Catalog

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p. 24 of 34 BACK | NEXT Executive Summary Introduction Good governance defined The elements of good governance The Bank’s concern with governance quality The Bank’s approach to governance issues Promoting the elements of good governance in Bank operations Building governance capacity Public sector Management Public enterprise management and reform Public financial management Civil service reform Participatory development processes Legal frameworks Information openness The Bank’s modalities for enhancing governance in DMCs Resource implications Reporting arrangements

Governance: Sound Development Management : Promoting the elements of good governance in Bank operations : Building governance capacity

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Civil service reform

Civil service reform is perhaps the most elusive transformation facing a government engaging in reforms to strengthen market-friendly processes of development. One major aspect of this problem, namely, public sector wage bills that are unsustainably high (in relation to government revenues or expenditure), is a direct function of the size of the state system, and will benefit from any downsizing that takes place. Other ills that afflict the public service include low morale and productivity, uncertain prospects for career development, and insufficient linkage of merit to promotion. When combined with inadequate salary scales, the cumulative effect can be pervasive corruption among public officials.

A professional and accountable civil service that can administer rules, maintain standards and competition, and respect property rights is critical for private sector confidence in the government’s efforts at economic reform. What is needed, therefore, is to move progressively towards public administration systems that provide clear career paths, adequate compensation and benefits, and incentives that tie advancement in the civil service more closely to staff performance and productivity. While downsizing operations should facilitate such improvements, it will not by itself obviate the requirement for more sophisticated management and control systems.

Reforms of this nature, especially action to tackle salary erosion and wage compression, should also impact favorably on the incidence of corruption. So, too, should market-friendly economic reforms in general, by reducing the discretionary powers of public officials. In addition, however, effective oversight mechanisms can help prevent government agencies from serving their own interests and, thus, reduce corruption. The Bank’s region offers several good examples of such institutionalized oversight (especially in Hong Kong, China; Republic of Korea; and Singapore). By familiarizing policymakers with what has worked elsewhere, the Bank could help DMCs design tailor-made oversight systems to fit their own civil service environments. However, in this—as in other areas—the Bank will proceed on the basis of requests made by the DMCs concerned.

Box 4 outlines a modest initiative taken by the Bank in the field of civil service reform.

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