GLOBAL REPORT PUBLIC SECTOR PERFORMANCE OCTOBER 2018 INAUGURAL ISSUE IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION GLOBAL REPORT PUBLIC SECTOR PERFORMANCE OCTOBER 2018 INAUGURAL ISSUE IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 2 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION TABLE OF CONTENTS List of Boxes, Figures and Tables 4 List of Abbreviations 5 ACKNOWLEDGEMENTS 8 About the Lead Authors 9 EXECUTIVE SUMMARY 10 Part I: Global Trends in Public Sector Performance 11 Part II: Special Topic: Policy and Inter-Agency Coordination 18 Conclusions 22 SETTING THE STAGE 24 Innovating in difficult places: Learning from governments as they re-invent themselves 25 Public Sector Performance: What is it and where does this report fit? 28 Recent literature about improving public sector performance 30 What does the World Bank frontline staff bring to the table? 32 What this report does – and doesn’t – do 33 Architecture of the report 35 PART I - GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE 38 Overview 39 Selecting the Cases 40 Identifying Drivers of Success 43 Linking the Emerging Themes and the Cases 46 Emerging Themes & Featured Cases 47 A Driving Results from the Center of Government 48 CASE STUDY 1 Fusing Tradition with Modernity: Imihigo Performance Contracts in Rwanda 52 CASE STUDY 2 Breaking Down Silos: Malaysia’s Experience in Strengthening Inter-agency 57 Cooperation CASE STUDY 3 Driving Education and Health Reforms from the Ministry of Economy and 61 Finance in Mozambique CASE STUDY 4 Making Regulatory Impact Assessments Work in Armenia 67 B Civil Service Management 72 CASE STUDY 5 Putting 800,000 Officials to Work: China’s State Administration of Taxation 76 Implements a Performance Management Reform CASE STUDY 6 Reforming Civil Service Recruitment through Computerized Examinations 81 in Indonesia IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 3 C Innovations in Managing Public Money 86 CASE STUDY 7 Turning Around an Agency: The Manaus Finance Secretariat Introduces 90 Results-Based Management CASE STUDY 8 Giving Government Units Access to Financial Data in a Cost-Efficient Way: 96 Indonesia’s Online Monitoring Financial Management Information System CASE STUDY 9 Rwanda: Pioneering e-Procurement in Africa 100 D New Approaches to Last-Mile Service Delivery 104 CASE STUDY 10 A New Law Leads to Service Delivery Reforms: The Public Services 108 Guarantee Act in Madhya Pradesh CASE STUDY 11 At Your Service: Improving Access to Information in Uruguay Through a 114 Government-NGO Partnership CASE STUDY 12 Engaging Citizens to Improve Service Delivery: The Citizen Feedback 119 Monitoring Program in Pakistan CASE STUDY 13 Using Smartphones to Improve Public Service Delivery in Punjab, Pakistan 125 E Innovations in Delivering Justice Services 132 CASE STUDY 14 Automating Processing of Uncontested Civil Cases to Reduce Court 136 Backlogs in Azerbaijan CASE STUDY 15 Incentivizing Courts to Reduce Backlogs: Serbia’s Court Rewards Program 140 PART II - SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION 146 Why Coordination Matters and Why it is Difficult 147 How We Got Here: Recent Developments in Light of the Literature 151 Toward Enhanced Coordination: Key Dynamics and Approaches 156 The Broader Environment 156 Formal Coordination Mechanisms 160 Practices That Influence Coordination 165 Global Experience with Strengthening Coordination 172 Reforms to Improve Policy Coordination 173 Reforms to Strengthen Whole-of-Government M&E 176 Examples of Malaysian Coordination Mechanisms 179 Lessons and Conclusions 181 What Has Worked? 182 What Has Not Worked? 184 Drivers of Effective Policy Coordination 186 ANNEXES 190 Annex 1. Methodology for Case Selection 191 Annex 2. World Bank: Strengthening Inter-Agency Coordination at the Sectoral Level 193 4 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION LIST OF BOXES BOX 1. Notable Innovations from Emerging Economies 27 BOX 2. Case Selection Process 40 BOX 3. Efficiency Gains in Egypt through the Creation of a One-Stop Shop for Business Registration 149 BOX 4. Coordination: Linkages between Part I and Part II 150 BOX 5. The Communist Party of Vietnam and Policy Coordination 159 BOX 6. Functions of a State Chancellery: The Example of Latvia 161 BOX 7. Cabinet Committees and Sub-Committees in the United Kingdom (2018) 162 BOX 8. Vertical Coordination in Guangxi Province 165 BOX 9. Progress in Key Sectors through Integrated Performance Management: The Brazilian State of Pernambuco 167 BOX 10. Policy Coordination in Latvia: A Tale of Two Mechanisms 174 BOX 11. Improving Whole-of-Government Coordination in Serbia: Thinking out of the Box 175 BOX 12. Efforts to Improve Government-Wide Performance Monitoring in India: An Ambitious Effort Falls Short 178 BOX 13. Lessons Learned in the Implementation of the National Transformation Programme 179 BOX 14. Liberia During the Ebola Crisis: Low Tech, but Effective 181 BOX 15. Improved Coordination in River Basin Management 194 LIST OF FIGURES FIGURE 1. The Five Key Factors to Successful Public Sector Performance Innovations 17 FIGURE 2. Public Sector Results Chain: Upstream and Downstream Outputs 28 FIGURE 3. Submissions and Selected Cases: Distribution by Region and Income Level 42 FIGURE 4. Submissions and Selected Cases: Distribution by Theme and Government Effectiveness 42 FIGURE 5. Center of Government as Concentric Circles 49 FIGURE 6. The Public Sector is a Large Employer across Regions of the World 73 FIGURE 7. Dimensions used by PEFA in Assessing the Quality of PFM 87 FIGURE 8. Service Delivery and Accountability Triangle 105 FIGURE 9. Network Analysis of SDG Goals 148 FIGURE 10. Expansion of Government Employment at the Federal, State, and Local Levels 153 FIGURE 11. Increasing Complexity of Coordination 155 FIGURE 12. Sweden’s Coordination Mechanisms for Implementing the SDGs 163 FIGURE 13. Sectoral Coordination Efforts within World Bank Projects 193 LIST OF TABLES TABLE 1. Common Elements Across the Cases 45 TABLE 2. Roadmap: Emerging Themes and Featured Cases 46 TABLE 3. Evolving Roles and Responsibilities within the U.S. Federal Government 152 TABLE 4. A Modified Metcalfe Scale 154 TABLE 5. Government Coordination: A Conceptual Map 157 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 5 LIST OF ABBREVIATIONS 11MP 11th Malaysia Plan, 2016–2020 DMO Delivery Management Office Saudi Arabia’s National Center for DOSM Department of Statistics Malaysia Adaa Performance Measurement DPO Development Policy Operations AGC Attorney-General's Chambers DTF Delivery Task Force Uruguay's Agency for DU Delivery Unit e-Government and Information AGESIC Society (Agencia de Gobierno EAP East Asia and Pacific Electrónico y Sociedad de la EC Economic Council Información y del Conocimiento) ECA Europe and Central Asia AOS Africa Olleh Services Limited Rwanda’s Economic Development ARV Antiretroviral EDPRS and Poverty Reduction Strategy ASA Advisory Services and Analytics e-Procurement Electronic Procurement Indonesian Ministry of National EPU Economic Planning Unit Development Planning (Badan BAPPENAS Perencanaan Pembangunan ERRC Eliminate-Reduce-Raise-Create Nasional) Economic Transformation ETP BF Bolsa Familia Program Programme BFR Big Fast Results EU European Union Indonesia's Civil Service Agency FCV Fragility, Conflict, and Violence BKN (Badan Kepegawaian Negara) FDI Foreign Direct Investment CAT Computer-assisted Test FHA Federal Highway Administration CC Central Committee International Football Federation CEO Chief Executive Officer FIFA (Fédération Internationale de Football Association) Citizen Feedback Monitoring CFMP Program Federation of Industries of the FIRJAN State of Rio de Janiero CIA Central Intelligence Agency Financial Management Information Mozambique's Central Medical FMIS CMAM System Store FY Financial Year CoG Center of Government Egypt's General Authority for CPV Community Party of Vietnam GAFI Investment and Free Zones CS Civil Service Global Centre for Public Service GCPSE Special Allocation Fund (Dana Excellence DAK Alokasi Khusus) GDP Gross Domestic Product Civil Society Organization in GGP Governance Global Practice Uruguay that works on Open data, Transparency and Freedom GKL Greater Kuala Lumpur DATA Uruguay of Information (Datos Abiertos, GLC Government-Linked Company Transparencia y Acceso a la Información) GP Global Practice Kuala Lumpur City Hall (Dewan Government Transformation DBKL GTP Bandaraya Kuala Lumpur) Programme United Kingdom’s Department for HI High Income DfID International Development HIV Human Immunodeficiency Virus United States’ Department of DHS HRM Human Resource Management Homeland Security Human Resource Management DLI Disbursement-linked Indicators HRMIS Information Systems 6 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION IAPG Inter-Agency Planning Group MP Madhya Pradesh International Business Machines M-PESA Mobile Money Transfer Service IBM Corporation Ministry of Performance MPME International Bank for Monitoring and Evaluation IBRD Reconstruction and Development MQA Malaysian Qualifications Agency Information and Communications ICT Malaysian Qualifications Technology MQF Framework Implementation and Coordination ICU MQR Malaysian Qualifications Register Unit MRT Mass Rapid Transit ID Identity Document Uruguay's Ministry of Public Health IEG Independent Evaluation Group MSP (Ministerio de Salud Publica) Inter-Ministerial Coordination IMCC Medium-Term Expenditure Center MTEF Framework IMF International Monetary Fund NA National Assembly IRS Internal Revenue Service National Aeronautics and Space NASA ISU Implementation Support Units Administration IT Information Technology NC National Congress ITU Information Technology University National Center for Legislative NCLR Regulation JD Justice Delivery National Economic Advisory KPI Key Performance Indicator NEAC Council Indonesia's Corruption NEM New Economic Model KPK Eradication Commission (Komisi Pemberantasan Korupsi) NGO Non-governmental Organization LAC Latin America and the Caribbean National Human Capital NHCDC Development Council LI Low Income National Implementation Task LMI Lower Middle Income NITF Force People Service Centers (Lok Sewa NKEA National Key Economic Area LSK Kendras) in Madhya Pradesh state, India NKRA National Key Result Area M&E Monitoring & Evaluation National Occupational Skills NOSS Standards Ministries, Departments and MDA Agencies NPC National Planning Council MDG Millennium Development Goal NPM New Public Management Multi Donor Trust Fund for Justice National Strategic Assessment MDTF-SSS NSAC Sector Support in Serbia Committee MEF Ministry of Economic and Finance NSO National Strategy Office Mozambique’s Ministry NSU National Strategy Unit MEHD of Education and Human NTC National Transport Council Development National Transformation MENA Middle East and North Africa NTP Programme MOF Ministry of Finance NY New York MOHR Ministry of Human Resources OBB Outcome-based Budgeting MOT Ministry of Transport Organization for Economic OECD MOW Ministry of Works Co-operation and Development IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 7 OGG Office of the Government Serbia's Supreme Court of SCC Cassation OGP Open Government Partnership SD Service Delivery Online Monitoring of Indonesia's OM-SPAN State Treasury and Budget System Mozambique's District Services of Education, Youth and Technology P4R Program-for-Results SDEJT (Serviço Distrital de Educação, PBA Performance-based Allocations Juventude e Tecnologia) PCC Policy Coordination Center SDG Sustainable Development Goal PCD Policy Coordination Department SEIO Serbia European Integration Office PDCA Plan, Do, Check, Act SIL Sector Investment Loan Problem-driven Iterative SME Small and Medium Enterprise PDIA Adaptation SMS Short Messaging Service PDO Project Development Objective SOE State-owned Enterprise Public Expenditure and Financial PEFA Malaysia's Land Public Transport Accountability SPAD Commission (Suruhanjaya Malaysia’s Performance Pengangkutan Awam Darat) PEMANDU Management and Delivery Unit Indonesia's State Treasury and SPAN Malaysia’s Special Task Force to Budget System PEMUDAH Facilitate Business Project Management System SPPII PFM Public Financial Management (Sistem Pemantauan Projek II) Program for International Student Shire River Basin Management PISA SRBMP Assessment Program Punjab Information Technology SRI Strategic Reform Initiative PITB Board National Team for the PM Prime Minister Acceleration of Poverty Reduction TNP2K (Tim Nasional Percepatan PMO Prime Minister's Office Penanggulangan Kemiskinan) Planning, Programming, and PPBS TOD Transit-oriented Development Budgeting System Technical and Vocational Public Services Guarantee Act TVET PSGA Education and Training (state of Madhya Pradesh, India) TWG Technical Working Group PSM Public Sector Management UN United Nations RAS Reimbursable Advisory Services UK United Kingdom RCT Randomized Control Trial UMI Upper Middle Income Malaysia's People's Volunteer RELA Corps (Jabatan Sukarelawan United Nations Development UNDP Malaysia) Programme RIA Regulatory Impact Assessment US United States Rwanda Public Procurement USD United States Dollar RPPA Authority Malaysia’s Urban Transformation UTC RRF Rapid Response Facility Centre RTC Rural Transformation Centre VAT Value-added Tax SAR South Asia WDR World Development Report China’s State Administration of WfD Workforce Development SAT Taxation SC Steering Committee 8 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION ACKNOWLEDGEMENTS This report was prepared by the World Bank team Haria Wibisana and staff of the BKN, Indonesia led by Jana Kunicova and Bernard Myers (task team (Indonesia CAT); Laura de Castro Zoratto, leaders). The lead authors are: Robert P. Beschel Lourival Litaiff Praia, Alessandra Nathacha Miwa (Part II); Blair Cameron (Part I case studies); Neves Pinheiro, Larice Maciel Suci Barreto, Renata Jana Kunicova (full report); and Bernard Myers Dickie de Almeida (Brazil Manaus); Hari Purnomo, (full report). The core team members included: Taj Ismail, Cem Dener, Sudarto and staff of the Datuk Surendran Balan, Zubair Bhatti, Ruxandra Ministry of Finance, Indonesia (Indonesia OM- Burdescu, Verena Fritz, Jeevakumar Govindasamy, SPAN); Nagaraju Duthaluri, Mulugeta Dinka, Kai Kaiser, Carmen Loo, Shomikho Raha, Carolina Richard Migambi (Rwanda e-procurement); Vikram Rendon, and Fabian Seiderer. Adele Barzelay Menon, Ana Bellver (India PSGA); Fabrizio provided research assistance. Graham Colin-Jones Scrollini, Daniel Carranza (Uruguay A Tu Servicio); skillfully edited the report. Chancey Lee Pacheco, Zubair Bhatti, Usman Bajwa, Hasnain Iqbal, Tauqir Joshua Foong, and Li Shen Liew provided tireless Shah (Pakistan CFMP); Zubair Bhatti, Umar Saif editorial assistance. Kane Chong created the graphic (Pakistan smartphones); Amitabha Mukherjee, Eva design and layout. Maria Melis, Khayyam Bayramov, Ramin Gurbanov, Rado Brezovar (Azerbaijan courts); Georgia Harley, The team worked under the overall guidance of Srdjan Svircev, Elaine Panter (Serbia courts). Deborah Wetzel, James Brumby, George Larbi, and Robert Taliercio. The team closely coordinated This report has been produced in partnership with with Ulrich Zachau, Mara Warwick, and Faris H. the Government of Malaysia, with substantive inputs Hadad-Zervos. from the Malaysian policy research community. The World Bank Group Global Knowledge and The team is grateful to peer reviewers – Helene Research Hub in Kuala Lumpur was launched Grandvoinnet, Ku Kok Peng, Nick Manning, in early 2016 with the aim of stimulating south- Datuk Latifah Merican, Dan Rogger, Tony south knowledge exchange based on Malaysia’s Verheijen, Michael Woolcock, Prof. Datuk Dr. development experience, including on public sector John Antony Xavier, and Yongmei Zhou – for their management and economic transformation. The thoughtful comments and suggestions on either the mandate of the Hub is threefold: to facilitate the concept note and/or the full draft report. Further flow of on-demand technical assistance to Malaysia; useful conceptual inputs were provided by Ana to help share the lessons of Malaysia’s development Bellver, Jurgen Blum, David Bernstein, Georgia experience with the world; and to foster development Harley, Zahid Hasnain, Norman Loayza, Svetlana research. The Governance Global Practice, who led Proskurovska, Vijayendra Rao, Mike Roscitt, Tony the development of this report, has a significant Verheijen, and Joanna Watkins. presence in the Hub, curating knowledge of Malaysian experiences in public sector performance The case studies would be impossible to develop and public financial management. Yet, rather than without the input and review of the following showcasing Malaysian experiences, this Global colleagues and government counterparts: Nicoletta Report is intended to be a source for global experience Feruglio, Enagnon Ernest Eric Adda, Vaster on public sector performance – experience to which Kanyesig ye (Rwanda Imihigo); Jeevakumar Malaysia is both a contributor and a beneficiary. In Govindasamy, Carmen Loo, Datuk Dr Aminuddin Part II, the report seeks to capitalize on Malaysia’s Bin Hassim and staff of the National Strategy Unit experience with policy development and inter- of the Ministry of Finance, Malaysia (Malaysia agency coordination, highlighting both its successes breaking silos); Furqan Ahmad Saleem, Courtney and challenges. Price Ivins (Mozambique P4R); Petter Lundkvist, Davit Melikyan (Armenia RIA); Min Zhao, Fu Shulin (China SAT); Erwin Ariadharma, Bima IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 9 About the lead authors Robert Beschel Malaysia. Since joining the Bank Robert P. Beschel Jr. is currently a Lead in 2006, Dr. Kunicova has worked Public Sector Management Specialist with governments in Europe and within the World Bank’s Middle East Central Asia, Africa, and East Asia on and North Africa region. He has also improving service delivery, strategic served as the Global Lead for the World planning, monitoring and evaluation, Bank’s Center of Government Global civil service, and public administration Solutions Group. He has written and reform. Aside from managing Bank worked extensively on economic and engagements and authoring numerous public sector reform issues in over fifty publications on these subjects, she has countries in the Middle East, East Asia, also worked and written on integrity and South Asia, and Central and Eastern anti-corruption systems and political Europe. In 2010, he was recruited by the economy analysis. Dr. Kunicova holds a Office of Tony Blair and the Government PhD in comparative political economy of Kuwait to serve as Director for Policy from Yale University. in the newly created Technical and Advisory Office of the Prime Minister. Dr. Beschel holds a Masters degree in Bernard Myers Public Administration from Harvard Bernard Myers is a Senior Public Sector University’s John F. Kennedy School of Specialist at the World Bank’s Global Government and a Masters and Ph.D. Knowledge and Research Hub in Kuala in Political Science from Harvard’s Lumpur, Malaysia, where he leads the Government Department. program on Public Finance Management. His previous assignments have taken him across Europe and Central Asia, Blair Cameron Southeast Asia, and Africa. His areas of Blair Cameron is an independent specialization include public investment consultant. He has extensive experience management, per formance-based conducting research and writing case budgeting, budget planning, civil service studies on public policy implementation reform, and strategic/functional reviews. across Africa, Asia, and Latin America. Mr. Myers facilitates knowledge sharing Previously, he worked for Innovations for for the Public Expenditure Management Successful Societies, a research program Network in Asia (PEMNA), a peer- at Princeton University. Mr. Cameron to-peer network for finance officials in is from Methven, New Zealand, and east Asia. Prior to joining the Bank, holds a degree in International Relations he worked for the US Treasury’s Office and Latin America Studies from Brown of Technical Assistance and for the US University. Government Accountability Office. He holds an MBA from Stanford Business School and a Bachelor’s degree Jana Kunicova in Political Economy from Princeton Jana Kunicova is a Senior Public Sector University. Specialist at the World Bank. In her current assignment, she manages the Public Sector Performance program at the World Bank’s Global Knowledge and Research Hub in Kuala Lumpur, 10 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION EXECUTIVE SUMMARY Public sector performance is fundamentally about governments being able to deliver on their policy commitments for the benefit of their citizens. G overnments with well-performing public and university programs. The primary purpose of the sectors are capable of translating good report is to help countries move further along the path policies into development outcomes. Such of reform to achieve better public sector performance. governments can also deliver outcomes to citizens in With that goal in mind, the report aims to serve as a a manner commensurate with what the country can reference guide for all those involved in designing or afford. They will be able to align the planned outcomes implementing public sector reforms. The report pays with citizens’ preferences, doing so in a way that is homage to an old Chinese saying, “Crossing the river perceived as broadly fair and impartial. In some cases, by feeling the stones” by highlighting the importance of improving performance starts with improving the experimentation, adaptation, and incremental reforms policy-making and policy coordination process at the in reaching one’s goal. center of government. However, many countries adopt sensible policies that do not result in better healthcare, This report consists of two parts. Part I, which education, sanitation, infrastructure management is designed as a recurrent stocktaking of global or reduced crime. This is primarily because of experience in improving public sector performance, implementation gaps in the public sector results chain. presents case studies organized along thematic Improving public sector performance therefore entails lines to highlight recent achievements in emerging closing these gaps. economies. Part II focuses on a special, cross-cutting topic that is critical to public sector performance. This report is an inaugural issue in a new series This year’s special topic is Policy and Inter-Agency that aims to offer a fresh look at how developing Coordination, drawing on the conclusions from the countries are overcoming persistent problems in 2017 World Development Report (WDR) which cites public sector management. It builds on a large body “coordination” as one of three essential institutional of literature on improving public sector performance, functions for making policies effective. Part II offers and it complements efforts of other international a canvas of strategies and techniques that countries organizations, private consultancies/think tanks, employ to operationalize this concept. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 11 EXECUTIVE SUMMARY PART I Global Trends in Public Sector Performance S ignificant improvements in public sector of the cases offers evidence of a tangible impact on performance are being evidenced across public sector performance, although the long-term the developing world today, as government story remains to be told. officials and political leaders find new and innovative ways to tackle long-standing public As the interventions to improve public sector management challenges. This report demonstrates performance occur at many different entry that public sector performance is not merely a concern points, the report has categorized each of of high-income and OECD countries; it is being the cases into one of five broad themes. The pursued diligently and successfully across a variety themes reflect that reforms have different objectives; of country contexts, including in low-income and some address concerns such as policy formulation post-conflict environments. Through surveying its and government administration, while others focus governance specialists from around the globe, the on functions that tend to be citizen-facing. The five World Bank has assembled a collection of 15 cases themes are: that showcase how lessons from global experience are being adapted and applied in practice. Indeed, A Driving Results from the Center of Government these cases reflect how the conceptual frameworks presented originally in the 2004 and 2017 WDRs B Civil Service Management are being operationalized. They are not intended to represent global best practice, but rather a mix of C Innovations in Managing Public Money recent and ongoing efforts that are helping the public sector to deliver on its promises to citizens. Each D New Approaches to Last-Mile Service Delivery E Innovations in Delivering Justice Services 12 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION EXECUTIVE SUMMARY A Driving Results from the Center of Government E ffective leadership and coordination from the top of the executive branch is perhaps one of the most important factors for improved public sector performance. When the group of institutions that provides support to the head of government and his/her cabinet is functioning well, collective expertise from across the public sector is mobilized and brought to bear on the most pressing decisions facing the country. Once decisions are taken and ministries move forward with clear objectives and adequate resources, a well-functioning Center of Government (CoG) creates incentives for implementation, such as a systematic monitoring and evaluation system to reinforce accountability to the chief executive. Unfortunately, many CoG institutions fall short of this ideal. Governments experience challenges upstream with flawed policy development, and equally vexing challenges to assure effective implementation at the point of service delivery. There are often information asymmetries between policy-makers and last-mile service providers, as well as differences in incentives that can impede the quality and efficiency of services delivered to citizens. The four cases under the theme of driving results from the center of government offer very different experiences, but each brings a compelling story of impact on the ground. i. In Rwanda, government fused the modern concept of performance contracts with a traditional practice of public commitment called Imihigo. The President’s Office began by using powerful non-monetary incentives to get mayors across the country to set development targets for their districts and deliver on them; after the initial success at district level, it was expanded to cover central government ministries as well. ii. In Malaysia , the key CoG institutions adapted a management consulting concept from the private sector to encourage collaboration, break down silos across ministries, departments and agencies (MDAs), and find efficiency gains. Malaysia’s case shows that it is possible to induce collaboration among MDAs to deliver services more efficiently and effectively. iii. The Mozambique case provides another example of how the CoG can provide appropriate incentives to enhance service delivery. The Ministry of Finance introduced financial incentives and better information flows that enabled line ministries to achieve measurable improvements in medicine supply chains and primary education. iv. In Armenia, a nascent but promising effort has been made to strengthen policy formulation at the very early stages. Armenia is integrating regulatory impact assessment (RIA) into broader government systems in order to enhance the take-up of more evidence-based policy-making. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 13 EXECUTIVE SUMMARY B Civil Service Management E ffective management of the public sector workforce is another critical element to improving the overall effectiveness and efficiency of the public sector. Personal emoluments often constitute one of the largest shares of the annual budget (between 24 and 27 percent), and civil servants represent an important voting constituency for many political leaders. The quality of civil service performance is affected by the policies and procedures that govern entrance into the service, as well as the policies for managing and motivating them once they are in. Yet, changes to existing civil service pay and employment systems are often politically difficult to make due to the number of people affected, legacy systems, and potential vested interest. As a result, governments often contemplate carefully whether to embark upon whole-of-government reforms or to target one or more institutions where impact can be demonstrated first. The report highlights two cases where countries have succeeded in improving the quality of civil servants at entry and enhanced the management systems governing their day- to-day performance on the job. The examples of Indonesia and China are all the more impressive given the large and diverse civil service workforces they have to manage. i. In Indonesia, the Civil Service Agency (BKN) succeeded in introducing a computer-assisted testing system (CAT) to disrupt the previously long-standing manual testing system that created rampant opportunities for corruption in civil service recruitment by line ministry officials. Now the database of questions is tightly controlled, and the results are posted in real time outside the testing center. Since its launch in 2013, CAT has become the defacto standard for more than 62 ministries and agencies. ii. In China, the State Administration of Taxation (SAT) embarked on a massive effort to transform the effectiveness of its core tax collection functions implemented by more than 800,000 staff. Over a three-year period, the SAT succeeded in implementing a performance plan for all staff. It included quantitative and qualitative indicators that cascaded down from the national level to the bureau level and to the individual. The new management systems were used by the Chinese authorities to expedite the transition from sales tax to value-added tax, while also gaining broad support from agency staff. C Innovations in Managing Public Money P ublic Financial Management (PFM) is a broad field encompassing government functions that are often invisible to the public, but nevertheless impactful. While the public may not observe these functions directly, they can experience problems with quality or access to public services when PFM is not working well. These are the functions for which civil servants themselves are both the agents and the customers. These internal clients require operating systems to work, information to be available when they need it, and others to perform their tasks on time and with accuracy. Service delivery suffers when governments do not adequately address the performance of their management systems and institutional incentives. These include public procurement, internal controls and standards (fiduciary), and the institutional incentives for budget management more broadly. 14 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION EXECUTIVE SUMMARY The three cases featured in this section offer a glimpse into how countries are taking steps to overcome institutional and technical constraints to improve their PFM performance. i. The case from Rwanda demonstrates that modern procurement techniques that are widely used in OECD countries do not need to be off-limits for the developing world; capacity constraints we commonly expect in Sub-Saharan Africa can be, and are being, overcome. Drawing on the experience of other countries, Rwanda has been able to implement an e-procurement system that now covers virtually all public procurement in the country. ii. In Indonesia , Ministry of Finance officials have demonstrated they can get timely, reliable expenditure and payment information to every government office across the nation, even though Indonesia is an archipelago spanning thousands of islands. They developed their online monitoring system (OM-SPAN) at a fraction of the cost that would have been the case under traditional approaches relying on international software licenses. iii. The case of the Brazilian city of Manaus demonstrates that dramatic results can be achieved in terms of fiscal performance with the help of determined leadership, an overhaul of performance management systems, and enabling technology. Within a short time, Manaus went from being one of the worst performing to one of the best performing municipalities in Brazil in terms of fiscal management. D New Approaches to Last-Mile Service Delivery W hile better services are the outcome of the complex machinery of the state, including its upstream functions like policy coordination and budget management, this theme focuses on how countries are tackling issues in the “last mile” of service delivery. It concerns: How can government create the incentives for service providers to deliver quality and efficiency? How can it ensure ease of access for citizens? In many emerging economies, citizens often lack easily accessible information about government services, including the types of services they can request, their price, or how long they will take. This asymmetry in information can give rise to middlemen, inflated costs, long waiting times, and often bribery. Many emerging economies also face absenteeism among their public sector workers, and where absenteeism is not an issue, governments still struggle with the quality of service: a teacher simply showing up for class does not mean that the students will actually learn. Several techniques to address key service delivery challenges emerge in the cases included in the report: institutional reform, beneficiary feedback, monitoring, and open data. i. In the state of Madhya Pradesh (MP) in India, the government addressed severe and persistent service delivery challenges that could not be overcome through regulation of service providers. By adopting the Public Services Guarantee Act (PSGA) in 2010, MP legislated citizens’ rights to a core 26 services. The legislation has helped create new norms for millions of day-to-day state–citizen interactions, inducing higher citizen expectations, and creating new standards of behavior for government servants. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 15 EXECUTIVE SUMMARY ii. In Uruguay, the Ministry of Public Health launched an innovative partnership with civil society to make data on prospective healthcare providers more accessible and easy to use. The new web- based platform has been embraced by citizens who need to make healthcare choices, and has helped make service providers more accountable. iii. The Pakistani state of Punjab introduced a citizen feedback program to monitor the performance of civil servants, stymy petty corruption, and improve public services. Starting from a small pilot in one of its districts, the province now operates a wide-ranging monitoring program that leverages the ubiquity of cellphones to actively solicit feedback from users of public services. The national passport office has since taken the approach on board and attributes citizen feedback to helping them slash the processing time for passports from three weeks to ten days. A lso in the state of Punjab, inexpensive smartphones have been used to monitor the performance iv. of officials in several sectors. The smartphones have helped to significantly reduce absenteeism, improve the quality and timeliness of facility inspections, and enhance spatial coverage. E Innovations in Delivering Justice Services T he administration of justice provides a window into how public sector innovations are impacting a unique sector. The delivery of justice, as a core public service, helps define and protect rights – individual, collective, and commercial – and enforce corresponding obligations. The quality, efficiency, and independence of justice sector institutions have a direct impact on the economic performance of a country and contribute to creating an enabling environment for the growth and development of the private sector. Poor and vulnerable populations, as well as micro, small, and medium enterprises, suffer most from poor court performance and weak justice systems. Initial efforts to reform the justice sector focused mainly on institutional strengthening of the courts and the judiciary, including investment in new/refurbished court houses. Building on lessons learned, justice sector reforms now incorporate broader public sector management concepts and tools to design performance incentives, measure results, and support change management. The experience amassed over the past decades of justice sector reform is highlighted in the cases from Serbia and Azerbaijan. i. In Serbia, the broader political dialogue on EU accession provided an important motivation and urgency for tackling reforms in the justice sector. However, for the government to overcome longstanding challenges to progress in the sector, it needed to be innovative in its approach. Serbia combined a system of performance incentives for courts with increased management authority for presiding judges to help stimulate new approaches to reducing backlogs and enhancing court performance. ii. In Azerbaijan, the government developed a new approach to dealing with their own backlog of cases, one which addressed both supply side and demand side elements. Recognizing that much of the backlog stemmed from relatively simple civil cases, such as claims for unpaid bills, the government partnered with the private sector in the use of an automated system to streamline the handling of uncontested cases, thus freeing up judges’ time for more important cases. 16 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION EXECUTIVE SUMMARY Success Factors in Undertaking Public Sector Performance Innovations T he cases, despite their diversity, offer • Transparency can benef it either internal insights into the relevance of five key stakeholders (e.g., other government officials) or factors to improving public sector external stakeholders and citizens. Aside from performance: political leadership, institutional the usual argument about the intrinsic value of capacity building, incentives, transparency, the right to information and general benefits of and technology. openness, the key takeaway from the case analysis in this report is that increased transparency can • Political leadership is needed because few, if help deliver change in public sector performance. any, of the innovations are a purely technocratic Greater internal transparency may mean breaking exercise. In some cases, innovation required down government silos and ensuring inter-agency a change in leadership at the top to create the information sharing, or publishing and circulating catalyst for a new approach to organizational performance information. Transparency can also management. Whether it applied to breaking be a powerful driver for changing incentives. down organizational silos, holding managers accountable, or requiring MDAs to comply with • Technology, while not a panacea, is present in a more efficient and transparent procedure, each two-thirds of the featured cases, either showcasing innovation required strong political leadership. the technology application that was central to Leaders need to find ways to collaborate with a the reform, or playing a supporting role (e.g., wide range of internal and external stakeholders on application of smartphones supported a broader the one hand, and overcome inherent opposition operational change in Pakistan). While the cases on the other. give insights into the relevance of technology for public sector performance, none of them reflected • Institutional capacity building of existing the use of cutting-edge technology. Instead, they bodies is a common element across many of the applied relevant, even basic, IT tools and know- cases, especially in driving results from the CoG how to their specific functional requirements and and in managing public finances. Officials often did not over-design their efforts. Furthermore, used a mix of technology, new management the technology application is rarely a stand-alone approaches, and staff training to strengthen solution; rather, it is accompanied by policies and institutional capacity to deliver results. For procedures to change behavior. reforms to endure, one ultimately needs to create sustainable institutions. • Incentives matter, and we see this applied both at the institutional level (e.g., through government- wide policy, creating systems and structures that shape institutional objectives, and program monitoring systems) as well as at the level of civil servants (e.g., through performance targets and reward systems). We see examples of performance management upstream at the CoG where broad policy is formulated, and also downstream at the point of service delivery closest to citizens and beneficiaries. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 17 EXECUTIVE SUMMARY FIGURE 1 The Five Key Factors to Successful Public Sector Performance Innovations INSTITUTIONAL POLITICAL LEADERSHIP 1 2 CAPACITY BUILDING KEY FACTORS 5 in improving Public Sector Performance TECHNOLOGY 5 3 INCENTIVES 4 TRANSPARENCY This analysis suggests some recommendations broad category, as it may include some quick wins for both governments and development in government-wide monitoring and HR systems, institutions who seek to support improvements while also involving more long-term transformations in public sector performance. In the short of the institutional and civil service culture. Last but term, it pays to invest in the initiatives that foster not least, acknowledging that political leadership transparency and/or employ technology in a context- is a necessary precondition for most public sector savvy and fit-for-purpose manner. At the same performance reforms is important. All too often, time, the medium- to long-term efforts can focus public sector performance reforms fail because they on changing incentives and building institutional are attempted as purely technical solutions, rather capacity. Changing incentives is a particularly than having a political ownership and drive. 18 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION EXECUTIVE SUMMARY PART II Special Topic: Policy and Inter-Agency Coordination Why coordination matters and why it is difficult A s the responsibilities of government An important benefit of improved coordination have grown in volume and complexity, is that it helps to ensure that disparate policy and program coordination has agencies are pulling in the same direction. become ever more challenging, and the stakes Many government decisions often involve the delicate have never been higher. Government ministries, weighing of priorities against each other. How should departments and agencies (MDAs) have expanded in a government in the Middle East, for example, best size and mandate to serve a growing population that balance the need to diversify non-oil revenue sources demands more and better services – a phenomenon through increased visa fees with its broader desire to that applies to both rich and poor countries alike. increase tourism? How should a large municipality in As bureaucracies have grown, coordination within Africa manage major investments in water, sanitation, MDAs also becomes more challenging, as more and land management in an integrated and holistic players and a greater array of interests now need to manner? Without appropriate forums to weigh these be brought into the decision-making process. Larger policy and operational tradeoffs, agencies can often bureaucracies in turn lead to greater separation work at cross-purposes. between the citizens and those who are supposed to serve them, contributing to a growing feeling of The social and economic impact of poor alienation from government. coordination takes various forms. First, poor coordination can lead to decisions being made on the Solutions to public service delivery often require basis of inaccurate, biased or incomplete information. more joined-up and inter-connected responses Second, decisions taken may not be implemented than was previously thought necessary, if they because they were not properly vetted for their cost, are to deliver results. A survey by OECD found legality, and consistency with established policy. that inter-agency coordination was viewed as the Third, it may generate needless waste and duplication most pressing challenge to implementation of the of effort among agencies. Fourth, poor coordination Sustainable Development Goals (SDGs). Indeed, can create additional compliance burdens on citizens, many social problems that require government for example, by forcing them to invest time, effort, and attention and action are not easily structured and energy fulfilling similar requirements with different contained, requiring that agencies with different government agencies because of lack of inter-agency mandates and missions work together to coordinate information sharing. their activities for the common good. Different levels of government may be involved every step of the way, Although this part of the report deepens the which may require not only horizontal coordination analysis of coordination, the cases presented in across sectors, but also vertical coordination across Part I illustrate the importance of coordination the national-subnational axis. The challenges to such in driving performance from the CoG and coordination may be magnified in emerging economy improving service delivery. In particular, Case contexts because information flows are often more #1 (Rwanda) detailed the coordination between rigid and hierarchical in nature, and subordinate the central and local governments at a critical employees are often not empowered to share time for this nation’s post-conflict rebuilding and information with employees from other ministries. development. Case #2 (Malaysia) has illustrated IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 19 EXECUTIVE SUMMARY how coordination may involve breaking down silos two ministries to complex whole-of-government among line agencies to achieve better service delivery coordination of government strategy. Some areas, outcomes for all. Case #3 (Mozambique) focused such as national security and foreign affairs, may have on coordination between the Ministry of Finance tight and well-defined procedures for coordinating and line ministries to improve health and education policy, whereas others (such as business regulation outcomes. At the same time, cases illustrating or social protection) may be much looser and more coordination mechanisms in Part I are not confined fragmented. to the CoG theme. For example, Case #10 (India) highlights the establishment of one-stop shops as part Governments around the world have adopted of the implementation of the PSGA, in which inter- various approaches to enhance coordination. agency coordination greatly increases convenience Some are formal and enshrined in their country’s and citizens’ access to public services. constitution; others are more informal; and yet others are by-products of formal processes established to Effective coordination can be viewed across a achieve other goals. In emphasizing that coordination continuum of simple to complex. The Metcalfe was one of three essential institutional functions for scale (Table 4) is a useful first-cut approximation for making policies effective, the 2017 WDR stressed addressing inter-agency coordination from a CoG the importance of focus on the function, rather than perspective, as it shows what a desirable trajectory on the form of the institution. Depending on the would look like. In practice, however, coordination historical traditions, the political and bureaucratic is not an integrated whole that progresses in a unified culture, but also the task at hand, a range of various manner from simple operational coordination between mechanisms can be fit for purpose. Toward enhanced coordination: Key dynamics and approaches E nhancing coordination will depend not (or difficult) it will be to establish institutions and only on the adopted formal institutional procedures that facilitate policy and operational mechanisms, but also on their interplay coordination. At the most basic level, effective with the broader institutional environment and policy and operational coordination is more with other processes that influence coordination. difficult in environments where the government Table 5 of the report presents a broader breakdown of structure is highly fragmented. Leadership style the dynamics influencing government coordination. matters, in that some leaders more naturally seek Formal policy coordination mechanisms at the apex consensus, while others prefer more hierarchical of government (such as cabinet offices, cabinet/sub- decision-making structures and processes. The cabinet committees, and delivery units) make up only existence of shared national values and a national a relatively small proportion of the diverse array of vision promote cooperation because they can coordination mechanisms and approaches taking facilitate policy legitimacy. Other important place within government. They are important, in factors are whether the country is a single party that they address the question of what government or multi-party state, and whether structures within should do in a given domain, and decisions reached the dominant political party are designed for at that level will have implications down the line. But coordination. much of the actual work of coordinating government activity and interaction on a day-to-day basis takes • Formal coordination mechanisms: These place elsewhere. include apex bodies at the CoG, such as cabinets, councils, or politburos, which are all forms of • Broader environment: A host of broader committees that are chaired by the chief executive political and social dynamics influence how easy of the government – be it a president, prime 20 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION EXECUTIVE SUMMARY minister, or a monarch – and consist of heads of functions, but still aid coordination. For example, government ministries. Their role varies greatly, budget process reforms focused on program from determining policy and coordinating budgeting have been used to promote greater operations in the Commonwealth systems, to coordination around shared objectives among largely ceremonial in nature in some presidential multiple MDAs. Government-wide monitoring systems. The institutions that provide support and evaluation (M&E) systems have played a to the chief executive, such as a Cabinet Office, similar role, especially for the goals that fall Chancellery, or General Secretariat, generally outside the jurisdiction of a single implementing establish procedures that ensure smooth cross- agency. Some governments have experimented agency information f low and help with the with Delivery Units, small agile bodies at the technical scrutiny of how decisions affect other CoG set up to drive a limited number of high- sectors. Cabinet sub-committees are used to help priority goals, most of which are usually beyond coordinate decision-making in certain areas. They the purview of a single ministry. Administrative can either discuss specific issues before they are reorganization, when a new department is created considered by the cabinet, or serve as the actual to carry out the functions of disparate agencies decision-making bodies. Other countries seek working toward a single goal that is deemed a broader support and technical input from civil priority of the administration, is another indirect society and business representatives by establishing mechanism to improve coordination, albeit with expert panels and advisory boards to feed into the varying results. Finally, socialization within an policy process. Vertical coordination with sub- organization can play an important role in shaping national governments presents specific challenges the perspectives, incentives, and preferences of to central governments, which have generally civil servants. A generalist civil service cadre is relied on fiscal transfers and regulation as the not a panacea, but at its best can inculcate a strong primary tools to influence them. sense of collective identity and the broader public good that transcends the parochial incentives of • Government practices that influence the ministry where the civil servant happens to be coordination: Such practices include formal posted. government processes that have different primary Global experience with strengthening coordination T he experience of the Bank staff in • Policy Development. In systems where assisting governments around the cabinets play an important role, their collective world with strengthening coordination decision-making capacity has often required is multifaceted. Improving coordination at the strengthening. This can take various forms, from sectoral level has found a heavy focus in the Bank’s preparation of a cabinet manual in Sierra Leone to sector investment loans, where more than 440 cabinet workshops in Serbia focused on a shared interventions over the past 30 years have sought to vision and collective leadership. Some countries, improve the quality of coordination within a specific such as Latvia, established formal bodies to sector. At the same time, in response to the rapid strengthen cross-ministry coordination and aid increase in country demand in the past decade, in the policy review process. The lesson from the Bank is now involved in over 40 interventions these reforms is that the technical advice must be dedicated to improving coordination at the CoG. delicately balanced with political imperatives; a This includes coordination at the time when policies policy coordination mechanism that is perceived are formulated, as well as coordination at the time of to replace political decisions with technical their implementation. solutions may not be sustainable. