53007 MIDDLE EAST AND NORTH AFRICA JANUARY, 2010 GOVERNANCE NEWS & NOTES VOLUME 4, ISSUE 1 IN THIS ISSUE: A NOTE FROM THE PUBLISHER A Note from the his edition of Governance News & Notes tackles the difficult and Publisher........................ 1 complex challenge of civil service and public administration reform within the Middle East and North Africa region. Civil service Governance Newsmaker reform is a broad discipline that covers a variety of sub-fields, many of Interview with Dr. Ahmed which themselves are quite extensive. Typically, it covers topics such as Darwish.........................2 how governments are organized and structured, often referred to as the machinery of government; how they are staffed (pay and employment The Challenge of Civil issues); and how staff or human resources are managed. Other topics can Service Reform in MENA....4 also be fit within this rubric, such as policy coordination; strategic management; training and staff development; and performance Brief Assessment of Global monitoring and evaluation. Experience with Civil Service Reform: The IEG The challenge of public administration reform is particularly pronounced Experience.....................8 in MENA, which is home to some of the largest public sectors in the world. Egypt has more than 6 million public employees--more than the Morocco's Experience in entire population of 10 MENA countries--as well as per capita staffing Streamlining the Public ratios that are on par with many developed countries. In other countries, Sector...........................10 such as some in the GCC, the public sector can employ as much as 90 percent of the native labor force. It is the employer of both first and last Upcoming Events and resort, and its fiscal burden can crowd out needed expenditure on Activities.........................11 supplies, maintenance and capital investment. Noteworthy Beyond the size of the public sector and the potential burden of the wage Links...................................11 bill, MENA countries can suffer from a variety of other problems. There are frequent complaints throughout the region about inefficiency and red tape that hampers the quality of service delivery. Bureaucracies can be seen as opaque, non-transparent and occasionally arbitrary (or worse) in their decisions. Factors such as wasta and patronage can undermine efforts to create a meritocratic public sector. From Morocco through Yemen, a variety of efforts are underway to try to address these problems. We are fortunate to interview H.E. Dr. Ahmed Darwish, Minister for Administrative Development in Egypt, about his country`s efforts to manage the dilemma of advancing public sector reform while coping with traditional attitudes and resistance to change. Dr. Darwish`s thoughtful reflections about the challenges inherent in seeking to streamline and modernize Egypt`s public sector and improve the quality of service delivery are both stimulating and engaging. We also highlight the experience of Morocco, which is one of the few countries within MENA that has sought to address the problem of overstaffing through embarking upon a Voluntary Retirement Program, or VRP. The Moroccan story is an interesting one. It was generally a GOVERNANCE NEWS & NOTES Page 2 VOL. 4, ISSUE 1 success in fiscal terms, and it has helped to rebalance because of the slow nature of cultural change, but the employment in more productive ways in terms of the man charged with achieving this task believes the categories of employees and their geographic process is finally underway, and initial distribution. However, it also struggled with breakthroughs can be identified. problems of adverse selection (i.e. the best and the brightest employees leave government), which are Dr. Ahmad Darwish, Minister of State for common in exercises of this type. The Bank will Administrative Development, said in an interview shortly finalize a case study on the lessons of the from his Cairo office in early December that three Moroccan experience for other MENA countries. main issues loom as priorities: changing the mindset of civil servants so that they accept reforms that will Finally, we discuss the findings of a recent report by benefit them and the country; revising the structure the Bank`s Internal Evaluation Group on the of the civil service system so that it focuses on core challenges of public administration reform functions and contract or outsource rather than throughout the globe. Bank experience has shown support ones; and, improving the efficacy of service that such reforms can be difficult and contentious, delivery systems in a manner that enhances which is to be expected whenever thousands or even efficiency and reduces petty corruption. millions of individuals depend upon government employment for their livelihood. However, there are The single most challenging task for us is changing also ways in which administrative reforms can move the culture of the civil service, to speed up the pace forward with a good probability of success. Their of change and overcome resistance to change, he