Ranjith Withana
After the wave of economic liberalization in the 80s and 90s in the South, the focus is now on the next significant area that needs reform in the developing world, namely government administrative machinery, both in the structural and operational aspects. Many of the countries of the South, particularly those that moved early into the free enterprise culture as Singapore, Malaysia, Thailand and some of the Latin American countries have made significant progress in this direction.

Sri Lanka, unfortunately has lagged behind. Though, like most of the countries in the region, it has transformed from a regulated economy dominated by the public sector to a liberalized open market private sector driven economy, the public sector still plays, and will continue to play, a key role in many critical activities as: formulation and implementation of many economic and social development programmes; negotiation with multi-lateral and bi-lateral agencies for resource mobilization and trade matters; development and maintenance of infrastructure; provision of services within the social sectors as health and education; provision of public transport services, agricultural research and extension services; and environmental control.

It should also be noted that though the private sector is the major player in the present free market economy competing in an increasingly globalised international market for capital, foreign private investment, export markets, trade and technology; the public sector also has an equally or more important part to play by formulating and maintaining the institutional and regulatory framework for the proper functioning of the private sector.

The new government, as the previous one, is pre-occupied with the "peace process" which no doubt is a priority item, as the restoration of normalcy is a necessary pre-condition to re-vitalise the economy and to embark on a concerted economic and social development programme. However, in addition there are other fundamental issues and shortcomings, particularly in the government institutional framework and administrative machinery which too need to be examined and rectified, as these too are critical and key pre-conditions for the government to successfully launch its planned development programmes and to strengthen the economy.

Almost all the major annual reviews of the performance of the Sri Lankan economy by the World Bank, ADB and other important studies on various economic and social development programmes by these agencies and other bi-lateral donor agencies have all emphasised on the need for reforms to the administrative machinery and restructuring and strengthening of many of the government institutions; the lack of which, according to these reports, have been one of the contributory factors for the poor programme implementation in some of the economic and social sectors.

This article is therefore firstly, to draw attention on the need for the new government to consider the administrative reform also as a priority item in their agenda. Secondly, to briefly outline some of the main aspects of reforms recently effected in other countries which are of interest to us; and thirdly to suggest broad areas and approaches for a Sri Lankan reform programme.

There have been previous limited efforts at administrative reform in Sri Lanka in the late 70s and early 80’s by the creation of a Task Force on Administrative Reform, and by certain changes to some of the senior managerial services as the Administrative Service, Engineering Service and the Scientific Service. However, these were more establishment (i.e. salary and promotional) oriented changes rather than professional enhancement measures linked with performance oriented changes.

The previous government had also taken some initial steps for a limited administrative reform program implemented by an Administrative Reform Unit under the Presidential Secretariat. This program identified some critical areas that needed reform, as introduction of a performance evaluation scheme for senior administrative grades, creation of a professionally oriented higher management service which was to be open to a range of professional and technical services including those in the private sector (knowing the limitations and poor quality of the present generalist oriented SLAS service). However, due to lack of the desired commitment and political support by the government none of these were implemented.

Also, a Public Service Management Development Authority (PSMDA) was recently set up, whose main function was to introduce improvements in procedures and systems in government institutions involved in providing services to the public (as social service payments, vehicle licenses, etc.) and to examine measures for improved performance of projects under the capital budget.

Unlike the above very limited efforts of Sri Lanka, many of the Commonwealth countries and those of the Asian region, since the mid 80s have effected substantial reforms and fundamental changes to their administrative systems along with measures to enhance the professionalism of the public service. Most of the changes have been in UK, Australia, and in the ASEAN region particularly Malaysia, Thailand and Singapore.

Structural adjustments and ‘down sizing’

One of the major areas of governmental reform has been the structural adjustment leading to ‘down sizing’ of government to meet firstly, the macro-economic criteria of limiting budgetary deficits; and secondly, to reflect public demands for dismantling large ‘bureaucratic edifices’ and creating in place smaller more efficient cost effective structures. Along with this the privatisation of major utilities added further impetus to the reform process resulting in a closer look at which functions and services should remain within the traditional public service. UK through the ‘Thatcher’ revolution heralded many of these reforms, while similar reforms have also been effected in Australia, New Zealand; and in Malaysia and Singapore.

Similar efforts at scaling down central government institutions and structures would no doubt be met with strong resistance here as in the case of India and Pakistan, in view of attendant job losses, as job for life is one of the basic features of the public service environment of these countries. However, effective measures to manage and mitigate the adverse effects of possible redundancies resulting from such structural changes have been done in Malaysia and Zimbabwe; and these lessons would be useful in a similar program in Sri Lanka.

Improvement of staff performance and effectiveness of management

One of the major components of the reform programmes in all countries have been the measures taken to enhance staff capacity and development. In most of the countries mentioned above including India and Pakistan substantial progress has been made in capacity building, particularly of the managerial levels and the infusion of professionalism in the public service senior administrative grades (an area in which we are far behind). Management capacity building and development in these countries were linked with innovative reforms by introduction of certain commercial sector practices of setting performance indicators and utilising these to appraise management performance.