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 21 EXECUTIVE SUMMARY • Policy Implementation. Various overarching What Has Worked? processes tend to provide an impetus for the coordination of reforms focused on whole-of- High-level political backing is important for government M&E. These include high-level any reform to enhance coordination, as is the quality of leadership. The person at the helm public sector reforms spurred by the long-term of the reform should be technically skilled Vision exercise in Botswana, or European and politically savvy, as well as close to the integration efforts in the Western Balkans or chief executive. Moldova. The institutional arrangements for F l ex i b l e a n d a d a p t i ve c o o r d i n a t i o n government-wide M&E vary, ranging from mechanisms work better than rigid and dedicated ministries and specialized agencies, to prescriptive ones, as they have a better delivery units and other agile bodies. No single chance to be sustained and become self- form is preferred or best practice; rather, its success reinforcing even as leaders change. depends on how it fits the purpose. Some overly The reforms that anticipated resistance ambitious efforts, such as India’s Performance and invested in buy-in were most likely to Management and Evaluation System, could not succeed. be sustained because they did not achieve the full buy-in of the relevant stakeholders. Another Routine reporting procedures, combined key message is that the role of the CoG should with a careful assessment and monitoring of obstacles and measures to resolve them, are be on high-level coordination issues rather than essential links in the accountability chain. managing the granular M&E that is best done by the MDAs themselves. Coordination of cross-sectoral priorities was most likely to succeed when there was an established link between these cross- Malaysia’s experience offers additional insights institutional objectives and the budgetary about what types of coordination mechanisms resources allocated to them. can work and why. Malaysia is an upper-middle income country with about 100 agencies operating Center of government functions best when it in the Prime Minister’s Department as of May 2018, focuses on strategic coordination and leaves the granular upstream and downstream rendering coordination within the CoG as well as coordination tasks to the MDAs. with and among MDAs particularly important. It has a sophisticated and comprehensive ecosystem of institutions and processes for policy development and policy implementation. The specific examples What Has Not Worked? of coordinating the implementation of past national agendas such as the National Transformation Complex designs often lead to faltering Programme through a delivery unit, as well as the reforms. Simple mechanisms often work best National Blue Ocean Strategy through the Ministry in low-income countries and FCV contexts. of Finance, further strengthen the takeaway that the O ve r l a p p i n g f u n c t i o n s a n d b l u r r e d specific institutional arrangement is less important accountability make coordination difficult. than whether it is fit for purpose. Similarly, This is often as important in sectoral overcoming the challenges in the coordination of coordination as it is in government-wide urban public transport shows that under certain coordination. conditions, even a highly fragmented institutional B efore introd u cing n ew in stitution al landscape can produce results. coordination mechanisms, it is important to take stock of what already exists. Building on The main conclusions from the review of the existing institutions tends to work better. global experience with coordination reforms Institutional solutions uncritically transferred reinforce the idea that no single institutional from one context to another lead to arrangement works for all contexts. In the spirit isomorphic mimicry and rarely produce the of the 2017 WDR, the institutional function is more desired outcome. important than a particular form. 22 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION EXECUTIVE SUMMARY Conclusions S uccessful efforts to improve coordination institutions. Incentives take diverse forms, and at the center of government described in Malaysia’s experience shows how institutions were Part II share some common dimensions motivated to accept support to break down silos with those identified in Part I: between them and achieve fast results. • Political leadership: Political leadership manifests • Transparency: Successful policy coordination at itself in the degree to which the chief executive – the CoG contributes to enhanced transparency. Prime Minister or President – can give focused Transparency may pertain to internal or external attention and follow-up to making sure that stakeholders or both. Well-functioning Cabinet coordination happens. As a result, a delivery unit processes will make new policy proposals and their or comparable body within the Cabinet Office or potential impact transparent to others in Cabinet Chancellery that has the political backing and who might be affected. Transparency – like good weight of the chief executive will see its requests coordination mechanisms in general – is fit for and actions taken more seriously by the MDAs. purpose. It does not overwhelm the capacity of Delivery Units fail when they are technocratic CoG bodies to absorb the information or respond only and detached from those with the political to it. On the one hand, performance management clout to reward, punish, and unblock. In addition, systems have been used successfully to communicate the number of priorities to be pursued needs to be to public officials and citizens the performance limited; otherwise, the political leadership will be standards that need to be met by MDAs. On the unable to give them the attention they require. other hand, when there are too many indicators to monitor, important accountability relationships are • Institutional capacity building: Long-lasting undermined because critical information cannot be coordination mechanisms are those that have processed and acted on in a timely manner. established a set of work processes that contribute to the long-term capacity of CoG institutions • Technology: While technology has been and where the processes have intrinsic value instrumental in helping improve service delivery in improving performance. Government-wide in the cases presented in Part I, its importance to monitoring bodies are more likely to leave a policy coordination at the CoG is less prominent. legacy if they are not designed merely as an ad hoc The role of technology can manifest itself in the effort to address a temporal (political) problem of enabling of one-stop shops by helping agencies share performance. Effective coordination also needs information more easily across service platforms to take into account the existing institutional and by making exchange of citizen information relationships and inter-dynamics across ministries. more seamless among agencies (e.g., Egypt’s one- Merging institutions rarely produces the benefits stop shops created by GAFI). Technology takes a to coordination that their designers promise. more prominent role in facilitating intra-sectoral coordination to improve last-mile service delivery. • Incentives: As policy-making inherently involves For example, modest technology applications are compromises and competing objectives, policy enabling data collection that directly feeds into coordination around the Cabinet process has performance dashboards, which are monitored by to speak to the incentives and motivations of CoG institutions. political officials. Incentives may be even more important at the implementation stage: there are The underlying message of this report is a positive one: abundant examples of the use of performance improving public sector performance is possible even management dashboards, accompanied by a set of in difficult circumstances, although the trajectory is formal and informal rewards for those who deliver not always linear. In today’s world, governments and on their agreed outputs or outcomes. Rewards the public sector are facing increasing pressures to and sanctions may be targeted to individuals or perform at a higher level than ever before. While this IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 23 EXECUTIVE SUMMARY report does not provide all the answers to public sector performance challenges, it analyzes innovations that have worked and identifies key factors that have contributed to their success. However, the overarching element of success is strong coordination to ensure that governments and their MDAs are no longer operating at cross-purposes. Through coordination, performance can be boosted, and through innovation and experimentation one can get a glimpse of the other side of the river and ideally the direction of the next stone. 24 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION SETTING THE STAGE Public sector performance is fundamentally about governments being able to deliver on their policy commitments for the benefit of their citizens. G overnments with well-performing public will also help to move beyond snapshots by tracing sectors are capable of translating good over time innovations and important developments policies into development outcomes. in public sector performance. By drawing on the Such governments can also deliver outcomes to Bank’s broad domain of expertise spanning many citizens in a manner commensurate with what the sectors and countries, the report aims to highlight country can afford. They will be able to align the the impact of public sector innovations in many planned outcome with citizens’ preferences, doing different contexts. The Bank’s experience and vantage so in a way that is perceived as broadly fair and point also provides a unique insight into the political impartial. In some cases, improving performance economy considerations that political leaders must starts with improving the policy-making and policy navigate. Finally, in the spirit of experimentation coordination process at the center of government. and searching for the best fit, the collection of case However, many countries adopt sensible policies studies presented in this volume aspires to serve as an that do not result in better healthcare, education, inspiration for governments around the world trying sanitation, infrastructure management or reduced to find their own solutions to persisting problems in crime. This is primarily because of implementation public sector performance. gaps in the public sector results chain. One key element in improving performance therefore entails This chapter lays out the building blocks for this closing these gaps. volume. The next section discusses why it is important to learn from non-OECD countries’ experience with This report is an inaugural issue in the new improving public sector performance. We then clarify World Bank series that aspires to fill an what we mean by public sector performance, and how existing knowledge gap by focusing on how this report fits into the existing knowledge landscape. governments in developing countries overcome To motivate why we are embarking on this series, institutional or capacity constraints to make we then discuss what the Bank brings to the table by change happen. Instead of being indicator-centric, offering hands-on, practical lessons from its support it draws on case studies of performance innovations. to public sector performance reforms. We finally It brings narratives from around the world and consider what the report does and doesn’t do, as well focuses on non-OECD perspectives. Its periodicity as the architecture of this volume. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 25 SETTING THE STAGE Innovating in difficult places: Learning from governments as they re-invent themselves G overnments around the world are spurring reform in the public education sector around facing strong pressures to re-invent the world. Although such rankings will always have themselves. Improving, or altogether their methodological critics, they are, at the very least, transforming, the performance of the public sector a useful approximation of public sector performance means finding ways to provide better services more in a particular area. Such rankings are also a powerful efficiently. This may involve enhanced delivery benchmarking tool: If students in two countries systems, better-managed public finance, a more have almost identical PISA scores, but one country skilled and accountable public workforce, as well as spends double per capita on education, there must be finding new ways to monitor services and coordinate efficiency savings in the system. the agencies that provide them. Many governments feel increasing fiscal pressures to do more with less, Both the internal and external motivations as public expenditures continue to grow faster than for change underscore how important it is for revenues due to complex challenges facing the 21st governments to learn and adapt while boosting century: aging populations, rising healthcare and their accountability to citizens. In the private pension costs, and mounting security concerns. At the sector, where competition is the primary driving force, same time, citizen expectations of government services the leading firms are constantly learning from each are generally growing as well. In the interconnected other, and adapting what they do and how they do it. world, citizens in some countries are accustomed to Governments are often slower and more reluctant to the ease with which they access services in the private change their ways of doing things. There are objective sector, booking appointments with a click of a mouse reasons for this, stemming from the fact that the or making banking transactions through their mobile business of government is fundamentally different phones; they expect the same of their governments. from that of the private sector (Micklethwait and Unfortunately, in other countries, even the most basic Wooldridge 2014).2 At the same time, the inability or services are a challenge for the public to access. unwillingness to learn and adapt leaves governments with outdated systems and approaches to tackle the Aside from the internal pressures from tight 21st century challenges, both present and emerging. budgets and citizen expectations, there is also the external pressure driven by international While the incentives are different from the benchmarking. For example, every year governments private sector, governments are also realizing around the world await the publication of the Doing that they need to keep competing and learning Business rankings, competing for the coveted top tier from each other. Although not perfectly mobile, in their region or income group in the ease of doing private investment, skills, talent, and tax bases are business. A higher ranking in Doing Business, as a much more portable than they were in the 20th result of simplifying business regulations, is positively century. As a result, states and local governments associated with higher investment and growth that are not offering effective or efficient services risk (Anderson and Gonzalez 2012).1 Notwithstanding the losing out to others (Rodrik 1998; Garrett 1998). 3 recent debate about the methodology, this exemplifies Where they have flexibility from central government the power of international public comparison and to define policies or test new delivery models, regional healthy competition to drive positive change in how and local governments have often been incubators of governments work. Other international rankings, experimentation. Not all reforms will work out, but such as the Program for International Student an array of experimentation means that some good Assessment (PISA) scores have a similar effect in results will emerge.4 Learning from each other, from 26 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION both the successes and the challenges in improving and costly to ponder. Aside from being more public sector performance, is an important way of contemporaneous and relatable, such peer learning moving forward and meetings citizens’ expectations. can also aid in leapfrogging ahead by utilizing technological advances, such as mobile phones Governments are increasingly interested in (World Bank 2017a). In fact, many service delivery moving from diagnostics to implementation, innovations take place in non-OECD countries, asking not merely what to do, but also how to where the stakes are higher, the scale of the challenge do it. Quantitative rankings are important because is significantly larger, and the existing systems more they induce competition, help diagnose the problem, rudimentary. Often, the innovations come from and often drive the momentum for change. However, governments themselves; yet others are born out of understanding how other countries have tackled their state failure, in which case the private sector fills the public sector transformation through qualitative case space to provide basic services in innovative ways. studies can provide inspiration for how to go about Even when privately driven, such innovations have the reform. What were the mechanics of solving the served as an inspiration to governments in both problem in a different country setting? What pitfalls non-OECD and OECD countries to emulate and could have been avoided? What features need to be adapt such approaches in their public sectors. Box adapted to the local context? 1 illustrates some of the widely known examples of innovations that originated in emerging economies. Emerging economies have important lessons to Conditional cash transfers initiated in Brazil are now offer not only to their peers, but to developed being considered in developed countries that look countries as well. The arguments for south-south to transform their social assistance programs, and learning are well-established. Emerging economies’ mobile money pioneered in Kenya has now spread to experience is often more valuable for their peers than parts of Europe and Asia. the OECD blueprints that may be too advanced IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 27 SETTING THE STAGE BOX 1 Notable Innovations from Emerging Economies Brazil: Bolsa Família – conditional the role of doctors, where some of the cash transfers in welfare simple tasks can be delegated to nurses and physicians’ assistants. The pressure In 2002, the innovative Bolsa Família is higher in the developing world: India Program (BF) was launched. It was has only 6 doctors per 10,000 patients based on a simple concept: trusting (as compared to 27 doctors per 10,000 poor families with small cash transfers in patients in the UK). Costs are further return for keeping their children in school reduced by using simpler and therefore and attending preventive healthcare much cheaper medical devices. Dr. Shetty visits. Ten years later, BF has been key to takes his ideas abroad: he has established helping Brazil more than halve its extreme video links with hospitals in India, Africa, poverty – from 9.7 to 4.3 percent of the and Malaysia. He also exports his training population. Most impressively, income model to over 30 countries. Although inequality also fell markedly. BF now these efforts in India are privately driven, reaches nearly 14 million households – 50 they have been implemented on an million people or around one fourth of the impressive scale. They offer inspiration population. Brazil’s experience is showing for healthcare reforms in other countries, the way for the rest of the world. Despite be they government or private-sector its relatively short life, BF has helped driven. stimulate an expansion of conditional cash transfer programs in Latin America and around the world – such programs Kenya: M-PESA – mobile money are now in more than 40 countries. In transfer service 2012 alone, more than 120 delegations visited Brazil to learn about BF. M-PESA, launched in 2007 in Kenya, started the mobile money revolution in Africa that is now taking root worldwide. India: Re-thinking healthcare The service allows customers to use a mobile phone for deposit, withdrawal, India cannot yet boast stellar health and money transfer activities; pay bills; outcomes, but that may be one of the and purchase airtime. M-PESA’s initial drivers of innovation in the sector. “When “disruptive” innovation was based on it comes to re-thinking healthcare, India leapfrogging: exploiting existing mobile is one of the most innovative places in subscriptions in Kenya to create accessible the world,” write John Mickelwaith and financial services, circumventing the Adrian Wooldridge in their best-selling expenses associated with storefronts book about global efforts to reinvent and in-cash transactions. By 2016, 75 the state. One of the new initiatives they percent of the country’s adult population describe is driven by Dr. Devi Shetty, a had a mobile money account, with heart surgeon and entrepreneur, who transactions amounting to the equivalent applies mass production to healthcare. of 4.5 percent of annualized GDP per day. His hospital in Bangalore has over 1,000 M-PESA transformed banking in other beds, which allows for specialization, countries, leading to an explosion of decrease in costs, and improvements mobile money services across Africa and in quality. This model also helps rethink beyond, enhancing financial inclusion. Source: Wetzel (2013); Micklethwait and Wooldridge (2014); World Bank (2017a) 28 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION SETTING THE STAGE Public Sector Performance: What is it and where does this report fit? T o understand why some governments Public sector performance is the ability of the perform better than others, it is useful government to produce high-quality results in to consider both the types of outputs an efficient and accountable manner. As Figure that the public sector produces, as well as 2 illustrates, those results take different forms. Some the process through which this happens services have considerable client-facing visibility (e.g., (World Bank 2012a). The public sector delivers a primary education), while others are less visible (e.g., variety of outputs. Some of them affect citizens and environmental or food safety regulations). firms directly; this includes public services such as education, healthcare, clean water, roads or better Why do some public sectors perform well, while regulations. These results occur downstream in the others falter? The answer to this question lies in production process, after a complex interplay among understanding how the links in the public sector decisions and processes upstream: for example, results chain, depicted in Figure 2, work. Good public policy formulation and prioritization; coordination sector performance means that the links in the results across government bodies; fiscal and institutional chain are working well, while poor public sector sustainability; revenue and expenditure management; performance can be traced to weak links within the or accountability and governance mechanisms. These results chain. For example, poor education quality can upstream public sector outputs are less tangible but be caused downstream (e.g., by school management equally critical. Figure 2 depicts the public sector arrangements that weaken accountability) or upstream results chain that includes both types of results. (e.g., by financing mechanisms that allow funds to FIGURE 2 Public Sector Results Chain: Upstream and Downstream Outputs The Public Sector… …and its functions Sector Outputs: Upstream Downstream • Services Sector Agencies / • Regulations Center of SOEs and corporate • Infrastructure investments Government bodies • Sector policies Fiscal and Institutional Sustainability • Realistic and achievable revenue targets Objective and • Cooperation between levels of government Subjective • Support for oversight bodies Development • Effective management of fiscal policy and aggregates Outcomes Source: World Bank (2012a) IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 29 SETTING THE STAGE dissipate before they reach schools). Weak links can when one or both routes of accountability are be either in formal rules and procedures, or in their weak. Information asymmetries between the lack of enforcement. Sound policies may also suffer three principal-client relationships were assumed from lack of implementation capacity. Similarly, some to be key to service performance failures.5 methods of service delivery may be outdated, or fail to take into account weak incentives for civil servants to iv. Governance and the Law (2017): This most do what is needed. Governments around the globe are recent WDR provides the latest analytical looking for new ways of fixing these weak links in the framework for thinking about what governance results chain, be it by improving the direct interaction features make the state effective. It argues that with citizens and firms, or enhancing the upstream or power asymmetries are the reason why the form back-office functions of the public sector. of the institutions is less important than their function: for example, decentralization does not Over the last two decades, the Bank has always produce better municipal services, and formulated ana lytica l frameworks for anti-corruption agencies do not always reduce understanding different aspects of public corruption. To produce better outcomes for sector performance, as evidenced by four World citizens, governments need to build institutions Development Reports (WDRs) that tackled that bolster commitment, enhance coordination, related themes. and encourage cooperation. These “three Cs” together counteract the unequal distribution i. The State in the Changing World (1997): This of power in societies that is often the answer to WDR was devoted to the role and effectiveness why formally well-designed institutions do not of the state: what it should do, how it should do always work as intended. Credible commitment it, and how it can improve in a rapidly changing to policies is important to counteract politicians’ world. It argued against reducing the role of the short-term horizons; enhanced coordination is government to the minimalist state; instead, it key to elicit behaviors and beliefs that lead to viewed the state as a facilitator of the activities of better development outcomes; and cooperation the private actors. is necessary to avoid the free-rider incentives, opportunism, and exclusion. ii. Building Institutions for Markets (2002): This WDR explored how the state should play the facilitator role. It suggested four principles It is impossible to address state effectiveness for building effective institutions: complement and public sector performance without a what exists, innovate, connect communities, and normative discussion addressing what the promote competition. state should provide. Should the state be minimalist or activist? Should it be built on democratic norms iii. Making Services Work for Poor People (2004): to serve its citizens? Full treatment of these issues This WDR delved deeper into the heart of is well beyond the scope of this report. At the same public sector performance, focusing on three time, the thinking in this report is anchored on the key accountability relationships in the service 2017 WDR, which starts from the premise that every delivery chain: between users and providers, society “cares about freeing its members from the between citizens and policy-makers, and between constant threat of violence (security), about promoting policy-makers and providers. The long route of prosperity (growth), and about how such prosperity accountability links citizens (through voice, or is shared (equity).”6 The WDR does not advocate an political process) to policy-makers, and, in turn, to ideological prescription for a particular size of the service providers through their managerial ability state, or a type of political regime. Its approach “is to supervise and monitor providers (through the consistent with the transition from a dialogue based compact, or contractual relations). The short route on ideology to the dialogue based on ideals that has of accountability links citizens more directly transpired in the global development community over to service providers, representing the ability to the past few decades.” These common goals adopted monitor providers and hold them accountable by the majority of nations worldwide are exemplified (client power). Service delivery failures happen in the Millennium Development Goals (MDGs) and 30 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION SETTING THE STAGE Sustainable Development Goals (SDGs). Starting by offering vignettes of innovations adopted by from this assumption of nearly universally shared emerging economies to enhance their performance. goals, this report focuses on how non-OECD In addition to highlighting the most interesting countries went about improving the state’s ability to and notable innovations from these economies, the perform these functions. report offers an in-depth analysis of a particularly relevant special topic in public sector performance. This report is grounded in the WDR framework The goal is to also look at this topic through the lens and assumptions about the role of the state, of the Bank engagement in an operational way. The while offering a hands-on practical look at special topic for this inaugural report builds on one improving public sector performance. It draws of the “three Cs” of the 2017 WDR – coordination. on the hitherto tacit knowledge of the frontline Bank Although the WDR uses the concept of coordination staff working with governments around the world that in a game-theoretic way, this report operationalizes it experiment with innovative ways to improve what by analyzing the practical aspects of this key concept: they do. The collection of these case studies seeks to the mechanisms that countries choose to facilitate provide inspiration to reform-minded governments their policy and inter-agency coordination. Recent literature about improving public sector performance T he literature dedicated to finding government (World Bank 2016a).8 Despite better new ways to improve public sector performance measurement, trust in government has performance is extensive. The last few not improved dramatically. In short, the NPM did decades of the 20th century were dominated by not bring about the revolution it promised. the New Public Management (NPM) approaches, characterized by introducing private sector elements The most recent thinking about improving to public management: measuring outcomes rather performance adopts a more incremental than processes; introducing performance-based approach that involves experimentation. The budgeting; emphasizing incentives, accountability, focus on incentives, accountability, citizen-centricity, and competition; espousing a customer- or citizen- data, and evidence-based decisions remains; at centric view of services; and embracing the digital the same time, there is also a recognition that one revolution and new information technologies size does not fit all and different solutions may be (Gruening 2001).7 In 1993, these ideas were collected appropriate for different contexts. Trial and error in a widely influential book by David Osborne and is expected, and flexibility is key on the path to Ted Gaebler, Reinventing Government: How the finding the best fit for the particular challenge and its Entrepreneurial Spirit Is Transforming the Public context. Progress is possible as long as governments Sector. For a generation, NPM was thought to show keep trying to improve, even while stumbling, the way to smarter, leaner government. However, but learning from these pitfalls and adapting their while it did influence how governments around the approach. In the academic and public policy circles, world work, NPM stopped shy of its larger goals. this method has become known as problem-driven Performance management systems were often too rigid iterative adaptation, or PDIA (see Andrews et al 2017; to spur continued innovation. Performance-based building on earlier efforts by Hirschmann 1967 and budgeting reforms have been difficult to sustain. The Ellerman 2006). The emphasis is on experimentation digital revolution and ICT alone failed to transform rather than ideology.9 Yet these ideas are far from new. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 31 SETTING THE STAGE They are encapsulated in the well-known Chinese reforms, among others. A more recent effort saying, “crossing the river by feeling the stones.” Each comes from the Global Centre for Public Service experiment that worked for some governments can be Excellence (GCPSE), founded by the UNDP and considered a stepping stone for others, but it needs the Government of Singapore. Working with leading to be tried out, and possibly adjusted to the specific think-tanks, universities and practitioners, GCPSE context at hand. Documenting such experiences thus explores trends and innovation in public service and becomes important as an inspiration or catalyst for produces new knowledge relevant to non-OECD trying and adapting, rather than as a prescription for countries.12 an approach that can be directly emulated.10 Private sector think-tanks and universities Establishing what works and why in enhancing have also started to curate some of the public public sector performance is fraught by data sector performance knowledge derived from challenges, which the latest research efforts their work with governments. These include are beginning to address. A set of recent handbooks the McKinsey Center for Government, the Boston summarizes what the development community has Consulting Group’s Centre for Public Impact, and learned in the past few decades about various themes the IBM Center for the Business of Government, in public sector management (PSM), such as civil among others. These centers generate position papers service reform or public finance (Massey 2011; Allen with a wider focus on public sector themes, but et al 2013; Bovaird and Löffler 2015). One of the most most of their outputs are focused on specific topics often cited limitations in these synthetic efforts is the in public sector performance, such as McKinsey’s availability of reliable data that would allow inference recent report on government productivity (McKinsey about what works and why. Aggregate indicators, such 2017). In addition, university-affiliated initiatives, as Government Effectiveness (GE) of the Worldwide such as Innovations for Successful Societies at Governance Indicators (WGI), are a good macro tool the Woodrow Wilson School of Public Affairs at to see major improvements across countries,11 but they Princeton University, look to chronicle home-grown have limited use for granular research or actionability government innovation around the world on a case- for governments. This spurred an ongoing effort, by-case basis.13 through initiatives such as the World Bank ’s Bureaucracy Lab, to collect better administrative data This publication series aspires to fill an across countries, such as civil service wage levels, to existing space in this arena by focusing on the enable cross-country comparisons of public sectors, experience of developing countries that have including better understanding of what affects public managed to improve public sector performance sector performance (World Bank 2017b). Relatedly, against the odds. It complements ongoing efforts, a growing body of experimental economics research such as the OECD Government at a Glance series is looking at what motivates public sector employees, and various data collection efforts, by being case- to help with the design of better incentive structures study focused, rather than driven by quantitative that would enhance public sector performance (Finan indicators. Importantly, the qualitative case studies et al 2015; Banuri and Keefer 2013). presented here highlight non-OECD perspectives. The annual collection of these innovative cases In recent years, several international from around the world will help to identify trends organizations have begun to capture and among emerging economies in any given year as well disseminate innovations and good practices in as over time. In the spirit of the PDIA, the report public sector management. Since 2009, OECD does not offer “best practices”; instead, it documents has been producing a biennial report Government at a the successes, pitfalls, and adaptation of different Glance, which provides a dashboard of key indicators approaches that countries have attempted on their for the analysis and international comparison journey to better performance. Building on the of performance, including indicators on key experience and knowledge of the Bank’s operational governance and public management issues (OECD staff also provides a unique angle that complements 2017). These include transparency in governance, the existing efforts by academics and practitioners regulatory governance, public procurement, and the alike. implementation of employment and remuneration 32 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION SETTING THE STAGE What does the World Bank frontline staff bring to the table? T he World Bank assists governments around the world in improving their performance throug h development finance and advisory support on both upstream During the last and downstream issues. The Bank’s upstream work includes supporting cross-cutting government- decade, the Bank wide initiatives, such as reforms in PFM, both budget has been supporting planning and execution; human resource management (HRM) and civil service reform, including public governments in their sector performance appraisal and HRM information efforts to introduce systems (HRMIS); internal controls; audit; functional reviews of public administration; and economic technological development planning. In addition, the Bank has innovations to improve engaged in supporting the downstream reforms that directly involve service delivery and citizen service delivery. interface. Examples include: capitation financing and procurement reforms in education and health; reforming administrative service delivery, including business process re-engineering, automation, and in OECD countries that are often not applicable to front-office reform; establishing one-stop shops for the reality in emerging economies. Before embarking government services; and improving judicial services. on this series, the Bank lacked an effective instrument for providing a timely, regular, and systematic update During the last decade, the Bank has been on what we collectively know about the state of public supporting governments in their efforts to sector performance innovations around the world. introduce technological innovations to improve service delivery. These innovations, particularly At the same time, this report is informed by the digital technologies, have transformed the way recent research emphasizing the importance that public sectors deliver services to citizens: from of political economy considerations for the the new wave of Digital ID, financial management success of the Bank’s PSM projects. The information systems (FMIS), HRMIS, and digital existing research shows that political context data exchange and interoperability on the upstream, factors have a larger influence on the success of to the downstream administrative service delivery, the Bank’s public sector reform projects than on geo-tagging and big data approaches, and seeking other projects (Blum 2014).14 Relatedly, there are citizen feedback through mobile technologies. limits to the Bank’s ability to support public sector reform because the governments often commit to The Bank’s experience in supporting these the Bank-financed PSM projects for other reasons public sector performance innovations than improving public sector performance (Andrews worldwide presents a treasure trove of learning 2013).15 However, the cases featured in this report opportunities; therefore, this report series is represent a “positive deviance” from this pattern. The designed to tap into the tacit knowledge of selection process allowed for highlighting those cases the Bank’s frontline staff. The Bank’s staff have where the governments were able to make change accumulated extensive knowledge from supporting happen and improve public sector performance in public sector performance reforms around the globe. their countries. Our detailed case descriptions also This report series can capitalize on this knowledge and analyze the political economy environment and allow for cross-pollination and south-south learning, related considerations, to highlight what may or may moving away from over-reliance on the best practices not be transferable to other contexts. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 33 SETTING THE STAGE What this report does – and doesn’t – do T his report series is intended for cases demonstrates, the solution to the problem has policymakers, g lobal practitioners to be context-specific and take into account the specializing in advising governments on underlying political dynamics. Because public sector improving public sector performance, as well as performance is ultimately about enhancing citizens’ researchers working in related fields. The report outcomes as manifested in better service delivery, strives to broaden the existing perspectives beyond the report also draws on the 2004 WDR on service the good practices in public sector performance delivery and the accountability relationships among from the advanced OECD economies and highlight the citizens, state, and service providers. Finally, since notable innovations among emerging economies. The innovations presented here often have a technological report also aims to re-invigorate the knowledge flow component, the report also links to the 2016 WDR on public sector performance among development on Digital Dividends. The findings from the cases practitioners more broadly. echo the 2016 WDR’s conclusions that ICT alone will not transform government; rather, ICT can only This publication series provides a recurrent be a conduit, as policies and processes are designed to knowledge outlet for systematic information change behaviors for better citizen outcomes. to the development community on public sector innovations around the world, as well as for Inclusion of cases in the report does not advancing the understanding of operationally- suggest an endorsement by the World Bank relevant topics in public sector performance. that these are the most innovative or the The series is designed to strike a middle ground very best public sector performance examples between a brief practitioner’s note and an academic that can be found. Indeed, there are many study on a particular topic of interest in public sector technological advances, such as big data or the performance, drawing on the experiences outside use of drones, that are not included here. Many OECD countries relevant for the developing world. countries by now have had some experience with A systematic stocktaking to learn about innovations open data, e-procurement, or FMIS, and some have in public sector performance worldwide on an advanced applications in place. Because the countries annual basis should be of interest to the development of focus were ones where the Bank has been actively community as a whole. It is our hope that capturing engaged, it naturally excluded most high-income and widely disseminating the vignettes of worthy countries (e.g., Singapore, Estonia, South Korea, and innovations from the developing world will give other notable public sector innovators). Rather than an impetus to peer-to-peer learning and move the finding the most advanced practices, the report shows public sector performance frontier further in a that PSM innovations are possible even in the most much shorter time. Moreover, drilling down more challenging environments, and that governments are practically and operationally into selected issues in succeeding in addressing long-standing challenges. public sector performance, and doing so periodically, can further our collective knowledge and give This report highlights only a small subset of development practitioners the tools they need to public sector performance innovations that bring improvements in this vital area. are occurring globally, but the series aims to stimulate identification of other cases that Instead of coming up with a new theoretical merit attention in the future. The report draws framework, this report is part of the effort to on examples from across the globe, including low- operationalize the 2017 WDR by building on income, fragile and post-conf lict countries. The its assumptions and validating its framework. report is naturally biased toward the Bank-supported In particular, this report upholds the 2017 WDR’s interventions because those are what the Bank’s staff emphasis on the function of institutions rather than are most familiar with. At the same time, it includes their form. As the empirical evidence in the featured some of the interventions that were not financed or 34 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION SETTING THE STAGE otherwise supported by the Bank, but are known to (World Bank 2013). However, as we argue in detailed the Bank staff through their frontline work with the case descriptions, there is good reason to believe that governments. While the current method of inquiry the benefits will endure. At the same time, given allows to tap into the accumulated knowledge of the that governments change, political and economic Bank’s staff, it also implies that only the innovations environments transform, and the needs and demands known to the Bank are highlighted. This is why the of citizens evolve, it is possible that these reforms will cases presented here should not be viewed as “top 15” be reversed or replaced with something even better. innovations currently found in non-OECD countries. It is quite possible that other countries have even more interesting innovations to offer that the Bank is not yet aware of. We hope that this report series re-invigorates the dialogue between governments and This report series the Bank about public sector performance and related is intended for innovations, so the subsequent issues can build on an ever-wider base of nominations. policymakers, global practitioners The case study method used in this volume presents its own set of tradeoffs. While other specializing in advising publications have opted for quantitative coding and governments on analysis of various aspects of public sector performance (e.g., McKinsey 2017; OECD 2017), this report improving public sector employs qualitative methodology. Although this does not allow for direct comparison and ranking of the performance, as well as countries and their experiences, it offers a more in- researchers working in depth look at how they were able to effect change in a given context. A case study can offer policy- related fields. makers a more granular look at not just what has been accomplished by a particular reform, but also how their peers went about it under specific circumstances. Often, the most valuable lessons are in how the trial and error took place, often with partial reversals and learning from pitfalls. This approach is grounded in a venerable literature on case study methodology (Yin 1984; George and Bennett 2005; Gerring 2007) that has enjoyed a recent renaissance in the research and policy arena (Rolfing 2012; Widner, Woolcock, and Nieto 2019) The ultimate impact and sustainability of a given public sector innovation can be hard to assess, but it should not diminish the achievements that these cases represent. The public sector innovations highlighted here are written to reflect both the achievements as well as the limitations. Many of the cases document reforms that are recently completed or still in progress. In each one, there are already signs of impact on public sector performance. This does not mean that an impact evaluation has been completed; many of these reforms either do not lend themselves to randomization, or contextual variables may be too complex to track IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 35 SETTING THE STAGE Architecture of the report T his report consists of two parts. Part I This year, the special topic is Policy and Inter- serves as an annual stocktaking of Agency Coordination. Coordination among various the global experience in improving government actors and units is key for the success of public sector performance. It highlights complex policies, but it remains a challenge irrespective the key challenges, innovative solutions, and of the country’s level of economic and public sector the Bank’s support to governments working on development. Building on the theoretical framework improving performance around the world. For of the 2017 WDR that highlights coordination as this inaugural issue, it presents a series of cases one of “three Cs” critical for effective institutions nominated and selected by Bank staff to illustrate and citizen outcomes, this report takes a hands-on innovative interventions by the Bank’s government empirical and operational approach to the topic.16 It counterparts. It includes innovations such as: setting looks into why policy and inter-agency coordination up innovative monitoring and evaluation systems in is such a persistent problem for countries at all Rwanda; managing performance from the center levels of development, delves into methodological of government by breaking down silos in Malaysia; challenges in assessing how well coordination works, using smartphones for the last-mile service delivery and attempts to categorize and learn from various and citizen feedback in Pakistan; and incentivizing types of coordination mechanisms used around the judicial performance in Serbia. globe. Most importantly, it attempts to distill the lessons from the experiences of governments that Part II zooms in on a special topic in public sector adopted various whole-of-government as well sector- performance, leveraging the Bank’s experience specific coordination mechanisms, teasing out what and collective accumulated knowledge. This is worked, where the challenges stemmed from, and designed to either address a new trend, highlight new what pitfalls could be avoided. Bank knowledge, or address knowledge gaps. The two-part structure allows for a recurrent update in Part I along a set of key issues, while Part II offers a deeper examination of a special topic. 36 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION SETTING THE STAGE NOTES 1. Although the causation is difficult to establish, a recent paper reforms on the agendas of most OECD countries and other by Anderson and Gonzalez (2012) shows that a difference nations as well. Only later did academics identify the common of one percentage point in regulatory quality as measured by characteristics of these reforms and organize them under the Doing Business distance- to-frontier scores is associated with label of New Public Management.” a difference in annual FDI inflows of US$250–500 million. 8. As the 2016 WDR Digital Dividends argues, “greater 2. For example, public sector productivity is a lot more difficult digital adoption [is] not enough. To get the most out of the to measure than in the private sector; governments must be digital revolution, countries also need to work on the ‘analog deliberately slower in some of their functions, like convicting complements’—by strengthening regulations that ensure citizens of a crime; and governments have to stop people doing competition among businesses, by adapting workers’ skills things they might want to do (e.g., by issuing regulations) and to the demands of the new economy, and by ensuring that make them do things they do not necessarily want to do (e.g., institutions are accountable.” paying taxes or wearing seatbelts). 9. The lack of an ideological prescription should not be confused 3. There is an influential literature in political economy in the with the lack of theoretical ideas underpinning PDIA late 1990s that showed that instead of a “race to the bottom” approaches. In many ways, they echo the power of incentives and gutting the state to attract firms and capital by offering and mechanism design, for which Leonid Hurwicz, Eric the lowest tax rates, globalization has been associated with Maskin, and Roger Myerson received the 2007 Nobel Prize expansion of the state and public services (Rodrik 1998; in economics. Garrett 1998). 10. This is, of course, not without pitfalls. For a recent analysis of 4. This line of reasoning has gained traction in the development the broad challenge of replicating a case from one context to literature. For example, Bin Wong argues convincingly that another, see Williams (2017). the Chinese history offers many lessons of experimentation 11. For example, Fritz (2016) utilizes the WGI GE indicator to with social spending that adapted to China’s development explore the characteristics of public sector reforms of non- goals over centuries (Wong 2011). OECD countries where the GE has increased dramatically 5. Politics shapes opportunities for client power and informs in recent years. She finds that political commitment was the the assumption of the short route to accountability for public strongest driver in these success cases. services existing in practice. In revisiting the 2004 WDR a 12. For the latest GCPSE publications, see http://www.undp. decade later, the core argument was amended in important org/content/undp/en/home/ourwork/global- policy-centres/ ways (Devarajan et al 2011; World Bank 2016b). The social publicservice.html contract created around a type of service in a given society (i.e., whether people mobilize for a type of service provision) and 13. For more information, see https://successfulsocieties. the political salience of a service (whether a sector is used for princeton.edu/about creating some rents) will determine whether citizens mobilize 14. Specifically, Blum (2014) analyzes a large dataset of the World to demand stronger accountability and how the government Bank projects between 1990 and 2013 and finds that PSM answers these demands. Understanding the political economy projects perform better in countries with democratic regimes; of existing distortions in the system (elite capture, politically in the presence of programmatic political parties; and in more grounded regional inequalities in access) is increasingly aid-dependent countries. recognized as critical to explaining public sector performance, and shaped the core of the 2017 WDR on Governance and 15. Andrews (2013) argues that governments are motivated to sign the Law. on to World Bank financing not because they want to improve public sector performance, but because they want to signal their 6. These ideas are rooted in centuries of European political wish to modernize. This often leads to isomorphic mimicry or thought. They are consistent with Thomas Hobbes’ view of the copying “best practice” institutions from developed countries role of the state providing law and order, J.S. Mill’s idea of formally, rather than emphasizing their function. When these the state securing the liberty of its citizens and thus allowing reforms fail, a new round of “signaling” commences, which is the markets to flourish, and Beatrice Webb’s and other welfare rewarded by the current aid system. state proponents’ expansion of the state’s role as a provider of welfare to ensure equity. See Micklethwait and Wooldridge 16. In a sense, policy and inter-agency coordination as discussed in (2014) for a recent re-examination of these ideas. this report is a combination of two high-level concepts in the 2017 WDR: coordination and cooperation. 7. As Gruening (2001) observes, the NPM movement precedes the attempts to codify it in the literature. It began in the late 1970s and early 1980s, when “its first practitioners emerged in the United Kingdom under Prime Minister Margaret Thatcher and in the municipal governments in the U.S. (e.g., Sunnyvale, California) that had suffered from economic recession and tax revolts. Next, the governments of New Zealand and Australia joined the movement. Their successes put NPM administrative IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 37 SETTING THE STAGE REFERENCES Allen, Richard, Richard Hemming, and Barry H. Potter, eds. 2013. Micklethwait, John, and Adrian Wooldridge. 2014. 