Q2 With Nick Manning

Mr Nick ManningNick Manning was Head of the Governance & Public Sector Management (GPSM) group at the World Bank until December 2013.  He was previously an Advisor in the GPSM anchor and one of the leaders of the World Bank’s Public Sector Performance Global Expert Team.
 
His previous leadership and advisory positions included, Manager for Public Sector and Governance in the World Bank for the Latin American and Caribbean Region; Head of the Public Sector Management and Performance Division at the OECD; Lead Public Sector Management Specialist for South Asia in the World Bank; Adviser on public management to the Commonwealth Secretariat and Senior Technical Adviser to UNDP in Lebanon.
 
Nick is also member of the editorial board of the Public Management Review and Visiting Professor at the Herbert Simon Institute for Public Policy, Administration and Management and honorary Senior Research Fellow in the Institute for Development Policy and Management at the University of Manchester. He has an extensive range of governance publications covering developing and developed countries, linking public administration with public budgeting and policy management.


Question 1: A high-calibre public service is central to the provision of economic growth, poverty reduction and the protection of civil rights. At a time of mounting pressure on governments to engage in public service transformation, what areas of reform might best address improved professionalism and capacity of government in developing countries while avoiding undue burden on the public purse ?

It is tempting to answer this question purely in terms of the recruitment and performance management arrangements for senior staff. However, the talents of good staff are wasted in a weak institutional environment – so the challenge is to strengthen the human resource within government while identifying the areas in which the management arrangements might be undermining their efforts.
 
As CAPAM members are very aware, senior government posts are a tough semi-political territory which requires distinct skills and competencies often not developed within traditional departmental careers. Distinctive recruitment efforts are often needed at senior levels to attract and retain the right staff together with distinctive competency management to build the right skills. Promotion through seniority is unlikely to be sufficient. One feature to be examined is the establishment of clear merit or competency bars to ensure that only the right people can enter these strategic positions. Half of EU member states have such competency profiles for senior civil servants. In Australia, the Senior Executive Leadership Capability Framework offers a great model for competency profiles, with its five elements including strategic thinking, results focus, personal drive and integrity, productive working relationships and communication.
 
The independence of the recruitment process through the use of panels, selection committees, and supervising bodies is also worth a fresh look. Outside of the Commonwealth, in Belgium, candidates for senior positions are first screened by an independent head hunting firm using tests and interviews. In Chile, senior staff candidates are selected through a process that combines the use of a head hunting firm for local executives and a private sector HR firm that screens online applications.
 
Such senior candidates can be supported by a Senior Executive Service (SES) or equivalent cadre with a whole of government perspective gained through experience across a range of government functions and working with diverse politicians.
 
The creators of the SES in the United States specifically envisioned it as a cadre of high- level managers in the government who could provide leadership for agencies across administrations and readily move into different assignments as needed.  In the US and the UK, it seems that one implicit purpose of the creation of the SES was to attract and retain a more risk-tolerant group of staff – not least through the distinctive emphasis on performance-related pay and performance contracts for the SES in those settings.
 
But I should emphasize again that the efforts of senior staff amount to little if there are weaknesses in the basic plumbing of the public sector. In assessing whether the public sector is orientated towards performance, it is worth thinking through the following checklist:
  1. At the time of planning and approving the annual budget and work program, are you confident that:
    1. There is a good budget classification - allowing funds available to be allocated on the basis of administrative units, economic purpose and functions or programs?
    2. The multi-year orientation is not just reflected in words but is also embodied in day to day recognition that deferring problems to the next year(or the next administration or management team) is unsustainable – avoiding the risk of ritualism in which the medium term perspective is provided on paper but is not reflected in the mindset of senior staff?
    3. A process for preparing the budget that is seen to be reasonable and during which the views of the spending departments are recognized? and
    4. The wage bill does not crowd out investment or other important recurrent expenditures?
  2. In implementing the work program or the annual budget, is it clear that there is:
    1. Confidence on the part of the spending units that they will get the funds that they were budgeted?
    2. Good recording and management of cash balances, debt and guarantees to prevent unwelcome end of year surprises?
    3. Effective payroll controls that minimize the usual sins of ghosts and double-dipping, and that salary payments are made on time? and
    4. Competition, value for money and controls in procurement?
  3. Is the internal audit reasonably comprehensive and is the scope and follow-up of external audit adequate at least?
  4. In practice, do alarm bells ring early if:
    1. Revenues and expenditures are not as expected in the budget or spending plan?
    2. Expenditure payment arrears grow?
    3. Public access to key financial/fiscal information is limited or diminishing? or
    4. Semi-autonomous entities are providing expenditure or governance risks? 
Staff and managers do not work in a vacuum.  Improving professionalism and capacity while avoiding undue burden on the public purse requires that they work in an environment where their efforts can make a difference.

