Civil Service Modeling: Simplifying the Complexities of Civil Service Pay and Employment

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Civil Service Modeling Simplifying the
Complexities of Civil Service Pay and Employment
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Why Model?
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Two Dominant Approaches to Civil Service Pay and
Employment Reform

• Macro-Analysis The Meat-Axe Approach?
• 2. Micro-Review The Bean-Counting Perspective

4
Macro-Analysis to determine appropriate size and
cost of civil service

• How it works
• Gross criteria to gauge nature and extent of
  reform needed
• (Wage bill/GDP government employment per capita
  salary compression ratios, public-private wage
  relativities)
• Pros and Cons
• Broad-brush reform guidance but over-simplified
  basis for government policy and lending terms and
  conditions

5
Micro-Reviews (Functional Analysis) to determine
staffing and incentive levels

• How it works
• Bottom-up scrutiny of individual organizational
  units objectives, tasks, and resource
  requirements
• Pros and Cons
• Accurate picture of on-the-ground reality
• Inconsistent methodology wide variability in
  quality
• Hard to do takes forever
• Difficult to sum up parts challenge to build
  coherent civil service strategy for whole based
  on micro- unit-based details

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Both approaches left big problems un-addressed

• Low government policymaking capacity for CSR
• CSR-PE reality hopelessly complex
• Competing sectoral considerations
• New wrinkles decentralization
• Conflicting government objectives (social welfare
  vs. fiscal prudence) 
• Flimsy empirical basis to donor-country dialogue
  (discussion often on different pages)

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What is the CS-PE Model?

• Civil service modeling as middle-range analytic
  tool to bridge gap in existing approaches
• Uses country customized data to render the key
  attributes of current PE situation
• Pay and grading arrangements
• CS employment numbers
• Sectoral/ministerial geographical particulars
• Establishes reform objectives and parameters
  Five-year CSR vision
• Wage bill envelope
• Compression ratio and salary levels
• Public-private relativities

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What is the CS-PE Model?

• Civil service modeling as middle-range analytic
  tool to bridge gap in existing approaches
• Simulates reform options calculating and
  demonstrating costs of alternative policy
  measures
• Assumptions about timing and extent of
  retrenchment or retirements
• Implications of different levels of pay raises
• Altering sectoral employment levels (teachers,
  health workers)

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The Joys of the Model

• Provides governments with hands-on tool for
  plotting realistic reform strategy with concrete
  targets
• Sorts out wheat from chaff focus on big picture
• Raises level of dialogue with donors (and donor
  understanding of issues)
• Helps policy makers combat special pleading of
  sectoral interests

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The Woes of the Model

• Cannot (should not) render all detailed
  characteristics of individual country CS reality
  (Trade-off between simplicity/clarity and
  accuracy)
• Garbage in-Garbage Out (Poor data mean targets
  may be off)
• Cannot make hard decisions for policy makers
• Havent dealt with some critical issues (pensions
  variables hard to incorporate)
• Cannot replace good establishment management
  systems (HR database, tight payroll controls,
  etc.)
• Cannot provide detailed information for reform
  implementation (for retrenchment severance
  package design, etc. consultancy needed) 

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East Asia Experience

• Pilots in 6 Countries
• Cambodia - Timor Leste - Philippines
• Mongolia - Indonesia - Thailand
• Capacity building grant from ASEM to assist
  countries in using modeling tools to develop
  civil service pay and employment reform
  strategies
• Development of robust and user friendly modeling
  tool for region

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Why Model in East Asia?

• Wake of financial crisis in 1990s led to fiscal
  constraints, raising profile of wage bill
• Crisis revealed shortcomings in government
  effectiveness and efficiency civil service
  reform became a priority
• Modeling reform options could help countries
  formulate strategy

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Different Countries, Different Entry Points

• Cambodia
• IMF pressure on government to reduce CS wage bill
  and employment resulted in stalemate
• Bank entered with model to provide empirical
  footing to dialogue
• Thailand
• Reducing civil service employment part of public
  sector reform program supported by Bank in
  aftermath of financial crisis.
• Support to Office of the Civil Service Commission
  included modeling reform options

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Different Countries, Different Entry Points

• Philippines
• Bloated wage bill and surplus CS employment
  aggravated by fiscal strain during crisis
• With a history of failed reform efforts, govt.
  agreed to try modeling to develop strategy
• Indonesia
• Civil service seen as corrupt, poor performer
  when growth rates screeched to a halt in crisis
  and beyond
• Decentralization about to transform nature of
  civil service
• Modeling intended to provide a starting point for
  thinking about modernizing CS, but timing was
  off, given general state of flux

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Different Countries, Different Entry Points

• Timor-Leste
• New state with no parameters for civil service
  pay and employment
• Model intended to work out relativities for new
  government
• Mongolia
• Fund pressure to reduce wage bill
• Government clueless on where to start model
  first step in roadmap to reform

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Results in EAP

• Improved, more focused dialogue with country and
  other donors on CS pay and employment
• Country counterparts at technical level gained
  modeling capacity
• Still limited engagement by higher level decision
  makers
• From spreadsheet to GameBoy
• Marked improvement in modeling mechanics through
  trial and error evolution
• User-friendly customized models
• Whizzy generic model available on website