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Washington, DC: Brookings Institution Press Massey, Andrew, ed. 2011. International Handbook on Civil Service Systems. Cheltenham, UK: Edward Elgar 38 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART 1 GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 39 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Overview S ignificant improvements in public sector The cases highlighted in the report can be performance are being evidenced across categorized broadly into five themes, reflecting the developing world today, as government differing objectives and functions of public officials and political leaders find new and sector management. The first three are considered innovative ways to tackle long-standing public “upstream” reforms because they deal with policy management challenges. Information in the 21st formulation and monitoring and the administration century on governance and public sector management of government. The latter two could be considered is extensive, and many forums are available for “downstream” reforms because they produce public countries to learn about international best practice. sector outputs that citizens experience first-hand. The Yet, as the fifteen cases in this report illustrate, the five themes are: real successes in public sector performance come not just from drawing on the global experience, A Driving Results from the Center of Government but adapting the lessons to one’s own national or local context. The types of reforms showcased in B Civil Service Management the report are not necessarily unique from a global perspective, nor are they intended to represent global C Innovations in Managing Public Money best practice. Indeed, the institutional, political, or capacity constraints in many non-OECD countries D New Approaches to Last-Mile Service Delivery would render international best practice somewhat irrelevant. Yet, we are convinced that the cases are E Innovations in Delivering Justice Services innovative and noteworthy because they illustrate how countries address persistent and pernicious public management challenges by selecting the right What do we learn from this collection of public mix of policies, tools, and incentives that fit their sector innovations from across the developing political economy context. Moreover, each of the world? In many respects, the cases reinforce the cases shows indications of the impact on public sector relevance of the frameworks and lessons in the Bank’s performance – in some instances that impact has 2004 and 2017 WDRs, and help shed light on how materialized and has been measured, while in a few it the concepts can be operationalized in practice. Due is still indicative as the implementation is at an early to their brevity, they do not necessarily capture the stage. Nevertheless, they all provide a measure of full extent of experimentation, missteps, and political assurance that public sector transformation is possible turmoil that has led to the success that we observe even in the most challenging of circumstances. Public today. They also may not give a full picture of the sector performance reform is not to be limited to political economy challenges that had to be overcome, high-income countries. or that may still loom on the horizon as threats to sustainability. Nonetheless, they show how efforts to introduce innovation into public sector management can be successful. 40 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Selecting the Cases C ase nominations for Part I were sourced While there was some consideration of regional from around the World Bank to illustrate representation, it was not a predominant factor in innovative interventions by the Bank’s the final selection. The cases were then developed government counterparts in improving public through interviews with Bank staff involved in the sector performance. The selection of interventions engagement, as well as the key government officials was based on four criteria, as described in Box 2. at the center of the reform. BOX 2 Case Selection Process All regional units of the Bank’s Governance Global Practice were invited to submit 5–10 interventions based on a common template. The template also provided guidance on what interventions were eligible as “innovations.” 1 A core team of approximately 10 public sector specialists reviewed and ranked each of the nominations based on the case selection criteria described below. The most promising 15 cases were submitted for further research and development into a fully developed case. The team tried to make the selection process as objective as possible, while recognizing that some judgment calls would be necessary. Case Selection Criteria 1. Clarity, significance, and persistence of the problem to be addressed: Can we clearly and succinctly identify the public sector performance problem that was being addressed? Is it a problem that could be relatable to other countries? Is it substantial, and has it been a persistent problem? 2. Innovative approach: Is the intervention itself clearly and succinctly identifiable? Can we credibly say that the intervention was innovative in its approach? (Other countries may have addressed similar problems – e.g., passport delays – but is the approach at least innovative for the country context?) By innovative, we mean a new way of addressing an old problem. Is the role of the government – rather than the Bank or a consulting firm – clearly evident? 3. Evidence of impact: To what extent can we clearly identify the benefits of the intervention? Are the benefits significant and widely recognized by key stakeholders? Are the beneficiaries identifiable? (This does not require the existence of a formal impact evaluation, but there should be some evidence that there is a demonstrable improvement in performance.) 4. Replicability: Does the intervention provide useful lessons that other countries may benefit from? Could it conceivably be replicated in other countries? Are the cost and scale of the intervention within the reach of other countries, at least those at a similar level of development? Source: Authors IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 41 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE The Bank’s selection process was designed to Case nominations draw on the tacit knowledge of Bank staff from across the world working on governance. In for Part I were total, 54 nominations were received from across the Bank’s six regions, with the vast majority (90 percent) sourced from around drawn from low- and middle-income countries and the World Bank to coming from all regions where the Bank works. Indeed, public sector performance innovations are illustrate innovative not confined to a particular geographic region or interventions by the income level; to the contrary, they can be found in the poorest and most fragile corners of the world if the Bank’s government governments are committed to improving the way counterparts in they work. At the same time, because the innovations presented here come from the developing world, improving public they may not represent the most technologically sector performance. advanced solutions available. A detailed discussion of the case nomination and selection process can be found in Box 2. Selected cases are largely representative of The World Bank has supported many of the the pool from which they were drawn. Case reforms that have taken place, but in some submissions and selections can be profiled along cases it has only been an observer. Most several dimensions such as region, income level, nominated (83 percent) and selected (87 percent) theme, and government effectiveness (see Figure 3 innovations have been supported by the Bank, either and Figure 4). For example, almost three-quarters through the provision of development financing or of selected cases are from upper- or lower-middle through advisory support.2 Countries have partnered income countries, and all the Bank’s regions were with the Bank when it is helpful to strengthen represented except for one. By far the largest number governance, but there is ample evidence of countries of submissions came from the broad area of PFM, transforming public sector performance without which includes budgeting, FMIS, fiduciary, as well a visible role played by international development as procurement reforms. This also reflects the lending institutions. For this report, cases were drawn from volumes and advisory support by the Bank that are those reforms known to Bank staff which supported tilted toward the technical PFM reforms. At the governance functions. Without doubt, other same time, the selected cases showcase more center countries who are not included in this report will have of government and service delivery reforms, even witnessed equally interesting and impactful examples though they represent a smaller share of the Bank’s of public sector performance improvement. As those portfolio. This suggests that these may be the areas examples are shared with the Bank in the years to where emerging economies most keenly experiment come, they could be considered for selection in future with new innovative approaches. There were some editions. Furthermore, although there are numerous differences between submitted and selected cases on examples of sector-specific improvements across the the dimension of government effectiveness, which world (e.g., in health, education, water, etc.), the is based on the quintile ranking in the Worldwide selection method for this report tried to focus on Governance Indicators (WGI). About 28 percent of examples that had more cross-cutting lessons that the submissions were for countries with low or very could be applied across sectors, with the exception of low government effectiveness rankings, but only 14 the justice services. The method of inquiry naturally percent of the cases actually selected were from these biases the pool of cases to be considered towards those lowest two quintiles (see Figure 4). with Bank involvement. 42 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE FIGURE 3 Submissions and Selected Cases: Distribution by Region and Income Level Distribution by Region Distribution by Region Submissions (54) Selected Cases (15) AFR – Africa SAR AFR SAR AFR 18% 17% 20% 20% EAP – East Asia and Paci c ECA – Europe and Central Asia MENA LAC 13% EAP LAC – Latin America and the Caribbean 13% EAP 30% 27% LAC MENA – Middle East and North Africa 9% ECA ECA 20% 13% SAR – South Asia Distribution by Income Level Distribution by Income Level Submissions (54) Selected Cases (15) HI 2% HI MIX LI 8% 7% LI – Low Income 11% LI 20% LMI – Lower Middle Income UMI UMI UMI – Upper Middle Income 33% LMI 33% LMI HI – High Income 46% 40% Mix Submissions and Selected Cases: Distribution by Theme and Government FIGURE 4 Effectiveness Distribution by Theme Distribution by Theme Submissions (54) Selected Cases (15) JD 5% COG JD COG – Center of Government 17% 13% COG SD 27% CS – Civil Service CS 28% 11% SD PFM – Public Financial Management 27% CS SD – Service Delivery PFM PFM 13% JD – Justice Delivery 39% 20% Distribution by Distribution by Government Effectiveness Government Effectiveness Submissions (54) Selected Cases (15) High Very 2% Very Low Low Low Upper 7% 7% Very Low Upper 12% Medium Medium Low 22% Low 28% 16% Medium Upper Medium Medium Medium 42% 64% High IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 43 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Identifying Drivers of Success T he cases, despite their diversity, offer the right to information and general benefits of insights into the relevance of five key openness, the key takeaway from the case analysis factors to improving public sector in this report is that increased transparency can performance: political leadership, institutional help deliver change in public sector performance. capacity building, incentives, transparency, Greater internal transparency may mean and technology. breaking down government silos and ensuring inter-agency information sharing, or publishing • Political leadership is needed because few, if and circulating performance information. any, of the innovations are a purely technocratic Transparency can also be a powerful driver for exercise. In some cases, innovation required changing incentives. a change in leadership at the top to create the catalyst for a new approach to organizational • Technology, while not a panacea, is present in management. Whether it applied to breaking two-thirds of the featured cases, either showcasing down organizational silos, holding managers the technology application that was central to accountable, or requiring MDAs to comply with the reform, or playing a supporting role (e.g., a more efficient and transparent procedure, each application of smartphones supported a broader innovation required strong political leadership. operational change in Pakistan). While the cases Leaders need to find ways to collaborate with a give insights into the relevance of technology for wide range of internal and external stakeholders public sector performance, none of them reflected on the one hand, and overcome inherent the use of cutting-edge technology. Instead, they opposition on the other. applied relevant, even basic, IT tools and know- how to their specific functional requirements and • Institutional capacity building of existing did not over-design their efforts. Furthermore, bodies is a common element across many of the the technology application is rarely a stand-alone cases, especially in driving results from the center solution; rather, it is accompanied by policies and of government and in managing public finances. procedures to change behavior. Officials often used a mix of technology, new management approaches, and staff training to strengthen institutional capacity to deliver These five success factors are on a continuum results. For reforms to endure, one ultimately from difficult to easy to change in the short to needs to create sustainable institutions. medium term. • Incentives matter, and we see this applied • Political leadership is an exogenous factor; the both at the institutional level (e.g., through emergence of strong reform champions is often government-wide policy, creating systems and thought to be an enabling condition for a reform structures that shape institutional objectives, and to succeed rather than a factor to be influenced program monitoring systems) as well as at the through the policy process. level of civil servants (e.g., through performance targets and reward systems). We see examples of • Building institutional capacity and achieving performance management upstream at the center a cultural shift within institutions can often of government where broad policy is formulated, take a generation, but it can become a goal and also downstream at the point of service that governments work toward, with long-term delivery closest to citizens and beneficiaries. objectives and many short- and medium-term actions. • Transparency can benef it either internal stakeholders (e.g., other government officials) or • Incentives can also take time to change, especially external stakeholders and citizens. Aside from those that involve civil service socialization; at the usual argument about the intrinsic value of the same time, some reforms – like instituting 44 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE key performance indicators (KPIs) and ministers’ This analysis suggests some recommendations personal accountability for their achievement – for both governments and development can affect some incentives fairly quickly. institutions that are seeking to support improvements in public sector performance. • Transparency reforms, either internal or external, In the short term, it pays to invest in the initiatives are similar to the reforms of incentives: there are that foster transparency and/or employ technology in underlying structural processes that take time, a context-savvy and fit-for-purpose manner. At the but some technical changes – like circulating same time, the medium- to long-term efforts can focus performance information – can be quick and have on changing incentives and building institutional powerful effects. capacity. Changing incentives is a particularly broad category, as it may include some quick wins • Technology can be introduced relatively in government-wide monitoring and HR systems, quickly. While not a magic bullet to transform while also involving more long-term transformations the government, some well-targeted and often of the institutional and civil service culture. Last but modest technological solutions can help countries not least, acknowledging that political leadership leapfrog. is a necessary precondition for most public sector performance reforms is important. All too often, such reforms fail because they are attempted as purely technical solutions, rather than having a political ownership and drive. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 45 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE TABLE 1 Common Elements Across the Cases 5b. Tech plays supporting role Performance Management Indicators & Monitoring Increased transparency Institutional capacity 5a. Tech plays major role 3a. Incentives: Results High-level political 3b. Incentives: HR strengthening leadership Driver Case 4. 2. 1. Fusing Tradition with Modernity: Imihigo 1 Performance Contracts in Rwanda Breaking Down Silos: Malaysia’s Experience 2 in Strengthening Inter-agency Cooperation Driving education and health reforms from 3 the Ministry of Economy and Finance in Mozambique Making Regulatory Impact Assessments 4 Work in Armenia Putting 800,000 tax agents to work: China’s 5 State Administration of Taxation implements a performance management reform Reforming Civil Service Recruitment through 6 Computerized Examinations in Indonesia Turning around an agency: The Manaus 7 (Brazil) finance secretariat introduces results-based management Giving government units access to financial 8 data in a cost-efficient way: Indonesia’s online monitoring FMIS system 9 Rwanda: Pioneering e-procurement in Africa A new law leads to service delivery reforms: 10 The Public Services Guarantee Act in Madhya Pradesh (India) At Your Service – Improving access 11 to information in Uruguay through a government-NGO partnership Engaging citizens to improve service 12 delivery: The Citizen Feedback Monitoring Program in Pakistan Using Smartphones to Improve Public 13 Service Delivery in Punjab (Pakistan) Automating processing of uncontested civil 14 cases to reduce court backlogs in Azerbaijan Incentivizing courts to reduce backlogs: 15 Serbia’s court rewards program TOTAL 11 13 14 10 11 46 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Linking the Emerging Themes and the Cases T he remainder of Part I presents the challenges. Finally, we discuss why the selected cases selected cases in five thematic clusters. are worth learning from, while taking into account The next section introduces the emerging their limitations. These thematic introductions are themes in more depth. For each theme, we first followed by the collection of fifteen individual cases. make the case why this particular area is important Each case consists of three parts: the description of for emerging economies to consider. After describing the functional problem, the government’s response, the challenges faced by governments around the and the reflections on what worked and where the world, each thematic introduction delves into challenges persist. Table 2 maps the featured cases to what these economies are doing to address these the themes. TABLE 2 Roadmap: Emerging Themes and Featured Cases Theme Cases Upstream Reforms A. Driving Results from the 1. Fusing Tradition with Modernity: Imihigo Performance Contracts in Center of Government Rwanda 2. Breaking Down Silos: Malaysia’s Experience in Strengthening Inter- agency Cooperation 3. Driving education and health reforms from the Ministry of Economy and Finance in Mozambique 4. Making Regulatory Impact Assessments Work in Armenia B. Civil Service Management 5. Putting 800,000 tax agents to work: China’s State Administration of Taxation implements a performance management reform 6. Reforming Civil Service Recruitment through Computerized Examinations in Indonesia C. Innovations in Managing 7. Turning around an agency: The Manaus (Brazil) finance secretariat Public Money introduces results-based management 8. Giving government units access to financial data in a cost-efficient way: Indonesia’s online monitoring FMIS system 9. Rwanda: Pioneering e-procurement in Africa Downstream Reforms D. New Approaches to Last-Mile 10. A new law leads to service delivery reforms: The Public Services Service Delivery Guarantee Act in Madhya Pradesh (India) 11. At Your Service – Improving access to information in Uruguay through a government-NGO partnership 12. Engaging citizens to improve service delivery: The Citizen Feedback Monitoring Program in Pakistan 13. Using Smartphones to Improve Public Service Delivery in Punjab (Pakistan) E. Innovations in Delivering 14. Automating processing of uncontested civil cases to reduce court Justice Services backlogs in Azerbaijan 15. Incentivizing courts to reduce backlogs: Serbia’s court rewards program IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 47 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Emerging Themes & Featured Cases A Driving Results from the Center of Government 48 CASE STUDY 1 Fusing Tradition with Modernity: Imihigo Performance Contracts in Rwanda 52 CASE STUDY 2 Breaking Down Silos: Malaysia’s Experience in Strengthening Inter-agency 57 Cooperation CASE STUDY 3 Driving Education and Health Reforms from the Ministry of Economy and 61 Finance in Mozambique CASE STUDY 4 Making Regulatory Impact Assessments Work in Armenia 67 B Civil Service Management 72 CASE STUDY 5 Putting 800,000 Officials to Work: China’s State Administration of 76 Taxation Implements a Performance Management Reform CASE STUDY 6 Reforming Civil Service Recruitment through Computerized Examinations 81 in Indonesia C Innovations in Managing Public Money 86 CASE STUDY 7 Turning Around an Agency: The Manaus (Brazil) Finance Secretariat 90 Introduces Results-Based Management CASE STUDY 8 Giving Government Units Access to Financial Data in a Cost-Efficient Way: 96 Indonesia’s Online Monitoring Financial Management Information System CASE STUDY 9 Rwanda: Pioneering e-Procurement in Africa 100 D New Approaches to Last-Mile Service Delivery 104 CASE STUDY 10 A New Law Leads to Service Delivery Reforms: The Public Services 108 Guarantee Act in Madhya Pradesh CASE STUDY 11 At Your Service: Improving Access to Information in Uruguay Through a 114 Government-NGO Partnership CASE STUDY 12 Engaging Citizens to Improve Service Delivery: The Citizen Feedback 119 Monitoring Program in Pakistan CASE STUDY 13 Using Smartphones to Improve Public Service Delivery in Punjab (Pakistan) 125 E Innovations in Delivering Justice Services 132 CASE STUDY 14 Automating Processing of Uncontested Civil Cases to Reduce Court 136 Backlogs in Azerbaijan CASE STUDY 15 Incentivizing Courts to Reduce Backlogs: Serbia’s Court Rewards Program 140 48 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Driving Results A from the Center of Government Effective leadership and coordination from the top of the executive branch is perhaps one of the most important factors for improved public sector performance. What is at stake? as well as cabinet offices, sub-cabinet committees, and other central coordinating mechanisms, T here are few factors more important including the ministries of finance and development for improving public sector performance planning. Figure 5 depicts the center of government th a n effective le a ders hip a nd as concentric circles with the central ministries of coordination from the top of the executive finance and planning occupying a special position branch. 3 Without the proper preparation of the vis-à-vis both the core of the chief executive’s offices sessions of the Cabinet or a Council of Ministers, and the council of ministers, which are further out decision-makers can become quickly consumed by (from Alessandro, Lafuente, and Santiso 2013). the minutia of policy proposals, losing focus on the strategic priorities of the day. Effective filtering If the CoG performs its tasks well, collective mechanisms are needed to weed out ill-prepared, expertise from across the public sector is un-costed, and uncoordinated policy responses, the mobilized and brought to bear on the most effects of which can be damaging for years to come. pressing decisions confronting the country. Recent episodes in the news of policy failures from MDAs with a stake in a particular issue are consulted, developed and developing countries alike illustrate and their views and technical knowledge are fully the point. integrated into the decision process. Senior officials have the opportunity to thoroughly weigh and Conceptually, the Center of Government refers review various options and to fully understand their to the institution or group of institutions legal, financial, and policy implications, resulting that provides direct management support in evidence-based decision-making. Once decisions to the chief executive (James and Ben-Gera are taken, ministries move forward with a clear set 2004; World Bank 2010a). Unlike service of directives, and adequate resources to implement delivery-oriented ministries and agencies, center them effectively. Incentives for implementation, such of government (CoG) institutions deal with the as systematic monitoring and evaluation (M&E) and strategic management, coordination, monitoring, public accountability to the chief executive, can also and communication of government decisions. They be put in place by the CoG. include the Office of the President or Prime Minister, IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 49 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE FIGURE 5 Center of Government as Concentric Circles A THEME Full Cabinet/ s Council of Ministries rie Ag st i en in M cie e s Lin Interministerial Ministry of Finance/ Committees Budget Of ce Interior/ Home Affairs PRESIDENT/ Ministry PRIME MINISTER Ministry/General Secretariat of the Presidency President/Prime Minister’s O ce Chief of Sta Cabinet Advisers/Policy Advice Unit Of ce Legal Counsel Unit Strategy Delivery and Performance Unit Unit/ Ministry of Private O ce Planning Spokesperson “Super Ministries”/ Crosscutting Agencies Other Coordinating Committees (i.e., Subnational Governments) Other Public Institutions Source: Alessandro, Lafuente, and Santiso (2013) However, CoG institutions in many countries To drive the results on the ground, CoGs must fall short of this ideal. At the policy formulation be organized in a way that strengthens the stage, the CoG often functions in a reactive rather links in the service delivery chain. The 2004 than proactive mode, going from crisis to crisis WDR highlighted the challenge of co-locating the rather than following a defined agenda. As a result, incentives and information necessary to improve many day-to-day decisions are made hastily with public sector performance in delivering services. little analysis or consultation. Evidence-based Political and civil service leaders at the CoG may have decision-making and participatory governance are the election and career incentives to deliver outcomes, all too often sacrificed in the name of expedience. but they do not readily possess the granular, timely The policy implementation phase can be similarly information about what is happening on the ground. difficult. Inter-agency coordination is the major In contrast, last-mile service providers have the implementation challenge for most CoGs. This is true information, but do not always have strong incentives not only for the implementation of complex policies to deliver. Incentivizing the service providers and that require whole-of-government involvement, but bringing the information up the delivery chain thus also for sectoral interventions that include many become key CoG tasks. This, however, is difficult to implementing agencies, such as transport or health. achieve if the performance measurements are not in Part 2 of this report discusses the issues of policy and place, there is little opportunity for evaluation, or the inter-agency coordination in depth. functional responsibilities are blurred. 50 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE How are emerging concepts to the local context for their maximum A economies addressing uptake. the challenge? THEME Effective policy implementation requires collaboration among MDAs, so breaking down T he recent wave of CoG reforms tackles silos is another important task for the CoG. both the ability of the central units While Rwanda looked to tradition to help improve of the government to make informed public sector performance, Malaysia’s CoG found policy decisions, as well as to coordinate their inspiration in the private-sector concept of Blue implementation. For example, the functions of Ocean Strategy to encourage collaboration, break prime ministers’ departments or presidents’ offices down silos among MDAs, and find efficiency gains.6 are being overhauled to help with the proactive As Malaysia’s case illustrates, it is possible to find work planning and clarity of responsibilities. To ways to induce collaboration among MDAs and improve the evidence-based policy-making at the deliver services more efficiently and effectively. While policy formulation stage, chancelleries are looking the secretariat leading the “Blue Ocean Strategy” to strengthen their capacity for vetting draft policies approach was housed in the Ministry of Finance, before they are submitted to cabinets. At the policy visibility to the Prime Minister’s office helped give implementation phase, many countries are taking a added clout to the targeted initiatives. fresh look at the design of the performance M&E systems at the CoG so that they can provide better Both the Malaysia and Mozambique cases monitoring of how the implementation of the top illustrate that ministries of finance can serve priorities is progressing and create opportunities as capable champions to drive results-based for evaluation and learning. Some countries are management for better service delivery. As experimenting with delivery units or similar semi- the Mozambique case demonstrates, the financial permanent structures at the CoG that are designed to incentives for line ministries to provide tangible results drive performance. Besides the apex of the executive can prove very powerful in fixing the thorny problems power, the ministries of finance or development in service delivery, such as improving medicine supply planning are seeking to improve their CoG functions chains or transforming the education sector. While that focus on coordinating the line MDAs, with in this particular case the reform was linked to an the imperative of the efficient allocation and use of innovation in development finance, specifically the public resources. The cases highlighted in this section World Bank’s results-based lending instrument, the illustrate four countries’ efforts to tackle these issues. role of the CoG went beyond financial incentives. The reform efforts in Mozambique also emphasized better At the policy implementation stage, motivating information flow and coordination, as well as capacity performance at the MDA and local level building, and facilitated communication between becomes a key challenge for the CoG. The the MOF and line ministries. Performance-based Rwanda case shows how that can be done through allocations and holistic results-based management fusing the modern concept of performance contracts4 must go hand-in-hand and mutually reinforce each with a traditional practice of public commitment other. called Imihigo.5 The President’s Office was able to use powerful non-monetary incentives to first push While the above three cases focus on the the mayors across the country to set development CoG’s role in implementation, the Armenia targets for their districts and deliver on them. After case illustrates an attempt to improve public the success of the program at the district level, more sector performance even further upstream – by of the public sector was covered within the central strengthening elements of policy formulation. government, where ministries require staff to sign The previous three cases show how implementation Imihigo contracts at the beginning of each fiscal year. of policies can be improved through CoG tools, but This created strong performance incentives across that assumes that countries adopt sensible policies in the country and contributed to the improvements in the first place. However, that is not always the case Rwanda’s development indicators. The Imihigo case – especially if the policy coordination at the center highlights the importance of tailoring performance is lacking and the government adopts mutually IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 51 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE contradicting policies. Introducing regulatory impact or delivery culture. While discrete problems that are assessment (RIA) is one way of ensuring that this highly visible (e.g. timeliness of trains, waiting lines A is not the case. In addition, institutionalizing good- for hospital services) can be adequately handled with THEME practice RIA is one way of improving evidence-based such an approach, many others cannot be. At the policy-making. At least 60 non-OECD countries same time, once underway, measurement and audit of have attempted similar reforms, but only one-third field progress remain central challenges, as seen in the are successful after two years (Kamkhaji et al 2018). Rwanda case. The performance contracts can become The Armenia case featured in this report shows that proforma, losing sight of the larger targets. Too many in order to succeed, RIA must be integrated into indicators can create confusion, while progress on broader government systems. Armenia’s Office of the outcomes, rather than outputs, may be difficult to Government (Prime Minister’s secretariat) was able demonstrate. to not only provide direct oversight of the reform, but also to underpin and support the RIA with While all four interventions discussed in this the strategic planning and programming, capacity section demonstrated immediate results, their building, performance contracts for high-level long-term impact still remains to be seen. At the officials, and consultation mechanisms. This ensured same time, the four reforms remain works in progress, the take-up and sustainability of RIA across MDAs with continued iterations and design adjustments. In and has set the stage for achieving impact. Rwanda, the institutions were so focused on their own objectives that little attention was paid to joint responsibilities; consequently, a newly adopted policy addresses these gaps. In Mozambique, while the reform worked well in the health sector, the education Why are these ideas sector had more difficulties in improving school worth learning from? management, despite the financial incentives. This led to trying different techniques, such as new school T he four cases, while very different, council and supervision manuals and training. These demonstrate the power of leadership iterative adaptations and desire to do better bode well commitment, incentives, and ideas in for the sustainability of these reforms. driving results from the CoG. The Rwanda Imihigo case illustrates the role of leadership and cultural norms in providing performance incentives and accountability. Similarly, the Mozambique example drives home the power of performance-based financing and results-based management, through which the CoG can offer the right incentives to fix persistent service delivery problems. The Armenia RIA case shows that it is possible to make policy formulation more evidence-based quickly, as long as it is designed to fit into other government systems and the CoG remains committed to it at the highest level. Finally, the Malaysia case is a useful example of how the CoG translated ideas from the private sector to the public sector context, providing collaborative, cost-efficient, and timely solutions to service delivery problems. At the same time, CoG reforms are not a panacea for all performance issues. A classic challenge with the COG approaches to improving performance is that they may catalyze or speed up some processes in the short term, but not fully transform a civil service 52 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 1 A Fusing Tradition with CASE STUDY 1 Modernity: Imihigo Performance Contracts in Rwanda Overview E nsuring follow-through on policy promises is always a difficult task, particularly in the wake of a national crisis. Following the Rwandan genocide, the country’s government had to find a RWANDA way to move on from the devastation, implement policies that would stimulate development and improve service delivery, and then make POPULATION (July 2017 est.)1 sure it delivered on those policies. To hold public officials accountable, 11.901 million the government chose to adapt the idea of performance contracts to GDP PER CAPITA (current US$)2 a traditional practice of setting and achieving goals called Imihigo. First implemented with district mayors, Imihigo were later expanded 702.80 across government ministries and agencies. The increased focus on INCOME GROUP3 performance of public officials helped Rwanda achieve impressive Low income rates of economic growth, rapidly improve infrastructure, and increase GOVERNMENT EFFECTIVENESS4 health and education outcomes for its citizens. More recently, however, 58.2% critics noted that focusing on district Imihigo targets – which were largely derived from central government priorities and financed by the national budget – had potentially limited the opportunity for citizen participation and for local governments to implement their own 1 CIA World Factbook, 2World Bank (2016), policies and solutions. 3 World Bank (2016), 4World Bank (2016) IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 53 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Introduction7 Enacting the agreements, however, required more than just a written promise. To ensure compliance with the A A t the start of the new millennium, Rwandans Imihigo – and push the country’s development agenda CASE STUDY 1 had begun to put their country back together forward – the government had to set up a structured after the horrors of the 1994 genocide. system to check mayors’ progress and incentivize Following the atrocities, the government focused on them to achieve their goals. After pioneering the providing urgently needed services to the distressed system with district mayors, Kagame planned to population, while long-term development strategies spread the program through all levels of government, took a backseat. By 2000, however, President Paul from high-level central government officials down to Kagame was ready to set the country on a course local leaders at the village level.  for rapid development. In 2000, he launched Vision   2020, a national plan to reduce poverty, improve The Imihigo program had several ambitious aims, governance, and promote economic development. including to:  Vision 2020 aimed to transform Rwanda into a middle-income country by the year 2020 with a per • Speed up implementation of the local and capita income of US$1,240, reduce the poverty rate national development agenda  to 20%, and increase average life expectancy to 66 • Ensure stakeholder ownership of the years (from 49 years in 2000) (Ministry of Finance development agenda  and Economic Planning 2000). • Promote accountability and transparency    Five years into the plan, however, progress had been • Promote results-oriented performance  painfully slow. More than half of the population still • Encourage competitiveness lived in poverty, and the rate had only decreased by 2.2%, from 58.9% in 2000 to 56.7% in 2005. An • Ensure stakeholders’ participation and evaluation of the country’s 2003 to 2005 poverty engagement in policy formulation and reduction strategy found that a weak monitoring evaluation  and evaluation system, poor prioritization, and • Instill a culture of regular performance a lack of accountability were major factors in the evaluation (Government of Rwanda 2010)  disappointing progress (African Development Bank 2012). To get its Vision 2020 plan back on track, the   Rwandan government had to drastically improve its Imihigo was designed as a Rwandan approach to performance.  performance management, as described in a policy   note published by the minister of local government in In 2006, Kagame launched an ambitious program to 2006: “The Imihigo approach shares many characteristics push mayors across the country to set development with results-based management tools. First, each Imihigo targets for their districts, and deliver on them. The identifies a set of clear priorities. Second, each Imihigo program was based on a pre-colonial tradition called presents a set of specific targets backed by measurable Imihigo, where individuals or communities would performance indicators. Third, each Imihigo undergoes publicly promise to complete certain tasks, sometimes a well-defined process of performance monitoring and set by the king or another leader. If the individual or evaluation. Fourth, each Imihigo constitutes an efficient group achieved their goal, the community celebrated accountability mechanism and an incentive for local their success; if they failed to follow through, they government leaders and their population to implement the faced public humiliation (Ndahiro 2015).  decentralization policies and to meet local and national   development targets.” Under the modern Imihigo program, mayors would   devise action plans based on the national development Many other countries used performance contracts to agenda in consultation with the local community, and incentivize follow-through on development promises, then make public commitments to implement them. but in Rwanda, Imihigo was a more traditional way The agreements were codified in contracts with the to achieve the same goals and thus much more national government.  understandable for the local population. Alexis   Dukundane, the former head of the Directorate for 54 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Community Development at the Ministry of Local those groups, the mayors could ensure coordination A Government said: “People wouldn’t understand if between the district government’s work and the you talk about performance contracts, but if you say projects being implemented by other organizations.  CASE STUDY 1 Imihigo, they understand.”8   Based on those national and local level conversations, the district governments developed 5-year plans for the 2007 to 2012 period. Each district government The Response also developed one-year action plans each year to put them on a path toward their 5-year goals. The T he national government’s ultimate goal was to action plans included all tasks the council planned have everyone in the public sector working to to complete that year, from administrative tasks such achieve specific goals, but it decided to focus as writing reports and preparing budgets, to large first on rolling out Imihigo for mayors at the district infrastructure projects such as building roads and level. Improving the performance of the mayors of bridges. Mayors’ Imihigo targets formed part of the Rwanda’s 30 districts was crucial for the country to action plans. achieve its goals. At the time, Rwanda was undergoing a decentralization process, and local governments had Each Imihigo was linked with a specific indicator of far more responsibility for service delivery than they success. For example, an Imihigo might be to increase had had previously. electricity coverage to 100%, and the indicator could be the percentage of households with an electricity connection.  Choosing targets   After settling on well-defined goals and measurement At the same time that it launched the Imihigo metrics, the local mayors signed the Imihigo in a program, the Rwandan government developed its ceremony with the President. The ceremony was Economic Development and Poverty Reduction broadcast on television and reported in newspapers, Strategy (EDPRS). The EDPRS was a medium-term and the Imihigo documents were made available to the plan to put the country on track toward its Vision general public. 2020 goals. The government incorporated the Imihigo   process into the EDPRS as a mechanism to ensure follow-through by local governments (Ministry of Monitoring progress  Finance and Economic Planning 2007).    Local governments were required to keep Development targets at the district level were documentation of all activities and expenses related partly inf luenced by the central government’s to their Imihigo so that the central government could agenda (defined in the EDPRS and Vision 2020), track progress. Halfway through the year, mayors and partly influenced by discussions and demands submitted reports to the government explaining their from local communities. Every year, each district progress in detail.  mayor and other senior district officials met with   representatives from central government ministries At the end of the fiscal year, the national government during meetings known as the Forum of Central put together two evaluation teams, each made and Local Government. The ministry representatives up of representatives from the Ministry of Local informed the mayor of the government’s priorities in Government, the Prime Minister’s Office, the their respective areas and gave an indication of the Ministry of Finance and Economic Planning, expected budget that would be available for the local the Rwandan Association of Local Government government to achieve those priorities. Authorities, the implementation secretariat, and civil   society organizations. The teams included high-level The mayor’s team would also speak with members of people from those groups, sometimes even the director community councils within the districts to take into of the organization. The two teams traveled around account local demands and priorities, as well as with the country, and between them visited each of the NGOs and civil society groups. By meeting with country’s 30 districts to conduct two-day evaluations.   IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 55 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE During the evaluation process, the teams would go country. Fred Mufulukye, the director general of through all of the district government’s progress territorial administration, said the system fostered A reports and audit supporting documentation. competition. “Now districts – both citizens and CASE STUDY 1 The team would then ask the mayor to explain mayors – want to compete and want to be best,” any discrepancies in the reports or any delays in he said. “This competition drives development.” 9 implementation. Finally, the team would choose a selection of the Imihigo targets and check them in person. For example, if an Imihigo was to build a new Expanding the Imihigo program school with 50 classrooms, the evaluation team would visit the school, count the classrooms, and check it After the success of the Imihigo program at the district met other specifications defined in the Imihigo target.  level, Rwanda expanded the system to cover more of the public sector. Administratively, each district in From 2014 to 2018, the Institute for Policy Analysis Rwanda is divided into sectors, each sector divided and Research, a Rwandan research institution, into cells, and each cell divided into villages. Public conducted the Imihigo evaluations. The Ministry of officials at each level (sector, cell, and village) were Finance and Economic Planning reported that from included in the Imihigo program and made public 2018 onwards the evaluations would be conducted commitments each year. Monitoring and evaluation by the National Institute for Statistics, a government was carried out at the local level. For example, agency. public officials at the cell level were responsible for monitoring village leaders’ Imihigo within the cell’s geographic area (Ndahiro 2015).  Holding districts accountable     The program was also expanded within the central The evaluation team scored each Imihigo target government, and beginning in financial year (FY) on a 1 to 10 scale. The score was based not only on 2009 all government ministries and agencies began whether the Imihigo was achieved, but also on the requiring staff to sign Imihigo contracts. completeness and accuracy of the mayor’s progress reports. An Imihigo that was fully implemented with complete and accurate supporting documentation would score a 10. An activity that had barely begun Reflections would score a 1.  S ince the Imihigo system was introduced, Finally, districts were given an overall score based Rwanda has scored highly on a range of on a weighted average of their scores for each Imihigo development indicators. While a number activity. Each activity was classified as an “economic” of factors have contributed to the country’s activity, a “social welfare” activity, or a “governance” improvements, the Imihigo program likely helped activity. Economic activities made up 60% of the keep officials at all levels focused on achieving scoring, social welfare activities 30%, and governance development targets. The country’s GDP increased activities 10%. After the team completed the scoring from US$3.2 billion in 2006 to US$8.4 billion in and evaluation process, the final scores and reports 2016 and life expectancy increased from 57 years to were presented in person to the mayors at another 67 years over the same period. In addition, the poverty ceremony with the President. At the same ceremony, rate decreased from 56.7% in 2005 to 39.1% in 2013.10 the mayors committed to new Imihigo targets for the next year.  Achievements of individual Imihigo targets in districts   across the country no doubt contributed to those The scores and reports were made available to the impressive national achievements. In FY 2014/2015, public online, along with a list ranking each district there were more than 2000 Imihigo targets spread from first to last based on their overall score. Using across the 30 districts. Of those, about 75% were those rankings, the public could see how their achieved. Based on a report by the Institute for Policy local government had performed compared to Analysis and Research, the key results of Imihigo neighboring districts and other districts across the during FY 2014/2015 were increased electricity 56 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE coverage, improved access to clean water, increased were linked with district and sub-district level A access to credit for women and youth, improved Imihigo, ensuring a focus on results from the public agricultural production, and a large increase in the officials involved in implementation.  CASE STUDY 1 number of roads and healthcare facilities (Institute of Policy Analysis and Research, Rwanda 2015). Reflecting on the program’s original aims, however, It is also possible, however, that official reports there was at least some concern that Imihigo did on Imihigo overstate the initiative’s success. Susan not necessarily ensure stakeholder participation. Thomson, the author of Rwanda: From Genocide Benjamin Chemouni, a fellow at the London to Precarious Peace, noted “stressed and under- School of Economics, noted that “theoretically [the resourced local officials regularly skimp to meet their Imihigo -setting process] should be informed by the Imihigo commitments” (Thomson 2018). In addition aggregation of the population’s wishes… [but] this to cutting corners, strong pressure to perform may process barely takes place in reality” (Chemouni have resulted in officials inflating achievements. 2014). The central government wielded strong   influence over the selection and implementation of Imihigo created a strong culture of performance district Imihigo, and local governments had little across the whole country. Scrutiny from the highest flexibility to implement policies that reflected local levels of government put pressure on public officials realities or the community’s wishes. As a result, at every level within the central and local government the Imihigo system fulfilled the goal of creating to perform. The increased focus on performance top-down pressure for public officials to perform, fit well with the World Bank’s new Program-for- but did not necessarily make public officials more Results financing instrument. World Bank-funded accountable to Rwandan citizens (Hasselskog and projects in Agriculture and Urban Development Schierenbeck 2015).  Success Drivers Rwanda’s introduction of Imihigo contracts to improve government officials’ performance across government reflects three of the five key dimensions for successful public sector innovation. Political Leadership drove the Imihigo program from the outset, and it was the sustained support from the president that enabled the program to expand across the whole of government. The political leadership recognized the gap between the country’s development vision and the outcomes on the ground, and initiated an outreach to mayors to bring them into a new partnership to deliver on district-level development plans. Scrutiny from the president and other high-level officials put pressure on government workers at every level to perform. Incentives were a key element of the Imihigo contracts and critical to the reform’s success. Mayors around the country had to report progress to the central government, and evaluations were conducted by a special team each year. All districts were scored on their performance, and top performers received special recognition from the president in a dedicated awards ceremony. Public recognition of achievement also helped create positive competition among mayors to do even better. Transparency was an important component of the Imihigo program. Contracts were signed in a public ceremony, and scores were disseminated through various media channels. Citizens could watch the broadcast of the Imihigo ceremony on television and look up results online to see how their local government was performing compared to other districts around the country. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 57 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 2 A Breaking Down Silos: Malaysia’s CASE STUDY 2 Experience in Strengthening Inter-agency Cooperation Overview D espite numerous inter-agency coordination mechanisms at the center of government, ministries and agencies in Malaysia still struggled to break out of silos and deliver the level of MALAYSIA services expected by the public. In 2009, the public administration looked for new ideas from the private sector to complement existing POPULATION (July 2017 est.)1 efforts within government. The “Blue Ocean Strategy” model was 31.382 million adopted to encourage government ministries/agencies, NGOs, and GDP PER CAPITA (current US$)2 the private sector to collaborate in innovative ways. While the Blue Ocean Strategy approach is no longer used by government to facilitate 9,508.20 coordination, the legacy remains. INCOME GROUP3 Upper middle income Introduction GOVERNMENT EFFECTIVENESS4 76% T he government’s efforts in enhancing the efficiency of service delivery resulted in several waves of reform efforts to improve the operations of the public administration. Expectations for reform were fueled in part by the government’s policy direction circa 2009/2010 of making Malaysia a high-income economy by 2020. While the five-year national development plans provided the overall policy direction, the government agencies were pushed to deliver high- CIA World Factbook, 2World Bank (2016), 1 impact, low-cost improvements to public services on the ground. World Bank (2016), 4World Bank (2016) 3 58 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Response that a significant portion of the police force was A not fully engaged in fighting crime as they were S enior officials in the government in 2009 involved in administrative duties. All positions in CASE STUDY 2 were attracted to the “Blue Ocean Strategy” the organization were filled by fully trained police concept developed at the INSEAD business officers, even office jobs. “We had police personnel school, as a means to promote a more creative way sitting behind desks doing administrative jobs, of delivering services and encourage greater inter- when they could have been on the street engaged in agency collaboration. The implementation of the Blue crime prevention,” said one of the team members. Ocean Strategy was headed by the Office of Chief The government quickly redeployed police officers Secretary to the Government. As the initiatives grew from administrative positions to crime-fighting in number, the government decided to establish the roles, and transferred administrative staff from other National Strategy Unit (NSU) within the Ministry departments to take on the newly vacated office jobs. of Finance. The NSU was tasked with facilitating strategic collaboration between ministries, agencies, Nevertheless, the government wanted to further and the private sector, as well as with monitoring the increase the number of police officers working implementation of Blue Ocean Strategy initiatives on the streets on crime prevention. But there was and assisting entities overcome obstacles they a barrier to doing so quickly: “We couldn’t train encountered. sufficient people in a short space of time,” said a member of the Blue Ocean Strategy team. All new police recruits went through a thorough training Pioneering the idea process before securing their positions. One option would be to reduce the entrance requirements, but Reducing crime was one of the first national priorities the government did not want to weaken the force that the NSU team turned their attention to. Supported with poorly trained officers. by the Chief Secretary to the Government, Minister of Home Affairs, and Minister of Defense, the team Instead, the government turned to the military: began thinking about possible solutions. One of the all members of the armed forces had been through members of the team recalled the beginning of the intense training, and there was a significant amount discussions: “How do you get more police to patrol the of overlap between how the police and the military streets for crime prevention? The traditional approach trained their staff. Through the Blue Ocean Strategy would be to train more police officers.” The Chief platform, the police and the military decided to Secretary to the Government of Malaysia, however, introduce a fast-track training for retired military was dedicated to thinking about non-conventional personnel to become police officers, and also to start solutions. “With the Blue Ocean Strategy approach, conducting joint patrols in high-crime areas. the strategy drives the structure, rather than the other way around,” said the team member. Bringing the organizations together also helped the government resolve another major problem: The Chief Secretary to the Government of Malaysia the country’s overcrowded prisons. Rather than called together officials working on public security sending petty criminals to prison, the team decided for the National Blue Ocean Strategy Summit, it would be better to send them to military camps. and together they began developing a new crime Instead of spending public money on new prisons, reduction strategy that was not confined by the the government began building new dormitories in existing structure of the police force. The meeting was military camps – a more cost-efficient alternative. chaired by the Chief Secretary, the highest-ranking In March 2010, the government launched the civil servant, and attended by relevant ministries’ Community Rehabilitation Program (CRP), Secretary Generals and high-level officials from all which would place petty criminals in secure institutions relevant to public security, including the military facilities, where they would be trained Inspector General of the Police and the Chief of the and rehabilitated before release. The Ministry of Armed Forces. Agriculture and Ministry of Rural Development chipped in with vocational training programs. As One of the first realizations of the group was well as reducing prison overcrowding, the initiative IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 59 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE had a secondary goal: reducing recidivism. “If you Transforming service delivery send petty criminals to prison, they might become A hardened criminals,” said a Blue Ocean Strategy One of the initiatives that required the most CASE STUDY 2 team member. “Now, they go through a process collaboration across government was the establishment of rehabilitation and get skills training, and when of Urban Transformation Centres (UTCs). The new they leave the center they are ready for a new life; it centers were essentially “one-stop shops” that brought breaks the cycle of crime.” various government agencies, statutory bodies and the private sector together in one location to provide services such as passports, identification cards, driving Creating collaborative opportunities licenses, a clinic, a police beat base, sports, and social welfare programs. While the early Blue Ocean Strategy initiatives focused on reducing crime, new initiatives adopted Because of the scope of the UTCs and the high at the Blue Ocean Strategy high-level meetings degree of coordination required across dozens of targeted a broad array of sectors. Priorities closely agencies, the NSU itself managed the initiative. tracked the government’s national development The first step to set up a UTC was to find a suitable strategy, as well as other issues that the government site. To keep costs low, the government tried to use and the public wanted to address. “New initiatives existing, under-utilized government owned buildings depend on what issues the country is facing at the that could be easily renovated to become a UTC. In time,” said the senior deputy director for policy some cases, the government owned suitable buildings and planning at the NSU. “For example, when the in state capitals, while in other cases the government government wanted to reinforce volunteerism among used buildings owned by state governments, local youths, the meeting introduced an initiative related governments, or even state-owned enterprises. Such to volunteerism and youths, and so on and so forth.” cases required an even higher degree of collaboration and commitment to push progress forward. To be considered an Blue Ocean Strategy initiative, any proposed project had to fulfill Blue Ocean The first UTC was launched in 2012 in Melaka, and Strategy principles, with implementation involving others quickly followed. By 2017, 21 were in operation either multiple ministries or agencies, or collaboration in state capitals around the country, collectively between a government organization and an NGO or serving millions of Malaysians. Compared with the private sector. For example, the Department of traditional government offices, the new centers had Wildlife and National Parks proposed collaboration much longer opening hours, usually 7 days a week, between its forest rangers and the military to from 8.30 am to 10.00 pm. better prevent the poaching of flora and fauna in Malaysia’s jungles. Another initiative, proposed by While the goal of the initiative was to provide faster the Malaysian Communications and Multimedia and more efficient services to citizens, it also implied Commission, saw this agency collaborate with cost savings for the government. After a UTC was private telecommunication service providers to set up, the government could cut infrastructure and expand the reach of broadband internet and other staffing expenses at the various agencies that had communications infrastructure to rural areas (The been incorporated into the one-stop shop. Malaysian Insight 2018). To expand access to services, the government also Every month, the lead agency for each Blue launched Rural Transformation Centres (RTCs), Ocean Strategy initiative had to report to senior which provided economic growth programs and government officials, including the Prime Minister, agriculture-oriented services to rural areas, and mini- on the progress it and its partners had made. By RTCs to serve more remote communities. Finally, 2017, more than 100 initiatives had been launched the government launched Mobile Community under the Blue Ocean Strategy banner. Transformation Centres, which traveled around the country bringing the same services to interior areas not covered by the UTC or RTC network. 60 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Reflections the MOF played an instrumental role. As UTCs were A being established in high density locales that come S trong support from the top leadership of the under state jurisdictions and with implementation CASE STUDY 2 government incentivized collaboration and highly dependent on the expeditious disbursement facilitated the rollout of Blue Ocean Strategy of funds, the MOF appeared better placed to lead its initiatives. Inter-agency coordination was occurring implementation and coordination. in Malaysia before the adoption of the Blue Ocean Strategy approach in 2009, and it will most certainly The state administrations and participating agencies continue after its abandonment in 2018. The broader at UTCs were also incentivized to execute decisions lesson is that high-level, focused attention on a narrow swiftly as they dealt directly with MOF on their set of objectives can help agencies and external entities funding and logistics requirements. It also offered overcome their natural barriers to collaboration. The them the opportunity to make the case for better 2009 government was receptive to applying private funding for higher quality service delivery options (as sector concepts to the public sector when it saw that opposed to the regular budgetary process involving existing institutional mechanisms were not producing competing priorities). The MOF in turn incorporated the results they wanted. Not all Blue Ocean Strategy performance measures through KPIs linked to initiatives were equally successful, and some agencies funding assigned to implementing partners. may have questioned the role and value of the NSU. Nevertheless, in a few areas, the government did The NSU also helped support stakeholders with ‘soft achieve lasting benefits from breaking down silos; infrastructure’. In the case of the UTC initiative, UTCs are an example. the provision of guidelines on the procedure for implementing UTCs and the demarcation of roles of A unique feature in the case of the UTC initiative is the participating entities facilitated the implementation direct involvement of MOF as the lead implementing and coordination process. Their pro-active and agency as well as overall focal point for Blue Ocean troubleshooting stance also helped strengthen Strategy initiatives. For an initiative such as the coordination and facilitate agreed outcomes. UTC, which appeared not to have a natural home, Success Drivers Malaysia’s implementation of its Blue Ocean Strategy reflects three of the five key dimensions for public sector innovation. Political leadership from senior officials was critical for inter-agency coordination to be successful. The Prime Minister, Deputy Prime Minister, and Chief Secretary to the Government placed high importance on Blue Ocean Strategy initiatives, generating new energy for collaboration between government organizations. Institutional capacity to deliver better public services was a central objective and driver of the Blue Ocean Strategy approach. This was achieved by improving coordination amongst agencies, optimizing resources, and reducing overlap. For example, the police and military worked together to optimize personnel and infrastructure to improve public security. Similarly, a nationwide network of one-stop shops was made possible by enabling agencies to collaborate and problem-solve in ways that had not been possible before. Incentives for government organizations were important to ensure the success of Blue Ocean Strategy initiatives. Monitoring and troubleshooting was led by the newly created National Strategy Unit (NSU), strategically positioned in the Ministry of Finance to ensure it had the clout to push reforms forward. Organizations involved in the Blue Ocean Strategy reported progress to the high- level meetings chaired by the Prime Minister or the Chief Secretary to the Government, and periodic reviews were conducted by relevant technical committees at the NSU. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 61 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 3 A Driving Education and Health CASE STUDY 3 Reforms from the Ministry of Economy and Finance in Mozambique Overview F acing multiple difficulties in delivering effective healthcare and education to its citizens, Mozambique turned to the World Bank in 2011 for assistance. One of the major problems MOZAMBIQUE was coordination between line ministries and the finance ministry. Without effective coordination, the education and health ministries POPULATION (July 2017 est.)1 struggled to get resources to the hospitals and schools where they 26.574 million were needed in a timely manner. The government used the World GDP PER CAPITA (current US$)2 Bank ’s “Program-for-Results” instrument to incentivize better coordination and collaboration between the health, education, and 382.10 finance ministries. Financial incentives, along with support from INCOME GROUP3 coaches trained to identify bottlenecks and help coordination, saw Low income Mozambique drastically improve disbursement of school grants and GOVERNMENT EFFECTIVENESS4 increase availability of critical medicines.  18.8% CIA World Factbook, 2World Bank (2016), 1 World Bank (2016), 4World Bank (2016) 3 62 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Introduction • The limited participation of parents and A communities in school councils  I n 2011, Mozambique was facing a number of CASE STUDY 3 challenges in the education and health sectors. In the health sector, the main issues with medicine Districts across the country kept running out of distribution were:  essential medicines, resulting in unnecessary deaths, and weak school governance was contributing to poor • Fragmented management responsibility  learning outcomes for Mozambican youth. • Inefficient and inaccurate information flow    • Poor inventory management  While both the Ministry of Health and the Ministry • Misalignments between supply and demand  of Education and Human Development (MEHD)   faced many obstacles to improve service delivery, one Mozambique had to urgently address those issues to of the most glaring was the management of finances improve education and health outcomes for its citizens. and other resources. To ensure resources were getting At the time, maternal mortality was extremely high to the right place at the right time, both ministries (490 deaths per 100,000 live births), there was high had to work closely with the Ministry of Economy HIV prevalence (about 11.5%), and malaria was the and Finance (MEF). But communication and leading cause of death for children under 5.11 Schools collaboration between the ministries was very weak, across the country struggled to pay staff and provide and resources allocated for health and education basic equipment such as books, pencils, chalk, and often arrived late, if at all. “The health and education blackboards. On any given day, more than half of ministries had tried to solve these issues before, the students did not show up to class, and about the but they had limited knowhow in public financial same percentage of teachers did not show up for work management,” said Furqan Saleem of the World (World Bank 2015a). Bank, who was based in Mozambique at the time.    Prompted by demand from the health and education ministries, the World Bank facilitated meetings Response between representatives from those two ministries T and the MEF. “The Finance Ministry did not know he MEF worked with the World Bank to about the problems,” said Saleem. “So it was a real eye- tackle the issues identified using the World opener for them.” Based on conversations between Bank ’s Program-for-Results instrument, the World Bank and the ministries, which occurred which provides financial incentives to achieve regularly over the course of more than two years, tangible results. The program, which had a budget the government began developing ambitious plans of US$130.6 million (including US$50 million from for a program that would bring the three ministries the World Bank) and would last from approximately together to improve financial management and 2014 until 2018, was tied to several disbursement- service delivery in the education and health sectors. linked indicators (DLIs). The DLIs were results the   program wanted to achieve by specific deadlines. In putting together the program, the government and If the government achieved them, the World Bank the World Bank conducted extensive research on the would provide the agreed-upon funds through issues facing the education and health sectors. performance-based allocations (PBAs). As well as financial incentives, the program also included Four main issues were identified in the education funding for “coaches,” experts who would help the sector:  ministries identify and overcome bottlenecks in their efforts to achieve the DLIs (World Bank 2014a).  • Persistent delays in the allocation of school grants, which constrained the availability of resources at the school level  Deciding priorities  • A lack of transparency in the education budget   allocation and spending at the district level  The government and the World Bank defined targets • Ineffective supervision of schools  for nine DLIs. The health sector DLIs focused on IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 63 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE the supply, storage, distribution and availability of Creating a reform team  medicines. For the education sector, DLIs focused   A on the accuracy of budget classification, timely The National Treasury Directorate, part of the CASE STUDY 3 disbursement of school grants, improved school MEF, established a Program Coordination Team to supervision, and representative and effective school strengthen coordination between the MEF and line councils.  ministries. It would also monitor progress, manage   the coaching program, and facilitate the disbursement The five DLIs for the health sector were:  of funds when DLIs were achieved.   • Fill rate of approved requisitions for medicines The goal of the PBAs was to motivate behavior change from the Central Medical Store’s (CMAM) in each of the ministries that formed part of the clients (hospitals and provincial warehouses)  program. Ministries could use the funds for a wide • Number of provinces achieving the minimum range of activities, from improvements in the working acceptable score of compliance with standards environment, to training, to procuring education for stock management, warehousing, and materials or medicines. About 80% of incremental distribution of medicines, as assessed by program funds were allocated to the PBAs, with the CMAM’s Internal Audit Unit  rest going to capacity development and operational • Proportion of districts for which CMAM costs. The Mozambican Administrative Court would receives logistics information through assess and validate compliance with the targets of its electronic logistics and management each DLI.  information system    • Average availability of essential maternal and With the administrative structure of the program in reproductive health medicines  place, the MEF began hiring coaches to work with the • Proportion of treatment sites with a stock-out education and health ministries to help them achieve of key anti-retrovirals (ARVs, used to treat the DLIs. Over the course of 18 months, the MEF HIV) at the end of each month recruited in each of Mozambique’s 11 provinces. By   July 2015, the MEF had hired 11 coaches for the The four DLIs for the education sector were:  education sector and 11 coaches for the health sector – one health coach and one education coach in each • Proportion of primary schools receiving direct province. The MEF also hired five more coaches school grants on or before February 28 of each to work at the national level. One worked with the year  Program Coordination Team, two with the MEHD, • Revised district level budget classification by and two with the Ministry of Health. sub-sector    • Proportion of primary schools that comply The coaches would facilitate communication and with defined standards for transparency and coordination between the three ministries, and also accountability – standards included: inclusive between the provincial and national authorities. In school councils (ensuring gender equity addition, they would work with counterparts in the and parental involvement), participatory education and health ministries to find solutions to development and approval of school difficult problems that came up in their efforts to development plans, and display of information achieve the DLIs. on resources allocated by school councils  • Proportion of primary schools visited for supervision by the District Services of Improving medicine supply chains  Education, Youth, and Technology (SDEJT)    The coaches working in the health sector decided on The program defined yearly targets linked to fund a “rapid results” approach to tackling the problems in disbursements. If a ministry failed to meet targets one the medicine supply chain and achieving the DLIs. In year, the funds would be carried forward to provide collaboration with partners in the Ministry of Health, an additional incentive to make the next year’s target the 13 coaches working in the health sector designed (World Bank 2014a). 33 “rapid results indicators” they aimed to achieve by 64 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE the end of 2015. To achieve the indicators, the health the MEF had never distributed a grant on time to A sector had to improve communication, infrastructure, any school district in the country, which often meant and processes to request and distribute medicines. schools did not have sufficient resources to pay staff CASE STUDY 3   or buy essential equipment. National coaches assisted The inefficient information flow along the supply the MEF and MEHD in revising the school grant chain was a key constraint to the availability of procedures manual and distributing copies to districts medicines. To address the communication issues, the around the country. The coaches also developed a coaches worked with their ministry counterparts to spreadsheet-based tool to monitor the allocation of increase collaboration between CMAM and donors, school grants, and ensured the tool was implemented who in 2014 had funded about 75% of Mozambique’s at the local level by remaining in contact with districts health spending (World Bank 2014a). The coaches and channeling information to the MEHD.  also set up an emergency communication line between   health units and CMAM to avoid the stock-out of A key part of the agreement between the two ministries medicines.  involved a new budget classification for education   spending that allowed for better monitoring of the flow To reduce wastage in storage units at the provincial of funds. The new classification system, implemented warehouses and district depositories, the health in 2016, allowed the MEHD to monitor, for the first ministry provided additional resources to improve time, which source of funding was being used for warehouse infrastructure. The additional funding paid certain types of expenditures, such as salaries. The for the maintenance of vehicles used in distributing MEHD used PBA funding to incentivize SDEJTs medicines, and air conditioners and refrigerators for to use the new budget classification. Coaches also the warehouses. It also paid for the IT equipment and contributed by conducting trainings on the new internet connections at the district depositories.  process at the provincial and district levels.   Another problem the team had to tackle was that As well as improved funding, the program also warehouses and district depositories often requested helped to make school governance more effective and more medicines than were actually needed. Coaches transparent. School councils across Mozambique had worked with district depositories and provincial long struggled to manage schools effectively, and in warehouses to improve the preparation and estimation most cases there was little meaningful participation of their requisitions of medicines and ensure requests from parents or local communities in school were submitted in a timely manner. governance. Further, information on how school   resources were used was rarely made public. Ministry Finally, the coaches helped the district depositories officials, in collaboration with education coaches, install the software that CMAM used to manage developed a school council manual that introduced logistics, and trained local staff in how to use it. new rules on how school councils should be formed Before 2013, the software had only been installed in and act. For example, the majority of board members 34% of district depositories and was fully functional should come from the local community. Local in just 58% of those, which severely hampered the education officials and coaches trained schools on flow of information to CMAM. Once installed and the new procedures, and the MEHD also launched functional, the new software facilitated medicine a communications campaign to publicize the changes requests and stock management, improving logistics and encourage community engagement through planning and allowing CMAM to better position social media, newspapers, and television. medicine stocks.  Transforming the education sector New collaboration between the MEF and MEHD, fostered by the coaches, resulted in them creating a joint action plan outlining respective responsibilities to ensure that grants were made on time. Previously, IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 65 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Reflections The faster progress achieved in the health sector was possibly due to the different nature of the A I n 2016, school grants were allocated on time for interventions in each sector. Whereas the health CASE STUDY 3 the first time since their creation, and in 2017 sector’s intervention sought to reinforce existing 99% of schools received their grants on time systems and procedures, the reforms in education compared to 0% before the program. Further, nearly were based on the implementation of new instruments all the district level expenditures on education had such as the school council and supervision manuals, been re-classified. The increased transparency of which required additional time to be institutionalized district expenditures on education and the timely and greater involvement of stakeholders at the central, allocation of school grants should result in the higher district, and community levels (World Bank 2017c).  availability of school resources. Whether higher   availability of resources will result in improved In the health sector, the PBAs were key to incentivize learning outcomes is unclear, as research on the topic change at the central and provincial level and to in other developing countries has found mixed results ensure the higher availability of essential medicines (World Bank 2017c). in health units. By linking a financial incentive to the   availability of maternal health medicines and ARVs, The government also made progress in strengthening the program guaranteed that these vital medicines school management and supervision, although were prioritized.  there was still significant room for improvement   going forward. “Through the program and the new The establishment of yearly financial incentives linked school council manual, the composition of school to increasing targets ensured that at least part of the councils has improved,” said Saleem. “There is more PBA funds was used to improve the performance of representation of parents and community members… the DLIs. In the education sector, the PBAs were used so now they have a say in how the school is managed.” to finance several activities related to the DLIs such By March 2016, new supervision manuals had as trainings on the revised budget classification and been approved and distributed, and in 2017 48% of the revision of the school grant procedures manual. schools received supervision visits following the new The same pattern was observed in the health sector, procedures. Supervisors made follow-up visits at 16% where the funds were employed in activities such of those schools. as the maintenance of the equipment of provincial   warehouses or the installation of logistics software The health sector made even faster and further in district depositories. The possibility of claiming progress on its goals. Compliance with the minimum undisbursed funds from previous years provided acceptable standards of warehouse practices increased additional incentives to achieve DLIs that sectors at the provincial level, and by 2015 all provincial were unable to achieve on schedule.  warehouses assessed were up to standard. The   percentage of district depositories reporting logistics Coaches played a key role in helping the government information to provincial warehouses through the achieve targets. In the education sector, the national supply chain management information system coaches facilitated meetings and coordination increased from 20% to 96% between 2012 and 2017 between MEF and MEHD staff, and played a (World Bank 2017c). key role in designing and disseminating improved   practices for the timely disbursement of school grants. The improved functioning of the pharmaceutical In the health sector, coaches facilitated improved supply chain led to the higher availability of communications within the medicines supply chain medicines. Essential medicine availability at health and developed a series of rapid results initiatives to centers increased from 59% in 2012 to 82% in 2015, address technical problems. and the fulfillment of approved medicine requisitions   from provincial warehouses and hospitals increased This initiative was the first time the World Bank’s from 72% to 86% over the same period. Moreover, the Program-for-Results system was used in Mozambique, stock-out rate of essential ARVs in HIV treatment and for many government officials it was their first sites decreased substantially from 27% in 2012 to 5% time working with results-based management. As in 2015. such, the program introduced a new way of thinking   66 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE for the Mozambican government, and has imparted hampered service delivery. In 2018, the Mozambican A knowledge and experience that may be used to government and the World Bank launched a new improve current and future government programs. In Program-for-Results initiative that aims to expand CASE STUDY 3 addition, the new collaborative relationship between on this success through improving medicine supply the MEF and the education and health ministries chains across the primary health care sector (World will likely have lasting benefits that help avoid the Bank 2017d). miscommunication and bottlenecks that have long Success Drivers Mozambique’s experience in using the World Bank’s Program-for-Results instrument to deliver health and education reform reflects three of the five key dimensions for successful public sector innovation. Building institutional capacity in the education and health ministries was a key goal of the program. Program-funded coaches facilitated communication and coordination between the Ministry of Economy and Finance and the education and health ministries, as well as developing tools to help ministry staff improve their capacity. Coaches also helped train civil servants in new procedures to streamline resource delivery in the health and education ministries. Improved communication, stronger coordination, and restructured processes will likely help avoid the miscommunication and bottlenecks that have impeded service delivery in the past. Incentives, particularly financial incentives from the program’s performance-based allocations (PBAs), were critical for driving change. Coaches and ministry staff worked hard to achieve targets to receive the PBAs. Importantly, funds were carried forward if targets were not met, providing an additional incentive to improve performance the following year. Technology was a crucial supporting element to achieve many of the program’s targets. For example, program-funded IT equipment and internet connections were important for district depositories to improve supply chain management. The coaches also provided support for the technology by installing the software and training officials to use it. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 67 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 4 A Making Regulatory CASE STUDY 4 Impact Assessments Work in Armenia Overview R egulatory Impact Assessments (RIAs) are a way to improve public sector performance by ensuring only effective and efficient policies reach the implementation stage. All too often, however, ARMENIA complicated or inadequate processes for conducting those assessments diminish their usefulness. When the Armenian government decided to POPULATION (July 2017 est.)1 reform its inefficient RIA processes, it approached World Bank experts 3.045 million for advice on how to go about the reform. With a strong commitment GDP PER CAPITA (current US$)2 to ensure the success of the reform, the government repurposed an existing agency, tasking it with training a cadre of RIA experts across 3,614.70 the government and eventually overseeing the entire RIA process. As INCOME GROUP3 of 2018, the new RIA system had positively influenced several new Lower middle income regulations, but it is too early to tell if the reform will prove successful GOVERNMENT EFFECTIVENESS4 in the long term.  49.5% 1 CIA World Factbook, 2World Bank (2016), 3 World Bank (2016), 4World Bank (2016) 68 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Introduction small and medium enterprises, competitiveness, anti- A corruption, social protection, budget, healthcare, and I n  2016, the Armenian government was trying the environment. The government assigned those CASE STUDY 4 to reform its regulatory processes. The country assessments to different ministries based on subject had an enormous amount of regulations on the matter, a practice not in line in with international books, creating a big burden for companies, which best practice (World Bank 2017e). “It was good that had to comply with them, and the government, there was already a system in place, but that system which had to administer them. The regulations was putting an enormous burden on the government,” also created opportunities for corruption. Creating said Lundkvist. new license requirements, for instance, could result   in officials requesting bribes from those wishing to In May 2016, the Office of Government (prime obtain the new licenses. “Companies faced a lot of minister’s secretariat) announced a plan to  make a regulatory burdens, and many regulations were not significant reduction in  the number of government being implemented correctly,” said Petter Lundkvist, decisions (Arka News Agency 2016). At the same time, regulatory reform expert at the World Bank. “And the government wanted to reform the RIA process, research has shown that the more regulations you with the goal of making policies more evidence- have, the more corruption you have.” based. The reformed RIA process could also result   in less regulation. “When you put in place a control Like dozens of other countries around the world, mechanism, you may realize that a certain regulation the Armenian government had a law in place that has more costs than benefits,” said  Lundkvist. required new regulations to undergo a RIA. When “RIAs are definitely a way to reduce the number of implemented effectively, RIAs  can  improve policy proposals and ensure that those regulations proposed coordination at the center of government by checking are the ones that make sense.”  the quality of potential new regulations, identifying   the direct and indirect costs of those regulations, and If Armenia could successfully improve systems for ascertaining whether there are better alternatives to evidence-based rule-making, the government could achieve the same outcome that the new regulations remove uncertainty about the impact of regulations, hope to achieve. Ideally, RIAs result in higher build public trust, and possibly attract more foreign quality regulations and policies being passed, and bad investment, which was a major goal for the country regulations being stopped before they are enacted. at the time.   Up until 2016, however, RIAs conducted in Armenia were of poor quality, given little importance, and were regarded by most within the government as Response being of little use. The assessments were written T after regulations had already been drafted, and were he Armenian government had long realized usually conducted in a hasty manner, not leaving that its existing RIA practices were not time for consultation with relevant stakeholders helping  to implement  high-quality public and the public. As a result, RIAs rarely provided policies, so in 2016 the office of government formally a comprehensive analysis, and instead created an requested support from the World Bank to improve additional burden on the government while providing its RIA system. Lundkvist  and others from the little, if any, benefit to the policy-making process. World Bank met with government officials and talked   about examples of countries around the world that Armenia’s law stated that  a  RIA should be used RIAs to improve the quality of regulation. The conducted for every new regulation the government meetings brought together the six ministries directly decided on or was passed by parliament. In 2016, responsible for carrying out impact assessments the government made more than 800 decisions (Ministries of Economy, Environment, Finance, and parliament passed more than 200 new laws, Health, Justice, and Labor and Social Affairs) as well amounting to more than 1,000 regulations that as the National Center for Legislative Regulation required RIAs. For each RIA, the government had (NCLR). The NCLR, which was affiliated to the to conduct seven impact assessments – one each on office of government, had been managing a “guillotine IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 69 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE reform” to remove  the  regulatory burden. By 2016, months each, while all other ministries would second that reform was nearly complete, so the center had the one staff member for two months, throughout 2017. A capacity to take on a new initiative. Next, the office   CASE STUDY 4 of government brought key decision-makers together The plan was that, after the secondment, those civil to draft a roadmap of how to implement a new and servants would become responsible for conducting improved RIA process. RIAs within their ministries, while the NCLR would focus on quality assurance and capacity building as an oversight body for the entire RIA process. Strategizing  By reforming the process, the government wanted Training civil servants and reforming to have RIAs that were conducted in a much more procedures  comprehensive way. A systematic process could identify likely impacts, compare policy options, Instead of conducting RIAs on all regulations, and consider unintended consequences, which as had been  the  practice in the past, the NCLR would reduce the risk of regulatory failures. A began focusing on the most important regulatory reformed process could also properly integrate reforms. One of the first RIAs developed within the public consultation, which could involve citizens in Government of Armenia’s new system addressed the the regulatory process. Better understanding of the problem of food safety related to meat in Armenia. reasons for, and impacts of, regulatory choices could The RIA analyzed the entire meat production help minimize regulatory capture and improve public chain, from the farm to the table. In particular, it trust in policy-makers. looked into the risks of animal butchering outside   of slaughterhouses, a common practice in Armenia. Following advice from the World Bank on best The team that developed the RIA was invited to the practices, the office of government and ministries prime minister’s office to present the outcomes. “The decided on a new process to conduct RIAs. Typically, RIA had an immediate impact,” said Lundkvist. “The a fully-f ledged RIA analysis would follow this RIA helped them drastically change the food security structure:  law that had first been proposed by the Ministry of Agriculture.” • Definition of the problem    All of the staff seconded to the NCLR received • Identification of the desired objective  extensive training on the RIA process and how to • Elaboration of the different regulatory and create RIAs using the new methodology. There was non-regulatory options (including “no action”)  at least one civil servant from each ministry, so if a • Open and public consultation with external policy proposal came from the Ministry of Education, stakeholders and experts  for example, the NCLR could have the seconded staff member from that ministry work on the RIA. • Assessment of the likely costs, benefits, and   other effects  In addition to the plan for the seconded officials to • Recommendation of the preferred option  conduct the RIAs upon returning to their ministry, another goal was for the NCLR to eventually become • Indications on the monitoring, evaluation, and an oversight body to ensure the RIAs conducted by reporting requirements (World Bank 2017e)  the ministries were of sufficient quality. “RIAs will be carried out in the ministries that are producing the In November 2016, the government announced that regulation,” said  Lundkvist. “Instead of [the RIA] the NCLR would be tasked with piloting the new RIA being sent to five different ministries, the person that process the following year. Specifically, the NCLR came up with the proposed regulation will be doing would carry out 20 RIAs, and train officials seconded the RIA on it.” from other ministries on the new RIA methodology. The six key RIA ministries would each second two staff members to the NCLR for a period of four 70 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Reflections allowing for more consideration of policy options A available to achieve specified objectives. A fter committing to revamping its RIA system,   CASE STUDY 4 the Armenian government quickly improved Still, there  is  a long journey ahead to realize the its processes and began producing higher envisioned benefits. As of 2018, the Armenian quality assessments, helping the central government government was in the process of revising the legal improve policy formulation. “There was a very strong framework that regulated the preparation of RIAs and will to roll this out across government,” said Lundkvist. its role in decision-making. “In most countries with “It takes a long time in most countries and we have well-developed RIA systems in place, there is a center not seen other countries do this with so many civil of government institution that checks that only servants from different ministries being trained and high-quality RIAs are being made,” said Lundkvist. then going to the ministries to start producing high “Otherwise it can easily become like it was before, quality RIAs.”  where the ministries just consider RIA as a formality.”   The NCLR, which played a leading role in the reform In early 2017, the World Bank launched “the throughout 2016 and 2017, is anticipated to assume Global RIA Awards” to identify and recognize  the an oversight role. It is also expected that the increased innovative  and impactful use of RIA in developing rigor and data quality required for policy proposals will countries. Armenia’s meat regulation RIA won eventually result in regulators self-disciplining, leading the  award for the “most influential RIA” – the RIA to fewer and better proposals. that was most successful in influencing the way policy-   makers think of a policy problem and impacting the The Armenian example shows how RIA reform can be regulatory outcome (World Bank 2017f ).  done quickly and have an immediate impact, but only   if the center of government is committed to seeing it While it  is  too early to declare the RIA reforms a through. “It can definitely be replicated, but it requires success, the initiative could potentially result in broad a lot of appetite from the government to do it at such benefits for Armenian citizens and the government. a quick pace,” said Lundkvist. “It is an excellent case of As of 2018, there were already several examples of how the World Bank can give advice without providing better-formulated policies resulting in better outcomes too much of an investment. In other countries, donors for citizens. For example, the Armenian government have run huge RIA projects, trained hundreds of civil suspended a proposed regulation on vehicle fuel tanks servants, and then nothing has really happened on the after the NCLR’s RIA concluded the costs of the ground. In this case it was totally different. They really proposed regulation outweighed the benefits. The meat wanted to run this themselves, and just wanted us to safety reform, heavily influenced by the NCLR’s RIA, provide quality control.”  was expected to have great health benefits by reducing food product poisoning cases across the country.   Greater transparency and participation in the policy-making process could also build trust in the government, which is especially important given the country’s history of social unrest.   On the government side, the new RIA process has resulted in better use of resources. Instead of carrying out piece meal RIAs on every single regulatory document, the new approach has involved the targeting of important policies for a more thorough analysis. Instead of completing over 1,000 RIAs of little use, the new process aims to produce less than 100 RIAs that are of far greater value. Further, the new RIAs are formed earlier in the regulatory process, IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 71 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Success Drivers A CASE STUDY 4 Armenia’s reform of its Regulatory Impact Assessment (RIA) process reflects three of the five key dimensions for successful public sector innovation. Political leadership instigated the reform of Armenia’s RIA system. When high-level officials from Armenia’s Office of Government (prime minister’s secretariat) recognized the inefficiency of the existing RIA system, they took the important step of bringing in outside expertise for advice and provided consistent support. In other countries, weak political commitment has often made efforts to achieve RIA reforms a slow and difficult process, even in cases when there have been extensive resources from governments and donors to train civil servants in new RIA processes. Transparency in the policy-making process is not only a goal in itself, but also helps drive key reform outcomes. In particular, the new RIA process includes greater public participation through consultations and clear communication. Better public understanding of different policy options, combined with increased transparency as to why certain policy decisions are made, helps minimize regulatory capture and improve public trust in policy-makers. Institutional capacity was critical to drive the reform. Strengthened capacity to conduct RIAs across government was a key outcome. The government decided to repurpose the National Center for Legislative Regulation (NCLR), an office with pre-existing capacity to take on the new initiative and drive the RIA reform process. All staff seconded to the NCLR undertook extensive training on the new RIA methodology. There was also potential for further capacity building, as seconded staff could spread knowledge and train colleagues on how to conduct RIAs after they returned to their original ministries and agencies. Over the period of the reform, the NCLR gained significant capacity in conducting RIAs and became well positioned to take on an oversight role of the RIA process in the future. 72 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Civil Service B Management Effective management of the public sector workforce is another critical element to improving the overall effectiveness and efficiency of the public sector. What is at stake? constituency in countries where public sector employment is relatively high. Regardless of the P olitical leaders and government officials region or level of development, many government from around the world rely on civil leaders discover that managing civil service servants to implement policies and performance is a chronic challenge. deliver public services to citizens.12 Individuals who are new to government often find managing a Civil service performance is one element public sector workforce much more challenging and in a broader government concern to increase limiting than managing one in the private sector. public sector productivity. Measuring public Indeed, even the most dynamic political leaders sector productivity is challenging because of the are obliged to work with the civil service they heterogeneity of services provided and the lack of inherit regardless of its weaknesses. Effectiveness market prices. Nevertheless, the driving question for of the civil service should also be a concern because most governments is how to increase productivity, so personal emoluments constitute one of the largest that services can be delivered more cost-effectively. shares of the annual budget, which is not surprising Many experts conclude that productivity must go given the size of the public sector across the world well beyond upgrading labor skills through training (see Figure 6). (A June 2016 IMF report pegged and capacity building programs. The World Bank’s average wage bill spending at 27 percent of total newly established Bureaucracy Lab aims at fostering government spending in low-income emerging research and innovation in how to make the economies and 24 percent in advanced economies.) government workforce more productive. Moreover, policies must be considered carefully because civil servants represent a powerful voting The quality of civil service performance is IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 73 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE FIGURE 6 The Public Sector is a Large Employer across Regions of the World 0.00 10.00 20.00 30.00 40.00 50.00 60.00 East Asia & Pacific Eastern Europe and Central Asia Latin America & Caribbean Middle East and North Africa B THEME THEME South Asia Sub-Saharan Africa Western Europe, US, Canada % of Total Employment % of Wage Employment % of Formal Employment Source: Worldwide Bureaucracy Indicators, World Bank, 2018. affected by the policies and procedures that How are emerging govern entrance into the service, as well as the policies for managing personnel once they are economies addressing in. At entry, governments must seek to ensure that the challenge? potential candidates are free from undue political T bias and obvious conflict of interest. Assuming those he World Bank’s Governance Global criteria are met, they seek to attract candidates with P r a ctice h a s b een s upp or tin g the skills, experience, and competence to succeed. governments on a range of civil service Managing the existing service effectively also presents management issues over time, but such reforms challenges, as government officials strive to make sure remain some of the most challenging. Unlike the that workers are present in their jobs (as the minimum implementation of accounting systems or training requirement), and secondly motivated to perform the programs, for example, civil service reforms are often jobs with integrity and to the best of their ability. politically sensitive and require not only technical Many countries will have a dedicated organization solutions but careful attention to change management. that sets the policies for the central government, In 2008, the Bank’s Independent Evaluation Group although some of these may permit a certain degree (IEG) issued a report that highlighted the difficulty of flexibility to ministries and agencies within a often faced in making civil service reform effective prescribed limit. Changes to the existing civil service and sustainable. Much of the Bank’s traditional work pay and employment systems are often difficult to has been motivated by fiscal pressures in a country, make within short time periods – not least because as ministries of finance seek to limit the growth of of the number of people affected, legacy systems of personnel costs and/or to create fiscal space for better administration, and potential vested interests. salaries by reducing the overall size of the civil service. 