effectiveness depends upon a variety of factors, said. People are always afraid of what they don`t including excellent diagnostics, realistic know, but once we can explain to them that reforms expectations, the appropriate choice of instruments, will make their lives easier in terms of the way they and a pragmatic and opportunistic approach to are doing their jobs and so on, they accept and reform. appreciate the new system. Robert P. Beschel Jr. He believes that most civil servants worry that Lead Public Sector Specialist reforms will cost them their jobs, or subject them to MENA Vice Presidency, World Bank much more stringent monitoring systems. So among his most difficult challenges has been the need to convince people about the sincerity of the government in its modernization plan. The second GOVERNANCE NEWSMAKER INTERVIEW most difficult step, he believes, is to untangle the work processes and the work cycle, because the more WITH H.E. DR. AHMED DARWISH, EGYPTIAN MINISTER OF STATE FOR complicated they are the more they open the way to ADMINISTRATIVE DEVELOPMENT corruption. BY RAMI G. KHOURI His ministry`s analysis shows that civil servants value and cling to the level of authority they have, Systems, mindsets top civil and sometimes abuse it for personal gain. They will service reform priorities in only change if they feel that reforms will benefit Egypt them as well as make the entire system more efficient for the country as a whole. CAIRO: Reforming the massive civil service in People in general are not willing yet to extend their Egypt, including reducing hand to us. And I think that it is our job to take a few petty corruption and steps forward and extend our hand and show changes increasing efficiency, will that work for all, until they trust us and they see that take many years to achieve, GOVERNANCE NEWS & NOTES Page 3 VOL. 4, ISSUE 1 we are doing a very good job, and they start working have been adopted by the government, and send the with us, he concludes. message that change can happen at a relatively fast pace in some areas (such as Ministry of Finance A primary area of focus for the ministry in its anti- procedural and budget transparency changes, and the corruption effort is to change the way that citizens creation of an ombudsman office in Egypt). access government services. This can be implemented relatively quickly, by using electronic The growing trust in the committee is probably its systems like cell phones, call centers and internet. By most significant accomplishment to date, the minister providing a new model for service delivery through suggests, to the point where there is unofficial talk such channels, citizens do not need to meet civil about making it totally non-governmental and servants face to face every time they conduct a designating it as the national focal point for the bureaucratic procedure, which will reduce some implementation of the UN convention against forms of corruption and abuse of power. corruption. Darwish explains that, The most problematic issue Structural constraints like over-staffing will take in the civil service in Egypt it not bribery in its well more time to change, and are being addressed known definition all around the world, which is through a two-pronged strategy. All government paying money employees are to accomplish being an illegal classified transaction. according to This exists but established at a very low international rate. The criteria, which bribery most will enhance common in the Egypt is management payment to of the civil speed up legal service staff transactions, by focusing on you pay money those who to get what is administer your own services to the right. public. The second prong At the larger is to hold national policy steady the size level, efforts of the civil revolve around service by the newly created Committee of Transparency and hiring only to replace those who retire, so that the Integrity, which advises him on devising a strategy size of the civil service relative to the entire work for more transparency and integrity in government force in Egypt will decline steadily over the coming administration. This quasi-governmental committee decades. (four members from government and eleven from outside government, including from opposition A fascinating aspect of the ministry`s work is to parties) has been slow to take root, but recently understand the values of Egyptians and how these seems to have gained more public visibility and apply in public jobs. The ministry commissioned a confidence, Darwish believes. One reason is that major national study (done by Cairo University) that some of their recommendations in their annual report GOVERNANCE NEWS & NOTES Page 4 VOL. 4, ISSUE 1 sought to understand the current values of Egyptians performance indicators that Darwish feels, will and to see if they had changed in recent decades. allow us in a very scientific way to consistently gauge if the measures we are taking are actually The most incredible observations that prompted us efficient and what impact they have. This is very to do this study were