Workshop on State Management Role
and Functions
Workshop IPSARD 2007-09-08
Introductional Remarks and Questions for Discussion
Arne Svensson
Part I: State Management Role and
Functions
Workshop discussion I

What would be the future roles?
Part II: State Management Reform
Decentralisation of State Management
Functions: How to make it work

Different types of decentralisation

Fundamental reasons for and benefits deriving
from organizing government structures in a decentralized
fashion

Constraints

How to overcome the constraints

Conclusions
Different types of decentralisation

Deconcentration implies a shifting of functions and
resources, including personnel, from the centre to
other locations.

Delegation is the transfer of functions and duties to
semi-autonomous bodies or public enterprises.

Devolution implies transfer of power, resources and
administrative responsibility from central government
to sub-national authorities.
Change of Roles and Functions
Decentralization

Local Government

Local Governance
Fundamental reasons for and benefits deriving
from organizing government structures in a
decentralized fashion
(1) Transaction costs are assumed to be lower in a
decentralised system
(2) Strengthening of social capital by mobilisation of
communities
(3) The fact that providers of services pay more
attention to local circumstances and needs when the
local community become direct clients as well as
controllers of the service.
Fundamental reasons for and benefits deriving
from organizing government structures in a
decentralized fashion (con´d)
(4) It serves to create additional civic space. By generating
more centres of power, there are inevitably more venues
in which civil society organizations - interest groups,
business associations, labour unions, the media,
etc. - can develop and find sustenance.
Fundamental reasons for and benefits deriving
from organizing government structures in a
decentralized fashion (con´d)
(5) It provides more options for individual citizens seeking a
positive response from government.
(6) It creates numerous training grounds for the development
of democratic skills and practices. Local government
provides not only a stepping stone to higher office but
indeed serves as an initial training experience for many
people in the processes of negotiation, compromise and
the like that are necessary elements in the process of
democratic governance.
Fundamental reasons for and benefits deriving
from organizing government structures in a
decentralized fashion (con´d)
(7) It more readily provides for diversity in response to popular
demands. Obviously, in the case of many countries, different
regions have different kinds of resources, different kinds of
needs and are the home to different ethnic, regional or tribal
groupings. A decentralized governance system provides at
the same time opportunities for a certain measure of
uniformity across a country but also opportunities for making
required local adjustments in order to be more responsive to
the needs and interests of the local population.
(8) It often provides the citizenry with a greater sense of political
efficacy. In general, people tend to respond more positively
to government that is nearer to them and more tangible.
Fundamental reasons for and benefits deriving
from organizing government structures in a
decentralized fashion (con´d)
(9) It provides the opportunity for local economic initiatives.
Hence, it is an effective means to poverty reduction. Highly
centralized governance systems tend to concentrate both
political and economic power in the capitol city of the nation.
When power is highly centralized, communities some
distance from the capitol city often have great difficulty in
creating the environment that can facilitate community and
economic development. They typically will lack revenue to
invest in the kind of infrastructure necessary to make it
feasible for private economic development to take place.
Decentralized resources and authority serves to provide
much greater opportunities for meaningful and responsive
economic development.
Constraints
 Decentralisation is in itself a difficult and an
expensive process.
 The weak implementation capacities of
administrations means good intentions are not
fulfilled.
 Lack of political will
 A compromised or corrupt centre has not supported
genuine devolution
 Capacity deficits
Constraints (con’d)

An inability to focus on empowerment and real participation
in the planning and budgeting process

Inadequate management systems

A mismatch between the vertical plane of decentralization
and the horizontal plane

The absence or ill working of accountability and transparency
from the centre to the periphery and vice versa