74 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Some countries, however, are seeking to enhance the motivation of high-skilled civil servants by The quality of civil reviewing performance evaluation, reward systems, service performance and career management to see how they can be better aligned to organizational needs. There are also more is affected by challenging public sector contexts, where countries find themselves still grappling with control of petty the policies and corruption or rampant absenteeism. procedures that Despite the potential pay-offs from civil govern entrance into service reform, governments often face the the service, as well B tactical dilemma of deciding between whole- as the policies for of-government reforms and reforms that focus managing personnel THEME on one or more entities. A big-bang approach across the whole-of-government offers an attractive option because of the more rapid pay-off it suggests, once they are in. but implementation can be much more complex to manage and opposition more abundant. On the other hand, targeting a limited number of entities with term performance concerns despite the obstacles whom to pilot offers an attractive option because it that stood in the way. focuses reform capacity, and it can be undertaken with those most receptive to the change efforts. The Indonesian authorities decided in 2013 The more targeted approach has enabled countries that they needed to address long-standing to demonstrate to others what can be achieved and perceptions that civil service recruitment inspire other entities to adopt a similar reform. If was corrupt, with payments being made there is no reform fatigue from the initial roll-out, in exchange for public sector jobs. The civil the targeted approach can provide measurable service service agency (BKN) determined that they could delivery enhancements in the areas most important to leverage technology to bring greater transparency the government. to the national civil service examination process and reduce the potential opportunities for tampering. The two cases presented in this section BKN’s computer-assisted test (CAT) was developed highlight two very different and equally initially in-house using open source software, but it valid approaches to addressing civil service was ultimately powered by a database of over 20,000 performance. The f irst case from Indonesia written questions that could be arranged in different demonstrates how a government can tackle combinations to generate tailored exams for different problems of quality at entry into the civil service. categories of applicants. Adding to its value, results The Indonesian civil service agency adopted a could be easily observed (by agency officials or civil government-wide strategy, but implemented it society) with scores posted outside the examination gradually across government as support grew room in real time. Line ministry acceptance of the (and continues to grow). The second case from new system was slow to come, but two institutions China represents a government reform aimed at did agree to launch the system and public reaction was increasing performance in a specific government strongly positive. Despite subsequent setbacks and a function – tax administration. Although the tax government-imposed freeze on new recruitment from administration’s workforce is larger than the entire 2015-16, the CAT has become the de facto standard civil service in many other countries, the reform for more than 62 ministries and agencies at the efforts were nevertheless concentrated in an entity national level. that enjoyed essentially a common work culture and business objective. Neither of these cases necessarily China found an innovative way to transform represents state-of-the-art practice or unique the performance of civil servants working at experiences, but they still offer very good examples the State Administration of Taxation (SAT). of how governments can succeed in addressing long- As one senior official noted, before 2013 “everyone IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 75 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE was treated the same, without any differentiation, and China both demonstrate this. Both countries no matter how they performed.” As a result, senior have very large public institutions and diverse ethnic management could not rely on staff to execute tax groups, but both succeeded in identifying the problem, policies in a timely manner, and taxpayers suffered developing a solution, and carefully rolling out a plan with poor service. However, in 2013, the SAT’s over several years. Though information technology is newly appointed head decided to pilot a performance an enabler in both, the improvement in performance is management system, that he hoped would help drive achieved through changing the institutional culture. reforms in the organization. SAT developed a three- Both countries faced opposition initially, but both year change management plan to roll out the system were able to demonstrate the benefits of the reform to across the agency and its more than 800,000 staff. internal stakeholders as well as to the public. The SAT’s performance plan included quantitative and qualitative indicators that cascaded down from Sustainability of civil service reforms is not B national level to bureau level to individual, with guaranteed, while some challenges may go THEME in-year performance monitored through records unaddressed. Computer-generated civil service of completed work and automatically-generated exams substantially increase transparency and trust computer data. The Chinese authorities credit the in the system, but governments are still challenged system with enabling them to make the switch from to make sure that what they are testing is an sales tax to value-added tax (VAT) in record time, appropriate indicator or predictor of civil service while also winning the broad support of tax agency performance. For example, tests that rely heavily on staff. assessing current knowledge on public sector laws, procedures, or issues, may miss candidates who are The above two cases are not the only examples relatively inexperienced but are fast-learners and have of how governments around the world are high potential for the future. Performance indicators making reforms to civil service management are almost always an effective motivator of human to enhance organizational performance. The behavior, but the institutions that use them must be Pakistani district of Sindh implemented biometric careful in their design and application. Performance monitoring systems to help reduce employee management systems also have limitations. Indicators absenteeism in its 45,000 schools. In other parts of can exaggerate some behaviors at the expense of Pakistan, reforms have been taken to strengthen others that are equally or more important but perhaps merit-based recruitment of teachers by tightening harder to quantify. Individuals are also known to procedures for entrance examinations. Performance try to “game” performance monitoring systems if incentives have not only been used by SAT, as China’s the rewards or sanctions are particularly significant. Communist Party also used them to motivate cadres The long-term outcomes of the Indonesia and China to deliver on its service delivery agenda. cases remain to be studied over the years ahead. However, both offer promising examples of what can be achieved on a government-wide level and within the confines of a single (large) institution. Why are these ideas worth learning from? Productivity of the public sector is driven to a large degree by the performance of the civil service. Government shoulders a direct budgetary cost from inefficiency among its staff – a cost that is not easily reduced without painful retrenchment or displacement of staff. Likewise, bad human resource policies can become a loadstone on organizational performance and poison organizational culture. Governments can break these cycles and overcome institutional inertia, and the examples from Indonesia 76 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 5 Putting 800,000 Officials to Work: China’s State Administration of Taxation B Implements a Performance Management Reform CASE STUDY 5 Overview B eginning in 2014, China’s State Administration of Taxation (SAT) implemented an organization-wide performance management reform. Rolling out the intervention was no CHINA easy task: the administration has approximately 800,000 employees, or about one-tenth of China’s entire civil service. Identifying POPULATION (July 2017 est.)1 key performance indicators and monitoring progress helped the 1.379 billion administration implement important tax reforms, such as switching GDP PER CAPITA (current US$)2 business tax to a value-added tax in 2016. Surveys indicated that taxpayer satisfaction in their local tax bureaus increased after the 8,123.20 performance management reform, and tax officials themselves also INCOME GROUP3 expressed satisfaction with the new system. Upper middle income GOVERNMENT EFFECTIVENESS4 67.8% 1 CIA World Factbook, 2World Bank (2016), 3 World Bank (2016), 4World Bank (2016) IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 77 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Introduction Response I A mplementing performance management within fter conducting studies throughout 2013, the any government organization can be tough, but SAT decided on a three-year plan to roll out a it is especially difficult to do in an organization new system across the agency. First, it would as large and sprawling as China’s SAT. The roll out a pilot initiative in 2014. By 2015, it would organization has about 800,000 employees working take the pilot nationwide, in every bureau from the at 5 different levels. As of December 2017, China local level to the national level. In 2016, it would look had 23 departments at its national headquarters, 71 at what improvements it could make to the system to provincial tax bureaus, 695 municipal tax bureaus, improve effectiveness. 6,123 county tax bureaus, and 26,940 local tax bureaus. Together, those agencies are responsible for B collecting more than US$1.5 trillion each year from Building expertise  CASE STUDY 5 about 43 million corporate taxpayers and more than   140 million individual taxpayers.13 The first step was to set up a new office to oversee   the performance management system. Officials Before 2013, the administration found it difficult with knowledge or experience in performance to motivate performance across all five levels of the management were transferred to the new Performance institution. “Job responsibilities and reward and Management Office in the General Office of the SAT. penalty mechanisms were unclear,” said Fu Shulin, After setting up the new office, the SAT brought Deputy Director General of the General Office of the in a team of consultants to provide advice on how SAT. “Everyone was treated the same, without any to set up the new system. The SAT recruited from differentiation, no matter how they performed.” As a universities around China, seeking to bring in the top result, Fu said, some employees underperformed, and performance management experts working across the upper management could not rely on staff to execute country.  tax policies in a timely manner, if at all.     With the management team in place, the SAT began Poor performance affected taxpayers, who struggled preparing its staff for the task ahead. The consultants to navigate the system. “From the perspective of the trained the new team in performance management, taxpayers, our performance of tax procedures was and several went on education trips abroad to learn inconvenient and complicated, which resulted in low from other countries and government offices with taxpayer satisfaction,” Fu said.  their own performance management systems. The   goal was to create a cadre of experts on performance In March 2013, Wang Jun, the former Vice-Minister management within the SAT.  of Finance, took over as Commissioner of the SAT.   Wang had piloted a performance management The SAT already had a strong IT platform and a reform at the finance ministry, and wanted to enact strict hierarchical structure in place, factors that were a similar initiative in his new role at the SAT. The conducive to implementing performance management central government had expressed a need to improve quickly. Those factors helped SAT management the efficiency of the tax administration, and Wang deploy performance management and allowed for believed that introducing performance management automatic collection of performance data through the within the agency could drive reforms across the existing IT infrastructure. Through that system, top whole organization. management could oversee performance management   of the whole administration in real time.  To do so, the SAT had to clarify roles, introduce   strong performance indicators, and motivate 800,000 The SAT built support for the initiative from the top tax officials around the country.  down. Managers at each level were responsible for passing on information about the upcoming reform to the level below them. For example, officials at the provincial level explained to municipal officials about the system and the new responsibilities it implied. 78 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE In addition, the SAT held several performance adhered to the strategic orientation and integrated management conferences to build awareness about the the long-term planning and the annual targets one- new initiative. The SAT publicized the effectiveness by-one into performance indicators,” said Fu. “We of performance management throughout the clearly defined roadmaps, timetables, task books and administration and introduced a new performance responsibility statements, and clearly displayed them management operations manual.  at all levels of the tax authorities.”    Performance indicators could be quantitative or Piloting the reform  qualitative and were based on time, quantity, quality,   effectiveness, or other dimensions. Data sources The SAT decided to roll out a pilot with about a to evaluate performance included original records B quarter of its workforce before taking the performance of completed work and automatically generated management system nationwide. The SAT selected computer data. CASE STUDY 5 tax bureaus at every level – from the local level to the   national headquarters – to participate, including 22 The leader of each bureau or department had national departments and nine provincial bureaus. performance indicators closely linked to his or her Those selected included a mix of the more-developed organization’s performance. Doing so, Fu said, eastern provinces and the less-developed central and encouraged “leaders to be the role model of the western provinces. whole organization and dedicated to performance   management.” New staff were brought on board at every pilot bureau to manage the introduction of the new system. The SAT hired three performance management staff Monitoring and improvement for every pilot bureau at the national, provincial,   municipal, county, and sub-county levels. The SAT headquarters established a system that   could monitor progress on indicators in real time, During the pilot period, the SAT also created a new and identify and correct any problems that came up group of individuals that had fully embraced the idea in the implementation process. The system showed a of performance management. The “Leading Group schedule of key tasks and allowed managers to follow for Performance Management,” as the SAT named up on any office lagging behind targets. “At present, the new group, included representatives from every the information system supports 23 departments level, and held regular meetings to study major issues at headquarters, 36 provincial state tax bureaus, 34 concerning performance management. Each pilot provincial local tax bureaus and 3 special regional bureau also set up “appraisal committees,” which offices,” said Fu in 2018. “The system contains 6 were responsible for reviewing and adjudicating any major functional modules, including performance performance management issues that came up within planning, reporting review, assessment scoring, their bureaus.  process monitoring, query analysis, and performance   feedback.” In late 2014, performance management was rolled out at all remaining bureaus and for all the 800,000 tax The information system allowed the SAT to follow officials working around the country. progress toward targets, and that progress was used as the basis for performance evaluations. “We track the completion of work through the monitoring Establishing indicators  module of the information system,” said Fu. “Then   we push the relevant information to the superior The SAT created a national performance plan based leaders through the system as the reference basis for on its own strategic objectives and direction from the performance evaluation.” central government. From the national plan, individual bureaus formed their own plans, and individual Any units or individuals lagging behind in terms performance indicators were based on those. “When of progress received special attention and guidance formulating the performance indicators, we always from the performance management office. “We IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 79 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE urge underperforming units to recognize their own in the performance indicators,” said Fu. “We set gaps, and help them find out why they are out of performance indicators around key time nodes, such line through performance feedback,” said Fu. “We as issuing VAT invoices by May 1 and completing the also provide training and support to help individuals VAT filing by June 1.” improve their performance.”     The SAT increased monitoring of the system, and the The appraisal units carried out assessments on the performance management team held three meetings completion of performance indicators, and submitted every day during the reform implementation period. performance reports to SAT headquarters. There, “The morning meeting looked back on the previous the performance management office conducted day,” said Fu. “In the middle of the day, we had a video analysis on performance indicators, progress reports, meeting which included every level of tax authorities, and key tasks accomplished. From their macro including grassroots ones, to check on the progress B analysis, the performance management office issued of everything. In the evening, we had a summary CASE STUDY 5 recommendations to optimize the functioning of the meeting of what had happened that day.” The evening SAT’s performance management system as a whole. meeting also served as a problem-solving meeting. For example, analysis of the first full year of the The team identified any roadblocks to achieving key system found that bureaus were creating too many performance indicators across the country and took performance indicators, and not enough of them action immediately. were quantifiable. After input from the performance   management office, “we drastically reduced non- As an additional incentive for workers to follow critical indicators and focused more on key tasks,” said through on the VAT reform, the SAT introduced Fu. “We [also] significantly increased the quantitative special recognition for top performers. “In 2017, we indicators.” awarded second-class merit to 30 individuals who made distinguished contributions to the reform, The SAT also made adjustments to its information and awarded third-class merit to 30 units and 130 system to make the interface more user-friendly individuals who made significant contributions,” said and add additional functions. “The main optimized Fu. “We also issued an order of commendation to a upgrades have been the addition of functional further 60 units and 350 individuals.” modules and the strengthening of monitoring and analysis functions,” said Fu. Reflections The system in practice  A   long with the successful implementation of Having a strong performance management system the VAT tax, the SAT pointed to reforms of in place helped the SAT in the implementation of state and local tax collection, implementation major tax reforms. For example, on March 5, 2016, of preferential tax policies, and increased participation the central government announced that from May 1, in international tax cooperation as evidence of the China would be switching a business tax, collected performance management reform’s impact. The SAT by local tax bureaus, to a value added tax (VAT), also said that the performance management reform collected centrally by national tax bureaus. Fu said had been a contributing factor to the government’s that being given the challenge of implementing such a increased tax revenue. In 2015, the first full year large reform in just 55 days was “a daunting task,” and of the reform, tax revenue collection increased that monitoring performance was critical to ensuring 6.6%. In 2016, it increased a further 4.8%, and in a smooth roll-out in the short timeframe.  2017, a further 8.7%. Performance management   indicators  “played an important role in closing the To implement the VAT reform, the SAT quickly loopholes in tax revenue and promoting tax revenue divided up the work required and added it to the growth,” said Fu. “Of course, the most important performance management system. “We clearly factor in increasing tax revenue is the enhancement of defined the roadmap, timetable, task statement, China’s economic vitality. But at the same time, the and responsibilities for all departments at all levels utilization of tax information and the improvement 80 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE of tax collection and administration capacity are also of responsibility for implementing the strategy of important factors.” ‘strategy-goal-execution-appraisal-improvement’ has   been formed,” said Fu. The SAT commissioned the National Bureau of   Statistics of Social Affairs and Public Opinion Survey According to Fu, almost all workers in the SAT to carry out surveys on the satisfaction of taxpayers, were highly satisf ied with the performance and the results showed that taxpayer satisfaction management reform. “Some tax cadres initially had increased in both state and local tax bureaus. According negative opinions on performance management, but to the World Bank’s Doing Business Project, the through trainings and publicity… we gained their average time to prepare and pay taxes decreased understanding and support,” said Fu. “For some more from 261 hours in 2015, to 207 hours in 2017.14 extreme opponents, we discussed and explained the B   reform to them one by one. The results of a third- Overall, tax bureaus and workers had a much clearer party survey in 2016 showed that 95.76% of tax CASE STUDY 5 understanding of their responsibilities, and all of cadres agreed with the effectiveness of performance their tasks were tied to clear goals. “Now, a chain management.” Success Drivers China’s implementation of performance management at the State Administration of Taxation (SAT) reflects four of the five key dimensions for successful public sector innovation. Political leadership at the head of the agency was the initial driver of the reform. Central government had expressed a desire to strengthen the efficiency of tax administration, but it was the new director of the agency who determined that this could be achieved through implementation of a new performance management system. Change management was essential to the reform’s success, and that required the agency leadership to progressively build support from stakeholders across from the vast organization, including regional offices. Incentives were critical to the SAT’s ability to transform its performance. The newly established performance management system centered on the agency’s capacity to develop clear, measurable goals for each level of the institution and for each tax official. Performance could be tracked through various means, and managers relied on the results to inform their employee evaluations. To help motivate performance, special recognition was given to top-performing units and individuals. Technology was an enabler for the reform. SAT already had a strong IT platform in place, and relied upon it for the automatic collection of data needed to assess performance. Developing quantifiable measures and tracking them for an institution the size of SAT would not have been possible without the technology to provide the foundation. Institutional capacity building was an objective and outcome of the SAT reform. Support for the initiative was spearheaded by a new Performance Management Office in the General Office of the SAT that included the recruitment of consultants and top experts from across the country. Conferences and training programs were employed at various stages to help managers and staff understand how to contribute to the new direction for the agency. The success of the reform enabled the SAT to implement tax reforms efficiently and effectively. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 81 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 6 Reforming Civil Service Recruitment through Computerized Examinations in Indonesia B CASE STUDY 6 Overview I n response to public suspicion about corruption in the recruitment process for government workers, Indonesia’s civil service agency in 2013 introduced a new computer-based civil service examination to INDONESIA replace the old paper-based one. Although the agency found it difficult to convince government organizations, especially at the provincial POPULATION (July 2017 est.)1 level, to adopt the new exam, strong support from top leaders and the 260.581 million public saw the new system quickly implemented nationwide. Observers GDP PER CAPITA (current US$)2 said the new system brought more transparency and credibility to the recruitment process and reduced opportunities for collusion and 3,570.30 nepotism. INCOME GROUP3 Lower middle income GOVERNMENT EFFECTIVENESS4 53.4% CIA World Factbook, 2World Bank (2016), 1 World Bank (2016), 4World Bank (2016) 3 82 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Introduction Vice-President Boediono began strengthening the public sector with a new wave of reforms in late 2010, P rior to 2013, applicants to the Indonesian the BKN decided to step up its efforts to overhaul the civil service sat their examinations in large civil service recruitment process. Beginning in 2010, stadiums alongside tens of thousands of other the agency piloted a new computer-based test for its aspiring government workers. The exam was paper- own internal selection process. based, and every year citizens complained about the exam process. Many believed that officials intervened The new test was fairer for candidates and conducted in the results to provide favors to friends, family in a more pleasant environment. Instead of taking the members, and political supporters. In addition, there test in a crowded stadium, candidates sat at computers were suspicions that corrupt officials offered jobs in in an air-conditioned room. Each candidate received B exchange for payment. a randomized set of questions of equal difficulty, and the computer automatically graded the tests as CASE STUDY 6 After the fall of the Suharto dictatorship in 1998, the candidate progressed. After the examination new political elites had quickly sought to capture the was over, candidates immediately received their final recruitment process for civil servants. There was little grade. transparency in how candidates were selected, and many government jobs were filled with unqualified Despite the existence of the new computer-based test, or incompetent workers. Despite the prestige of the BKN found that other government ministries government positions, many of Indonesia’s top and agencies had little interest in the system. The university graduates opted not to apply to the civil government did not mandate that other government service because they perceived the recruitment process agencies require the new test, and most chose to stick as unfair. Without high-performing civil servants, with the old system. The BKN did not push agencies it was difficult for the government to develop good to adopt the new test, and besides, it was uncertain if policies and deliver public services efficiently and the system was robust enough to be used nationwide. effectively. Running an electronic test would require significantly more infrastructure, including computers and servers, The civil service recruitment process had three and a better-designed test itself. main stages. First, candidates went through an administrative selection process, which screened Introducing the computer-based examination for all applicants based on their experience and educational candidates would have broad benefits for Indonesia’s qualifications. Next, candidates sat the general civil public sector. In the short term, it could accelerate the service exam, a paper-based exam made up of three recruitment process and reduce the human resources parts: a general intelligence test, a nationalism test, needed to conduct and grade examinations. Longer and a personality test. Then, candidates sat a more term, a fairer examination process could increase specialized exam for the specific ministry or agency public trust in the government, and improve public they hoped to enter (for example, the Ministry of policy implementation through having a better- Foreign Affairs required each candidate to write qualified and more capable civil service. an essay using a foreign language). Some jobs that required specialized capabilities had obligatory physical or psychological tests. Response A fter Indonesia’s Corr uption Eradication I Commission (Komisi Pemberantasan Korupsi, or mplementing the new examination, called the KPK) recommended reforming the civil service computer-assisted test (CAT), required the BKN recruitment process, the Civil Service Agency (Badan to design a new and robust test that would be safe Kepegawaian Negara, or BKN), in 2008, began from malfeasance and that could be implemented experimenting with how it could make the general civil across the country. The agency then had to build service exam fairer and more transparent, and reduce support for the new system across the government – opportunities for corruption, collusion, and nepotism. in ministries, agencies, and regional governments. When President Susilo Bambang Yudhyono and IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 83 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Designing a new system Building support The BKN used its existing staff to develop the CAT Initially, the BKN found it hard to get government system in-house, mostly using readily available open ministries and agencies on board with the new system. source software. They also brought in staff from Many preferred to stick with the old system, either the Ministry of Communication and Information because it was what they were used to or because it Technology to identify and fix vulnerabilities in the gave officials the opportunity to derive benefits from system. Later, the BKN brought in support from the the recruitment process. Fortunately, the BKN was country’s Cyber Security Agency to ensure the system able to garner support from two large ministries that could not be hacked. were open to change and eager to implement a better system: the Ministry of Law and Human Rights, and The CAT software was designed to give each the Ministry of Foreign Affairs. B candidate a unique set of questions from a list of CASE STUDY 6 over 20,000 written by a consortium of university With those two large ministries on board, and a host professors specifically for the civil service exam. of smaller government organizations that voluntarily The randomized questions were weighted so chose to recruit through the CAT system, the BKN that candidates received tests that were equally launched the CAT exam nationwide in 2013. Across demanding, though certain candidates were eligible the country, 263,288 individuals sat the computerized to take less difficult tests. Following the government’s exam over the course of a few weeks. To utilize space policy of affirmative action for civil service recruits and computers efficiently, each candidate was issued from indigenous groups and less-developed parts of with a time and location to take the exam. the country, candidates that belonged to those groups sat tests weighted to be less difficult than those sat Public reaction to the new system was positive. by candidates from areas with stronger education “Everybody who had taken the old system asked systems, like Java island, where the capital city of [ministries and agencies still using the paper-based Jakarta is located. test] why they didn’t have the CAT system,” said BKN Chairman Bima Haria Wibisana. “The old In Jakarta, the BKN had a fixed test-taking location system was not transparent and accountable, so the equipped with computers, but for tests in regional public put pressure on the government to open jobs areas the agency had to adapt to the locally available through the CAT system.” In addition, the BKN infrastructure. In most cases, the BKN worked with built support among students by visiting universities the military to make use of their facilities to create and explaining the new system. The agency hoped to secure test-taking locations around the country. The attract students, who might have been disinterested BKN also had to procure sufficient computers for its in the civil service because of the former examination own facility and to send to regional locations. In most process, to consider applying. parts of the country, internet connectivity was reliable enough for the tests to be taken online. In remote The public pressure from applicants and students locations where that was not the case, the BKN set reached the highest levels of the Indonesian up servers that allowed for the test to be taken on a government, and in 2014, Vice-President Boediono localized network. declared that all civil service jobs must recruit using the CAT system. To increase the transparency of the new system, BKN designed the software so observers could track candidates’ results live while tests were being taken. Expanding nationwide At each location, the BKN could set up monitors displaying the live results outside of the test taking With the Vice-President’s backing, the CAT system room. That way, observers (including civil society was set to be used for the recruitment of all new groups, which the agency invited to witness the tests) civil servants in 2014. Rolling the system out in sub- could check in real time that results were not being national governments turned out to be a far more interfered with. After the test was finished, each difficult task, however. “Some provincial governments candidate could instantly see his or her final score. tried to avoid using the system, especially in remote 84 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE areas,” said Wibisana. “But then the Minister of Reflections Administrative and Bureaucracy Reform and the A Minister of Finance agreed that they would not s of 2018, it is too early to tell if the CAT provide resources for recruitment if the provincial system will have the desired result of creating government did not use the CAT system.” Even with a better-qualified and more capable civil recruitment resources frozen, some sub-national service. Even so, initial indications are that the governments blocked the CAT system from being Indonesian public perceives the new system as being used in their regions. far fairer and more transparent than the old paper- based process. “We have less complaints now,” said The impasse was somewhat avoided for several years, Wibisana. “Before, applicants complained that the when President Joko Widodo’s administration took system was corrupt when they failed the test. But now B over in 2014 and immediately instituted a 5-year they just say they will try again and do better next moratorium on hiring civil servants. As a result, no time.” CASE STUDY 6 civil service examinations were held in 2015 and 2016. The BKN received international recognition for its In 2017, the government relaxed the moratorium at the work in implementing the CAT system, receiving an central level, but only one sub-national government award for “Public Sector Organisation of the Year” – North Kalimantan province – recruited new civil from the Association of Southeast Asian Nations servants. North Kalimantan was a new province that at the 2014 Asia Pacific “FutureGov Summit” in had been created in 2012 on the island of Borneo, Malaysia. Domestically, the BKN received an award and there was less resistance from local politicians from the Ministry of Law and Human Rights for there than from other sub-national governments. its work to improve civil service recruitment and In addition to that one provincial government, the selection in 2017. CAT system was also used to test applicants for 62 ministries and agencies at a national level in 2017. The government has not conducted any evaluations of the CAT system, its impact, or public perception, Though some ministries and agencies did not fully but the BKN pointed to social media feedback as embrace the new system, strong support from the evidence the CAT was having a positive impact. President and senior officials forced compliance. “We gather information on Twitter and Facebook, “Some of the ministries were still unwilling, but and many people are saying that the CAT must they had no choice,” said Wibisana. “When the be continued,” said Wibisana. He also noted that, President’s daughter took the test and failed, that anecdotally, government officials said they were no quashed arguments from the ministries.” President longer being contacted to assist certain people in Widodo’s daughter had sat the examination in 2014 getting civil service jobs, as was common in the past. and scored below the minimum required to enter the civil service. Media reports at the time noted that the In addition, the computerized system saved time President’s daughter was treated exactly the same as and money compared to the old system. Because the other applicants, “which caused a stir in Indonesia, computer automatically graded the CAT, there was where corruption and nepotism are chronic problems, no need to expend human resources evaluating paper and the children of the elite are often given special exams. Wibisana estimated that the CAT system used treatment” (Satriawan 2014). only 30-40% of the budget of the paper-based test. The real test for the CAT system will come in late The CAT system was highly scalable and had been 2018, when more provincial governments are set scaled up from just a few ministries to potentially to begin recruitment for new civil servants. “We being implemented in all government entities in are already thinking about the recruitment process Indonesia in 2018. Other nations had approached for this year, and trying to work with provincial the BKN to learn about the CAT system, and governments,” said Wibisana in January 2018. “We Wibisana noted that his team had worked closely tell them we are just trying to help them increase the with neighboring Timor-Leste to help that country’s transparency and accountability of government.” government replicate the CAT. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 85 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE The BKN has worked to continuously improve the smartphone or online version of the CAT that would CAT system, and in 2018 was trying to work with increase accessibility and cost less to implement, as it individual ministries and agencies to introduce would not require physical space and applicants could computerized special competency examinations. The use their own devices to take it. next steps for the organization include introducing a Success Drivers Indonesia’s reform of civil service recruitment reflects four of the five key dimensions for successful public sector innovation. B CASE STUDY 6 Political leadership was a necessary ingredient at various stages, starting with the initial decision by the chairman of the Civil Service Agency (BKN) in 2010 to strengthen its efforts to overhaul the recruitment process. This was sustained by the Vice-President when he declared in 2014 that the new system would be used for all the central government’s civil service jobs, and reinforced by the President in 2017 after a two-year freeze on hiring was lifted. Political leadership was essential to overcome the opposition of line ministries and agencies to adopt the new system and accept the results. Technology was the central platform and means through which the reform became possible. Yet, BKN did not have expensive consultants or sophisticated technology to draw upon. Instead, they developed a system in-house, drawing upon open-source software and collaborating with other ministries and agencies that had expertise in technology solutions, including cyber security. Transparency was a central objective of the reform, with technological change merely being the means to achieve this end. In turn, transparency to the public on how exams were to be conducted, including the display of test-results in real time, became the enabler of accountability and a powerful driver for the public to advocate for the reforms. This public support for transparency undoubtedly made political support for reform easier. Institutional capacity building was essential to enable and sustain the reform from pilot stage to national roll-out. BKN carefully considered the readiness of the system, including infrastructure and test design, before it was applied nationwide. In addition to facilities and software, they had to devote resources to develop a robust database of exam questions and weight the randomized questions appropriately to ensure that candidates received tests of equal difficulty. 86 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Innovations C in Managing Public Money Public Financial Management (PFM) is a broad field encompassing government functions that are often invisible to the public, but nevertheless impactful. What is at stake? consequences. Maintaining budget discipline is a core objective. Second, good PFM systems should P ublic financial management is a broad facilitate strategic allocation of resources to those field encompassing many different areas that ref lect the development priorities of government functions that are often the country and its government. Third, a well- invisible to the public, but nevertheless functioning PFM system should promote technical impactful. Using the simple typology of front- efficiency in government spending. It should assure office and back-office functions, PFM is most often that funds get to the designated policy areas in the considered back-office. These are the functions for budget, and that the funds can be used efficiently which civil servants themselves are both the agents and effectively to produce the desired outputs and and the customers. These internal clients require outcomes. operating systems to work, information to be available when they need it, and others to perform Service delivery suffers when governments do their tasks on time and with accuracy. While the not adequately address the performance of public may not observe these functions directly, their management systems and institutional they can experience problems with quality or incentives. Three pillars of the systems include: access to public services when PFM is not working public procurement, internal controls and standards well. Improving PFM performance, therefore, (fiduciary), and the institutional incentives for is ultimately about improving service delivery to budget management more broadly. citizens. PFM functions are the engines that propel other systems forward. • Public procurement is the interface through which governments purchase goods and At its essence, a sound PFM system aims to services to perform their core tasks. Well- achieve three core objectives. First, it needs to functioning procurement systems make the assure fiscal discipline and macroeconomic stability. difference in whether goods and services are Few governments can overspend their budgets received on time and acquired with value- indefinitely without generating severe economic for-money. The existence of a transparent and IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 87 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE level playing-field also ultimately affects the 7). Repeat assessments are in turn used by countries development of the private sector. to measure progress over time (more than 500 PEFA assessments have been conducted in 150 countries • The fiduciary responsibilities of the government since the launch of the initiative in 2001). Within are directly impacted by its accounting systems, specific functions or elements of the PEFA, many internal controls, and auditing capacity. Well- diverse efforts abound. For example, governments performing PFM systems ultimately help assure are giving greater attention to public procurement that resources reach where intended, for the policies and procedures, because they see the potential prices agreed, for the purposes intended, and savings they can achieve by making systems more the quality expected. transparent and better performing. An increasing number of countries are also introducing accrual • Incentives drive behavior, and the quality of accounting and strengthening audit capacity in order budget preparation, execution, and reporting to ensure the accuracy and relevance of their core will undoubtedly be affected by the “rules of financial data. While corruption is the most obvious the game” that managers perceive to be at work, and egregious result of weak controls, countries by what is rewarded, and by what is punished. are looking beyond that to see better management It is evident that governments can only as the objective for improved accounting, payment, ignore organizational culture and managerial and control systems. Budget planning systems are incentives at their own peril. also changing. Central budget offices across the globe have initiated reforms to improve the linkages between planning and budgeting, and to increase the use of performance information in taking decisions. C How are emerging economies addressing The three cases featured in this section THEME offer a glimpse into how countries are taking the challenge? steps to overcome institutional and technical constraints to improve their PFM performance G overnments have been very active to the benefit of service delivery. The case from in improving P FM sy stems and Rwanda demonstrates that modern procurement using global benchmarks to assess techniques that are widely used in OECD countries progress. The Public Expenditure and Financial do not need to be off-limits for the developing world; Accountability (PEFA) assessment tool has been capacity constraints we commonly expect in Sub- used by countries around the globe to assess the Saharan Africa can be and are being overcome. In the performance of their PFM systems against objective, world’s fourth most populous country, Indonesia, an evidenced-based performance standards (see Figure archipelago spanning thousands of islands, officials FIGURE 7 Dimensions used by PEFA in Assessing the Quality of PFM The Seven Pillars of PFM Performance Budget Transprency of Management Policy-based Predictability and Accounting External scrunity reliability public finances of assets and fiscal strategy control in budget and reporting and audit liabilities and budgeting execution Source: PEFA Secretariat, 2018. 88 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE from the Ministry of Finance have demonstrated they can get timely, reliable expenditure and The three cases payment information to every government office featured in this section across the nation. They managed to do so at a fraction of the cost that would have been the case offer a glimpse under traditional approaches. The third case from into how countries the Brazilian city of Manaus shows the dramatic transformation that can take place when a committed are taking steps to government decides to address the core performance overcome institutional bottlenecks that ultimately affect service delivery. Within a short period of time, Manaus went from and technical being one of the worst performing to one of the best constraints to improve performing municipalities in Brazil in terms of fiscal management. their PFM performance to the benefit of In 2013, when the Rwandan government approached the World Bank to finance a service delivery feasibility study for implementation of an e-procurement system, they knew that such a system had never been implemented in reason OM-SPAN was a significant intervention is Africa. For Rwanda, which had already tackled because MOF only had sufficient software licenses to C corruption through other means, e-procurement connect 3,000 MOF staff to the newly implemented presented an opportunity to squeeze efficiencies financial management information system (SPAN); out of government procurement through greater line ministries and agencies had not been included THEME competition among bidders. To help concentrate due to the high cost. OM-SPAN was an in-house attention on development of the system, the innovation designed to replicate the SPAN data Rwandan government took advantage of the World and upload it within a day to a web-based platform Bank’s results-based lending program and included accessible anywhere and on any device. It is truly the piloting of the e-procurement system as one of a game-changer for line ministries and agencies the conditions for the disbursement of the funds. accustomed to struggling to get simple information Drawing heavily on international experience from about their financial transactions. countries where e-procurement was already well- established, Rwanda was able to have virtually all The Brazilian city of Manaus demonstrated public procurement conducted electronically by that dramatic results can be achieved in January 2018. Over 3,500 suppliers are registered on terms of fiscal performance with the help the e-procurement website (as of December 2017), of determined leadership, an overhaul of nearly 2,000 tenders had been advertised on the site, performance management systems, and and 685 contracts signed. enabling technology. Manaus is the largest city in the Amazon rainforest region of Brazil. At the end I ndonesia’s implementation of Online of 2012, it was in fiscal distress, underpinned by a Monitoring SPAN 8 (OM-SPAN) in April 2015 weak tax collection system and deteriorating public enabled ministries and agencies across services. The transformation of the city’s finance the country to monitor relevant financial secretariat, responsible for revenue collection and transactions and generate financial reports in financial management, began in 2013 with the almost real time. This was a significant achievement election of a new mayor who was determined to for two major reasons. Previously, civil servants in inject private sector management principles into line ministries had to call or visit treasury offices to the city administration. Upgrading the information find out the status of payments and whether they had technology used for procurement and tax collection been approved. This led to substantial time wasting was a critical first step in Manaus’ transformation, for civil servants and frustrations for vendors; it also because it enabled the financial secretariat to made budget monitoring cumbersome. The second eliminate some of the manual processes they had IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 89 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE previously relied on. Yet perhaps the most profound country, as well as the Head of State, have evidence of changes came through the establishment of the a night-and-day difference in getting timely financial performance management system, which included information; this timeliness and transparency in turn clear performance goals for every department and a helps SMEs who must transact business with the transformed management culture that emphasized state. In Rwanda, the economic benefits of using the monitoring progress and collective problem solving. e-procurement system have not yet been studied or The results have been dramatic. In 2017 Manaus was quantified. But evidence from elsewhere around the ranked first of all Brazilian state capitals and 33rd of globe gives confidence that increased competition will all Brazilian municipalities in a nationally recognized result in better pricing of services for the government, index of fiscal management. which will ultimately benefit Rwandan citizens. Well-performing PFM systems are an important foundation for transparent and cost-effective Why are these ideas service delivery, but they are only a contributor worth learning from? within the overall service delivery value-chain. Of course, policies and programs need to be designed well from the outset, and service providers need to have W hatever the level of a country’s sufficient competence and motivation to implement development, strengthening PFM the programs correctly. Yet, well-functioning PFM systems is a continuous process systems will also include the capacity to conduct that is impacted by capacity constraints program or expenditure reviews, so policy-makers – both financial and human resource. IT- have access to information on what works and what C driven investments are especially costly and time- does not. Achieving technical efficiency in public consuming for institutional champions, even if the expenditure management is an elusive goal, but it is THEME anticipated pay-off may look attractive. IT systems an important link to how service delivery is working also require continual investment in order for them to in practice and whether it provides value-for-money. meet increasing demands and to remain performant over time. Clearly, non-IT investments also require adjustment and continuous improvement. In particular, efforts to change the management culture and incentives for performance may need fine-tuning over time and the sustained political support of senior officials. Fiscal discipline, strategic allocation, and technical efficiency can all be undermined by poor leadership. Despite the vigilance required to sustain PFM reforms, the investment of effort can be transformational and help stimulate improvements in service delivery. Because PFM reforms are often beyond the visibility of ordinary citizens, the burden on political leaders to “sell” the reforms is perhaps more challenging. The pay-off to the public often comes some time later, through the improved performance of the back-end systems and through savings generated from introducing the more efficient, transparent, and effective procedures. In Indonesia and Manaus, the benefits are already tangible. Manaus citizens can already see the benefits of increased investment in health, education, and transport. In Indonesia, civil servants across the 90 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 7 Turning Around an Agency: The Manaus Finance Secretariat Introduces Results-Based Management C CASE STUDY 7 Overview I n 2013, Manaus, the capital of Amazonas state in Brazil, was not managing its finances effectively and as a result, public services were lacking. Many secretariats, departments, and MANAUS, BRAZIL individuals lacked focus, a major impediment to improving financial management and service delivery. Understanding the need to POPULATION (July 2017 est.)1 improve worker performance in order to introduce much-needed 207.7 million (Brazil) reforms, the Secretariat of Finance introduced a new performance management strategy for all of its employees. Staff began working 2.130 million (Manaus) toward specific goals, and a new department within the secretariat GDP PER CAPITA (current US$) closely monitored each individual’s progress. The new focus on results 9,821.40 (Brazil, 2017 est.) 2 helped the secretariat introduce new services for citizens and improve 9,783.203 (Manaus, 2015 est.) tax collection. As of 2018, the secretariat was beginning to work with INCOME GROUP3 other government departments to introduce similar performance management reforms. Upper middle income GOVERNMENT EFFECTIVENESS4 47.6% 1 IBGE, 2World Bank (2016), 3World Bank Staff Calculations, 4World Bank (2016), 5World Bank (2016) IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 91 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Introduction of finance. “All over Brazil, politicians often give positions like [secretariats] to their supporters,” A t the end of 2012, Manaus, the largest city said Laura Zoratto, senior economist at the World in the Amazon rainforest region of Brazil, Bank. “But this mayor brought in Tapajós based on was in crisis. The municipal government his technical abilities… he had just retired from the was struggling to manage its finances, and had less private sector and wanted to make the city better.”  