that some people who are important for us. We are, for example, measuring if taking bribes are actually very religious people, people are moving to the new service provision individuals who would take a petty bribe and then go model, and if they are moving, where they are to pray in the mosque of the organization they are moving to, and is this helping them? working for. So it came to us as a surprise how people are separating between their religious values The slowest progress, he feels, is in areas where and the way they deal with each other, Darwish human resources are involved in a big way, given the explained. He concludes that the core of Egyptian time and effort needed to change mindsets and values remains strong and clean, but with time the behavior. The most significant accomplishments, on surface has become tarnished and needs to be the other hand, are in the e-government program, cleaned up. Educational efforts are one method that which ranked 28 out of 192 in the UN rankings will be needed for long-term change, he says. (compared to a rank of 160 in 2001). Progress is also evident in the area of national databases and Also at the national level, Darwish sees no problem government to government network (linking with the dual efforts of his ministry and the Central government agencies together and exchanging Agency for Organization Administration (CAOA). information). One area this has been translated into tangible benefits is building the family database and They should not be merged into one, because they issuing a family card to poor families. By the end of have different jobs. The Ministry sets policies and this fiscal year, he says, 11.8 million Egyptian works on regulations, while the CAOA is the families will have family cards that will give them implementer that deals with day to day and on the access to subsidized grocery shopping, cash ground issues. Whatever is in their hands to put into payments, and health insurance. Over Six million practice, they are doing. But I have other policies families have the card today. that we cannot implement without changing the law, that is to say we cannot proceed without Parliament THE CHALLENGE OF CIVIL SERVICE approval. This I have not been able to get through, REFORM IN MENA he says, pointing out one of the bottlenecks in the civil service reform process in Egypt. BY ROBERT P. BESCHEL He believes Parliament is interested and supportive, Issues of civil service and administrative reform have but this interest and support in the Parliament are been pursued by a large number of MENA countries not being translated into a civil service law, frankly for decades. As noted in the introduction, the field is because the civil service law is not one that a a large one that covers how government is structured parliamentarian will take to his people and say that it and organized; the size and composition of its staff is good for them, unlike health insurance, pensions, and the wage bill; issues of human resource or increased water and sewage spending. The law has management and capacity; and a variety of additional benefits that people would like, but also new sub-topics within these broader themes. regulations for getting civil servants to be accountable, with penalties, and so on. If we are This note is intended to briefly summarize some serious about reducing corruption, it is about time lessons that can be drawn from MENA`s that the penalties are a bit more deterring than the experience with public sector reform to date. It current ones. draws upon the Bank`s experience in working with client governments on these issues in a variety of Tracking the impact of the ministry`s work will soon countries stretching from Morocco to Yemen. It is expand by establishing some benchmarks and key admittedly more illustrative than comprehensive, and GOVERNANCE NEWS & NOTES Page 5 VOL. 4, ISSUE 1 it is intended to spark a broader debate among agencies and departments. Reforms that cut across knowledgeable observers both within and outside of organizational boundaries, while not impossible, MENA governments regarding what is working, have typically been much more problematic. Yet what isn`t, and why. In the interests of being there are numerous examples of where dynamic and provocative, it is laid out not by topic and sub-theme, effective public managers from throughout the but by what type of reforms have tended to work MENA region have managed to make a difference across MENA countries; what type have tended to be within their particular sphere of competence. context specific and may or may not work in various Egypt`s Minister of Finance, Youssef Boutros-Ghali, settings; and what types have typically struggled and managed to bring over a million new taxpayers into would be difficult to implement in most countries the system while simultaneously restructuring the throughout the region. personal and corporate tax offices and increasing tax revenue from 7 to 9 percent of GDP. Egypt`s The Successes Minister of Investment, Mahmoud Mohieldin, managed to reduce the average registration period