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Five lessons for an effective public sector

ADDIS ABABA, Ethiopia, Dec 12 – An efficient and accountable public sector is essential for effective delivery of services to the needy, according to a group of representatives and policy-makers from eight African nations.

Delegates from Ethiopia, the Democratic Republic of Congo (DRC), Madagascar, Nigeria, Sierra Leone, Sudan, Rwanda, and Tanzania are meeting in Addis Ababa to share lessons on how to improve the effectiveness of the public sector and to learn from each others’ experiences. The conference, entitled “Lessons from a Decade of Public Sector Reform”, will be closed by the Prime Minister of Ethiopia, Meles Zenawi, and is co-hosted by the Norwegian Agency for Development Cooperation, the World Bank, and the Bank’s Independent Evaluation Group (IEG).

The public sector is the largest spender and employer in virtually every developing country and sets the policy environment for the rest of the economy. About one-sixth of World Bank projects in recent years have supported public sector reform, because the quality of the public sector— accountability, effectiveness and efficiency in service delivery, and transparency — is essential for a country’s development.

“Our evaluative evidence shows that World Bank support for public sector reform in developing countries has helped to improve performance in key areas, such as public financial management, which is the most common theme in Bank support in recent years, and tax administration. But in other areas the support was less effective,“ said Ali Khadr, IEG’s Senior Manager for Country Evaluation and Regional Relations, “To realize the benefits in terms of improved delivery of public services and accountability, public sector reforms need to make progress across the board, including in particularly difficult areas such as the civil service and the control of corruption.”

The two-day conference provided a unique forum for African policy makers to engage representatives from the World Bank and other development partners on the successes and failures of donor-supported public sector reforms in Africa. The discussion enables participants to learn from each other on what has worked well and what hasn’t when designing and implementing public sector reforms.

According to IEG, among low-income countries that receive interest-free credits and grants from the World Bank’s International Development Association (IDA), 69 percent showed an improvement in the functioning of the public sector, albeit with considerable room for further progress.

"Capacity building projects, for example, have had a very mixed record. The key is ownership and leadership by government. It is rather fitting that this event is taking place in Ethiopia, because this is one of the countries where the government has shown strong commitment to capacity building," said Ken Ohashi, World Bank Country Director for Ethiopia & Sudan.

Participants discussed how to apply five important lessons that were identified by a recent IEG evaluation, “Public Sector Reform — What Works and Why”.

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Be realistic about what is politically and institutionally feasible. In some countries, such as Ghana, the Bank supported preparatory work on civil service and anticorruption when substantive reform was not yet politically feasible, but later these proved useful when a reform-minded government came to power. “Donors also have to acknowledge that reforms, particularly those in the area of civil service, take time to implement and to show tangible results”, said Anand Rajaram, Sector Manager for Public Sector Reform & Capacity in the World Bank’s Vice-Presidency for Africa.

“Tanzania provides a good example of a reform process where the government has taken the lead in terms of pace and direction and has invested in capacity building. The responsibility of the development partners is to provide advice and support as requested.”

Recognize that enhancing technology is not enough. The most crucial and difficult challenge is to change behaviour, and technology can support but not substitute for this. In Ghana, for instance, implementation of the integrated financial management system stalled until attention turned to changing behavioral patterns by introducing stronger incentives, such as rewards for good performance. And in Tanzania citizens were given the opportunity to provide feedback on the quality of public services they received, which in turn helped greatly to improve the services, according to George Yambesi, Permanent Secretary at the Office of the President of Tanzania.

Deal with the basics first.  For example, taxpayers should have unique identification numbers before installing a complex collection system, and the government should be able to execute a one-year budget well before launching sophisticated, multi-year budgeting. In Sierra Leone, such sequencing worked relatively well. In some cases, however, countries that received support through policy-based lending aimed for reforms on too many fronts at once and exceeded their technical or political capacity. Initial projects in Ghana had difficulty because they went straight to complex measures, such as installing accrual accounting, when personnel capacity was missing and the government was not yet successfully administering cash accounting.

Do not expect measures that address corruption head-on, such as anticorruption laws and commissions, to substitute for more fundamental institutional change.  Direct measures often lack the necessary support from political elites and the judicial system. “Reducing corruption is a long-term effort, and countries undertaking reforms should emphasise two things: building country systems that reduce the opportunities for corruption and making information public to build popular demand for more efficient, less corrupt delivery of public services,” said Ali Khadr.

Generate demand for public sector reform at different levels. Public sector reform in decentralised governments works better if there is demand for, and ownership of, reform at the local government level.  In some cases, such as Tanzania, fiscal and other incentives have helped to create demand for improving local governance and for strengthening institutional capacity. In other countries, budget support to the center has not always been accompanied by effective reform at the local level.


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