One of the major reasons for the shortcomings and inefficiencies of the governmental machinery in Sri Lanka has been attributed to the poor quality and lack of professionalism of the senior management grades, particularly the administrative service. It is possible that one of the causes could be the lack of a clear demarcation between administrative responsibility of public officers and the functions of the politicians (at all levels) and their pressure groups. Nevertheless, there have not been any significant efforts either for professional training and capacity building of these grades, nor to improve the intellectual and academic base from which they are recruited, compared to significant developments in education, training and professionalism of the managerial grades, in almost all the countries referred to earlier.

In contrast, the private sector in Sri Lanka has been able to satisfactorily respond to its new demands in the open economy and link itself to the international business network by creating a more internationally oriented professional management class. It achieved this both by intensive professional training here and abroad, as well as by recruitment of Sri Lankans who graduated from foreign Universities or who had worked in more competitive and professional business environments overseas.

Privatization

A key element of the economic liberalisation in most of developing countries has been the privatization of some of the manufacturing, services and utilities which were under public sector management along with setting up effective regulatory mechanisms to oversee and monitor the privatized utilities. We too have been able to privatize most of the public sector manufacturing activities, but have lagged behind in the privatization of the services and utilities. In addition there is scope to examine what other commercialised or commercialisable services as public transport, power generation, highway maintenance could be added to the privatization list.

Contracting services through market testing

Reforms in the direction of privatization have also led to a trend towards contracting some the services performed by government agencies to private commercial organizations. These enable stricter imposition of cost control and performance criteria along with substantial reduction in governmental overheads. Such reforms have been successfully implemented in UK, Australia, New Zealand and to a lesser extent in Malaysia and Singapore, on the basis of the concept of market testing. Market testing determines whether or not contracting out will be the most efficient manner of carrying out a government activity which clearly needs to remain the ultimate responsibility of the public sector.

Quality improvement of public services

The recent reform programmes have embodied a concern to raise and maintain the quality of the public services. This has been effected through various innovative approaches. In Singapore and Malaysia an effort was made to re-orientate public sector activities by which users of services are to be perceived as active customers rather than passive recipients so that customer satisfaction would be the criteria by which the quality of the service would be evaluated. In UK the recent introduction of citizens charter and customer charter indicate the level and quality of service to be provided.

The overall effect of these administrative and managerial reform is expected to bring a new management approach to the public sector, which is distinct from the traditional bureaucratic practices. This new approach, could be termed the New Public Management, to reflect the fundamental features of these reforms with the primary managerial focus being on outcomes and outputs rather than on procedures; that is on results rather than procedural consistency. It entails the administrative system continuously endeavouring to determine objectives and performance indicators of the public service activities, and striving to achieve these within defined cost and resource parameters.

Broad areas and approaches for Sri Lanka reform programme

On the basis of recent reform programmes in other countries it is suggested that the Sri Lankan reform programme could be approached under the following broad areas:

• Changes to the administrative structures by which government carries out its functions;

• Innovations in the operation of government and changes in procedures;

• Demarcation of the political/administrative boundary

• Improvement of the quality and professionalism of the managerial grades;

• Management of the administrative reform programme i.e. strategies and approaches for effective internalization of the reform process.

The governmental structures and administrative systems are governed by, and operate within constitutional and legal provisions and other regulatory measures as the Financial Regulations, Establishment Code, Personnel Service Minutes of the Clerical Service, Administrative Service, Engineering Service, Scientific Service, Accountants Service and other Departmental Service regulations. Therefore, any substantial and fundamental reforms to these systems and services would involve changes to the legal and regulatory provisions and hence should be considered as a long term exercise.

Therefore, the programme should initially focus on the main shortcomings and limitations in the areas (a) to (c) above which could be overcome by reform measures implemented in the short term (i.e. which do not entail major changes to the existing constitutional, legal and regulatory framework within which government administrative systems operate); and subsequently examine the direction in which long term reforms in these areas should take place.

Equally important are the strategies and approaches by which the short term measures should be implemented and internalized and the setting in place the institutional mechanisms to effect the long term reforms (i.e. area (e) above).

The success of any administrative reform programme depends on the commitment and support from, and the institutionalisation of the reform programme as a continuing activity under the highest government and political level, namely the office of the Prime Minister. This has been the experience of most of the countries that implemented such reform programmes. Apart from broad public support such programmes would generate it is also essential that professional organizations and the business sector also articulate their support and interest, all of which would assist in overcoming any political resistance and public service apprehensions and strengthen the case for such reforms.

(The writer was a former Chief Technical Adviser/Snr. Industrial Economist of UNIDO and is presently a free lance consultant in UK. Recently he participated in restructuring and institutional strengthening of some public sector institutions in Sri Lanka under UNIDO and IDA funding. Prior to his consultancy career he was a senior officer in the SLAS)