for Turning first to issues of pay and employment, getting a business license from 34 days to 3 days. countries throughout the globe have employed a Lebanon managed to streamline and reengineer its variety of strategies for reducing the fiscal burden of customs procedures, reducing clearance times while the wage bill, ranging in increasing severity from simultaneously increasing excise and VAT revenues. reducing overtime pay to hiring freezes to furloughs The list goes on. Often, such reforms are quite and unpaid vacations to voluntary retirement and comprehensive, involving changes to organizational eventually targeted redundancies. With the structures, business processes and work flow, debatable exception of the West Bank & Gaza, no staffing, recruitment and promotion. MENA countries have utilized targeted redundancies, and only Morocco has opted for Furthermore, civil service attitudes and orientations voluntary retirement (about which more will be said are not immutable. Such reforms have often been below). However, several have been able to utilize accompanied by a fundamental reform and hiring freezes. The virtues of such an approach are reorientation of employee attitudes from one of that they are typically relatively easy and policing and lording over the citizens to a service- straightforward to implement. They do not harm the oriented culture. Such transformations are not easy interests of existing employees and, as such are often to achieve; nor do they take place overnight. But more palatable politically. They can create with committed leadership and the right set of demographic bulges within a given agency or messages and incentives, change is possible at the department, but these are more of a long-term organizational level if not across the public sector as concern than an immediate problem. Particularly in a whole. countries where the attrition rate is high (such rates are typically around 2 to 3 percent, but can be as Mixed Success high as 7 to 10 percent in agencies that recruited Other public administration reforms may or may not heavily in the 1970s and 1980s), if officials can hold succeed depending upon a variety of factors, such as the line for a couple of years, they can witness the wisdom, clout and tenacity of their champions (as significant savings. well as their opponents); the skill with which they Another area where a number of MENA countries are implemented; and the broader political milieu in have witnessed success is in the reform of individual which they are introduced. GOVERNANCE NEWS & NOTES Page 6 VOL. 4, ISSUE 1 Voluntary retirement programs are as of yet Graph 1. General Civil Government as a Percentage of relatively rare in the region. Morocco`s Total Employment experience, captured in the box by Khalid El- Massnaoui, illustrates well both the potential benefits and complications that typically surround such efforts. On the positive side, the Morocco Voluntary Retirement Program (VRP) was effective in helping to reduce the fiscal burden of the wage bill. It improved the skills mix and geographic distribution of the civil service. However, it was also subject to problems of adverse selection, in that many of the best and the brightest ended up leaving the public sector, and the controls put in place to prevent that were ineffectual. Furthermore, unless rigorous efforts are sustained to control new recruitment, there is a tendency for public sector employment to drift back up again after a few years. into valuable expertise that they would not otherwise be able to exploit, and a number of far-reaching A second area where reforms have tended to move administrative reform efforts have relied heavily forward selectively have been efforts to reform upon such talent. Yet such practices can also payroll and computerize HR management. Perhaps exacerbate pay discrepancies within the public sector the most impressive example was Salam Fayyad`s and lead to anger and resentment among traditional efforts to pay salaries for Palestinian security service agency staff. While arguing that such staff are directly into Bank accounts, which was resisted by essential, some of the more successful reformers in the service heads but quite popular with the rank and MENA also seek to keep them in the background and file. Other countries have embarked upon similar utilize them sparingly. reforms as well. At times, they can be quite sophisticated, such as Kuwait`s efforts to move Areas where CSR has Struggled virtually its entire processes for HR management on- line. At other times, the functionality can be more Finally, there are a number of areas where civil limited, such as Yemen`s efforts to implement a service and administrative reform have struggled in biometric system that will help it to remove ghost MENA. In some cases, such reforms have simply workers and double dippers from the payroll. Such not been tried. As Graph 1 indicates, MENA public efforts should be undertaken with care. The sectors are, on average, among the largest in the implementation of large IT systems can be world. Yet there is