The conflict between unity and fragmentation

The political and institutional inheritance of the country from
the colonial period
How to overcome the constraints
(1)
Recognize the Complexity of the Task
(2)
Citizen Empowerment Underlies Effective
Governance
(3)
Build Sustainable Partnerships
(4)
Understand the Fragility of the Reform Process
(5)
Strengthen Management Capacity and Management
Systems
(6)
Recognize the Centrality of an Adequate and
Dependable Revenue Base
How to overcome the constraints (con´d)
(7)
Build Coalitions of Support by Drawing Upon the
Strength of Civil Society
(8)
Strengthen the Partnership between Local and
Central Governments
(9)
Develop Effective Public-Private Partnerships
(10) Need Based Planning and Budgeting are at the
Heart of Responsive Government
(11) Accountability and Transparency are Critical to
Building Citizen Confidence
(12) Recognize the Importance of a Long Term
Commitment
………………Conclusion………………..
It is of critical importance that national and local officials, as
well as civil society representatives, work together. In that
regard, it is especially necessary that those at both the
local level and the national level recognize that the
strengthening of one or another level of government does
not represent a “zero sum game” in the sense that, if one
level of government is enhanced, another will inevitably
become weaker. Indeed, much contemporary experience,
particularly in those countries where governmental
institutions are highly developed, suggests quite the
opposite. When one level of government becomes
institutionally stronger and more competent, pressure
builds for the other existing levels of government to follow
suit and likewise enhance their capacity.
…….Which implies changing role of leadership

A need for strong and sustainable leadership in
implementing performance management

Leadership for changing the organisational culture
(”from rules to results”)

Leadership in changing other management systems

How are leaders changing their own leadership style?
…………and more Dialogue ………….
Dialogue on goals
Politicians
Visions
Politicians
Resources
Outcomes
Arena for dialogue
Performance incl
Quality standards
Officials
…….and supporting administrative and
managerial systems

Regulations (character of legislation and complementary
regulations)

Management policy (contractual arrangements etc)

Staff remuneration policy

Supervisory authorities (control, analyses)

Auditing, incl. value for money auditing
….and quality is not only setting
standards………CQM (Commitment
Quality management)
Workshop discussion 2


If you compare the process so far in MARD and
Vietnam with the general experience as stated in the
Introductional remarks what lessons can be learned?
What would be the optimal division of responsibilities
between central, provincial and local level?
Part III The Reform Process
The Modernisation Agenda – the Swedish Example (1)
Topics of the Swedish Modernisation Agenda

1976 – 1982
- streamlining bureaucracies
- support of private care and private education
- end of public sector employment privileges
- introducing competition in selected areas

1982 – 1989
- “free municipalities” experiments
- public sector career model abolished decentralised and
flexible personnel policy
- management by results
- budget process reform
- deregulation of telecommunications and financial
markets
The Modernisation Agenda (2)
1989 – 1994
- deregulation of public transport, aviation, public
broadcasting
- privatisation of municipal services allowed
- decentralisation of education and elderly care to
municipalities
- client-provider split introduced in some local
governments
- experiments with service vouchers in day-care and
schools
- creation of public enterprises as stock companies
 1994 - tax increase and budget consolidation
 - harmonisation and alignment to European Union
regulations
 - de-ideologisation of public sector modernisation
instruments

The Modernisation Agenda (3)

2006 –
- focus on growth and employment
- tax decrease
- increased quality and freedom to choose
What are the key management issues in service
delivery at the local levels?
• Resources: human capacities in government,
private sector and civil society
• Resources: financial capacities in all levels of
government, private sector and civil society
• Resources: information for planning, decisionmaking, implementation and evaluation & IT
• Networking and partnerships vertically and
horizontally
• Achieving and improving results / performance
Strategy of Regulatory Reform

Adopt broad programmes of regulatory reform at the
political level that establish clear objectives and
frameworks for implementation.

Review regulations systematically to ensure that they
continue to meet their intended objectives efficiently and
effectively.

Ensure that regulations and regulatory processes are
transparent, non-discriminatory and efficiently applied.
The Reform Process
Implementing Innovative and Effective Management
Systems (1)
The first phase has involved addressing the full range of
familiar bureaucratic shortcomings: waste, unnecessary
activity, over complex regulations, overlap and duplication of
functions, confused lines of responsibility, slow and over
centralised procedures for decision making, divided authority,
unclear performance standards and lack of information about
results and costs. Such reforms have focused on matters
like the elimination of outdated reporting systems, of
expensive work being conducted by government when it is
clear that external purchasing is cheaper and of common
services being provided free of charge to user departments.
The Reform Process
Implementing Innovative and Effective Management
Systems (2)
The second phase of reform typically has focused on more
general public management modernization. The objective
has been to shift from procedures-based administration to a
results-based management style, with improvement in
performance. This provides measures on a yearly basis of
results and costs and leads to better methods of using
human and financial resources. This phase relied on a ”onebest way” management-by-objectives (MbO) philosophy
strongly influenced by private sector experience. The main
themes of the second phase have been:
Review of organisational structures – vertically as well as
horizontally – in order to strengthen accountable line
management
 developing new systems, structures and priorities to
decentralize financial management and cost control