Question 2: In the area of public service reform in developing countries, you have been known to say that ‘best practice’ suggested or even imposed by external entities (such as donor organisations) or based on well-regarded research should be replaced with ‘best fit’ which is underscored by more practical, context-based solutions. How can recipient countries better prepare to diagnose problems and implement relevant solutions? What can be done to transition public service practitioners to this way of thinking? To transition donor organizations to this way of thinking?

This is really a question about how we do “reform”. I am certainly an advocate of reforming reform in order to ensure that the many millions that are spent on public sector reform achieve more. The reputation of public sector reform in developing countries is not great. ‘Fewer than 40% of the eighty countries receiving World Bank support for public sector reform between 2007 and 2009 registered improved CPIA [Country Policy and Institutional Assessment] governance scores in that period. A quarter of these countries actually saw such scores decline, whereas more than a third stayed the same’ (Andrews, M. (2013). The Limitations of Institutional Reform in Development. Cambridge University Press, New York, p13). Although recent work has suggested that this track record is better if country context is taken into account (Blum, J. R. (2014). What Factors Predict How Public Sector Projects Perform? A Review of the World Bank’s Public Sector Management Portfolio. World Bank, Washington DC).

The reputation of reforms for achieving public sector improvements are not great in OECD countries either. A recent large scale literature review of NPM-style public management reforms across the EU concluded that it has been a very hit-and- miss process with fewer than 9% of the 519 studies analysed showing plausible information about changes in outcomes resulting from reforms. Only about a quarter had such information on changes in outputs. In this minority of studies where there was information relating to changes attributed to reforms, only around half the findings indicated improvements. (Pollitt, C. and S. Dan (2011), The Impacts of  the New Public Management in Europe: A Meta-Analysis (COCOPS World Package 1 - Deliverable 1), Brussels, European Commission). In the US a detailed analysis of 141 reforms to the federal government between 1945 and 1995 found that few achieved their goals (Light, (1997), The Tides of Reform: Making Government Work 1945- 1995, New Haven, Yale University Press).

What is going on here? What is wrong with our approach to reform? There are three likely suspects.
 
First, it seems probable that reformers are not doing their homework about what is broken and why? All too often reforms are packaged as “best practice” with little or no evidence that they have a positive track record. The appropriate place to start is with rigorous diagnostics and a strong measure of agnosticism about what works. Good diagnostics focus on solving a performance problem not on imposing a new and untested system; they engage stakeholders in the problem-solving process and recognize that very often there are vested interests in maintaining performance problems – staff groups, managers, politicians, others, can have stakes in the current situation which are more to do with managing their careers and managing their business contacts than with results for tax-payers. Finding out whose interests the dysfunction serves is an important part of diagnosis if proposed reforms are to be implemented as intended.
 
Second, we have historically approached public sector reform as if we were building a new road or a harbour. We have scoped out the inputs needed, designed the new management arrangements and the Information Technology that will be necessary to support them, set it all out in Gantt Charts and log frames and then pressed the start button and watched from the sidelines. In fact, of course, often the real problems emerge during the first attempt at reform. Experimentation and learning-by-doing are increasingly seen to be key to success and the traditional distinction between “reform design” and “reform implementation” in can be a constraint.
 
Finally, we seem to have an allergy to any serious use of data in thinking about reform. We rarely exhaust the research literature or consult with others who have attempted similar things in similar places. Practitioners’ experiences are an invaluable source of knowledge for reform design – many senior administrators and advisors can sense that a reform is implausibly ambitious or excessively modest – but we need to dig deep into the data and not simply rely on the views of expert consultants.