limited political appetite for any problematic throughout the globe in both the public retrenchment, targeted or otherwise. In Egypt, for and private sectors, and MENA is no exception. Yet example, some unofficial estimates indicate that as with careful planning and implementation, success is many as 20 to 30 percent of staff (and possibly more) possible. may be redundant. In a similar fashion, the A third area where progress is occurring is the use of productivity of the public sector in several GCC contract employment. In many countries, there has countries is clearly compromised by policies that, in been a proliferation of talented professional staff essence, amount to recruiting almost every native- being brought in as consultants to ministers and other born citizen into the civil service. senior officials, whose salaries are paid either by The roots of government over-employment in donors or occasionally by the government itself. MENA are many. In labor surplus economies, the Egypt currently has draft civil service legislation public sector has historically played an important under preparation to expand and routinize this role in soaking up excess employment. Politicians practice. The use of such employment can be a and senior officials were reluctant to dispense with mixed blessing. It can allow senior officials to tap GOVERNANCE NEWS & NOTES Page 7 VOL. 4, ISSUE 1 an important source of legitimacy and patronage, and In a similar fashion, comprehensive reform the public was reluctant to forgo a comfortable and programs that envision moving forward in an protected sinecure in the civil service. In oil-rich integrated, holistic fashion across a range of economies, public employment was viewed as a dimensions, such as machinery of government, pay means of redistributing the national patrimony and and employment, HR reform, etc. are typically not sharing the wealth. Yet many countries have successful. While there are virtues in thinking of reached the point where such strategies are no longer fiscally sustainable, and the transition to private sector led growth as a solution for unemployment and burgeoning youth population is already well advanced in countries such as Egypt. There is also evidence that the widespread availability of public sector positions in a number of Gulf states can have a pernicious impact upon society as a whole. Male high school graduation rates have peaked and started to decline in a couple of GCC countries, largely because nationals have limited incentive to finish since they will The machine is titled: "Administrative Appointments Mechanism". The lane labeled: sect or "confessional background" leads the candidate to the front row and the lane ultimately be employed anyway. labeled: "qualifications" leads the candidate to be thrown off of an edge. Another area where reforms Source: An-Nahar Daily Newspaper, January 2010 have typically struggled are in reform in an integrated fashion, the reality is that efforts to reform the machinery of government such approaches are extraordinarily difficult to from the center. Abu Dhabi has a strong Executive Council and was able to successfully streamline and coordinate and sustain in a consistent, phased approach across time. Bank experience has indicated rationalize its government structure. But such efforts are often the exception rather than the rule. Far more that the most effective reforms often have an opportunistic and ad-hoc quality about them. They common are efforts to reform government structures start as efforts to fix a specific problem or achieve a by a given Ministry of Administrative Development or Civil Service that end up producing elaborate given set of results, and then build off of that success. They also have an organic nature to them, restructuring plans that seldom see the light of day. Efforts to restructure individual line departments that in that some sets of reforms may move rapidly whereas others may struggle in ways that are not are spearheaded by central agencies for entirely predictable beforehand. The genius of administrative reform almost never work, as they typically lack the necessary ownership and political effective reform often relies more in adept tactical implementation than well laid strategic planning, buy-in for success. However, as noted above, there are examples of dynamic ministers who have been although the latter is not unimportant. able to opportunistically align their ministry or Another area where reforms have typically struggled agency restructuring with a broader reform effort and have been in efforts to confront wasta directly, such achieve some degree of success within their sphere as Lebanon`s recent efforts to implement of authority. meritocratic recruitment for the top grade of the civil service. Jordan also experimented with some GOVERNANCE NEWS & NOTES Page 8 VOL. 4, ISSUE 1 potentially far-reaching reforms in HR management BRIEF ASSESSMENT OF GLOBAL in its National Agenda that were never implemented. EXPERIENCE WITH CIVIL SERVICE Some of these efforts are still in play, and it may be REFORM: THE IEG EXPERIENCE too soon to write their obituary. Yet experience to date has not been positive. However well- BY LYDIA HABHAB intentioned, such initiatives have typically The development encountered fierce resistance from traditional of a country constituencies who have feared the loss in jobs and depends a great patronage that could result from their deal upon the implementation. quality of its public sector. Finally, success in public sector reform requires Since the 1980s, the World Bank has been promoting consistency and stability in leadership across time. public sector reform to improve efficiency and There are countries such as Jordan that have a history promote better delivery of public goods and services, of frequent cabinet turnover. Between 1999 and as well as to enhance transparency and 2007, for example, no fewer than eight ministers accountability. Civil Service and Administrative held the public sector reform portfolio. Under these (CSA) reform is one important thematic area of circumstances, it was virtually impossible to develop public sector reform. While important, CSA reform a coherent, sustained program that could be has been met with variable success. According to the implemented without interruption. Independent Evaluation Group (IEG), fewer than 45 Towards the Future percent of borrowers in this area show improvement, compared to 60-70 percent improvement in public MENA is hardly unique when it comes to civil expenditure and financial management in public service and administrative reform. As a whole, the sector reform.1 region tends to struggle in areas where other lower middle income countries have struggled and succeed CSA reform is the second most common public where they succeeded. The reform agenda itself is a sector reform in the World Bank portfolio after difficult and complicated one, as hundreds or in public expenditure and financial management. CSA some cases millions of employees can hardly be reform efforts include measures to track, contain, and expected to be indifferent regarding significant reduce the number of civil servants in a given changes that affect their livelihood. country, compensation reforms, organizational reforms, demand-side reforms, human resource Yet issues of service and regulatory quality, public management and training and capacity building. accountability, meritocracy and the fiscal burden of Many of these components face challenges that are the wage bill are at the core of the good country-specific; however political risk, financial governance agenda. They will not go away. As costs, and capacity all contribute to the success and Lebanon`s experience with meritocratic reform failure of CSA reform. indicates, such issues tend to keep emerging even when many sophisticated political observers have The lack of political commitment can affect even the written them off. Since the pressure for these least contentious components of CSA reform. reforms is likely to expand and intensify, it is Coupled with discontinuity over the implementation important that reformers throughout the MENA period, reallocation of resources, and staff turnover, region have a sophisticated and nuanced the lack of political commitment can slow, stall, and understanding of how to best pursue them--one that kill any public sector reform. Changes in political is informed by careful study of the successes and leadership and political time horizons can also failures of others. When well-conceived and adeptly undermine the reform process. In countries where the carried out, such reforms are both possible and can patronage system is prevalent, reforms that affect bring significant political and developmental rewards. 1 Public Sector Reform: What Works and Why? IEG GOVERNANCE NEWS & NOTES Page 9 VOL. 4, ISSUE 1 pay, recruitment, and promotion are very difficult to reform environment. It is important to be realistic achieve. that a country`s system will not change overnight and that focusing on select entry points and IEG identifies six factors that seem to contribute to incrementalism will be more successful than any the success in CSA reform and in their absence, attempt at remodeling an entire system. likely contribute to reform failures. The first is to have strong and coherent analytic diagnosis and Finally, effective donor coordination is imperative to advice. Unlike public expenditure and financial a successful reform strategy. Facilitating efforts management reform`s PEFA indicator, CSA reform between donors can ameliorate the results of a single lacks a standard analytic tool or report. This coupled donor`s effort in absence of political commitment with the scarcity of standardized data (ex. the and in a difficult reform environment. Minimizing number of staff by grade or occupation group) often conflicting advice and multiple agendas is also a prohibits strong and coherent analytic diagnosis and necessary component of effective donor advice from being realized. coordination. Another factor is to have realistic external CSA reform is not futile. In addition to the six expectations. CSA