The Reform Process
Implementing Innovative and Effective Management
Systems (3)
The third phase of performance management reform involves
the changing of culture, attitudes and behaviour in government
so that continuous improvement becomes a widespread and
built in feature in the search for better value for money and
steady improvement of services. This phase can be summarized
in the following way:

focus operational management responsibilities by clearly
defining objectives and tasks

keep strategic policy and resource decisions at the centre,
but devolve implementation decisions to the units responsible
for results; and,

establish processes for agreeing on performance measures
and “contracts” between the centre and the units responsible
for programme results.
The Reform Process
Implementing Innovative and Effective Management
Systems (4)
The fourth phase of reform is often quite different. This phase
aims at large-scale structural reorganisation of public service
delivery systems. A macro management process is always
required to steer structural changes because they ultimately
are beyond the control of individual organisations. Another
defining feature of the new method of management is its
responsiveness to stakeholders’ interests and needs. Thus,
one task of the reform, if it has not previously occurred, is to
identify and support the development of local partnerships
(e.g. with community-based organisations, non-governmental
organisations, and the private sector).
Key Functions at Central Level
International Co-operation
 Policy Analysis
 Strategies for Empowerment of Beneficiaries/
Stakeholders (Farmers etc)
 Provide Legal Environment
 Performance Budgeting
 Organization of Public Service Delivery
 Result Monitoring and Evaluation
 Policy Impact Assessment

Experiences of PMS
Performance Budgeting Techniques:

Fixed Total Budget

Per Capita Budget

Income Per Delivered Service

Income only Per Delivered Service with Performance
according to Commitment
Experience shows the importance of performance
measurement (1)
It is critical to use the terminology that provides the structure
around which performance measures or indicators can be
constructed. Different types of indicators must correspond to
each level of the hierarchy.
Output indicators track the most immediate results - that is,
the physical quantities of goods produced or services delivered
(number of contraceptives handed out). Outputs may have not
only quantity but quality dimensions as well (contraceptives
meeting a technical standard). They often also include counts of
the numbers of clients or beneficiaries that have access to or
are served (examples: number of persons attending a
workshop).
Experience shows the importance of performance
measurement (2)
Outcome indicators measure relatively direct and short-tomedium term effects of project outputs on intermediary
organizations or on the project beneficiaries (clients, customers)
- such as the initial changes in their skills, attitudes, practices or
behaviours. Often measures of the clients’ preferences and
satisfaction with product/service quality are also considered as
outcomes (percent of clients satisfied with quality of health clinic
services).
Impact indicators measure the longer-term and more
widespread development changes in the society, economy or
environment to which the activity contributes. Often these are
captured via national sector or sub-sector statistics (examples:
reductions in percent of the population living below the poverty
line, declines in infant mortality rates).
Experience shows the importance of performance
measurement (3)
Indicators on an aggregated level are generally conceptualised
as long-term and significant sector or sub-sector development
results. Development objectives differ primarily in perspective as
they are viewed more explicitly as the consequence of multiple
intermediate outcomes resulting from many different sets of
activities rather than from the perspective of one activity.
Intermediate outcome indicators on an aggregated level are
similar in concept to outcomes from an activity but are much
more comprehensive. They are inclusive of all outputs from all
activities, grouped according to the intermediate outcomes to
which they contribute.
Experience shows the importance of performance
measurement (4)
The indicators at the very top of the hierarchy are too long-term
and broad to be of much use for guiding shorter- or medium
term activity decisions, and moreover aren’t much good for
measuring individual activities contributions.
More attention should be given to developing good intermediate
outcome indicators that are beyond outputs but still can be
linked to individual activities/contributions. A number of levels of
intermediate outcomes between outputs and ultimate impact
may be needed to adequately demonstrate and measure the
cause-and effect chain.
Accountability with a Performance
Management System
Accountability
Performance
Contribute
to
Desired
Results
Results
Impacts
Strongly General Objectives
Influence
Control Specific Objectives
Outcomes
Control Activities
Outputs
Inputs
Resources
Long-term
Time
Workshop Discussion III


Which steps should be taken in the reform process?
Which are the additional development processes that
should be discussed?