skilled staff from other public agencies. However, this will leave those other public agencies with a lower skill base, and thus lower chances of effective service delivery.

Civil service reforms have been only modestly successful in terms of meeting either macrofiscal or structural objectives. What has been especially problematic is the simultaneous achievement of both macrofiscal and structural objectives, since there may be tradeoffs between the two. For example, an overall reduction in real public sector wages may help to trim the wage bill but exacerbate difficulties in retaining skilled staff. In a similar way, there may be tradeoffs between different structural components of a civil service reform. For instance, introducing a higher pay scale in a ministry or department and protecting it from political interference may attract skilled staff from other public agencies. However, this will leave those other public agencies with a lower skill base, and thus lower chances of effective service delivery.

Whether for these reasons or others, capping, or reducing the wage bill has often proved to be unsustainable in the medium term. However, the picture is difficult to read, because central government employment has been falling globally in both reforming and nonreforming countries alike. 16 Thus, the contribution of individual Bank- or Fund-supported programs and the effectiveness of reforms, including design of social safety nets, must be distinguished from this underlying trend.

On the structural side, it is striking that, despite the intensity of reform programs in Africa, real wages have continued to show a significant decline. Reviews of effectiveness may paint a less than rosy picture of individual interventions, but they have generated some insights that seem to be influencing current reforms. The importance of understanding the pattern of total compensation, including complex interactions between allowances, has become clearer. Similarly, the greater attention paid to corruption has shown that there are few simplistic linkages with levels of pay. More generally, there is ample evidence that large-scale introduction of fixed-term contracts and performance-based pay is unlikely to be feasible or productive.

Why Has Success Been Limited?

Transformation of the civil service is one of the most politically sensitive and difficult government reforms. As a result, it is not surprising that the track record of civil service reform is modest for both institutions. Still, there are several additional reasons why progress has been limited:

  • The reform objectives have at times been unfocused, and occasionally contradictory. Figure 1 (on page 4) outlines the typical objectives of civil service reform programs. Bank- and Fund-supported programs often include multiple objectives in civil service reform, which have occasionally been contradictory, and often not made explicit. In addition, there has been little consensus on what constitutes an acceptable approach to addressing each objective.

  • Reform programs have paid too little attention to political or other institutional constraints. Stakeholders have different perceptions about the benefits of civil service reforms. Quite frequently these reforms are obstructed by influential vested interests that do not see any immediate advantage from the reforms. When governments provide employment as a social safety net to segments of the population, reducing public sector employment deprives them of a key policy instrument. Indeed, reducing political patronage in public sector employment may undermine the stability of the very government that must support reform. Governments also can have internally conflicting objectives, with the ministry of finance focused on fiscal savings but other ministries more concerned with salary increases. The public is often sympathetic to public servants and supportive of their demands for pay raises; but the public may accept that raises are only possible if total employment is reduced.

  • Data are rarely of sufficient quality or clarity to inform policy choices. Weak data have prevented governments from modeling alternative scenarios or choosing between different courses of action. Along with basic aggregate wage and employment data, key data that are often missing include a sectoral breakdown of wages and employment, wage scales in different sectors, and comparisons of wage levels with those in the private sector.