reforms take a long time to factors of success outlined by the IEG, focusing on implement and an even longer time to see results. incremental and select entry points can be successful Donors usually act on their own timeline, which is and can lay the foundation for later progress. often much shorter than the time needed to Concurrently, CSA needs strong country ownership realistically reform. Whether it is due to inflexible and donors need to tailor assistance to a country's project deadlines or for financial disbursement pace of reform. reasons, too short-termed reform efforts will Table 1. Success standards of common civil service and inevitably lead to failure. administrative reform measures A third factor is to ensure the appropriate packages CSA Reform of lending instruments. Particularly in countries with Success Standard Components: low capacity for implementation, policy-based Database Reform Collecting missing data collection lending should be coupled with technical assistance. and Tracking is not controversial and important Capacity building and ensuring the transfer of Existing Staff in diagnosing issues and designing knowledge will not only ensure success but will help reforms create sustainable programs. Training Training is not controversial Demand-Side Focusing on the users of A fourth consideration in CSA reform programs is to Reforms uncontroversial services (service standards, e-government, etc) have identify tangible indicators of success. Political shown moderate success leaders are more likely to champion reforms where Case studies have shown that Functional they can point to the benefits, whether it is a cost Reviews (ex. reviews are generally unsuccessful savings or a new system in place. One way of report to support because they do not lead to real indentifying tangible indicators of success would be downsizing process change to link CSA to more concrete reforms such as that of efforts) public financial management. Another way would be Human Resource Reforms such as merit-based to develop measurable indicators of results, though Management recruitment and promotion are very this would clearly be a more complex approach. difficult to implement and faces political risk, especially in A fifth factor is to take a pragmatic and patronage ­ based systems Downsizing and Politically unrealistic and assumes opportunistic approach to CSA reforms where Payment that the changes will bring about institutional environments are challenging. Decompression improved public administration. Diagnoses have concluded that the patronage system Staff reduction either never in developing countries creates a very difficult happens or is reversed through rehiring; and often the same people are rehired. GOVERNANCE NEWS & NOTES Page 10 VOL. 4, ISSUE 1 MOROCCO'S EXPERIENCE IN STREAMLINING THE PUBLIC SECTOR BY KHALID EL-MASSNAOUI The Government of Morocco designed and implemented an ambitious voluntary retirement program (VRP) in 2005--the only example of its type in the MENA region. More than 39,000 employees (7.6 percent of civil servants) elected to benefit from this program and left the public sector. The VRP is one of the most important components of the broad Public Administration Reform program (PARP) launched in 2003. In the short term, the VRP aimed at streamlining civil service and containing the wage bill at fiscally sustainable levels. In the medium term, it sought to facilitate the reorientation of the State to better fulfill its social and economic priorities while improving productivity in the civil service. The VRP has achieved most of its objectives. Although the current size of the civil service has reached its aggregate level prior to the VRP reform program, its age structure, skills mix, and geographic coverage have improved significantly. The VRP allowed the government to recruit new civil servants on the basis of proven needs and profiles, mainly in social sectors such as education and health. The improved composition and coverage of the public sector has enhanced productivity and improved service delivery. Second, the cost of the civil service on the budget has been brought to sustainable levels. Indeed, the wage bill has steadily declined since 2005 from 11.8 percent of GDP to around 10 percent end 2009. Many factors explain the success of this ambitious program. There was good preparation during all phases of the operation. The communication phase succeeded in widely disseminating needed information to all stakeholders, especially potential candidates, using all available media. The efficient management in the implementation of the VRP also helped streamline the process and win the credibility for the operation. From the outset, the direct involvement of the Prime Minister in monitoring the implementation process sent a strong signal to stakeholders. The Morocco VRP program also suffered from some problems that are typical for this type of program. The most critical shortcoming was that of adverse selection--i.e. the best and the brightest civil servants tended to be the ones who left. This problem was