Thursday, December 6, 2018

Each publication of the Pay Research Bureau comes with its dose of recrimination, and for good measure this time, we had a hunger strike to show the extreme discontent in the civil service.

Yet a recent salary survey revealed that the public sector ranks much higher than the private sector in most grades except C-class executives, where salaries in the private sector may easily double those in the public sector. If non-monetary benefits such as security of employment, pension for life, duty free cars and passage benefits are added, the disparities are even greater. Computing total benefits per effective hours worked would make the comparisons rather shocking.The public sector has often been derided for its stifling bureaucracy and chronic efficiency, leading to wasteful and non-productive expenditure at the expense of taxpayers. For the sake of social stability, but perhaps more importantly because it constitutes a sizeable vote bank, overstaffing has been condoned and year after year benefits have increased with no improvement in performance. Performance management systems and innovative working arrangements like flexitime are still being resisted.

As economic conditions worsen, there will be more and more pressure on the public sector to cut costs and increase performance, and our country will have no choice than to emulate those countries which have implemented new methods of management, modelled essentially on the private sector. Under the impulsion of political leaders like Reagan and Thatcher, championing economic liberalism, there emerged a new doctrine called New Public Management (NPM) which quickly spread to all Anglo-Saxon countries. In conjunction with massive privatisation there was an infusion of private sector methods in the public sector, moving away from traditional line budgeting to performance based systems involving objectives, targets and metrics.

Mixed feelings

How successful has been NPM is still highly controversial and many scholars have mixed feelings in its effectiveness in improving the public sector. To start with, reducing administration to performance metrics is highly simplistic and totally ignores the complexity of public governance, which many have categorised as a wicked problem. The Australian Public Service Commission, in a document on public policy, defined a wicked problem as being difficult to clearly define, have many interdependencies and are often multi-causal and unstable, have no clear solution and are socially complex. Furthermore, public sector projects are very long term, overlap several organisations, involve continuously changing behaviour from the various actors, and are prone to policy failure. To make matters worse, there are broken chains of accountability on account of devolution and decentralised structures, as well as pervasive corruption, perhaps the mother of all evils.

Theorists came with a number of arguments showing why public sector methods had its own purpose and rationale. For instance, government red tape is part of the due process that ensures fairness to all citizens as well as pro-activeness in showing compassion and protection of people against potential harms.

NPM, far from bringing remedies, instead increased institutional and policy complexity, and failed to solve social issues. Hence the wave of NPM adoption is being stalled and even reversed. Research in many countries showed that privatisation fell considerably short of expectations. As regards the new methods, as an observer remarked during its heydays in UK, ‘new Labour is looking out of date. What it thinks of as new management theory in fact consists of old private management methods. Cutting edge firms are prioritising relationships over transactions. New Labour is going in the opposite direction.’

Theorists came with a number of arguments showing why public sector methods had its own purpose and rationale. For instance, government red tape is part of the due process that ensures fairness to all citizens as well as pro-activeness in showing compassion and protection of people against potential harms. Fairness is one of the core ethical issues in governments, and as opposed to the private sector which asks the key question ‘is it efficient ?’ the public sector asks: ‘for whom is this efficient and for whom is it inefficient?’ Also, public policy involves making choices between conflicting values such as equality and efficiency, and challenges the likelihood of achieving public interest when partnering with firms whose main concern is profit maximisation.

By trying to operate like the private sector, the public sector may fail to achieve its intended objectives, but more seriously, by opening the doors to fraud and corruption, may leave the public sector worse off than before.

More importantly, NPM was seen to result in perverse performance consequences and to be destructive of a distinctive public service ethic and culture. The measurement of productivity in the public sector may indeed lead to various ‘diseases’ such as tunnel vision, sub-optimisation, perverse learning and measures fixation, and these can lead to organisational paralysis, and can have very harmful effects when organisations or individuals deliberately sabotage the system or resort to gaming strategies. These deliberate and unintended consequences happen particularly in the public sector because of the conflicts that exist between the policy objectives of politicians and the goals of public administration. By trying to operate like the private sector, the public sector may fail to achieve its intended objectives, but more seriously, by opening the doors to fraud and corruption, may leave the public sector worse off than before. This happens because of the greater discretionary powers given to managers, the increased focus on outputs and outcomes and the consequential elimination of control and supervision by the hierarchy, as well as the employment of senior public officers on short term contract. These contractual employees are recruited from the minister’s network of patronage and are more intent to show loyalty and allegiance to their political masters, catering for their self-interests rather than looking after public interests.

Work ethics

There are also fundamental differences between private and public sector values when it comes to processes, outputs and outcomes. These have been categorised by Christopher Hood, one of the gurus of NPM as Sigma, Theta and Lambda. Typical of private sector management, Sigma type values focus primarily on resource efficiency and cost cutting, and result in services with least acceptable durability and quality and with little regard to externalities. What no doubt comes to mind here is the Verdun Terre Rouge disastrous road construction. Theta type values are based on honesty, fairness or mutuality, with process controls that emphasise prevention of inequity, bias and abuse of office. This is public bureaucracy at its best, a time bygone, when civil servants could stand up bravely and not succumb to political pressure. This happened in 1980 when the entire NTC board, inclusive of topmost civil servants, threatened to resign when forced to buy buses other than from Japan. Lambda type values seek to incorporate redundancy, resilience and robustness in the quality of goods and services that the state has to provide. The roads and bridges built centuries ago by public engineers and functioning in defiance of time, is testimony of what we now pompously call management excellence, but was nothing but good administration.

The new model of public administration and public private partnership has impacted on each of the generic principles of the public sector work ethics, which are accountability, bureaucratic behaviour, public interest, selflessness and loyalty. These values, summed up as public sector ethos, are being greatly undermined as well as the democratic and ethical profiles of the public sector. However, the enlightened private sector is gradually awakening to the virtues of social responsibility, of stakeholder engagement, of good governance and business ethics, the once exclusive province of the public sector. It is perhaps time that the new generation public administration reflects on the true meaning of a civil service: a duty to serve, regardless of the reward system in place.

 

Deva Armoogum

Business consultant

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