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Managing Human Resources in a Decentralized …

A central rationale for decentralization is that,bymoving government closer to the people, itbrings public sector activities and decisions in linewith popular preferences. Yet, in practice, the civilservice a critical component of government rarely enters the decision calculus of decentraliza-tion design. The civil service is often recognized asan afterthought rather than seen as essential to suc-cessful decentralization . This is lamentable but notsurprising, as decentralization is quintessentially apolitical process. In East Asia, whether it was thedesire to quell the forces of regional disintegrationin the Philippines and Indonesia, the urgent needto meet the demands of economic transition inChina and Vietnam, or pressure to improve servicedelivery and citizen participation in Cambodia andThailand, the primary motivation for decentraliza-tion has been political notwithstanding variedproximate common failure to address the details ofcivil service management as an integral part of thedecentralization package has significant implica-tions.

A central rationale for decentralization is that, by moving government closer to the people, it brings public sector activities and decisions in line

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Transcription of Managing Human Resources in a Decentralized …

1 A central rationale for decentralization is that,bymoving government closer to the people, itbrings public sector activities and decisions in linewith popular preferences. Yet, in practice, the civilservice a critical component of government rarely enters the decision calculus of decentraliza-tion design. The civil service is often recognized asan afterthought rather than seen as essential to suc-cessful decentralization . This is lamentable but notsurprising, as decentralization is quintessentially apolitical process. In East Asia, whether it was thedesire to quell the forces of regional disintegrationin the Philippines and Indonesia, the urgent needto meet the demands of economic transition inChina and Vietnam, or pressure to improve servicedelivery and citizen participation in Cambodia andThailand, the primary motivation for decentraliza-tion has been political notwithstanding variedproximate common failure to address the details ofcivil service management as an integral part of thedecentralization package has significant implica-tions.

2 Civil servants form a crucial link between thedelivery of financial Resources to the governmentand the delivery of essential public services tothe people (World Bank 2003a). The relation-ship between decentralization and civil service1297 Managing HumanResources in aDecentr alizedContextAmanda E. Greenmanagement is a two-way process. The behavior ofcivil servants has important consequences for gov-ernment performance in a Decentralized , decentralization alters both the incen-tives of and the demands on the civil this behavior is critical to realizing thebenefits of , this chapter argues that civilservice management or more broadly humanresource management should be seen as anessential component in the design of decentraliza-tion rather than a separate, stand-alone discussion marshals evidence from across EastAsia and around the world.

3 The following sectionpresents a framework for exploring the interactionbetween administrative decentralization and civilservice management in terms of both the theo-retical goals of decentralization and their realiza-tion in practice. The third section delves into therealities of administrative decentralization in EastAsia through the experiences of six countries:Cambodia, China, Indonesia, the Philippines,Thailand, and Vietnam. The varied approachesand responses of these countries offer insightsinto the process of Managing civil servants in adecentralized setting. The final section examinesthe central dilemmas that arise in 5/17/05 11:42 AM Page 129130 East Asia Decentralizesadministrative decentralization and draws lessonson how countries in East Asia and beyond canmaximize the benefits and minimize the risks Interplay betweenDecentralization and HumanResource ManagementDecentralization is a spectrum rather than a singlestate, ranging from deconcentration to delegationtodevolution (see box ).

4 As table shows,key features of the civil service vary with thedegree of administrative decentralization . Overall,East Asian countries fall into the intermediate cat-egory, with local managers enjoying some freedomtorecruit and allocate staff subject to centralguidelines on pay levels and total and the Philippines took the biggestleaps along the decentralization continuum inboth law and practice, but central governmentsretained considerable control over civil servicewages at the local level. In Indonesia, recent revi-sions to the Law on Regional Administration haverolled back decentralization in hiring Philippines, the momentum behind imple-menting decentralization policy has slowed con-siderably. China and Vietnam have taken a moreopportunistic approach, experimenting with dif-ferent degrees of local autonomy.