than 20 million Brazilian reais cash on hand (about   US$9 million at the time), while owing more than 360 million reais (about US$160 million) to suppliers. Similar to many municipalities in Brazil, Manaus Response had a weak tax collection system and relied heavily T on transfers from the federal government (World apajós had an ambitious vision for the city. He Bank 2015b). Without strong revenue collection, wanted to make Manaus one of the best places the government did not have funds available to pay to live in Brazil and among the top five best- its suppliers, or to make the investments in health, managed capital cities in the country. Reforming the education, and transport that its citizens demanded.  finance secretariat was the first step toward achieving   those goals. After improving financial management Part of the problem was poor management at the and increasing revenue, the city could begin investing city’s finance secretariat. The secretariat, responsible more in services for its citizens.  for revenue collection and the city’s financial management, mostly relied on manual processes for all of its tasks, instead of adopting digital technologies Changing a culture within the C that could improve efficiency. Poor staff motivation secretariat  further contributed to the productivity problem.   CASE STUDY 7 “The secretariat was very poorly managed,” said When Tapajós arrived at the secretariat, he quickly Lourival Praia, who was the sub-secretary of budget realized he had to change the culture of the institution and projects at the time. “There was no management and get civil servants motivated. Without committed, plan, and workers had no targets to work towards. We high performing staff, all the big reforms he had in desperately needed a new management model.”  mind would likely fail. With the mayor’s backing,   Tapajós brought in a team of business consultants to When newly elected mayor Arthur Virgílio took help instill a new results-focused culture within the office at the beginning of 2013, he knew he had to secretariat. The consultants trained managers within turn the finance secretariat around. Manaus urgently the secretariat on how to build trust, credibility, and needed to increase revenue, reduce unnecessary respect from their staff, and led workshops to build expenses, and start delivering better public services. pride and camaraderie among civil servants. Next, Manaus was one of 12 cities selected to host the 2014 the consultants trained every staff member in PDCA FIFA World Cup, and public services, particularly (Plan, Do, Check, Act) methodology, a popular transport, had to be functioning efficiently before the management tool used to ensure follow-through on tourists arrived. goals and for continuous improvement of business   processes. Virgílio had a different management style than his   predecessors. “The new mayor had a vision of the In July 2013, Tapajós created a new department public sector as a big company,” said Praia. “He wanted within the finance secretariat to institutionalize the to treat public services as he would a business. The new PDCA methodology. The sub-secretary for government had to earn revenue, and then invest that management was charged with implementing results- revenue in public services… It was very important to based management institution-wide and working have a leader that believed in meritocracy and wanted with other sub-secretaries on process improvement. to treat the public sector like a business.”  The new sub-secretary had to train staff on how to   develop indicators, targets, and action plans, and The mayor appointed Ulisses Tapajós, a well-known motivate staff to achieve them. retired businessman, as his incoming secretary   92 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Some staff at the secretariat were reluctant to accept reform, the secretariat sought advice from the state change, but came on board when they saw the direction government of Amazonas, which had overhauled its the new secretary was leading the organization. procurement systems just a couple of years earlier “Initially, the workers did not want to change,” Praia (Zoratto 2016). Creating partnerships and learning said. “But after participating in the trainings, workers from others’ experience was another strategy adopted started to become more comfortable with the idea.”  by the secretariat to accelerate the pace of reforms.   “Tapajós reached out to other governments that were At the same time the trainings were taking place, already achieving what he wanted to achieve,” said the secretariat began reforming its own information Zoratto. “Learning about procurement from the state technology (IT) systems, and those of the entire government was just one example of that.”  government. “Tapajós asked to be in charge of Manaus’ IT, knowing that IT is a crucial element to In 2014, the finance secretariat began negotiating a modernize and streamline processes,” said Zoratto. US$150 million development policy loan with the “The Secretary of Finance became the Secretary of World Bank to help finance its reforms. Zoratto said Finance and IT.”  the secretariat used the agreement to strengthen its   commitment to achieve Tapajós’s goals. “Tapajós The mayor set the secretariat an ambitious goal: accelerated and locked-in reforms by including to increase its revenue by 10% each year. If the overambitious targets as indicators of their DPO secretariat achieved the goal, the mayor said, every (development policy operation) with the World employee would get an extra month’s salary at the end Bank,” she said. “It served as an external enforcement of the year. After spending 2013 training staff and to implement difficult reforms, such as procurement.” C improving IT infrastructure, the secretariat was ready to get to work in 2014 to make internal processes Following the goal setting model taught by the more efficient, provide better services to taxpayers, consultants the previous year, all employees at CASE STUDY 7 and increase tax collection.  the finance secretariat set two main goals for 2014 in collaboration with their managers. The goals were quantifiable, and broken down into monthly Setting goals  targets. The goals were added to the secretariat’s   new performance evaluation system, which the sub- Based on the institutional goal of increasing revenue secretary for management had created to monitor for the city by 10%, the secretariat began setting progress. targets for each of its different departments. Tapajós   and his management team looked at every department Each employee signed an agreement with their and every process within each department to find manager to achieve the yearly goals and monthly ways to increase revenue.  targets agreed upon. “The goals are negotiated   between managers and their staff,” said Praia. “The At the time, there was huge room for improvement goals cannot be imposed on staff. If the worker did in tax collection. The state collected two main taxes, not agree with the goal, they would not sign the a property tax and a tax on services, and together form.” they accounted for less than 25% of state revenue.   Property tax collection was particularly poor: there To ensure full commitment to the agreement, was an estimated 550,000 properties in Manaus, but the secretariat linked achievement of the goals to only 150,000 were included in the property cadaster the employee’s salary. “The signed forms are legal and only about half of those actually paid tax (World documents that can be checked by the public auditor,” Bank 2015b). said Praia. “Part of the worker’s salary depends on   achieving the goals. If they fail to meet targets, they Increasing property registration and improving are penalized.”  collection of taxes from already-registered properties   were just two of dozens of goals created by the Working with their managers and the sub-secretary secretariat. Another major goal included introducing for management, each worker devised an action plan an electronic procurement system. To enact that outlining how they would achieve their targets month IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 93 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE by month. Each plan followed a standard template servant has to meet at least 75% of their goal [for that devised by the sub-secretary that detailed what would month],” said Praia. “If they do not meet 75% of their be achieved, why it was important, how it would be goal, they do not get paid their full salary.”  achieved, who was responsible, and when it would be   achieved by.  Targets were designed to be ambitious but achievable,   and some workers struggled initially. “In the first The new performance-based way of working instance, the worker feels mad when they lose their fundamentally changed the day-to-day culture of the salary,” said Praia. “But the intention is not to take secretariat. “Now, civil servants do not arrive to work people’s salary, the intention is to get people working wondering what they are going to do today,” said hard.” Each employee agreed to the targets set, and Praia. “They have goals, they have a plan, and they had no recourse if they did not achieve them other know exactly what they are going to do.”  than to work harder the next month to ensure their salary was not docked again. Monitoring progress and solving problems    Reflections To ensure follow-through on the goals, the sub- F secretary set up a monitoring system to follow ive years after introducing results-based each individual’s progress. Managers uploaded management reforms at the Secretariat documentation on achievements in real time to the of Finance in Manaus, there were clear performance evaluation system and set aside time indications the changes had been effective.  C every Monday from 3.00 pm to 5.00 pm to check   progress, identify obstacles, and solve problems. In 2017, Manaus was ranked first of all Brazilian CASE STUDY 7   state capitals and 33rd of all Brazilian municipalities If any employee encountered a roadblock, they could in the FIRJAN Fiscal Management Index. The work with their managers to analyze the problem index, created by the Federation of Industries in and find a solution. In some cases, difficult situations Rio de Janeiro State (FIRJAN, an organization that called for collaboration between different sub- promotes business competitiveness), evaluated more secretaries, or intervention from Tapajós or other than 5,000 municipalities across Brazil according to senior management. For example, increasing property their capacity to manage revenue and expenditures. tax payments required the secretariat to improve In 2013, Manaus had been ranked 1,200th out of the communication with property owners across the city. cities evaluated.  Different units within the secretariat collaborated to   create radio advertisements and a broad social media The municipality revised and upgraded its property campaign.  tax cadaster, reduced tax noncompliance, overhauled   its procurement systems, and partnered with other While collaboration between different sub-secretaries governments to learn and adopt best practices in had been disjointed in the past, joint trainings and several areas, including upgrading urban transport and an emphasis on teamwork from top management monitoring bus concessions. Another reform created broke silos within and between secretariats. “Usually a marketplace, designed as a tourist attraction, to give coordination is very difficult, with staff sending physical workspace to street vendors and incorporate memos and following official procedures,” said them into the formal economy. Zoratto. “In this case, the workers were constantly   coordinating with each other by exchanging messages The finance secretariat also developed more citizen- on WhatsApp [a popular smartphone messaging centric services using its enhanced IT capacity, such application].”  as an online information portal. The portal provided   assistance to citizens, businesses, and the self- Each worker had to strive to meet their targets, or they employed, and allowed individuals and companies would see their pay docked at the end of the month. to submit tax payments online.16 Other IT reforms “To receive 100% of their monthly salary, each civil replaced outdated paper-based processes and allowed 94 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE for faster and cheaper electronic communication meetings, motivating people, and creating a purpose between citizens and the secretariat, and between the for their work.”  secretariat and other parts of the Manaus government.      The finance secretariat’s focus on changing the culture Despite Brazil’s dismal economic performance during within its own agency, as well as in other government the same period, Manaus increased revenue between offices, made it a unique example within Brazil. 2014 and 2018. The increased revenue stabilized the “Results-based management has been implemented city’s finances and enabled the government to invest in other sub-national governments in Brazil, for more in services for citizens, including building new example in the state of Minas Gerais,” said Zoratto. roads, upgrading bridges, and improving schools. For “But the Manaus case is innovative because it was low- example, the education secretariat rolled out a new cost, gradual, and focused on changing culture, with management model in primary schools that provided bonuses that were contingent on revenue increases monetary incentives for school directors to achieve added at a later stage.” At the same time, only time specific targets, and in 2016 Manaus was ranked 11th will tell whether this approach is sustainable. It out of all state capitals according to Brazil’s Basic operates mostly on positive incentives, with limited School Development Index (an improvement from options to dismiss non-performing staff. Yet as the their 2014 ranking of 18th) (Amazonas Atual 2016).  reform takes root, there are possibilities for tweaking its design and addressing these shortcomings. Workers within the finance secretariat were far more motivated than they had been before the management Although the finance secretariat did not reach its goal reforms took place. “In Brazil, there is an entrenched of increasing revenue collection by 10% each year in C culture within the civil service to not work hard,” the first four years of the management reforms, staff said Praia. “The goals became the stimulus to change expressed confidence that they would reach their that.”  target in 2018, and finally receive the bonus of an CASE STUDY 7   extra month’s salary. “In 2016, we reached 87.61% of The management reforms required strong support the target, while in 2017 we reached 99.27% of the from the secretary of the institution, Ulisses Tapajós, target,” said Praia. “Of course, the economic crisis and the city mayor, Arthur Virgílio. With strong of 2014–2017 negatively affected tax collection. and motivated managers, the system would be highly However, because of our management model, we replicable in any government organization. Virgílio were less impacted by the crisis than the state and the was trying to use the finance secretariat’s experience to rest of the capital cities.” improve productivity across the Manaus government. “We are now trying to replicate the system in all the other secretariats in Manaus,” said Praia, who took over from Tapajós when he resigned due to health problems in 2017. “We started working with the education secretariat in mid-2017, and we are planning to start working with the health secretariat this year. After we have set up the system in those two big secretariats we will start working with the smaller secretariats.”    Manaus’s success proved that results-based management reforms could be implemented even when facing the toughest financial situations. “There is a perception that governments cannot do results-based management when in a difficult fiscal situation,” said Zoratto. “But you don’t need money to pay extra salaries to create a new culture. You can start by creating work plans for people, having weekly IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 95 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Success Drivers Manaus’s experience in reforming its finance secretariat reflects four of the five key dimensions for successful public sector innovation. Political leadership from the mayor and the head of the finance secretariat was the key driver behind the reforms. The new mayor took office with a business-minded management style and decided to appoint a strong manager to head the finance secretariat, instead of a political supporter. The head of the finance secretariat knew he needed a motivated workforce to achieve the ambitious reforms he envisioned, and led by example, instilling a culture of high performance throughout the secretariat. The mayor is now attempting to build on that success by having the secretariat lead reforms in different departments across the city’s government. Building institutional capacity was an important precursor to enacting any reforms in the finance secretariat. A team of business consultants trained staff on how to set goals using the secretariat’s new results-focused methodology, and motivated them to achieve those goals. To ensure commitment to the new way of working, the head of the secretariat created a new department dedicated to training and motivating staff to set and achieve ambitious goals that would drive stronger performance across the institution. Incentives facilitated performance improvement on multiple levels. First, the mayor set an ambitious goal for the secretariat and promised each employee a bonus if it was achieved. Within the secretariat, employees had to set two goals for each year and signed commitments to meet monthly C targets towards achieving those goals. The secretariat tracked progress and checked in with all employees weekly to ensure no one was falling behind. In turn, political incentives were created by CASE STUDY 7 the secretariat by including its targets as indicators for the city’s development policy operation with the World Bank. Although there was a financial incentive for the institution to achieve its goals, the Manaus experience suggests that it was not a critical feature, and that instilling a results-focused culture through work plans, trainings, and follow-up can be equally powerful to improve civil service performance. Updating technology played an important role in the reforms. Replacing manual processes with digital ones was more efficient both for staff working in the finance secretariat and Manaus citizens interacting with the secretariat. The head of the secretariat placed new technologies at the center of all the secretariat’s reforms, and also took over the city’s IT department to facilitate the modernization and streamlining of processes across the city government. 96 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 8 Giving Government Units Access to Financial Data in a Cost-Efficient Way: Indonesia’s Online Monitoring Financial Management Information System Overview W hen Indonesia upgraded its financial management information system (FMIS), the Ministry of Finance (MOF) was set to drastically C improve the efficiency, transparency, and accountability of its INDONESIA public financial management. However, the new system was not going to provide immediate benefits to line ministries and agencies, which relied on CASE STUDY 8 7 POPULATION (July 2017 est.)1 data from stand-alone systems to make their own reports. To address the 260.581 million problem, the MOF developed an online monitoring system, which extracts GDP PER CAPITA (current US$)2 data from the FMIS and transforms it into various data sets and reports. Those data sets and reports are then uploaded to a web-based platform, 3,570.30 allowing ministries, agencies, and other stakeholders to monitor the budget INCOME GROUP3 implementation process and produce their own reports as needed. The online Lower middle monitoring system has given more than 100,000 government officials access income to relevant data, and has the potential to reduce the time spent reconciling GOVERNMENT EFFECTIVENESS4 transactions and generating reports. 53.4% Introduction I n 2014, when Indonesia began piloting its new FMIS (called Sistem Perbendaharaan dan Anggaran Negara, or SPAN), officials foresaw a major impending challenge. SPAN, which was set to streamline the country’s financial management systems, was only going to be accessible to around 4,000 staff at the MOF and its more than 200 treasury offices around the country. Spending units of line ministries, which relied on financial data from treasury offices, were not going to get access to the new system. “At the time, it was very difficult for spending units or ministries to get the data and information they needed,” said Sudarto, the Director for Treasury Technology and Information Systems, who was the project director for SPAN. For example, to get information on the process of budget disbursements, officials from spending units of line ministries “had to physically come to treasury offices to ask about the status of a payment or to find out other information,” CIA World Factbook, 2World Bank (2016), 1 Sudarto said. World Bank (2016), 4World Bank (2016) 3   IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 97 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE   The SPAN system promised to radically improve the To avoid putting too much stress on the SPAN efficiency of the government’s financial transactions system, the MOF decided to extract only essential by creating one central financial management data in real time, and extract other data during hours database to replace the myriad of different systems the when fewer people were using SPAN. “If we extracted government used at the time. The government had been data all the time, it would affect the performance of working on procuring and developing SPAN, with SPAN,” said Sudarto. “So we extract data based on support from the World Bank, since 2004. LG CNS the users’ needs. For example, spending units don’t Co., Ltd, a multinational information technology need financial reports in real time; it is no problem subsidiary of South Korea-based LG Corporation, for them to receive them the next day. So we extract won the contract to develop and implement SPAN that data at midnight when the load of the system is using Oracle E-Business Suite, a “Commercial Off- very low.” the-Shelf ” system that would allow the government   to report and track its budget realization in real time. While SPAN was in its development, testing, and pilot   preparation phases, the MOF developed an open- Access to SPAN was to be limited to around 4,000 source, web-based application platform to monitor employees of the MOF and its treasury offices, as transactions and other information processed by granting all spending units access to the system was SPAN and store the extracted data. The government prohibitively expensive. “We have more than 24,000 called the new system “Online-Monitoring SPAN” spending units across Indonesia and each [Oracle] or OM-SPAN. OM-SPAN could be accessed by license could cost around US$1,500 per user,” line ministries, spending units, and other authorized Sudarto said. “It was too expensive for us.” Instead, users anytime, anywhere, using any electronic those spending units would use stand-alone in-house device capable of accessing the internet. As well as a C applications developed by the MOF to upload their website, the MOF developed an OM-SPAN mobile financial transactions. application using open source software. CASE STUDY 8   To monitor the budget implementation process, or to SPAN was officially launched by President Joko develop financial reports for line ministries and the Widodo in April 2015. OM-SPAN was launched central government, the MOF had to reconcile data simultaneously. Users of the new OM-SPAN system and investigate information discrepancies between included the President’s Office, the MOF, line the stand-alone applications and the MOF’s own ministries and agencies, sub-national governments, systems. Ideally, spending units around the country the central bank, and commercial banks. Each user would be able to access the data from the SPAN was granted a different level of access to the system system relevant to them, reducing the need for data based on the information relevant to their work. reconciliation and avoiding the risk of information discrepancies between SPAN and the stand-alone The enhanced accessibility addressed the following applications. While the SPAN system was still being requirements of the line ministries and agencies: developed, the MOF got to work to find a cost- transaction monitoring and analysis, more detailed efficient solution. and accurate state budget financial information, transaction audits, and managerial reports.   Response Examples of OM-SPAN functions include:  T he government had procured new servers to • Budget execution/realization transactions  cope with the new Oracle-designed system, • Contract and supplier registration transactions  leaving it with several high-capacity servers • Invoice payment transactions  from its old system that could be used for other • State revenue transactions  purposes after the SPAN system went live. The • Cash management  MOF decided to use the old servers to manage data   extracted from SPAN. That way, spending units could Officials of line ministries and agencies could log in get access to SPAN data quickly and easily without and quickly retrieve data from the OM-SPAN system, disrupting the operation of the SPAN system itself. significantly reducing the time it took them to access 98 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE information. For example, officials could check online through the regular reporting mechanism of the to see if payments were approved and received by the district government. However, it was difficult and beneficiaries. “Previously, there was a lot of waiting costly to collect the reports since many districts did around,” said Sudarto. “Now, there is no need to wait. not submit the reports on a timely basis. Beginning Spending units can submit requests and then go back in June 2017, the central government required district to their offices and get all the information they need governments to report on what local governments through OM-SPAN.” spent on the DAK and village funds through the OM-SPAN system and linked the system with the The OM-SPAN system was designed to be intuitive, fund withdrawal process. The MOF would not release and most line ministry officials required little training funds without a report being submitted. to use the system. “People learned very quickly how to use OM-SPAN,” said Sudarto. “We had small Utilization  of DAK and village funds was not trainings at local treasury offices for spending units, reported transaction by transaction, but rather by and also invited line ministry staff for trainings to output. For example, if a village was given funds to learn about the information they could get from OM- build a road, they would report where and how long SPAN.” The MOF also created videos explaining how the road is, but would not report the inputs, such as to use the OM-SPAN website and mobile application, how much they paid to the workers or suppliers. The and uploaded them to Youtube. If an official had new data collection function of OM-SPAN created difficulty accessing information, he or she could use a a link between sub-national governments’ spending chat function within the mobile application to get live and central government  spending, and  allowed the support from a treasury official. central government a broader snapshot of how DAK C and village funds were being spent. “The central Some  government officials, however, preferred to government needs to know the output of the village stick to the old system of visiting treasury offices fund,” said Sudarto. “We have 74,000 villages, and CASE STUDY 8 rather than using OM-SPAN. “Our offices are the village fund is very large. Now, we can see all that mostly in cities, and there are many spending units in information through OM-SPAN.”  rural areas,” said Sudarto. “Some people from those offices like to make visits to the city. We explain to them that they could use OM-SPAN instead, Reflections but they still like to come. It is something we can’t T avoid at the moment…. But I believe that culture will he  introduction of OM-SPAN widened change over time. In fact, we are already noticing the benefits of Indonesia’s new financial that treasury offices are becoming quieter.”  management information system and reduced the need for constant phone calls, fax messages, and In April 2017, the functionality of OM-SPAN was in-person visits to track financial transactions. The extended to also capture spending data of some OM-SPAN system provided line ministries and transfer funds at the sub-national level. The new other authorized users with real-time information function was in addition to its main purpose of on transaction data through an easy-to-use platform. extracting and transforming data from the SPAN “Now, you can access OM-SPAN from our mobile system. Every year, the Indonesian government made app, as long as you have an internet connection, and unconditional transfers to sub-national governments a username and password,” said Sudarto. “It is very through its “General Allocation Fund” as well as simple and easy to use.”  transfers for specific purposes through its “Special Allocation Fund (Dana Alokasi Khusus, or DAK)” The new  system was particularly helpful for line and other types of funds, including its “Village Fund.” ministries and agencies, which previously had The DAK and village fund resources were distributed difficulties getting timely and accurate financial to more than 500 district governments, which in turn information from their spending units. “OM-SPAN distributed funds to local government spending units had a big impact on the ministries,” said Rinaldi, the (in the case of the DAK), and over 74,000 villages (in project manager for OM-SPAN. “Before, ministers the case of the village fund). Previously, the reports had to wait for the spending units to submit reports. on the DAK and village fund utilization were made Now ministers can directly check the performance IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 99 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE of their spending units, resulting in better policy savings for the Indonesian government, though as decisions.”  of 2018 the actual amount of savings has not been measured. If all government units used the OM- The  President’s Office used the OM-SPAN system SPAN data, the government could save tens of to track the budget implementation of the entire millions of dollars per year in internal communication, government using a dashboard interface. Such printing, and transportation costs (from reduced monitoring from the top could potentially help visits to MOF offices). “Previously, spending units the government to better manage the budget. For had to make so many reports, but now, headquarters example, the Indonesian government previously can get that information directly from OM-SPAN,” had been slow to disburse funds, concentrating said Sudarto. “Sometimes spending units had to visit spending at the end of the fiscal year. With increased Jakarta [Indonesia’s capital] to submit those reports, monitoring in real time, the President’s Office could but not anymore… We can save a lot of time and potentially identify any lagging areas early, and push money from OM-SPAN, in terms of time saved ministers to accelerate the budget execution. from making reports, and transportation costs.” The government could also potentially optimize human While  the procurement, development, and resources by shifting existing staff from clerical into implementation of the SPAN system cost a total of analytical roles. US$57 million (US$42 million funded by a World Bank loan and US$15 million from the Indonesian OM-SPAN is just one of a series of public financial government), the OM-SPAN system cost less than management reforms in Indonesia. As of 2018, the US$1 million for in-house development and some government is in the process of introducing several additional Oracle database licenses, according new reforms, including an in-house developed cloud- C to Sudarto. “OM-SPAN now has more than 100,000 based financial information system for users of all line users, so it was very cost effective,” he said.  ministries and spending units that will be interfaced CASE STUDY 8 to SPAN. The  system has the potential to create large cost Success Drivers Indonesia’s OM-SPAN reform to improve accessibility of budget execution data reflects three of the five key dimensions for successful public sector innovation. The OM-SPAN system strengthened institutional capacity within MOF and across the government. Instead of spending hours reconciling information and compiling reports, government officials could access much of the data they needed directly from the OM-SPAN website or the mobile application. By reducing the time cost to access core financial data and create reports, the OM-SPAN system meant line ministries and other government organizations had more time to focus on their primary functions. The President’s Office gained improved capacity to track budget implementation and more detailed information on how specific grants allocated to local governments were being spent. Increased transparency of data via the OM-SPAN system increased the accountability of spending units for how they use their budget. Officials could easily look up spending or transaction data they were authorized to access in almost real time. Local government spending also became more transparent, as district governments had to report the outputs of the Special Allocation Fund (DAK) and village funds through the OM-SPAN system. Technology initiatives were the building blocks for creating OM-SPAN. First, the introduction of SPAN, Indonesia’s new Oracle-based FMIS system, brought a modernized technology platform to the country’s finance ministry. Using existing servers to extract and transform data from SPAN to create OM-SPAN was another adaptive innovation. Finally, developing a new website and mobile application using open source software was a low-cost way to create an easy-to-use system for government officials to access the data and reports they needed. 100 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 9 Rwanda: Pioneering e-Procurement in Africa C CASE STUDY 9 Overview E lectronic procurement (e-procurement) systems have helped governments across the world to reduce costs and increase transparency in the procurement process. Beginning in 2014, RWANDA the Rwanda government started the process of becoming the first country in Africa to realize those benefits, by partnering with a South POPULATION (July 2017 est.)1 Korean firm to develop its own e-procurement system. The government 11.901 million launched a pilot system in mid-2016 and rolled out e-procurement GDP PER CAPITA (current US$)2 nationwide in mid-2017. 702.80 INCOME GROUP3 Introduction Low income G GOVERNMENT EFFECTIVENESS4 overnments around the world are constantly buying goods and 58.2% services from the private sector, from small everyday expenses to large infrastructure projects. Keeping the procurement process simple and cost efficient is a major challenge that every government faces. Despite best efforts, the public procurement process is often lengthy, complex, and costly. To address the problem, many governments around the world have implemented digitized processes 1 CIA World Factbook, 2World Bank (2016), to make procurement easier, faster, and more transparent, and to 3 World Bank (2016), 4World Bank (2016) IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 101 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE reduce opportunities for corruption. other African nation except for Botswana, Cape Verde, the Seychelles, and Mauritius (Transparency Rwanda began reforming its procurement processes International 2013). “Bid manipulation in Rwanda by passing a new procurement law in 2007 and is very low compared to other Sub-Saharan African establishing the Rwanda Public Procurement countries, and the government has zero tolerance Authority (RPPA), a regulatory body, in 2008. for corruption,” said Mulugeta Dinka, World Bank At that time, the country began looking at how procurement specialist in Rwanda. to modernize its procurement systems. Rwandan officials traveled to the Republic of Korea, to look at The government hoped that the introduction of an how that country’s e-procurement system, one of the e-procurement system could make the procurement most advanced in the world, operated. process more efficient and transparent, promote competition among bidders, and generate cost E-procurement systems have several advantages savings. If the country could successfully implement a compared to traditional paper-based procurement fully functioning e-procurement system, it would be procedures. First, an e-procurement system the first country in Africa to do so. creates a single online portal for stakeholders to access information on procurement opportunities, learn about the procurement process, and obtain documents including technical specifications, user- Response friendly templates, and the terms and conditions for S all types of public contracts. The open availability hortly after the feasibility study was completed, of information promotes equal access for all the Rwandan government launched a US$100 C types of businesses, including small and medium million World Bank Program-for-Results enterprises, by reducing the possibility of large or initiative focused on improving the country’s CASE STUDY 9 well-connected firms gaining an advantage because public financial management. The project had eight of information asymmetries, and potentially increases disbursement-linked indicators, upon completion of competition for government contracts. In addition, which funding would be distributed. One of those e-procurement facilitates quick and easy decision- indicators, worth US$12.5 million, was to establish making. Government officials can easily see detailed and pilot an e-procurement system (World Bank information on bids through the online system, rather 2014b). than having to sift through paperwork. In January 2014, the Rwandan government formed In 2013, the Rwandan government approached the a joint venture with Korea Telecom Corporation, World Bank to help fund a feasibility study on the the Republic of Korea’s largest telecommunications implementation of such a system. At the time, Rwanda provider, to create a new company: Africa Olleh spent about US$0.8 billion on procurement each year. Services Limited (AOS) (Rwanda Development The feasibility study found that an e-procurement Board 2014). The government opted not to hold system in Rwanda could increase efficiency and an open procurement process to develop the transparency in public spending, and that Rwanda e-procurement system, and instead contracted AOS could start the implementation of e-procurement directly in December 2014. following the allocation of the necessary funding (Singh and Melham 2014). Over the following 18 months, AOS developed a customized online e-procurement system, based on In many countries, a desire to reduce corruption in the Korean model. The World Bank also provided the procurement process and reduce collusion among technical support by sending e-procurement bidders has prompted e-procurement reforms. In experts to Rwanda every six months to support Rwanda, however, those issues were not a major implementation. The system consisted of an online concern when the government began planning portal where suppliers could register and submit its e-procurement reforms in 2013. Rwanda was bids online. During the registration process the ranked 49th in Transparency International’s 2013 system would automatically check the authenticity Corruption Perception Index, higher than every of documents uploaded by the supplier. After a bid 102 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE was accepted, the system could prepare the contract By January 2018 the system had been fully functional and send it to the winning bidder for review. After for six months, and the RPPA reported that almost the supplier had accepted and electronically signed all government procurement during that period the contract, the contract was shared with Rwanda’s had used the new system. “Only a few waivers have financial management information system to issue been issued in specific circumstances, such as for payments. the purchasing of special medicines,” said Richard Migambi, e-procurement manager at the RPPA. By July 2016, the government was ready to pilot the new system with a few selected government ministries, agencies, and district governments. The eight entities chosen were the Ministry of Finance and Reflections Economic Planning, the Ministry of Infrastructure, A the Ministry of Health, the Rwanda Development s of December 2017, nearly 3,500 suppliers Board, the Rwanda Transport Development Agency, had registered on the e-procurement website, the Rwanda Biomedical Centre, the Gasabo district, nearly 2,000 tenders had been advertised on and the Kicukiro District (both districts in Kigali, the site, and 685 contracts had been signed. Tenders Rwanda’s capital). received four bids each, on average. As the system had only been fully operational for six months, it To launch the pilot, the government had to train was too early to tell if it had delivered the improved officials in all the pilot organizations how to use efficiency the government had envisioned. In theory, the e-procurement system. It also conducted media the system should have created time and cost savings C campaigns across the country to advertise the new for both government officials and contractors, as system and encourage contractors and suppliers to the single online portal provided all the documents register online. and information required, eliminating the need for CASE STUDY 9 in-person visits and printing costs. The government To ensure that small businesses were also included, also reported “increased authenticity of procurement the government trained internet cafe operators how documents,” as document forgery by bidders had been to use the e-procurement system. Small and medium a major problem in the past. enterprises could then visit those internet cafes to be coached through the process of registering and The government reported a one-time cost of US$7.8 submitting bids online. million to develop the system, as well as about US$1.12 million in ongoing costs. In the first year During the pilot phase, more than 1,000 suppliers of the program, the government reported spending registered on the e-procurement platform. Those US$500,000 on management of the system, including suppliers made 1,108 bids for a total of 376 tenders salaries for ten IT engineers and five procurement announced on the online platform, meaning the staff, as well as US$620,000 in system maintenance average tender received about three bids. costs. It was difficult to tell if that represented value for money, as no studies had been done on cost After one year of piloting the system without running savings from the system as of January 2018. “While into any major obstacles, the government decided to the initial investment in the system seems to be expand the system nationwide beginning July 1, 2017. high, experience from around the world shows that Per Rwandan law, all public procuring agencies had e-procurement leads to significant savings in public to use the e-procurement platform after that date. spending,” said Hiba Tahboub, procurement manager “So far, there are 137 procurement entities using at the World Bank. “E-procurement will potentially the system,” said Dinka. “But that does not include alter the impact of the procurement function: strategic schools, hospitals, and health centers, which are sourcing will become more predictive, transactional in the process of being included into the system.” procurement will become more automated, and The law exempted projects funded by international supplier/contract relationship management will development aid from using the system, and allowed become more proactive. All these enhancements will the RPPA to issue waivers on a case-by-case basis. lead to more efficient public procurement.” IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 103 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE The procurement process was more transparent, and with international standards and good practices,” it was easier to ensure compliance with the RPPA’s said Nagaraju Duthaluri, lead procurement specialist procurement policies because of automated controls. at the World Bank. “It is unique because it is on the For example, the system enforced controls on the African continent, and the government has developed minimum advertising days for tenders, and deadlines and rolled out e-procurement across the country for for bid submissions. Availability of information on the whole procurement sector.” Many other countries public tenders increased, as the public can visit the took several years to pilot e-procurement systems and government’s procurement website (http://www. were slow to use e-procurement at the sub-national umucyo.gov.rw) to see details on transactions, and local levels. including the bidders, bid prices, contracts, and evaluation reports. The single platform also helped As of 2018, Zambia had joined Rwanda as one of the government to create a consolidated nationwide the pioneers of e-procurement in Africa, and other procurement report. countries were beginning to follow suit. “Rwanda and Zambia have broken the myth that e-procurement In addition to being the first African country to cannot be done in Africa,” said Duthaluri. “It has implement such a system, Rwanda rolled it out created a ripple effect across the continent, and now nationwide in a very short space of time compared we have seen Tanzania, Uganda, and others sign to other countries. “The Rwandan system is in line contracts to implement e-procurement.” Success Drivers C CASE STUDY 9 Rwanda’s introduction of an e-procurement system reflects four of the five key dimensions for successful public sector innovation. Political leadership initiated the reform of Rwanda’s procurement processes by passing a new procurement law in 2007 and establishing a new regulatory body for procurement in 2008. Leaders sought expertise from the Republic of Korea, which has one of the most advanced e-procurement systems in the world, to customize a new system for Rwanda. Institutional capacity was a critical component of this reform. By partnering with a Korean company to form a joint venture, and seeking out support from the World Bank, Rwanda was able to build capacity within its government to implement an e-procurement system. The new system was instrumental in helping the government to enforce its procurement policies through in-built automated controls. The government also helped small and medium enterprises to learn to use the system by partnering with internet cafes across the country to train companies interested in bidding on government contracts. The new system greatly improved transparency in the procurement process. The government’s procurement website provided equal information on the bidding processes for all types of businesses, and open access to procurement reports, government contracts, and bid prices, for any member of the public. Technology formed the basis of the e-procurement system. The procurement website provided a single online portal to access information and obtain documents and templates to participate in the procurement process. The automated system for processing bids and contracts streamlined processes, reduced the possibility of bidders using falsified documents, and made the procurement process faster and more efficient for both businesses and government organizations. 104 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE New Approaches D to Last-Mile Service Delivery While better services are the outcome of the complex machinery of the state, including its upstream functions like policy coordination and budget management, this theme focuses on how countries are tackling issues in the “last mile” of service delivery. What is at stake? questions, building on the theoretical framework provided by the 2004 WDR, Making Services Work D elivering services with quality and for Poor People (Figure 8). efficiency while ensuring access for all citizens is key for inclusive growth and Non-OECD countries face a range of challenges building trust in government. At the same time, in delivering services to their citizens. In many of service delivery is a broad concept encompassing these countries, citizens often lack easily accessible virtually every interaction between the state and the information about government services, including citizen. This includes the administrative services, the types of services they can request, their price, such as permits, licenses, or certificates, as well as or how long they will take. This asymmetry in government-provided public goods, such as health, information can give rise to middlemen, inflated education, or water services. Service delivery is costs, long waiting times, and often bribery. often used as a proxy for assessing public sector Middle-income countries strive to find ways in performance. Better services are the outcome of the which citizens can access information and services complex machinery of the state, including its upstream faster, cutting the number of steps required to functions such as better budgeting, central personnel produce some of the administrative services. In management, or inter-agency coordination. We have addition, physical access to services is a particular addressed some of these questions in various sections issue for the poor or rural populations in both low- of this report. However, there are also specific issues and middle-income countries, especially if they concerning the “last mile” service delivery: How require travel to the capital to obtain certificates or can incentives be created for the service providers to permits, or if the nearest school or clinic is far away. deliver services with both quality and efficiency? How Many emerging economies also face absenteeism can ease of access for citizens be ensured? What is the problems among their public sector workers, best way to hold service providers accountable? This including teachers and doctors, often because their section begins to tackle some of these downstream low salaries require them to have additional jobs. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 105 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE FIGURE 8 Service Delivery and Accountability Triangle THE STATE Politicians Policymakers Co e m te of accounta c rou i pa bil Vo ng ity ct Lo CITIZENS/CLIENTS S h o r t r o u te PROVIDERS Coalitions/inclusion Client power Management Nonpoor Poor Frontline Organizations Services Source: WDR 2004 In middle-income countries, where service delivery service delivery puzzle, but they present important sectors are well resourced and absenteeism is not an innovations that add value even when used alone. issue, governments struggle with quality of services: These cases are also in the classic public sector a teacher simply showing up for class does not mean space. They are not about a particular sector, but that the students will actually learn. about an idea that can be applied to many sectors. Some of these techniques are primarily focused on increasing the accountability of service providers, D others on increasing the quality of services – and yet THEME How are emerging all of them have complex implications for various economies addressing aspects of service delivery, including the efficiency of service provision and citizens’ access. The the challenge? achievements notwithstanding, all of them are still works in progress, facing implementation challenges S everal techniques to address some of the highlighted in the individual cases. key service delivery challenges recurred in the cases nominated for inclusion in In the most challenging environments, a this report: institutional reform, beneficiary fundamental institutional reform aimed at feedback, monitoring, and open data. The changing norms may be required to create selected cases represent these recurring strands of the momentum for improving service delivery; similar solutions that other governments are also but this needs to be accompanied by a experimenting with; at the same time, these cases comprehensive implementation strategy. Many stood out because they were particularly pioneering countries adopt service delivery standards that clearly and far-reaching, were implemented in a challenging specify the types of services, their cost, and business setting, or have demonstrated impact. These four standards of timely provision. This is usually done by ideas alone are not meant to address the complex secondary legislation by the service provision agencies. 