The Changing Role of Government

Transcription

1 The Changing Role of Government

2 The Role of Government in Adjusting Economies General Editor: Professor Richard Batley, International Development Department, School of Public Policy, The University of Birmingham Over the last two decades there has been a strong emphasis on reducing the role of government and on reforming traditional public sector bureaucracies. The new conventional view has become that, where possible, services should not be provided directly by government but be contracted out or privatized. Where this is not possible, the predominant view has been that the public sector itself should change by setting up semi-autonomous agencies and by making public management more performance and customer-oriented. This series investigates the application of such reforms in Africa, Asia and Latin America. Underlying the enquiry is the question whether reforms, which were initially conceived in countries such as Britain and New Zealand are appropriate in other contexts. How much sense do they make where levels of public management capacity, market development, resources, political inclusiveness, legal effectiveness, political and economic stability are quite different? To investigate these issues, the series covers four service sectors selected to be representative of types of public sector activity health care, urban water supply, agricultural marketing services and business development services. Titles include: Richard Batley and George Larbi THE CHANGING ROLE OF GOVERNMENT The Reform of Public Services in Developing Countries Mike Hubbard DEVELOPING AGRICULTURAL TRADE New Roles for Government in Poor Countries Paul Jackson BUSINESS DEVELOPMENT IN ASIA AND AFRICA The Role of Government Agencies Anne Mills, Sara Bennett and Steven Russell THE CHALLENGE OF HEALTH SECTOR REFORM What Must Government Do? Andrew Nickson and Richard Franceys TAPPING THE MARKET The Challenge of Institutional Reform in the Urban Water Sector The Role of Government in Adjusting Economies Series Standing Order ISBN (outside North America only) Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and the ISBN quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England

3 The Changing Role of Government The Reform of Public Services in Developing Countries Richard Batley and George Larbi University of Birmingham, UK

4 Richard Batley and George Larbi 2004 Softcover reprint of the hardcover 1st edition All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act First published 2004 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin s Press, LLC and of Palgrave Macmillan Ltd. Macmillan is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN ISBN (ebook) DOI / This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Batley, Richard. The changing role of government : the reform of public services in developing countries / Richard Batley and George Larbi. p. cm. (The role of government in adjusting economies) Includes bibliographical references and index. 1. Public administration Developing countries. 2. Municipal service Developing countries. I. Larbi, George A. II. Title. III. Series. JF60.B dc

5 Contents List of Tables List of Figure and Boxes List of Acronyms and Abbreviations Preface About the Authors viii ix x xi xiii 1 Changing Views of the Role of the Government 1 Introduction 1 The role of government in development 2 The background to public service reform in developing countries 7 Capacity to perform the new roles of government 15 An overview of the study 20 Conclusion 28 2 Changing Approaches to Public Sector Management 31 Introduction 31 Theoretical basis of new approaches to public management 31 Pragmatic rationales for public sector reforms 38 From old public administration to new public management 39 The era of new public management 40 A review of new public management in practice 44 Conclusion 52 3 The Politics of Service Reform 54 Introduction 54 Political stakes in the reform of public management 56 Principals and agents in public service reform 58 External bodies agents or principals? 58 The principal-agency characteristics of services 62 The principals citizens and political leaders 65 The agents public service administrators, professionals and workers 71 Emerging constituencies for change 76 Conclusion 78 v

6 vi Contents 4 Decentralizing Organizational Arrangements for Service Delivery 81 Introduction 81 Pre-reform organizational arrangements 81 Types of organizational arrangements 85 Reform of organizational arrangements 88 Have reforms improved performance? 98 Institutional and capacity issues 102 Conclusion The Experience of Charging for Public Services 106 Introduction 106 Explaining user charges 106 Charging what and how? 110 Charging: performance and impact 116 Conclusion Working with Private Partners 125 The case for privatizing management 125 Organizational arrangements for service provision 128 The application of public-private arrangements for service delivery 133 Matching organizational arrangements to capacity 136 Conclusion The Experience of Contracting 144 Introduction 144 The use of contractual arrangements 145 Assessment of the experience of contracting 158 Capacity to contract 167 Conclusion Regulating and Enabling the Private Sector 180 Introduction 180 Forms of regulation 181 De-regulation and support to market development 184 Re-regulation under the new management 185 Economic regulation of urban water supply 186 The social regulation of health services 195 Enablement of private providers business support services 203 A comparison of the experience of regulation and enabling 215

7 Contents vii 9 Conclusion 219 Introduction 219 Summary 220 Performance and capacity constraints in specific reforms 224 Implications for capacity development 232 Conclusion 235 Notes 238 Bibliography 240 Index 253

8 List of Tables 1.1 Economic and social indicators in the study countries Human Development Index trends from HDR Sector characteristics and the motive for intervention Key elements of NPM by different authors Reform types analyzed by sector The public and bureaucratic arenas of response and resistance to reform Principal-agent relationships by service Summary of performance in urban water supply Cost recovery as a percentage of recurrent health expenditure From bureaucratic administration to charging, short-term contracts and the market Distribution of functions in different organizational arrangements Contract types and examples mentioned in the text Evidence on health policy outcomes: comparison of contracted-out service with directly-provided government service The feasibility of contract types Key constraints on governments capacity to contract Forms of regulation and enablement of the private sector Actors involved in regulation in Tamil Nadu, India Key regulatory statutes in Sri Lanka and Zimbabwe The relationship of business support services with government and the private sector Key constraints on governments capacity to regulate and enable private firms Summary of performance of organizational reforms Key constraints on governments capacity to perform new management roles 227 viii