5 However, thecentral government and Communist Party con-tinue to influence how decentralization plays , a legal framework defines an interme-diate form of administrative decentralization , butmost of this framework has yet to materialize inpractice. Finally, Cambodia can best be describedas a deconcentrated system, with a high propor-tion of staff based in the field but working onbehalf of the central along the spectrum of administrativedecentralization depends partly on interplay withthe political and fiscal aspects of example, a local government that has fullauthority over the size of its civil service cannonetheless face restrictions in the use of fundstransferred from the center. Similarly, the strengthof a country s accountability framework is influ-enced by whether political decentralization has cre-ated institutions for locally elected politicians tooversee the activities of local governments.

6 The casestudies illustrate the results of a mismatch in thedimensions of Key Features of Administrative DecentralizationDeconcentration (minimal change) Provider staff working at locallevel are employees of andaccountable to the center,usually through theirrespective ministries; centralemployees compensate forweak local capacity. Accountability remainsdistant: the short route ofaccountability may be weak ifprovider monitoring is weak,and citizens may have torely on a weak long routestretching to politicians at thecenter; a strong compactbetween policymakers andproviders can compensate tosome (intermediate change) Providers could be employeesof central or local government,but the center typically definespay and employment. Local government has someauthority over hiring andlocation of staff, but is lesslikely to have authority overfiring.

7 Both longand short routes ofaccountability are potentiallystronger; greater localknowledge can allow bettermatching of supply with localpreferences and bettermonitoring, strengtheningboth the compactand (substantial change) Providers are employees oflocal government. Local government has fulldiscretion over salary levels,allocation, and numbers ofstaff, as well as the authorityto hire and fire. An overarching civil serviceframework covering localgovernments may stillestablish standards andprocedures for hiring andmanaging staff. Potentially strongest longandshort routes to accountability,but influenced by local socialnorms and vulnerable to localcapacity constraints : Adapted from World Bank 2003h, 5/17/05 11:42 AM Page 130 Managing Human Resources in a Decentralized Context131 What Makes a Decentralized Civil Service Work?

8 1To better understand the opportunities and obsta-cles that a country may encounter on the road toadministrative decentralization , it is first useful toconsider the destination. A functioning system ofdecentralized civil service management as dis-tinct from a centrally directed model has severalkey characteristics: Local governmentfunctions are clearly definedso staff know what is expected of them and man-agers can adapt the local civil service to reflectwhat needs to be done, without inefficient gapsor overlap with other levels of government. Local government can allocate staff across func-tions as requires that civil servicemanagers have autonomy or at least influ-ence in operating the local establishment aswell as deploying staff across different depart-ments and facilities.

9 Local government is able to attract and retainqualified individuals,and to build a team with adiverse set of skills. This requires that localgovernment have something to offer, throughcompetitive pay, career opportunities, prestige,or other incentives. Local government has flexibility in managingfinancial civil servantsrequires Managing their cost, either directlythrough pay levels or indirectly through staffnumbers. Local government can hold staff accountable fortheir requires the capacitytosupervise and monitor civil servants, the abil-ity to reward good performance through payincreases, promotions, and other benefits, andthe authority to punish deficient performancethrough disciplinary measures or may not meet some or all of thesecriteria for numerous reasons.

10 In some cases, thefailure is one of design. For example, as mentioned,comparatively limited independence among localgovernments on fiscal and political matters mayconstrain their administrative other cases, it is by design that the criteria arenot met. First, keeping local civil services underthe umbrella of central direction can ensure somestandardization in working conditions across thecountry. Otherwise, local governments in poorerareas will find it difficult to compete against richerareas, and national coverage of public services maysuffer. Second, central government involvement instaffing may expand civil servants career paths byopening channels between local and centralemployment. Third, the center may wish to retaincontrol over hiring and pay to shield subnationalgovernments from local pressure to overspend onwages and salaries.


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