augmented by some design weaknesses. The VRP did not target specific jobs and grades, and all civil servants were eligible to participate. Indeed, the design of the severance packages favored civil servants in the highest salary range, which includes senior personnel with accumulated managerial, academic and technical experience--exactly the profiles most needed for a high performing public service. This resulted in the preponderant departure of higher ranked civil servants, while the government would have preferred the departure of lower ranked personnel where redundancies and weak productivity are most pronounced. The VRP experience carried out by Morocco provides several important lessons. First, it is possible to succeed a major downsizing operation of a costly and unproductive public civil service without generating major disruptions in service delivery. Second, it is also possible for such an operation to be financially attractive and result in significant savings for the budget. Third, the sustainability of the VRP`s results depends on the timely implementation of the related and complementary reforms, such as geographic redeployment of existing employees, new hiring targeted to needed skills and geographic locations, and timely and continuous training of civil servants to adapt their skills to the new needs of a modernized public sector. Fourth, such efforts need to be carefully targeted to avoid problems of adverse selection. GOVERNANCE NEWS & NOTES Page 11 VOL. 4, ISSUE 1 UPCOMING EVENTS AND ACTIVITIES March 25, 2010, Company Secretary Workshop: Essential Company Secretarial Practices in February 8, 2010, Enel Sustainability Forum 2010 Corporate Governance, Dubai, UAE. This is a one "Business as Usual," Rome Italy. Organized by day interactive workshop with presentations covering UNESCO, the Sustainability Day is a new initiative to five modules on different aspects of the role of the share and promote a culture of common purpose` Company Secretary and corporate governance, leading toward new thinking and best practices in benefiting from case studies, recent surveys and corporate sustainability at a global level. research data. info@hawkamah.org and sustainabilityday@eneleventi.it and www.hawkamah.org www.enelsustainabilityday.com February 20-21, 2010, INSOL International Annual Regional Conference, Dubai UAE. This conference offers you the opportunity to keep abreast of technical NOTEWORTHY LINKS issues as well as sharing best practice for developing innovative solutions to help local and global companies World Bank MENA Governance Website: in both the public and private sectors restructure. http://www.worldbank.org/mena/governance pennyr@insol.ision.co.uk and www.hawkamah.org World Bank General Governance Website: February 25-26, 2010, Annual Forum on Combating http://www.worldbank.org/governance Corruption in the EU 2010, Trier, Germany. The objective of this annual forum will be to debate how The World Bank`s Administrative and Civil best to ensure effective detention, investigation and Service Reform Website: prosecution of corruption, particularly affecting the http://go.worldbank.org/J5MJ0P5HR0 EC`s financial interests. info@era.int and www.igac.net Independent Evaluation Group (IEG) Website: th http://www.worldbank.org/ieg March 17-19, 2010, 4 Annual Fraud & Corruption Summit, London, UK. The summit will focus on the detection, prevention, and investigation of fraud, corruption and financial crime. shook@mistieurope.com and www.mistieurope.com March 23-24, 2010, 23rd National Conference on Foreign Corrupt Practices Act, NY, USA. Benefit from the practical perspective of seasoned corporate FCPA compliance executives, get an update on To subscribe or to change your enforcement and policy initiatives from top Government subscription status, please officials and FCPA attorneys, and learn how industry is contact: setting up internal controls to comply in this constantly changing global legal landscape. Ms. Lida Bteddini www.fcpaconference.com Social & Economic Development Middle East & North Africa The World Bank 1818 H St. NW Washington, D.C 20433 +1 (202) 458-4937 + (202) 477-0432 (fax) lbteddini@worldbank.org GOVERNANCE NEWS AND NOTES Page 12 VOL. 4, ISSUE 1 FOR FURTHER READING Civil Service Reform: A Review of World Bank Assistance. Report No. 19599, World Bank, 1999. Moore, Mark H., Creating Public Value: Strategic Management in Government, Harvard University Press, 1995. Organising the Central State Administration: Policies and Instruments. Sigma Paper No. 43, OECD/Sigma, 2007. Public Sector Reform: What Works and Why? An IEG Evaluation of World Bank Support, The World Bank, 2008. Rama, Martín. "Efficient Public Sector Downsizing." Policy Research Working Paper No. 1840. Development Research Group, World Bank, 1997. Shah, Anwar, Public Sector Governance and Accountability Series, Public Services Delivery, The World Bank, 2005. Disclaimer: views expressed in this publication reflect those of their authors and do not necessarily represent the views of the World Bank Group, its Board or its management.