9 List of Figure and Boxes Figure 1.1 A framework for analyzing capacity 19 Boxes 1.1 Market failure arguments Line ministries have often had little influence on sector liberalization Corporatization of the water sector in Ghana Addressing equity and efficiency in tariff reforms: the case of Bulawayo Public-private organizational arrangements A service contract an example from Santiago, Chile Contracting for the services of private GPs in South Africa A concession contract an example from Buenos Aires, Argentina Models of price regulation Boundary problems in water regulation in Buenos Aires Ineffectual regulation of private health providers in Zimbabwe The Council for Scientific and Industrial Research, India Zimtrade, the export promotion agency of Zimbabwe 212 ix

10 List of Acronyms and Abbreviations BOT Build-Operate-Transfer CWE Cooperative Whole Establishment (Sri Lanka) DfID Department for International Development (UK) DWR Department for Water Resources (Zimbabwe) ESAP Economic Structural Adjustment Programme FCD Food Commissioners Department (Sri Lanka) GDP Gross Domestic Product GNP Gross National Product GWC Ghana Water Company HDI Human Development Index IFIs International Financial Institutions IMF International Monetary Fund LBA Licensed Buying Agency (Ghana) MDG Millennium Development Goals MTM Market-type Mechanism NHS National Health Service (UK) NWDB National Water and Drainage Board (Sri Lanka) NPM New Public Management OECD Organization for Economic Co-operation and Development SAP Structural Adjustment Programme UNDP United Nations Development Programme USAID United States Agency for International Development x

11 Preface This is the final volume of a series on the reform of service delivery in developing countries. The research on which the five volumes are based was funded by the economic and social research fund of the British Department for International Development (DfID), but the facts presented and the views expressed here are those of the authors and do not necessarily reflect the views of DfID. Each of the four previous volumes has examined a particular area of government activity: health care, urban water supply, business development, and services to support agricultural trade. A broad pattern of reform has affected these different sectors: liberalization, the introduction of private sector management approaches, charging for services, and new forms of working with the private sector. The leading question running across the five volumes is whether these approaches are appropriate to the context and capacities of developing countries. This final volume draws together the strands, comparing the experience between these sectors in selected developing countries of Africa, South and Southeast Asia, and Latin America. The research programme involved research groups from five British universities: the International Development Department of the School of Public Policy, University of Birmingham; the Health Economics and Financing Programme, Health Policy Unit, London School of Hygiene and Tropical Medicine; the Overseas Development Group of the School of Development Studies, University of East Anglia; the Water, Engineering and Development Centre, Loughborough University of Technology; and the Department of City and Regional Planning, University of Wales. The overall research programme was coordinated by Richard Batley of the International Development Department, University of Birmingham. The health sector research was developed and organized by Sara Bennett, Anne Mills and Steven Russell, with support in the undertaking of country cases by: A. Asamoa-Basah, Nimal Attanayake, Sifiso Chikandi, Charles Hongoro, Philemon Kwaramba, V. R Muraleedharan, Paul Smithson, Anuwat Supachutikul and Viroj Tangcharoensathien. The water sector research was led by Richard Franceys and Andrew Nickson, with support on country studies by Philip Amis, Frank Asiedu, Hartash Aturupane, Richard Batley, Srinivas Chary, Ngoni Mudege and xi

12 xii Preface Kevin Sansom. The research on business development services was led by Paul Jackson and Richard Slater, with support in country studies by R. Basu, T. K. Bhaumik, Sunil Chandrasiri, Asoka Gunawardena, Ram Khanna and George Larbi. In the case of the agricultural sector, the research was led by Michael Hubbard and Marisol Smith with country studies by Frank Ellis, R. Kohli, D. Atse, S. Chikandi, G. Onumah, J. Rusike, Andrew Shepherd and C. Sukume. User surveys on the health and water sectors were undertaken by Carole Rakodi with the support of Steven Russell, Tudor Silva and Dorothy Mutizwa-Mangiza. Together this team produced 41 papers and case studies. This book was written jointly by Richard Batley and George Larbi, but it has depended greatly on the work undertaken by the whole team and particularly by the authors of the previous four volumes: Sara Bennett, Anne Mills and Steven Russell, The Challenge of Health Sector Reform: What Must Governments Do? Paul Jackson, Business Development in Asia and Africa: The Role of Government Agencies Michael Hubbard, Developing Agricultural Trade: New Roles for Government in Poor Countries Andrew Nickson and Richard Franceys, Tapping the Market: The Challenge of Institutional Reform in the Urban Water Sector We gratefully acknowledge their contribution to our thinking.

13 About the Authors Richard Batley is professor of development administration in the International Development Department of the School of Public Policy, the University of Birmingham. His research interests are in governance, service delivery and urban policy in India, Latin America and Africa. George Larbi is senior lecturer in public sector management in the International Development Department of the School of Public Policy, the University of Birmingham. His research interests are in governance (including corruption and ethics), new approaches to public sector management and service delivery. He has experience in Africa, the United Kingdom and Kazakhstan. He is the assistant editor of the journal Public Administration and Development. xiii