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Government Employment and Pay: a Global and Regional Perspective

S Schiavo-Campo, G de Tommaso, and A Mukherjee (1997)
68 pages (6.44 MB)

How can the civil service be most successfully reformed? Is it possible to make general presciptions? This study of government pay and employment is based on a survey of about 100 countries. The report outlines the nature of civil service problems in different regions. It also makes suggestions about the necessary conditions for reform. However, it emphasises that while the data are useful to highlight possible problems, recommendations must be based on country-specific analysis.

Worldwide, total government civilian employment averages about 4.7 percent of population. Civilian government employment accounts for about 11 percent of total employment. The research determined that, for the total of countries studied, the central government wage bill absorbs about 5.4 percent of GDP. Local government wages are roughly three quarters of central government wages.

The study suggests that the true objective for each country is to achieve a civil service of the size and skill-mix, with the incentives, professional ethos, and accountability needed to provide public goods, help formulate and enforce the rules, and intervene to remedy market failures. The key measures for reform concern rightsizing, incentives, and accountability. These are all relative notions. The right size of the workforce depends on the roles assigned to government in each particular country. The research made the following findings:

  • The fiscal burden of the wage bill is considerable in countries with a large government. However, it matters not only how much the wage bill is reduced, but how it is reduced.
  • In the past there was an over-emphasis on retrenchment for fiscal reasons. There is a danger causing skills reduction, demoralization and a lower-quality service.
  • Performance bonuses have been only marginally effective in developing countries, even in the private sector. They can cause problems where there are ethnic, clan, or religious conflicts.
  • Without greater accountability, downsizing and better incentives may result in a small and well-paid but no less inefficient or corrupt civil service.
  • In strengthening accountability, there needs to be a sense of for what and to whom. Improvements will most often require greater external openness and systematic feedback from service users.

The research suggests that civil service reform can begin with various diagnostic and fact-finding activities. It outlines six general conditions that have been shown by international experience to be necessary for constructive efforts at reform:

  • Genuine ownership of the reform is needed by the government as a whole if systemic issues are to be addressed.
  • A coherent long-term vision is mandatory. The government must formulate - with appropriate participation by the public and government employees - quantitative targets, specific timetables, explicit criteria, and indicators of performance;
  • Selectivity of intervention is important because it is unrealistic to try and reform the entire system all at once.
  • Sensitivity is necessary to understand the situation of those affected as well as the social constraints.
  • There needs to be a long-term investment of imagination and resources and government willingness to stay the course.
  • Institutional capacity is important although not all institutional capacity needs to be pre-existent.

Source: Schiavo-Campo, S., de Tommaso, G., and Mukherjee, A. 1997, 'Government employment and pay: a global and regional perspective,' prepared partly as background to the World Bank's 1997 World Development Report (The State in a Changing World), World Bank Policy Research Working Paper No. WPS 1771, The World Bank, Washington, D.C.

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