106 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE However, when the service delivery challenges faced dissatisfaction recurs, proactive initiation of contact by citizens are severe, the government may need a by the government can help improve trust, change game-changer: a high-profile, whole-of-government individual behaviors, and mobilize public interest. approach. By adopting the Public Services Guarantee Act (PSGA) in 2010, the state of Madhya Pradesh The rapid spread and falling cost of (MP) in India legislated citizens’ rights to the core 26 smartphones has opened a myriad of new ways services. The legislation has helped create new norms of monitoring and keeping service providers for millions of day-to-day state-citizen interactions, accountable. Smartphones, with their interaction inducing higher citizen expectations, and creating capacity, ability to capture and play photos, audio and new standards of behavior for government servants. video, identify location, and transmit data, provide By 2018, more than 20 other Indian states had passed dramatic possibilities to improve service delivery. similar acts. A similar initiative is now underway Location, date and time-tagged pictures of service in the Khyber Pakhtunkhwa province in Pakistan. providers at the point of delivery of services can help However, as the implementation of the MP PSGA check absenteeism. Moreover, service providers, such illustrates, the right-to-services legislation alone is as agriculture extension workers or vaccinators, may not a panacea. It can create momentum and a high- visit the field but neglect remote or hard-to-reach level drive to change the status quo, but it must be areas. Spatial analysis of service delivery, as done with followed through by a comprehensive implementation vaccinators in Punjab, Pakistan, can help address strategy. This includes regulatory reform, business this challenge. More generally, any data collected process re-engineering, a public awareness campaign, on paper can be collected on phones to help improve as well as new ways to monitor and evaluate service granularity, timeliness, and quality. In addition, delivery. photo, video, and location data (and increasingly biometric features such as fingerprints) can also easily Benef ici a r y feed b a ck is one widel y be collected and transmitted. Free Android-based acknowledged pathway to improve services. applications can help in the creation of customized The almost universal presence of mobile phones – forms, including with local language interface.17 there are more phones than toilets in the world is only one eye-catching statistic – has been widely hailed as Technology can also help improve the efficiency a game-changer for development. Many governments of service delivery using open data initiatives. are seeking feedback from citizens about the quality Many governments, especially in the developing world, of service delivery through various online complaint believe that they have to closely guard the information mechanisms, often with mobile apps to facilitate that they make public because information is power. D submissions. This is useful, but essentially mimics the However, this does not have to be a zero-sum game. age-old practice of citizens petitioning governments Information can also mean power for the citizens who THEME or kings. Citizens can reach their government, but can make better choices about services. These choices governments in emerging economies can also reach can in turn provide further helpful information to out to citizens. If the mobile numbers are captured governments. In the case of Uruguay, an innovative at the point of service delivery, then governments partnership between a civil society organization can use text messages or calls to seek feedback from and the Ministry of Public Health allowed citizens citizens on quality, just like private companies reach to compare data on healthcare providers on a user- out to their customers to rate their services. For friendly website – for example, average wait times to example, all the customers of the Pakistan Passport see a doctor. As a result, not only have citizens been office – averaging around 15,000 per day across more able to make more informed decisions about which than 100 offices – receive a text message from the healthcare provider to choose, but the government Director General checking if they faced any bribery now also has a better understanding of its own data or other problems. Some 15 percent reply with a mix and where healthcare dollars are spent. Opening up of praise for this effort, complaints, and suggestions data and making it accessible in an easy-to-digest for improvements. Other countries – Albania, Brazil, form can help correct inefficiencies in the healthcare Myanmar – are adopting similar strategies. Aside system. It can also help induce service providers to from improving the accountability of service providers compete on the quality of service delivery.18 and identifying problem offices or wards where citizen IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 107 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Why are these ideas example. Combatting absenteeism is important, but it does not equate with quality. In addition, building worth learning from? backend analytical capacity and ensuring compliance of thousands of recalcitrant service delivery providers T he four cases in this section offer may be challenging, especially in low-income and powerful solutions to thorny service fragile environments. Open data initiatives may face delivery challenges, and the initiatives various issues around privacy, while outreach will have already been replicated elsewhere. Some of be necessary to enhance citizens’ understanding. these initiatives serve as strong signals of government Finally, the limitations of transparency should intention, such as legislating new standards and norms be acknowledged, as it cannot fully address the in India, or ministers sending text messages to citizens complicated issues surrounding the quality of service in Pakistan. The Uruguay case shows how a strong delivery. government can work with civil society to correct both public and private sector failure by opening up Yet the emerging impact evaluations related data. Digital data are easily produced and circulated, to some of these initiatives suggest that they which further increases transparency when these indeed move the needle in the right direction. innovations are adopted. The fact that these initiatives Helped by the required use of smartphones by some have been implemented in emerging economies makes 4,000 vaccinators in Punjab, absenteeism has fallen. them powerful examples of government-led, scalable, The share of full immunization of children under 20 and replicable ideas. These initiatives also allow for months rose from 62 percent in 2014 to 82 percent iterative design development, where the design can in 2016, and disparities in immunization rates for quickly be adjusted and improved with agile ICTs. urban and rural areas, and for girls and boys, have While the implementation arrangements for India’s almost disappeared.19 A randomized control trial MP PSGA required substantial investment, the (RCT) of health inspectors in Pakistan found that costs of the mobile-phone assisted interventions and the inspections doubled in the treatment areas where open data initiatives are minimal. And indeed, these the health inspectors were required to take pictures initiatives are being widely adopted around the world: with the staff of the inspected facilities to document PSGA has been adopted in over 20 states in India and their visits (Callen et al 2015). Similarly, an impact in the Khyber Pakhtunkhwa province in Pakistan; evaluation of the citizen feedback monitoring the nutrition program in India aims to provide program (CFMP) in Punjab, Pakistan showed that smartphones to more than 100,000 community citizens who recalled being contacted by text message health workers; smartphones are being deployed for or robocall perceived the quality of service delivery monitoring of the construction of shelters in India; more positively. 20 And most intriguingly, research D and a citizen feedback mechanism via SMS is being from a different part of the developing world shows THEME implemented in Albania, Brazil, and Myanmar. that proactive, scripted contact by government – similar to CFMP – can also induce individuals and However, the limitations of these experiences communities to change behaviors and mobilize are also instructive when governments public interest. In an RCT led by Tufts University consider introducing similar initiatives. The researchers in Niger (Aker and Ksoll 2015), reading Right-to-Services legislation can generate a powerful and math scores of an adult education program run by momentum for change, but it can only change non-governmental organizations (NGOs) in remote behavior if followed by strong implementation rural areas improved substantially after inputs were arrangements. The citizen feedback mechanism is monitored through weekly calls to village chiefs, only as good as the quality of the underlying feedback: students and teachers. The remoter the area, the beneficiaries may not understand quality or may be stronger were the results. Feedback loops between colluding. If a large proportion of the beneficiaries is beneficiaries and authorities can thus have measurable illiterate, the inexpensive SMS will be less effective. impact on service delivery outcomes. Automated or agent calls could be a solution, but they are more expensive. Similarly, for the monitoring of service providers by smartphones, not everything can be easily measured – delivery of basic education, for 108 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 10 A New Law Leads to Service Delivery Reforms: The Public Services Guarantee Act in Madhya Pradesh Overview D I n Madhya Pradesh state, India, citizens have long CASE STUDY 10 struggled to access government-provided services. Low access to information and long bureaucratic processes MADHYA PRADESH, INDIA created opportunities for public officials to demand bribes and intermediaries to take advantage of citizens, particularly POPULATION (March 2018 est.)1 the poor and less educated. In 2010, the state government 1.316 billion (India) attempted to shift the balance of power by passing a new law: the Public Services Guarantee Act. The act gave citizens the 79.936 million (Madhya Pradesh) legal right to public services, and provided for sanctions against GDP PER CAPITA (current US$, 2018 est.)2 officials who did not comply with the required procedures and 1,976.26 (India) deadlines. To implement the act, the government set up a new 1,371.49 (Madhya Predesh) agency to oversee public services and took steps to simplify INCOME GROUP3 service delivery, including by setting up “one-stop shops,” where citizens could apply for multiple administrative services in one Lower middle income location. By 2018, more than 20 other Indian states had passed GOVERNMENT EFFECTIVENESS4 similar acts. Access to 428 services covered by the act improved, 57.2% but access to many public services remained a difficult and Central Statistics Office, India, 2World Bank (2016), 1 costly process for some citizens. World Bank (2016), 4World Bank (2016) 3 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 109 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Introduction deliver public services that would make processes easier and more efficient for both citizens and the M adhya Pradesh (MP) is a low-income state in government. Finally, citizens and the government India where castes and tribes – historically would be able to utilize the legislation to hold public the most disadvantaged groups in India officials accountable. – are highly prevalent. Before 2010, many of its 72 million citizens had low trust in government agencies and tried to minimize interactions with government Setting up an oversight system officials, who potentially deprived them of helpful government programs or valuable public services. Shortly after passing the act, the MP government created the Department of Public Service Management Following a trend in India to legislate citizens’ rights to coordinate between government agencies and (India had passed a Right to Information Act in implement the new legislation. Importantly, the 2005, and also declared rights to food, education, and government also decided to create a separate office housing, among others), the MP government in 2010 affiliated to the new department that would allow it passed a Public Services Guarantee Act (PSGA). The to work in a more innovative way. The new agency PSGA, which was the first act of its kind in the world, – called the State Agency for Public Services – was guaranteed that citizens would receive specified established as a “society,” a special structure that gave public services within certain timeframes. It initially it more flexibility in how it used its resources. covered 26 services, and allowed further services to be added over time. The PSGA set a maximum number The first services covered by the act came from a range of days within which a government official had to of government departments, including the state’s either provide a service or reject an application for that General Administration Department (income and service and provide a written reason for doing so. If domicile certificates), the Social Justice Department the deadline was not met, or the application wrongly (pensions), the Food, Civil Supplies and Consumer rejected, the PSGA gave citizens the right to appeal. Protection Department (ration cards), and the Through the appeals process, the official responsible Home Department (drivers’ licenses). The deadline could be fined for not providing the service in a timely to approve or reject applications ranged from three manner or for wrongly rejecting an application. days for issuing an income certificate to 60 days for approval of a pension service (Public Affairs Centre Passing the act was an important first step toward 2016). improving service delivery, but the government faced many challenges in ensuring that the new To create awareness about the PSGA, the new D legislation would be enacted in an effective way. The department took out newspaper advertisements, CASE STUDY 10 government had to simplify unwieldy bureaucratic erected hoardings, visited schools, and made radio and processes that resulted in delays and repeat visits to TV announcements. All government offices where government offices and created opportunities for rent citizens applied for services displayed information seeking. It also had to spread the reach of the state regarding the PSGA and the timeframes within geographically; at the time, some people in rural which services had to be provided (Murilidharan areas had to travel several days to reach government 2015). offices. Finally, it had to incentivize civil servants to provide high-quality, timely service, and hold those Public officials received training on the PSGA and accountable who did not. were informed of the new time limits to provide services. However, services continued to be provided through existing manual processes, and few efforts Response were made to make the process faster or easier to navigate. As a result, meeting the specified time F irst, the MP government had to decide who deadlines proved to be a challenge. would be in charge of making the PSGA work. Then, with an oversight body in place, After a survey revealed that about half of the public officials could set up new mechanisms to applicants were still not receiving receipts and, in 110 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE many cases, there was not sufficient data to verify the application. The system automatically forwarded if services were being delivered on time or not, the the application to the appropriate government government decided to replace the manual verification department for action, where an official would assess system with a computerized one. Public officials were the case and either accept or reject the application. trained on the new system, which allowed them to The applicant could choose to receive an SMS electronically register applications and issue computer notification of the decision or follow up in person at generated receipts. The state agency of public services the LSK (Murilidharan 2015). hired a full-time district manager in each district to oversee the roll-out and train officials to use the The creation of the LSKs eliminated the need to visit new system. The electronic system was a significant multiple government offices to apply for government improvement, but still did not solve old problems: services. Instead, citizens could visit their local many citizens still did not receive receipts, and most LSK and the operator could submit the required still had to hire middlemen to help them fill in forms documentation to the various offices electronically. and obtain documentation to access services (World The LSKs also reduced paperwork because, for the Bank 2014c). first time, all the documentation could be submitted electronically. Creating one-stop shops To ensure the sustainability of the privately-operated LSKs, the government created a “viability gap To make the application process easier, the fund” to help LSKs in less profitable districts stay Department of Public Service Management decided in business. The LSK operator collected a small fee to set up “people service centers” (known as Lok Sewa for every application (in addition to the fee charged Kendras, or LSKs) where citizens could apply for a by the department providing the service), and about range of services in one location. Staff at the LSKs 15% of that fee went to the viability gap fund. If would accept applications for a range of government an LSK received fewer than 2,000 applications in a services, submit documents electronically to the month, equating to 50,000 rupees in revenue (about appropriate offices, and collect a small fee for doing US$785), the state topped up their income to that so. The government wanted to open an LSK in each amount using the viability gap fund. of the more than 300 blocks throughout the state (administratively, MP is divided into 51 districts, The MP government quickly implemented LSKs which are in turn divided into blocks). across the state. By 2016, 336 LSKs had been established, including at least one in each of the D The LSKs were established as public-private state’s 313 blocks (World Bank 2015c). partnerships, and the government held open tender CASE STUDY 10 processes to select private operators for each of the more than 300 LSKs. The private partner was usually Improving procedures and expanding a local entrepreneur, and the government provided impact the space, furniture, and software for the operator to run the LSK. The operators paid for the computers In 2015, the World Bank launched a project with and the day-to-day expenses to run the facility, such the MP government to simplify procedures, make as electricity (Murilidharan 2015). access to public services more inclusive, and increase accountability. The project aimed to increase the At the LSK, the operator collected the citizen’s number of services on offer through the LSKs and documentation, scanned it, and uploaded it also to increase the availability of services in the using the government-provided software. Using hardest to reach regions. Through the project, the checklists, the operator could immediately confirm MP government wanted to give citizens the option to if all the necessary documentation required for that apply for government services through the method of particular service had been received or not. If the their choice: by phone, online, or through LSKs. The application was complete, the operator issued a MP government also wanted to simplify application computer-generated receipt indicating the deadline processes by removing the need for unnecessary by which the assigned official had to accept or reject certificates it required to access certain services. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 111 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Supported by the project, the government expanded Holding public officials accountable the LSK network by incorporating other “kiosks” through which citizens could interact with the state As stipulated by the PSGA, a designated public and national governments. As of 2016, there were servant was required to either provide the service 6,500 “Citizen Service Centres” in MP (which or deny it with a written explanation within the provided access to national government and some designated time period (ranging from 3 to 60 days private sector services) and around 3,200 “MP depending on the service). If they failed to do so, Online” kiosks. Incorporating those kiosks into the applicant could lodge an appeal, usually with a the LSK system created an opportunity to provide mid-level official who had to decide on the appeal services covered by the PSGA at many more within a stipulated time period. The decision of that individual locations throughout the state (World official could be further appealed to a higher-level Bank 2015c). official such as a district collector or a divisional commissioner. The second appeal officer could fine By 2017, the MP government had made over 80 the designated public official between 500 and 5,000 services available online, allowing citizens to apply Rupees (about US$8 to US$80) if they felt the official for those services at 36,000 MP Online kiosks had failed to provide the service without “sufficient or spread across the state, according to Vikram Menon, reasonable cause” (Robinson 2012). senior public specialist at the World Bank. Next, the government made those services available at In practice, however, penalization was rare. The the Citizen Service Centres, further increasing the government reported that as of November 2012, two number of kiosks at the village level, and covering years after the act had been passed, 137 officials had more than 30,000 additional locations in total. been forced to pay fines for delays in service delivery The government also developed a mobile phone (Department of Public Relations of Madhya Pradesh application as an additional channel for service 2012). However, researchers reported that details delivery. on those fines proved difficult to obtain (Robinson 2012). The MP government began creating a digital database of citizen data that would reduce the need In a 2016 World Bank-commissioned survey, only to collect multiple documents every single time about 2% of those surveyed reported filing an appeal, they applied for a service. Once implemented, if a even though about three-quarters of users reported citizen had applied for a service in the past, when not receiving services within the stipulated timeframe. he/she made a new application or applied to renew a The authors of the survey report surmised that certificate, the database could provide officials with citizens lacked awareness of their right to appeal, or D the documents the citizen had previously submitted that they perceived the appeals process itself as being CASE STUDY 10 to the government. The reform had the potential to too cumbersome or costly (Public Affairs Centre generate time and cost savings for citizens, as well as 2016). Ana Bellver, senior public sector specialist at reduce waste and corruption. the World Bank, said that even if citizens did not file appeals in practice, the possibility of a citizen Making the digital repository effective, however, filing an appeal was enough to drive improvements will require the government to make procedural in performance. “The fact that public officials know changes. It could also result in reduced income for they are being monitored provides incentives for LSKs and government departments. For example, compliance,” Bellver said. as of 2018, the government still requires citizens to submit original caste certificates every year, and original residence certificates every three to five years. Fees to obtain those certificates make up a large proportion of revenue from government services (Murilidharan 2015). 112 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Reflections awareness was lower outside of the capital city. In Bhopal, the capital, 39% of users were aware of A fter first being introduced in MP in 2010, the act, while in Jabalpur, MP’s third largest city, the PSGA was rapidly scaled up within MP that figure was less than 10%. However, after that as well as being replicated by other states study was conducted, the government “launched around the country. Twenty-six services were covered a process to enhance public awareness through a by the PSGA when the MP government first passed focused information education and communication the act, all of which had to be applied for at specific campaign,” according to Menon. No new data has government departments. By 2018, the PSGA covered become available to indicate whether the campaign over 428 services, most of which could be applied for has improved public awareness. at LSKs. The government had also introduced online applications for 200 of those services. In addition, In theory, the PSGA should have reduced more than 20 other Indian states had followed MP’s opportunities for corruption and the use of middlemen lead in implementing PSGAs. in the application process. Provided applicants submitted the correct documentation, and followed After passing the PSGA, the MP government initiated the appeal process if there was an undue delay or several interventions to improve the accessibility of denial, there would be no need for a middleman public services, for example by introducing LSKs or bribes to ensure applications were received and and later by allowing online applications for a range processed on time. However, there was no evidence of services. One view was that the “shock value available that suggested the PSGA had reduced and high-profile nature” of the PSGA might have corruption or the use of middlemen in MP. In fact, stimulated the government to take more of an interest 92.5% of citizens surveyed in MP reported using a in shifting the status quo of service delivery. middleman in the application process. Data from the survey in MP and three other states that implemented Others noted that establishing a separate public PSGAs (Delhi, Karnataka, and Bihar) showed that services agency was an innovative way to approach the for every 1,000 rupees (about US$16) citizens paid problem, considering the difficulties of changing the to government officials, the chance of timely service status quo in existing government departments. “It is delivery doubled. As a result, the poor were much less difficult to change things from within,” said Menon. likely to receive public services in a timely manner “Madhya Pradesh has shown that what you need is than wealthier citizens. a focused administrative mechanism that supports implementation of the PSGA.” Still, citizens that used the LSKs, other kiosks, D and the online systems benefited from cost and The PSGA also introduced more transparency to the time savings. The reforms made it easier to apply CASE STUDY 10 application process for public services. Transactions for government-provided services and reduced the were recorded digitally, and service providers were need to make repeat visits to various government required to issue receipts to applicants. Further, in departments during the application process. Online cases where applications were rejected, the designated applications and SMS alerts also saved citizens’ time. official had to provide a written reason. The extent While the government has taken important steps to of increased transparency in practice did not meet simplify procedures for all 428 services covered by expectations, however. Only 35% of surveyed the act, further reforms of the complex bureaucratic applicants in MP received a receipt, and officials process could potentially further enhance service rarely provided a reason for rejecting an application. access for citizens. In some cases, officials just wrote “not eligible” instead of providing a valid reason why the applicant was not eligible. Awareness of the act was low, at least in the first five years after it was passed. A 2016 World Bank- commissioned survey found that less than one-third of users in MP were aware of the PSGA, and that IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 113 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Success Drivers Madhya Pradesh’s implementation of a public services guarantee act (PSGA) reflects all five of the five key dimensions for successful public sector innovation. Political leadership from the Madhya Pradesh government to create India’s first PSGA has led to many other states across the country also passing their own laws to guarantee citizens the right to public services. Being the first government to pass a PSGA meant that Madhya Pradesh (MP) had to experiment with different ways in order to deliver on what the law promised. Sustained political leadership over a number of years led to the government incrementally making the process of accessing public services easier and more efficient. Institutional capacity was key to the successful delivery of the promised services. As the implementation began, it quickly became clear that the MP government did not have sufficient capacity to adequately provide the public services the PSGA promised. To address this capacity gap, the first institutional reform was to create the State Agency for Public Services, which coordinated between government agencies and oversaw the implementation of the PSGA. To better reach its citizens, the government created more than 300 one-stop shops, which were formed as public- private partnerships with local entrepreneurs. Over time, it also made public services available online and through a network of thousands of kiosks throughout the state. Creating incentives for public servants to deliver services within an agreed-upon timeframe was essential to ensure adherence to the PSGA. Citizens could lodge appeals if public officials failed to deliver public services on time, and the law stipulated fines for officials for not meeting deadlines. While such appeals were rare, just knowing that there was a monitoring system in place drove public officials to improve the quality and timeliness of service delivery. Greater transparency about public services fostered citizen access. Information on the act, the services it covered, the costs of each service, as well as the expected timeframes within which each service would be provided, was posted on the walls of government offices and the one-stop shops. However, despite such actions, public awareness of the PSGA remains fairly low and further efforts are required to broaden the public’s use of the services available. New technology made it easier for citizens to access public services and easier for government officials D to deliver public services faster. The government developed new software for one-stop-shops to use to facilitate interactions between citizens and the state. This new system issued computer-generated CASE STUDY 10 receipts and automatically forwarded documentation to the relevant government department. Over time, the government adapted to new technology by increasing the number of services that could be applied for online, and launching a mobile application for smartphones. 114 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 11 At Your Service: Improving Access to Information in Uruguay Through a Government-NGO Partnership Overview I n Uruguay, an innovative partnership between a civil society organization and the Ministry of Public Health has shown how governments can collaborate with NGOs to improve access to information – and URUGUAY potentially health outcomes – for citizens. Every year, Uruguayans get to choose a healthcare plan from a selection of public, semi-private, and private POPULATION (July 2017 est.)1 health providers. After launching an easy-to-use website in February 2015 3.360 million that allowed citizens to compare data on the providers, such as average wait GDP PER CAPITA (current US$)2 times to see a doctor, tens of thousands of Uruguayan citizens have been able to make more informed decisions about which healthcare provider to choose. 15,220.60 INCOME GROUP3 High income Introduction GOVERNMENT EFFECTIVENESS4 D 73.1% E very year, healthcare providers in Uruguay engage in widespread CASE STUDY 11 marketing campaigns and launch special offers to entice Uruguayans to switch healthcare plans. Options include public providers, private providers, and semi-private providers, which receive government funding partly based on the number of people they have signed on to their plans. Individuals sifting through the various marketing brochures faced a near- impossible task in figuring out which plan offered the best value-for-money given their specific circumstances. “Citizens were essentially navigating in the dark,” said Fabrizio Scrollini, director of the Latin America Open Data Initiative and co-founder of Datos Abiertos, Transparencia y Acceso a la Información (DATA Uruguay), a volunteer-run civil society organization. “You wouldn’t know how many doctors a provider had, how much they charged you, or if the provider complied with national targets.” Up until 2018, citizens could switch plans during a month-long enrolment period in February. For the 2014 enrolment period, DATA Uruguay decided it wanted to use publicly available information to help citizens make better CIA World Factbook, 2World Bank (2016), 1 decisions about their healthcare plans. The NGO partnered with Portal 180, World Bank (2016), 4World Bank (2016) 3 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 115 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE an online media platform, to publish Ministry of Collaborating was not easy, however. There was no Public Health (MSP, Ministerio de Salud Publica) precedent in Uruguay for a government ministry data on the various providers. The ministry’s data to partner with an NGO for such an initiative, and had been available for several years, but it was both the MSP and DATA Uruguay were cautious published online in difficult-to-read Microsoft Excel about working together. With external funding from spreadsheets. Few people downloaded the data, and the Latin American Open Data Initiative, the two even fewer could understand it. partners set about overcoming those challenges to make the envisaged open data platform a reality. DATA Uruguay’s initial experiment was not as successful as it had hoped. The group misinterpreted some of the data, and other data they collected from Forming a partnership the MSP website turned out to be inaccurate. Several thousand people visited the project website, which The partnership approach was new for the Uruguayan was far more than had downloaded the ministry’s data government. Ministries were accustomed to hiring in previous years, but the site failed to significantly contractors to implement certain initiatives, but improve individuals’ ability to choose the best working together on an equal footing with an outside healthcare plan for their particular circumstances organization was a new concept. The partnership (Scrollini 2017). relied on building trust between civil servants in the ministry and volunteers at DATA Uruguay. Still, the initiative did succeed in creating Uruguay’s The two counterparts developed a Memorandum of first digital platform to compare healthcare providers, Understanding that outlined their commitment to and the website attracted the attention of citizens, equal input in designing and building the system. the providers, and the MSP. Officials at the MSP had wanted to create a similar kind of website, but Developing close working relationships and shared the ministry did not have the in-house expertise goals on both sides was critical. According to to design a suitable platform, and procuring an Scrollini, concerns about the impact of open data, as outside organization to do it would be complex and well as a lack of interest in the project, made some potentially expensive. Further, ministry officials officials within the ministry reluctant to collaborate had worried that making data more accessible could with DATA Uruguay. On the other hand, several have unintended consequences; thousands of people civil servants within the MSP were big supporters and switching providers could affect the stability of the actively worked with DATA Uruguay’s volunteers to entire healthcare system. make the project a success. Strong support from the Agencia de Gobierno Electrónico y Sociedad de la D Around the same time, DATA Uruguay began Información  y del Conocimiento (AGESIC), the CASE STUDY 11 working with the Open Government Partnership Uruguayan government’s agency for information (OGP), a global initiative that promoted multi- technology, e-governance, and open data, also helped stakeholder collaboration to disclose government data drive the initiative forward. AGESIC coordinated and empower citizens. The OGP platform provided a Uruguay’s involvement with the OGP and helped space for the MSP to begin discussions with DATA ministry officials understand the government’s Uruguay on how they could work together to achieve commitments to improving data transparency and shared goals. accessibility. Through discussions, the MSP and DATA Uruguay Response overcame different ways of thinking, aligned objectives, and developed a shared understanding of D uring the discussions, the MSP and DATA what the collaboration hoped to achieve. The most Uruguay decided to form a partnership to contentious discussions surrounded what data, and move the initiative forward. Both would how much data, to make available. From the outset, contribute time and resources to put together a DATA Uruguay encouraged the MSP to collect and new and improved website for the next enrolment publish more data than it had previously. Scrollini period, which was set to take place in February 2015. said the NGO initially wanted to run surveys and 116 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE focus groups to gather citizens’ views on what data provider that did not comply. Private providers, was most important to them, but with the February however, were less willing to submit data that the deadline to launch the platform looming, they decided MSP and DATA Uruguay requested. there was not enough time for such research. Instead, they made decisions on what data to include based on DATA Uruguay’s team developed the application to what they thought would be most helpful for citizens import and process data, and ran tests to ensure the and what data citizens had requested from the MSP data was compatible with the application. Syncing the in previous years. Examples included waiting times at data and the application was a time-consuming and clinics, drug prices, and the availability of specialists. technically difficult process, and both the MSP and DATA Uruguay had to constantly refine the system, The group decided it was best to publish all the data right up until the website launch in February 2015. in an easy to digest format that clearly showed how each provider compared to the others on individual After a few frenetic final weeks putting the website variables. A lot of discussion went into deciding on together, the MSP-DATA Uruguay team successfully a simple platform on the website’s homepage that launched the website, which they named A Tu Servicio would present the data accurately. Scrollini said the (At Your Service), on time. The website’s user-friendly group specifically decided not to create a ranking infographics helped citizens visualize the data and system using the data. Choosing a process to rank the easily compare providers. As more Uruguayans looked providers and how to weigh different variables would at the website and submitted feedback, the team was create unnecessary additional complexity. Those able to further improve the quality of the data. DATA factors, combined with the difficulty of ensuring Uruguay’s team could correct any data errors pointed impartiality in the rankings, meant that “ranking out by website users, and in cases where healthcare providers would have been a disservice to the system,” providers had not submitted data, citizens could put Scrollini said. pressure on those providers to update the information they sent to the MSP. When citizens questioned the data on the website, the MSP conducted formal audits Developing a platform to ascertain if the data provided was indeed accurate. After agreeing on what data to include and how to present it, the MSP-DATA Uruguay team began Stimulating debate collecting information and developing a website to publish it on. Any providers that received government DATA Uruguay launched a marketing campaign to D funding (including all semi-private providers) were inform citizens about A Tu Servicio as soon as the site legally mandated to provide data on their operations launched. The NGO concentrated its efforts on social CASE STUDY 11 to the MSP. But the providers did not submit data media, for example by purchasing advertisements in a standardized way, and ministry staff had to on Facebook. The MSP also placed advertisements manually go through the data sets to find what they in traditional media and held press conferences to were looking for. Further, the ministry did not have promote the site. sophisticated information systems to manage its data. Most data was manually entered into spreadsheets The website received more than 32,000 unique visitors and then published on various pages of the ministry’s in 2015. Journalists also took notice, and began website. Turning that data into a standardized format drawing attention to citizens’ concerns that were that allowed for easy comparison between providers evident in the data, such as long wait times at public was a difficult task. hospitals. The data helped stimulate public debate about the quality of health services across the country. As ministry staff began collecting and analyzing the Later that year, the debate spread to Uruguay’s data, the team realized there were inconsistencies in parliament, and politicians began quoting data from the data provided. The MSP had to follow up with the A Tu Servicio platform during parliamentary providers and push them to provide more accurate discussions on healthcare policy (Sangokoya et al and more timely data. Because of its legal backing, 2016). the ministry was able to sanction any publicly funded IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 117 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Reflections the innovative way DATA Uruguay and the MSP had collaborated to make data available to the public in a A fter A Tu Servicio ’s first month in operation, useful way. In 2015, the OGP awarded A Tu Servicio the MSP and DATA Uruguay kept working first prize in its annual open government award on the platform to improve data accuracy ceremony. and ensure it was presented in an easy-to-use format. The number of users increased the following As of 2018, the initiative looks to be sustainable. The year. In 2016, A Tu Servicio had more than 50,000 MSP has funded the website through its own budget, unique visitors, which equated to about 4% of the and Scrollini estimated the total cost of the project population eligible to change providers. It was to be less than US$20,000 per year. A Tu Servicio unclear, however, how many of those visitors were continued to receive government support during an Uruguayan citizens in the process of choosing a administration change in 2015, and the MSP has new provider, or if the site helped them choose a committed to supporting the platform through at better healthcare plan. In 2016, about 4% of eligible least 2020. Uruguayans changed healthcare provider during the February enrolment period, a similar amount to prior Uruguay’s A Tu Servicio project has important lessons years (Ministerio De Salud Publica 2016). In 2017, for other countries interested in open data initiatives. unique website visitors dropped to about 36,500. First, it showed how simply making data available to Daniel Carranza, co-founder of DATA Uruguay, the public was not sufficient to have a real impact. The said that due to budget constraints the NGO had MSP had made some data on healthcare providers to cut the advertising budget for the site by 50% in available on its website for years, but it was not until 2017, which likely contributed to the site receiving the information was published in a more easy-to- fewer visitors than it had the previous year. Scrollini understand format that citizens began using the data. said that DATA Uruguay hoped to conduct a user survey in 2018 and do more in-depth research on the Second, it showed the benefits of government system to better determine the initiative’s impact. working in partnership with civil society. It was a political risk for the MSP to collaborate with DATA In 2018, the MSP began implementing a new system Uruguay on an equal footing, instead of a more for switching healthcare providers, and DATA traditional arrangement where the government would Uruguay was planning how to adapt A Tu Servicio have more control over the process. The decision paid to the changes. “The February transfer window was off, however. DATA Uruguay pushed the MSP to suspended until a new online system for transfers is publish more data than it might otherwise have implemented within the year,” said Carranza. “The been comfortable doing, which potentially provided D new system will eliminate the need for a transfer citizens with more relevant and useful information. CASE STUDY 11 window because it will function all the time. As The NGO was also more open to new ways of a result, we will probably change A Tu Servicio to thinking, such as publicizing the initiative through a year-round information service, hopefully with social media, which may have resulted in a greater more updates.” impact than if the MSP had embarked on the project alone. Scrollini pointed to people having more access to data and being able to make better choices, and the An opportune platform to build the partnership, and government having a better understanding of its own the partners together defining shared objectives were data and where healthcare dollars were being spent, two key elements to the success of A Tu Servicio. as early indicators of the initiative’s success. He was cautious about making any links to health outcomes, Uruguay’s engagement with the OGP created an however. “Open data is not a miracle tool, and health opportunity for the government to collaborate outcomes are not easy to track,” Scrollini said. “But with civil society in new ways. The government’s [A Tu Servicio] can help correct inefficiencies in the commitment to the OGP ensured sustained healthcare system.” interaction with civil society actors like DATA Uruguay. Further, the existence of AGESIC (the The initiative received international recognition for government agency that led the OGP engagement) 118 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE provided institutional support for collaboration. The Uruguay collaborated with a Mexican NGO to A Tu Servicio initiative itself did not require high-level develop another healthcare data website that aimed political support. Instead, senior officials allowed to improve service delivery in the Mexican state of middle managers within the MSP to lead the process. Sonora. Scrollini said DATA Uruguay had also engaged with potential collaborators in Chile and Developing shared objectives was critical to success. Colombia to explore if similar websites to A Tu Though the MSP did not support DATA Uruguay’s Servicio could work in those countries. As of 2018, the initial intervention in 2014, it did see that the NGO Latin America Open Data Initiative was supporting had similar goals to the ministry. DATA Uruguay also the secretary of health in Bogota, Colombia’s capital, came to understand the intentions of the MSP, and to replicate A Tu Servicio there. was able to nudge ministry officials toward embracing open data. Both partners wanted to increase access Other government ministries in Uruguay also learned to information and improve the national healthcare from the initiative. AGESIC used the example of system. Despite not having a legal framework in A Tu Servicio to encourage other ministries and place for the partnership, shared objectives and trust agencies to engage in open data initiatives. In 2017, between the partners helped hold the partnership in DATA Uruguay began discussing with the Council place through the challenges they confronted. Neither for Secondary Education about the potential for an partner could have implemented the initiative alone. A Tu Servicio-style website for the education sector. The government needed civil society engagement The new collaborations within Uruguay and in other to ensure relevance, and the NGO needed the parts of Latin America were early indications of government’s institutional, technical, and financial the potential to replicate the A Tu Servicio model in resources. different sectors and in different countries around the world. Knowledge of the A Tu Servicio initiative quickly spread to new sectors and other countries. DATA Success Drivers Uruguay’s experience in making healthcare data more accessible to and useful for citizens reflects three of the five key dimensions for successful public sector innovation. D Transparency in healthcare performance data enabled citizens to make better choices about their healthcare. While the Ministry of Public Health (MSP) had collected data for several years, it was CASE STUDY 11 published in a format that made it difficult for citizens to access and understand. By partnering with DATA Uruguay, an NGO that advocated open data, the MSP was able to collect more data than before and present it in an open and transparent way for Uruguayan citizens. More eyes on the data made it easier to identify inaccuracies, inducing healthcare providers to give accurate and complete data. With more-accurate data available in an accessible format, citizens could make informed choices regarding their health plans. Incentives also changed for healthcare companies as a result of increased transparency. Wide and easy availability of their performance information pushed them to improve their performance to compete for new customers. Technology, particularly the simple web-based platform co-created by DATA Uruguay and the MSP, provided the mechanism to share the MSP’s data with the public. Additional functions, such as a feedback form for citizens to report inaccurate or incomplete data, increased the usefulness of the website for both the public and the government. Partnering with the Uruguayan government’s agency for information technology, e-governance, and open data provided additional support for the technology platform. DATA Uruguay also made use of new technology platforms, such as social media, to market the new website to Uruguayans. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 119 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 12 Engaging Citizens to Improve Service Delivery: The Citizen Feedback Monitoring Program in Pakistan Overview D CASE STUDY 12 E ngaging citizens to get critical feedback on public services can help governments improve service delivery and reduce petty corruption. But even on a small scale, many governments PUNJAB, PAKISTAN struggle to collect objective feedback from their citizens, analyze it, and act on it. In Punjab, a Pakistani province of about 110 million POPULATION (2017 est.)1 people, the government has scaled up a small pilot in one of its 207 million (Pakistan) districts to create a wide-ranging monitoring program that leverages the ubiquity of cellphones to proactively solicit feedback from users of 110 million (Punjab) public services. The Punjab Information Technology Board (PITB), GDP PER CAPITA (current US$)2 the government’s technology agency, turns that information into 1,443.60 (Pakistan) easily digestible quantitative and qualitative data, and provides that INCOME GROUP3 information to senior officials who can hold frontline civil servants Lower middle income accountable for their performance.21 GOVERNMENT EFFECTIVENESS4 28.8% Census of Pakistan, 2World Bank (2016), 1 World Bank (2016), 4World Bank (2016) 3 120 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Introduction Response “A B government’s greatest challenges are hatti’s initial intervention required little more delivering on electoral promises and than a phone and a list of phone numbers, delivering public services,” said Tauqir but implementing a systematic province-wide Shah, the former chief of staff to Shehbaz Sharif, the feedback program would require more capacity and chief minister of Punjab, Pakistan’s largest province. investment. In Jhang, Bhatti was not able to call as “The chief minister wanted objective feedback on many people as he wanted due to the time the calls how his government was doing in that regard.” Under took. As the district coordination officer (DCO), he Sharif, Punjab has implemented an innovative citizen was responsible for the entire district administration, feedback program to monitor the performance of including issuing licenses and permits, and delivering civil servants, address petty corruption, and improve services such as health and education. To contact more public services. citizens, the CFMP had to begin using technology in innovative ways. One approach governments have traditionally taken to get feedback from citizens is to set up call centers The initiative would also require strong political will that take complaints about corruption or service to ensure follow-through from DCOs, as well as to delivery issues. But such “hotlines” have often been counter backlash from civil servants who had taken prone to abuse, and have created large administrative advantage of the previous lack of oversight from the burdens in the investigation of complaints. Further, provincial government. individual citizens are unlikely to report minor issues because of the time and travel burden imposed on them in the required due process investigations. Piloting the program Because those complaints usually go unreported, higher-level officials often have no actionable In 2010, Sharif requested Bhatti, who had left evidence about persistent service delivery problems or the government in 2008, to take up a short-term petty corruption issues. position in the chief minister’s office to start a pilot at the provincial level. Bhatti presented the program In 2008, Sharif read in a newspaper about a new to DCOs across the province, and six signed on for initiative a government official had begun in Jhang, the pilot. The DCOs asked civil servants to begin one of Punjab’s 36 districts, to tackle petty corruption. collecting phone numbers at the point of service That official, Zubair Bhatti, had begun asking delivery, and then getting staff in the DCO office D frontline staff to collect phone numbers from citizens to call citizens back and inquire about the service that came into their offices so that Bhatti could received, based on training provided by Bhatti. CASE STUDY 12 personally call the citizens to ask about the quality of service they received. Based on that feedback, Bhatti As well as looking for cases of recurring negative could confront civil servants that citizens consistently feedback, the DCOs also looked for trends of complained about. Sharif invited Bhatti to Lahore, invalid or incorrect phone numbers; such a pattern Punjab’s capital, to discuss how to scale-up the idea could suggest an official was listing false numbers to province-wide. avoid getting negative feedback. When a trend was identified, the DCOs confronted officials receiving Rather than building criminal cases against officials persistent complaints and counseled them to change suspected of corruption, the citizen feedback their behavior. In several cases, citizens reported cases monitoring program (CFMP) aimed to identify of petty corruption in property registration branches, patterns of persistent negative feedback and provide and after investigations, some officials working in that information to officials who had the power those branches received disciplinary action. to change management practices and to transfer, suspend, or reprimand poor performers. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 121 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Scaling up data collection The phone call and SMS approaches each had distinct advantages and disadvantages. For example, calls Despite some early success with the pilot, the CFMP allowed the program to solicit responses from people could not scale up adequately using the same model. who couldn’t read, as illiteracy was widespread. Calls DCOs and their staff did not have enough time also enabled more structured questions. On the other in their workday to constantly be calling citizens, hand, text messages were easier and cheaper to send, gauging feedback, and identifying trends. The Punjab and gave respondents more time to reflect and provide government wanted to find a way to use technology to a considered response. Eventually, the PITB decided reduce the time burden on those staff. on a hybrid approach whereby citizens would receive a robocall asking them to express “satisfaction” or After a stint in the private sector and at the Asia “dissatisfaction” with the service in question, and Foundation, Bhatti moved to a position in the World then to select the reason for their dissatisfaction from Bank’s Pakistan office in 2011. In his new capacity, he a range of categories. A follow-up text message then continued to support the CFMP project, albeit from gave citizens the opportunity to go into further detail the World Bank side. He applied to the World Bank’s on the problems they encountered. Having citizens Innovation Fund for a grant to boost the CFMP pilot. self-categorize the reason for their dissatisfaction With US$100,000 from the fund, Bhatti hired some eliminated the need for the call center, significantly technologically-minded young people to work on the reducing costs. The PITB reported monthly operating CFMP. They worked with the PITB to develop a costs for the program of 350,000 Pakistani rupees program that could automatically send SMS messages in 2018 (about US$3,000), compared to 1,785,000 to collect feedback from citizens. rupees (more than US$15,000) when using the call center. Next, the PITB sought to procure a call center to operate the feedback program. The procurement The PITB chose which services to use the CFMP process quickly ran into problems, however. “The for, based on the ease of soliciting useful feedback. government was very comfortable contracting for For example, it was easy to get constructive feedback civil works, but not anything non-standard like a on simple processes like birth certificate applications, call center,” said Bhatti. “At the time, we did not but more difficult to get objective feedback on more understand exactly what we wanted, and the [company complicated services, such as police investigations, that won the contract] did not understand either.” where the outcome could be affected by circumstances Eventually, the call center contract broke down, and outside the civil servant’s control. “We monitor the CFMP began relying on the SMS application. basic public services that are mechanical in nature; services where there is not a lot of investigation or D Umar Saif, who became the chairman of the PITB in discretionary interpretation involved,” said Saif. CASE STUDY 12 November 2011, brought new energy and focus to the fledgling program. Under Saif, the PITB brought in a new contractor to create the call center and oversaw Taking action the spread of the CFMP to all 36 districts across the province. The government decided to begin soliciting Analyzing the data and acting on it was critical for feedback through “robocalls,” recorded by the chief the CFMP to be effective. The CFMP team had to minister himself. The new approach created a direct boil down the vast array of data into a format that link between the citizens providing feedback and the the chief minister and other senior officials could provincial government, and encouraged ownership understand and use. To do so, the PITB developed of the initiative from the chief minister. Call center a user-friendly dashboard that clearly showed where workers categorized citizens’ responses and made the problem districts and offices were. “The chief follow-up calls when citizens indicated possible cases minister only needed a graph that could depict what of corruption or requested to speak to a live person. districts were doing well and what areas were not They also recorded positive responses, which the doing so well,” said Shah. PITB often passed on to the chief minister’s office – hearing positive feedback from citizens helped Government departments could access the dashboard maintain political support for the initiative. to monitor the feedback they were getting, and a 122 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE team of staff within the PITB closely monitored the program in place for its 164 offices around Pakistan, incoming feedback and created reports based on the relying on occasional preannounced visits from data. “We generate about 400 reports on a monthly senior staff to check things were running smoothly. basis,” said Saif. “Those reports are sent out and the Usman Bajwa, the head of the directorate, said departments are expected to take action based on he had three main objectives when launching the those reports and provide evidence that they have CFMP in his directorate: “First, we wanted to done so.” proactively engage with citizens. Second, we wanted to improve performance monitoring. And third, we Every month, the chief secretary, the senior most civil wanted to enhance the accountability of field staff.” servant of the province, held a daylong meeting with all 36 DCOs, and the CFMP was always discussed. In November 2015, the directorate began sending “He would always ask them about the initiative,” SMS messages to solicit feedback from every said Shah. “That way they knew it was a serious passport applicant who provided their cellphone program and high on the government’s agenda.” In number. Bajwa said they sent out about 250,000 to the meetings, the chief secretary discussed CFMP 300,000 messages each month, and about 10-12% data with the DCOs and addressed any issues that of people replied with feedback on the application had come up. process. A team in the central office categorized responses, quantified them, and uploaded them to In cases where SMS and robocall data showed a dashboard system through which Bajwa could persistent issues, the government took action. “For monitor offices around the country. The feedback example, if there was persistent negative feedback was integrated with individual staff members’ about the land ministry in the 55th district, it would performance evaluations, and in cases of corruption come to our office and we had the full mandate to allegations, Bajwa implemented a three-strike take corrective action, including removing the official system: if an office was getting consistently high in question,” said Shah. “The CFMP gave [the complaints, he issued them with a warning. A actions taken] a lot of credibility. If a decision came second warning was issued if complaints persisted. from within the administration, people could allege If things did not improve after the second warning, bias, but we were making these decisions based purely Bajwa initiated disciplinary proceedings against the on citizen feedback. Anyone engaged in malfeasance staff in question. He said that, as of 2018, he had stood out like a sore thumb.” taken administrative action against 53 offices. The SMS messages and recorded robocalls provided As well as making efforts to improve staff D strong and irrefutable data that the chief minister’s performance, Bajwa used the CFMP to improve office could use to overcome backlash. In one case, processes within the directorate. He said that CASE STUDY 12 a land registry office headed by a close relative of there were consistent complaints about long queues a powerful Punjabi politician was f lagged after throughout the application process, but particularly persistent reports of petty corruption. The chief for making payments. “In many areas there was minister’s office was able to use call recordings and only one bank branch that was authorized to collect SMS messages from citizens to prove that any move passport fees,” said Bajwa. In response to the citizen to reprimand the official was based on real citizen feedback, Bajwa authorized all bank branches feedback and was not politically motivated. to collect the fees, and soon after set up a mobile payment system that meant citizens could pay passport fees in any location where they could top Replicating the program up credit on their mobile phones. Word about the success Punjab was having with By 2018, such process improvements had led to the CFMP spread quickly around Pakistan and the a much faster and smoother passport application world. In 2015, the head of Pakistan’s Directorate process for Pakistani citizens. Bajwa said the General of Immigration and Passports reached out directorate had cut the processing time for passports to Bhatti to talk about replicating the initiative. At from 3 weeks to 10 business days, and from 7 days the time, the directorate had a very basic monitoring to 5 days for priority applications. The average IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 123 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE time spent in the passport office itself was cut from timeliness of service and help reduce corruption, 290 minutes in 2015 to 70 minutes in 2018. The and more than 90% believed it could improve the improvements were backed up by CFMP data: when government’s image and trust between citizens and the directorate first launched the program, 15% of the state. Some of the citizens that had received responses were categorized as “negative,” whereas in robocalls recorded by the chief minister said they felt 2018 that figure was less than 5%. “delight” at having been approached directly by the government to provide feedback. Those who could recall the call or the text message were also more likely to say the initiative helped reduce corruption Reflections and improve service delivery (Oasis Insights 2016). T he CFMP created what Shah described as a As of 2018, the Punjab government was using “paradigm shift”; for the first time, the Punjab robocalls to seek feedback on 27 different services government began proactively reaching out in all 36 districts across the province. “We are to citizens for feedback. “Suddenly, the citizen has sending out more than 15,000 robocalls every day everything at his fingertips,” he said. With just to a randomized sample of 40% of people who use their phones, citizens began actively participating one of those 27 services and provide a valid telephone in governance by providing real-time information number,” said Saif. Several services had benefited on service delivery. Further, that information went from corrective actions taken, such as improved directly from citizens to senior officials, who had processes or removing problematic officials. The stronger incentives than mid-level officials to cut PITB noted that such actions had been particularly corruption, including political incentives. effective in improving the dispensation of medicines at hospitals, with 84% of contacted users in January While the feedback was used to investigate 2018 reporting they received prescribed medicines for corruption in some cases, similar to a complaints free at public hospitals, compared to 46% in October hotline, the main focus of CFMP was preventative: 2015. The government also introduced biometric frontline service providers knew that their superiors attendance systems at public hospitals where citizen were contacting citizens via SMS and phone calls. If feedback indicated high rates of doctor absenteeism. they provided poor service or requested bribes, they Overall, more than 38,000 corrective actions had could face disciplinary action down the line based on been taken by 2018, based on more than 2 million citizen feedback reports. unique pieces of feedback received from citizens.22 The CFMP empowered government officials to take In addition, the CFMP had been replicated D corrective action. In the past, the government found domestically in Pakistan’s Directorate General of CASE STUDY 12 it difficult to take action against underperforming Immigration and Passports, and internationally or corrupt officials because the officials in question in Albania. As of 2018, the Albanian government could allege the action taken was politically had implemented the CFMP in 5 government motivated. Further, genuine complaints by citizens organizations, including the tax directorate, where it were often withdrawn because of the time it took was using citizen feedback to monitor the performance to make complaints and provide evidence, or more of tax inspectors. The government had contacted often, because the errant official and the citizen over 180,000 citizens, a sizeable number considering reached a compromise outside the process, leaving no Albania’s population of less than 3 million. complainant to provide evidence. With the CFMP, officials did not face the same problem: no one could The initiative could be implemented on any scale, argue against extensive written and recorded feedback depending on the cost of SMS messages and/or from citizens. calls, and how large a segment of the population the government wanted to reach. The passport office sent The CFMP also had political benefits. A 2014 phone messages to 100% of applicants, while the Punjab survey of Punjab citizens who had been contacted government opted for a 40% sample size. Government through the CFMP found that more than 75% of officials said that the program was extremely cost citizens believed the initiative could help improve effective, considering the service improvements it 124 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE resulted in. “We got immense value for money from beginnings show that managers who want to fight the CFMP,” said Shah. “Looking at the impact and petty corruption in their departments could easily scale, the costs were peanuts.” start the program on a small scale. “When the CFMP started it was just me,” said Bhatti. “Any government While the scale of the CFMP in Punjab has become official could start this program tomorrow; you just very large over the course of a decade, its humble need to pick up the phone and call.” Success Drivers Punjab’s experience with the citizen feedback monitoring program reflects all five of the key dimensions for successful public sector innovation. Political leadership was key because the initiative required strong political will to implement it across services and districts in a province of more than 100 million citizens. Shehbaz Sharif, the chief minister of Punjab, championed this initiative because his government’s greatest challenge was delivering on electoral promises by improving public services. The citizen feedback monitoring program (CFMP) provided objective feedback on how his government was doing in that regard. The chief secretary regularly discussed CFMP in his monthly meetings with district coordinating officers (DCOs), which signaled to DCOs that CFMP was high on the government’s agenda. Institutional capacity building took place chiefly through the Punjab Information Technology Board (PITB), the government’s technology agency. Initially, there was a lot of trial and error as the design was iterated and procurement issues were resolved. Eventually, a reform-minded PITB chairman, Umar Saif, oversaw the spread of the CFMP to all 36 districts across the province. Getting incentives right was instrumental to ensuring success of the program. The feedback went directly from citizens to senior officials who had political incentives to cut corruption. In addition, the cost of reporting for the beneficiary was much lower: only a text message with no need to follow up with visits to the courts. Crucially, the main focus of CFMP was preventative rather than investigative: frontline service providers knew that their superiors were contacting citizens via SMS and phone calls. If service providers offered poor service or extorted bribes, they could face disciplinary action D down the line based on citizen feedback reports; this provided an incentive to adjust their behavior ex ante. CASE STUDY 12 Transparency associated with the CFMP empowered government officials to take corrective action. CFMP focused on intra-government transparency. Large volumes of feedback created more credible information, which was shared up and down the government hierarchy. Government departments and districts could access the dashboard to monitor the feedback they were getting. A team of staff within the PITB closely monitored the incoming feedback and issued reports based on the data. Technology, in particular simple tools, as citizens only needed a basic feature phone, was key to the success of the program. When CFMP started in Jhang with one DCO making calls to citizens, he was not able to obtain sufficient feedback, and so the program had to leverage technology to contact more citizens. Later, the CFMP team had to boil down the vast array of data into user- friendly dashboards so that reports, both electronic and paper, could be generated and understood by senior officials for them to take action. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 125 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 13 Using Smartphones to Improve Public Service Delivery in Punjab, Pakistan Overview D CASE STUDY 13 I n Punjab, a 2011 project to improve performance monitoring of public officials that inspected healthcare facilities has led to dozens of reforms across a range of government departments. The project, PUNJAB, PAKISTAN launched by the World Bank’s Pakistan office, used inexpensive smartphones to check that the inspectors were showing up to work POPULATION (2017 est.)1 and an open-source application to improve the quality and speed of 207 million (Pakistan) inspections compared to the old paper-based system. Supported by the World Bank’s Punjab Public Management Reform Program, 110 million (Punjab) the Punjab Information Technology Board (PITB), an innovative GDP PER CAPITA (current US$)2 government institution, has since launched smartphone and tablet- 1,443.60 (Pakistan) based interventions to improve data collection across the province and INCOME GROUP3 help government officials manage staff and programs more efficiently. Lower middle income Punjab’s success shows how governments can use simple applications in many different ways: from tracking disease outbreaks, to monitoring GOVERNMENT EFFECTIVENESS4 public schools, or as a performance management tool for agricultural 28.8% extension staff. Census of Pakistan, 2World Bank (2016), 1 World Bank (2016), 4World Bank (2016) 3 126 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Introduction management problems. With resources from the World Bank Innovation Fund, health inspectors L ike many governments around the world, in Khanewal were issued with smartphones Punjab, Pakistan’s largest province, has long and instructed to use a special application when struggled to manage its staff effectively. As of undertaking inspections of healthcare facilities. 2011, the province had about 100 million inhabitants, and the provincial government had tens of thousands The World Bank team believed that smartphones of employees. Absenteeism was pervasive: doctors could improve the quality of data gathering across sometimes didn’t show up to work in public hospitals, government, including from inspections. With and teachers were often missing from classes in public the smartphones – equipped with cameras, GPS schools. technology, and the simple open source application – inspectors took photos of the healthcare facilities The Punjab government found it difficult to hold and all staff present. The photos were automatically public servants accountable because it did not have a geo-tagged and time-stamped, and the inspectors good mechanism to collect administrative data, and uploaded the images to an application created by the little data it did collect was often unusable or went the World Bank team using Open Data Kit, a unused. Inspection reports on health, education, and free software suite developed by the University of other sectors were frequently inaccurate, sometimes Washington. as a result of corruption, or sometimes because the inspectors too failed to show up for work. Employees Initial results from the experiment were positive. often filled out paper forms incorrectly, and sometimes The technology worked, and district officials received data entry mistakes compromised information faster and more accurate information than they had digitized from paper forms. Even when field staff got from the previous paper-based system. submitted data correctly, it often never saw the light of day. When government officials did analyze the In October 2011, Shehbaz Sharif, the Chief Minister information, it could still take weeks or months to of Punjab, invited the World Bank team to propose publish reports and make decisions. a similar initiative to help with the dengue problem. The team explained how, when equipped with Those problems were on full display in summer 2011, smartphones, municipal workers could take photos of when an outbreak of dengue fever, a disease transmitted the dengue prevention activities they undertook and by mosquito bites, swept across the province. Despite upload the location-tagged images to an application sending thousands of public servants into the streets that would log all activities on a map of the province. D to engage in dengue-prevention activities – such as With that information, they explained, the chief removing tires, buckets, and other water-bearing minister would be able to manage the government’s CASE STUDY 13 containers that could provide a habitat to dengue- response to the pandemic in real time. carrying mosquitoes – the provincial government failed to stop the rapid spread of the disease. Part of the problem was monitoring. The government Responding to a crisis couldn’t track in a timely manner which areas were hardest hit, where municipal workers were focusing Though Sharif responded positively to the idea their energies, or even if staff had completed tasks and the World Bank team quickly put together an assigned to them. application to use, it was too little, too late. By the end of the year, over 21,000 people in Punjab had become infected with dengue. Of those, 350 had died Response (Kugelman and Husain 2018). A t the same time the dengue crisis was The Punjab government was determined to not let unfolding, staff at the World Bank’s Pakistan the 2012 monsoon season be a repeat of 2011. Sharif office were working on a pilot project in hired Dr. Umar Saif, a computer science professor Khanewal, one of Punjab’s 36 districts, to see if at the Lahore University of Management Sciences, smartphones could help address the province’s as chairman of the PITB, and tasked him with IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 127 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE developing a system to monitor prevention activities 70 people. PITB began hiring software developers and identify dengue “hotspots” across the province. and other technical staff, and was quickly transformed into a large team of over 1,000. Crucially, it attracted After the PITB team perfected the dengue monitoring highly capable computer scientists and managers. application and distributed smartphones, provincial staff could take photos of prevention activities, record With the extra resources and capacity, PITB was able sightings of mosquito larvae, and pinpoint the homes to create its own smartphone applications. Although of infected people. Through a dashboard linked to the the free tools available from Open Data Kit were application, the chief minister and other city managers ideal for the pilot intervention, the government could track the government’s response to the disease wanted additional features – icons instead of text in real time on Google Maps, identify at-risk areas, for low-literacy users, for example – that could and help predict localized outbreaks. PITB’s efforts make the applications even more useful for public helped slow the spread of dengue and prevent a officials. PITB used Df ID funding to partner with similar pandemic happening the following year. In Information Technology University (ITU), a Punjab 2012, Lahore, Punjab’s capital, had just 255 reported university founded by Saif in 2013, to develop “Data cases of dengue and no deaths (The Economist 2013). Plug.” This was a specialized platform that civil servants could use to rapidly test and iterate advanced data-gathering applications. Building on success After seeing the success of the dengue application, Improving performance – and the World Bank and the provincial government outcomes wanted to spread smartphone interventions across the public sector. Despite initial concerns that the One initiative the World Bank-financed program technology might not work in rural Pakistan, the targeted was Punjab’s child immunization program, pilot project in Khanewal had shown that health which was supposed to vaccinate all children against inspectors were quick to take up smartphone use preventable diseases such as measles, whooping and that network coverage was sufficiently robust. A cough, and polio, but for years had been plagued by randomized control trial that expanded the project to poor monitoring and management. Vaccines were half of Punjab’s 36 districts showed a large increase readily available, but the government struggled to in attendance at facilities monitored by smartphone- distribute them effectively. equipped inspectors (Callen et al 2014). The 3,750 vaccinators tasked with immunization D A US$50 million World Bank project, the Punjab of newborn babies and children were supposed CASE STUDY 13 Public Management Reform Program, with support to complete paper forms documenting their work also from the United Kingdom’s Department for and submit those forms to supervisors who would International Development (Df ID), provided enter the information into a database for the health resources to expand smartphone initiatives in Punjab. department to analyze. However, the whole process The five-year project, launched in November 2013, – from delivering vaccinations to recording data to targeted five key departments for service delivery: managing the vaccination team – rarely functioned Livestock and Dairy Development, Irrigation, smoothly. Without accurate and timely data, the Agriculture, School Education, and Health. Punjab government did not know how many children PITB, supported by the project, would work with had been vaccinated, which geographical areas had those departments to roll out smartphone-based been covered, or even if their staff had delivered the management systems. vaccines they said they had. Increasing the government’s capacity to deliver IT PITB and the health department launched a solutions was crucial to spreading the idea to new smartphone application for vaccinators in four districts areas of government. At the beginning of 2012, PITB, in June 2014, and rapidly rolled it out province-wide which Sharif had created in 1999 during a prior term by October. After the vaccinators received their as chief minister, was a small IT department of about smartphones (which each cost 12,000 Pakistani 128 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Rupees, or about US$120), the health department virtual polygons representing each neighborhood,” instructed them to use the new application to check- said Saif. “Then we correlated the check-ins of the in when they arrived at “kit-stations,” locations where vaccinators with the polygons. If any of the polygons the program stored vaccination equipment across the didn’t get enough visits from the vaccinators, we province. Vaccinators were also directed to record knew that some kids had missed out on vaccinations the phone number of each child’s parents, and an in that area.” automated system contacted 10% of parents to verify that the child had indeed received the vaccination. The An alert system was set up within the dashboard so health department monitored a dashboard that showed the polygons stayed green when the area was receiving performance rankings of vaccination teams, and enough visits, but flashed red when not enough visits officials followed up with lagging districts. Using the had been recorded within a certain time period. “The data, district managers could identify and reprimand goal for the government became simple: keep all the poor performance. Vaccinators quickly realized that polygons green,” said Saif. their absenteeism would no longer go unnoticed, and attendance reported in the new digital system increased from 36% to over 80% in just four months.23 Expanding and improving Some vaccinators were unhappy with the new By 2017, many more smartphone and tablet-based arrangement, claiming that the cellphones were interventions had been rolled out in Punjab and other too cumbersome to use, and several phones were Pakistani provinces, all stemming from the original mysteriously broken in the first few months. However, 2011 health inspector project in Khanewal. they quickly learned that supervisors were using the system to monitor their performance and hold them Health inspectors monitoring more than 3,000 accountable. “We had a systematic framework in facilities across the province used an updated place so that the data was used by line managers,” said application to check staff attendance, availability Saif. “It became the staple diet for the government to of medicine, and the condition of equipment, and evaluate the performance of these vaccinators.” another application to record the cleanliness and maintenance of hospital facilities. Inspectors took When looking at the data from the first few months photos as evidence of their activities, and the photos of the new system, the project managers found that were linked to a dashboard through which the health while absenteeism had dropped off sharply, the department could track hospitals’ performance. geographic coverage of the vaccination program The same dashboard was also used to monitor the D had barely changed. “The attendance was going inspectors’ performance: the geo-tagged photographs up – the vaccinators were showing up for work and provided evidence of how much work the inspectors CASE STUDY 13 submitting reports through their smartphones. But were doing each day. the geographic coverage remained low at only about 50%,” said Saif. “They would go to places convenient In the education sector, school inspectors armed to them, do the vaccinations and send us the pictures, with tablets collected data on teacher presence, but the far-off places were ignored. Another part of student attendance, and availability of safe drinking the problem was that Pakistan had not done a census water, electricity, and toilets. In 2015, PITB and the in a long time, and there were communities that education department expanded the use of tablets had popped up here and there but were not on the further by launching a student assessment application. government’s maps.” During their monthly visits to each school, inspectors could use the application to spot-test students on PITB partnered with faculty at ITU to find a way to English, Mathematics, and Urdu. The tests provided ensure all population centers in Punjab received equal an indication of learning outcomes without the cost attention from the vaccination team. Using satellite and complexity of organizing large-scale student images from Google Maps, the university team used assessments. machine learning to identify clusters of households. “We looked at the Google satellite imagery, saw where In the agricultural department, PITB launched the household clusters were, and then we layered in an application called AgriSmart to monitor 2,700 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 129 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE agriculture extension workers and help expand the tasks assigned, and not just filled in paper forms farmer assistance across the province. Similar to from home. Location data clearly showed geographic the vaccination program, absenteeism dropped and coverage and ensured difficult-to-reach areas did not geographic coverage increased after the application miss out on public services. The information helped launched and extension staff learned they were the government plan what services would be needed being monitored. In November 2017, the agriculture when, for example by using the dengue tracking department began pilot testing a financial incentive application to predict localized outbreaks. system for extension staff, using performance data gathered through the AgriSmart application. The improved performance of public employees resulted in better outcomes for citizens, particularly As word spread about Punjab’s success with in the highly successful vaccine program intervention. smartphone and tablet interventions, other provinces When the vaccine application was first launched in in Pakistan began their own initiatives. In Sindh October 2014, vaccinators reached just 25% of the province, a bloated education department packed polygons the PITB used to measure geographic with ghost teachers and plagued by absenteeism coverage across the province. In May 2016, that had strained public resources for years. In 2016, the figure had increased to 88%. 24 As a result of the province, supported by a World Bank team, began increased attendance and coverage, the percentage of using smartphones equipped with fingerprint readers fully immunized children under 20 months rose from to improve the accuracy and timeliness of reporting 62% in 2014 to 81% in 2016, and 95% of children on school inspections. Proponents hoped that the were fully vaccinated against polio (Government of improved inspections could help the education Punjab 2016). The increased vaccination coverage department remove ghost teachers from the payroll helped reduce the risk of contracting polio. After and decrease absenteeism. having 7 polio cases in 2013 and 5 in 2014, Punjab had only 2 cases in 2015 and 0 in 2016. 25 Despite the best efforts of reform leaders in the Punjab government, occasionally they ran into entrenched In most cases, PITB did not encounter resistance to groups that stifled implementation of reforms. In its initiatives. This was partly due to strong support an effort to root out water theft in rural areas, PITB from the chief minister, and partly due to the encountered tough opposition. “Pakistan has one of approach PITB took when working with government the largest irrigation systems in the world, and there departments. “A large part of our success has been is a lot of theft in the system from large landholders, managing relationships with other departments in a and smaller landholders don’t get water for their way where our work is seen as a positive contribution,” crops,” said Saif. “There are irrigation inspectors who Saif said. “The departments themselves have D are supposed to make sure that the water doesn’t get ownership. We are not seen as outsiders, there is co- CASE STUDY 13 stolen… but they are protected by the rural elite, creation and joint ownership.” and we have not been able to make them use the smartphones.” Financial and political support from the chief minister was also crucial to PITB’s success. “PITB is [chief minister Sharif ’s] baby,” said Saif. “He created it in 1999, a time when few people had appreciation Reflections for IT-driven reforms in government. He is a big believer in IT and he made sure that I was included in T he smartphone revolution in Punjab showed all important meetings of the government.” how a government could easily improve data collection and service delivery by using cheap Initial worries about a backlash over increased and easy-to-use smartphone applications. Information monitoring proved unfounded. “I was initially very collected through the applications was more accurate worried that there would be resistance,” said Zubair than that collected through paper-based systems, Bhatti, who led the World Bank team. “If all the and, in addition, could be matched with photos, inspectors decided to throw their phones into a canal videos, and location data. The additional data there was not much we could do about it.” However, provided real evidence that officials had completed Bhatti said field staff usually reacted positively; they 130 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE appreciated that supervisors could see the work they Saif said there were three key things to the success of were doing and hold accountable colleagues who a smartphone intervention. First, “you have to get the were slacking. PITB also tried to encourage buy-in technology absolutely right,” he said. “If it works 100% by providing additional benefits. “When we gave out of the time, everyone will use it. But if it only works the smartphones we always included some minutes 99% of the time, then no one will use it.” Second, for them to call friends and family,” said Saif. “That the intervention had to provide benefits to decision- way they would see some value in looking after the makers in government who could then champion the phone.” reform. “If you don’t have an owner in a decision- making position who benefits from the application, The instant transmission of verifiable data through the chances are that the technology will not get used the smartphone application reduced opportunities for or institutionalized within the government,” Saif said. corruption and created a less stressful environment Third, the IT team had to build positive relationships for inspectors. In the time between an inspection and work together with staff in the reform area to and writing a report, field staff could be pressured to “co-create” solutions. “When all three of those things inflate staff attendance, overlook infringements, or worked, our interventions succeeded,” said Saif. “In write overly positive evaluations. But after the rollout cases where one of those things was missing, we of smartphone applications, inspectors uploaded struggled.” photographic evidence of the inspection in real time, reducing the opportunity for others to influence the inspection report. The digital data generated from the initiatives also helped the government promote transparency. The provincial government created an open government website, http://open.punjab.gov.pk, which made information available to the public. As of 2017, the site featured education data on teacher attendance, student attendance, and school inspections. It also featured data from the vaccination program, including the photos and location of vaccinated children as recorded by the vaccinators through the smartphone application. D Several key features of smartphones suggested CASE STUDY 13 that the interventions introduced in Punjab could be widely replicable. Smartphones do not require uninterrupted power supply, which is a huge benefit in remote areas that may experience regular power outages, and data gathering does not need an active internet connection. Training costs are low, especially since smartphones are easy to use and quickly becoming widespread. Several high-quality free open source software suites exist, which enable fast iterative design changes to smartphone applications. As prices decrease and network coverage increases, the potential to replicate PITB’s interventions – mainstreaming the use of smartphones for day-to-day data gathering and performance monitoring – to the rest of the developing world increases even more. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 131 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Success Drivers Punjab’s experience of using smartphones to improve delivery of public services reflects all five of the five key dimensions for successful public sector innovation. Political leadership from Chief Minister Shehbaz Sharif was essential to get this reform off the ground. Crucially, Sharif was able to find a strong leader in Dr. Umar Saif, Chairman of the Punjab Information Technology Board (PITB), who went on to become the driving force behind digital reforms across the Punjab government. Sharif included Saif in important meetings, and through those interactions the PITB was able to build partnerships with other government organizations and strengthen its credibility. Increasing institutional capacity to deliver IT solutions was critical. After Sharif hired Saif to run the PITB, the new chairman quickly recruited top software developers and computer scientists to the organization. The PITB also formed a partnership with a local university to further increase its capacity to develop innovative digital solutions for government departments. Creating incentives for civil servants to show up to work and perform well at their jobs was a key goal of many of the PITB’s reforms. By increasing monitoring of vaccinators, for example, first by monitoring attendance and then by scrutinizing geographic coverage, the Punjab government was able to quickly improve the percentage of children receiving vaccinations across the province. Smartphones proved to be a useful tool for collecting performance data, and the agriculture department began to experiment with financial incentives for extension staff using data collected through its PITB-designed smartphone application. The government also encouraged buy-in from civil servants by offering phone credit for personal use to workers issued with smartphones. Smartphones increased transparency in school inspections. They reduced opportunities for corruption by allowing inspectors to upload data in real time and minimized pressure to overlook infractions or write overly positive reports. Through dashboards, the chief minister and government departments could access real-time data on what employees were doing and track progress on government programs. The government also published large portions of data from its smartphone interventions on its open government website, where citizens could access information and monitor the government’s performance. D Technology advancements, particularly innovations that increased the usability and decreased the cost of smartphones, were leveraged by the government to deliver better services to its citizens. CASE STUDY 13 The PITB also assisted government departments in switching from paper-based processes to digital systems, which helped minimize data entry mistakes and made it possible to analyze data on a much larger scale. Crucially, most interventions used open source software and freely available data (for example, satellite images from Google Maps), which made the PITB’s programs low-cost and highly scalable. 132 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Innovations E in Delivering Justice Services The administration of justice provides a window into how public sector innovations are impacting a unique sector. What is at stake? and equitable mechanism for contract enforcement; provide a system of redress for rights’ infringements; T he justice sector plays a pivotal role and improve security and dissuade violence. in society and the economy. Justice institutions, including courts, police, Doing business in a weak institutional setting prosecutors, and public defenders, use the authority for justice comes at a cost, as potential of the state to enforce laws and other rules of behavior. investors and contractual partners are Enforcement of rights and contracts is critical for deterred by dysfunctional justice systems. attracting private investment, encouraging firms Unresolved commercial claims can clog the courts to grow and take on credit, and stimulating broad- and immobilize valuable resources. Micro, small, based economic growth. The delivery of justice, as a and medium enterprises (MSMEs) also suffer core public service, helps define and protect rights – disproportionately from poorly performing justice individual, collective, and commercial – and enforce systems. Their relative power imbalance makes them corresponding obligations. less able to resolve disputes equitably and uphold their rights, either in or out of court. MSMEs are less likely The importance of the justice system in to have in-house legal expertise or be able to afford influencing economic behavior and facilitating legal costs, and they have less capacity to absorb the poverty reduction is widely recognized impacts on their operations. They are more likely (World Bank 2012b). The quality, efficiency, and to operate informally without legal protection and independence of justice institutions have a direct are more vulnerable to vexatious litigation or abuse impact on the economic performance of a country and practices by larger players. With less buffer, MSMEs contribute to creating an enabling environment for are more in need of protection by an effective court the growth and development of the private sector. A system. Also, given the power imbalances embedded well-functioning justice sector will promote the rule in weak justice systems, women-led businesses tend of law; protect civil and property rights; provide a fair to suffer more than those headed by men. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 133 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Poor and vulnerable populations suffer of reforms. Building on lessons learned, justice disproportionately from weak justice systems. sector reforms incorporated broader public sector These groups are less likely to have access to management concepts and tools to design performance information about their rights, and are least likely incentives, measure results, and support change to be able to afford to pursue redress. Many also management. Focusing on citizens and businesses as suffer from structural discrimination that limits users of justice services, there was a recognition that equality and inclusion. For marginalized citizens, courts do not operate in isolation and that reform a poorly performing justice system thus constitutes efforts should include broader stakeholders such as a barrier to access to justice and economic mobility. ministries of justice, prosecutors, judicial academies, Property rights provide a means to generate income; ombudsmen, the police, bar associations, civil society, their proper protection is especially important for and others. Tackling challenges posed by “traditional” vulnerable groups, such as women, who often are access barriers (costs, location, legal literacy) was affected by loss of property through divorce, death or as important as improving the time it takes for the disinheritance (De Soto 2002). cases to be processed, streamlining small claims, re-engineering archaic and burdensome processes, and reducing backlogs. Identifying incentives to enhance performance, measuring results, and feeding How are emerging back lessons learned have been pivotal to improving economies addressing justice services. Likewise, change management considerations were embedded in efforts to build the challenge? consensus for reforms among various stakeholders, and they substantially changed the way in which the I nitial efforts at justice reform focused courts and the justice system operate as a whole. mainly on institutional strengthening of the courts and judiciary. Priorities Although implementing reforms to improve included increasing budgetary allocations to the the efficiency, quality, and accessibility of judiciary as well as improving court infrastructure. justice services can be challenging, there is Several reform initiatives included civil works for evidence of success. The challenges stem from the building new courts or for the refurbishment of fact that this is a particularly complex and sensitive the dilapidated ones. Infrastructure investments sub-sector. However, there is increasing evidence were considered a prerequisite for the efficient and of success in improving the efficiency and quality transparent functioning of courts and the accessible of the services provided and in enhancing access to delivery of justice services. These infrastructure courts and legal and judicial services (Chemin et al investments, including from modern information 2017). Nevertheless, such success is dependent on and communications technologies to court processes the combination and sequencing of reforms, which and case management systems, were paired with needs to be based on country-specific factors and will institutional development activities, such as legal and therefore vary greatly among countries. regulatory reforms, and training for judges and court personnel. Results were mixed; while some progress Countries have experimented with many types was made, improving the regulatory framework and of reforms to improve the efficiency and quality the physical infrastructure of courts yielded only of justice services. Improving the efficiency of modest improvements to the provision of justice courts has been tackled by amending procedural services. Although they may have become faster and codes (India), addressing delaying tactics (Senegal), E more transparent, these reforms were not designed or improving case management f lows (Pakistan, THEME to target some of the core justice problems, such as Italy). Likewise, efforts to improve the quality of political interference in the judiciary. judicial decision-making can include the utilization of ICT tools to randomly assign cases and avoid “judge- Subsequent efforts adopted a more holistic shopping” practices and racial bias (Argentina, US); approach to improving access to justice, as they granting judges and court personnel online access sought performance improvements and change to jurisprudence and specialized scholarly articles management support for the implementation (Colombia); or empowering judges to decide their 134 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE work schedule (Israel). 26 Focusing on performance Although incentives, the Serbia case featured in this report exemplifies this type of effort. addressing access Although addressing access barriers to barriers to justice justice services can take many shapes, the services can take successful reforms involve a targeted solution within the country context. Access is a matter many shapes, the not just for poor and vulnerable groups, but also for successful reforms specialized issues that are not adequately dealt with by the existing justice structures. In some countries, involve a targeted specialized jurisdictions have been created to address solution within the a particular access gap. This includes India’s Debt Recovery Tribunals, Peru’s Commercial Courts, as country context. well as the Azerbaijan case featured in this report: the introduction of procedures to enhance access to justice services responding to an economic crisis. All these examples of successful and sustainable reforms to reduce case backlogs validated their knowledge have elements in common: they demonstrate a good and capacities and placed them in the forefront of understanding of the country context in which they the reform. Transparency, public communication, are applied and place strong emphasis on mapping out and outreach were also important complements that relevant stakeholders and incentives for change. They helped ensure buy-in, generate peer-pressure, and all also focus on an identifiable and persistent problem improve public perception, as well as recognition of in the system and put in place a targeted solution. those courts that improved their performance. These These are not broad reform efforts but focused and performance incentives were key to the success of defined; they are examples of the problem-driven the reform. Furthermore, this initiative benefited reform approach, often with adaptive elements that from the coordination and cooperation among the are experimented with and further improved. institutions representing the justice sector and the donor community. Consolidating donors’ funds in a multi-donor trust fund and aligning reform efforts contributed to obtaining results in a cost-effective Why are these ideas manner as well as leveraging reforms. These efforts worth learning from? took place in the context of the overall EU accession effort for Serbia, which created a larger momentum and drive. The cases presented in this section offer a selection from the wealth of experience The Azeri case shows the importance of amassed through justice sector reform over learning from international experience to the last decade. They portray the evolution and design reforms that respond to both the sophistication of reform interventions. demand and supply sides of justice services, while tailoring the intervention to the local The Serbia case shows the importance of context. In this case, the ‘demand side’ refers to E identifying broader country incentives and users of the justice system, such as utility and phone aligning them with a tailor-made justice service providers that needed to seek redress for THEME intervention to solve a persistent problem. nonpayment in the courts. The ‘supply side’ refers to While being responsive to citizens’ demands for faster first-instance judges and court personnel who needed justice, it centered on offering judges some positive to fast-track small claims to respond to a specific competition and recognition for improving the economic situation in Azerbaijan. An initial success efficiency of their work with increased management of the proposed reform was building consensus and authority. Allowing presiding judges to organize their obtaining the political buy-in of the government courts, assign workloads and implement mechanisms decision-makers to effectively pursue and enact such IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 135 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE reforms. The pilot has benefited from the adoption of a holistic approach, clear communication of the benefits of the proposed reform, the engagement of stakeholders so that they were willing to change the way they worked, and the provision of ICT tools to the courts to streamline and automate procedures. Peer-learning from the Slovenian experience further enhanced the Azeri reform efforts. Although the results of the Azeri and Serbian reforms are still fresh, there are some common elements in both efforts that suggest they are on the right path. First, there was a concerted attempt to create consensus among stakeholders and generate a common vision for the proposed changes in the way justice services were provided. Countries that are keen to adopt reforms to address issues of efficiency, quality, and access need to generate consensus and engage the various actors and stakeholders to build momentum for the reform. The Azeri reformers did exactly this: the problem was well understood and the response well crafted. It addressed a clear demand from businesses in a context of economic downturn, while also creating the necessary procedures for judges to efficiently direct the reform. Second, great care was taken to identify the right incentives, support managerial authority, and develop the capacity of the justice sector actors in charge of implementing the reforms. In this sense, the Serbia case is interesting because the incentives served as a catalyst for managerial empowerment and change internally. It also offered an opportunity for the justice system to signal positive change to external audiences, and to reinvent itself in the eyes of citizens and businesses. In showing that small incentives can go a long way, this case offers a promising example of what can be achieved to improve justice system performance on a broader scale. E THEME 136 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 14 Automating Processing of Uncontested Civil Cases to Reduce Court Backlogs in Azerbaijan Overview I n 2016, courts in Azerbaijan were becoming clogged with relatively simple civil cases, such as claims against citizens that had failed to pay their phone bills. Judges had to spend inordinate AZERBAIJAN amounts of time on these cases, and backlogs continued to build. The judiciary turned to Slovenia, which had faced a similar problem a few POPULATION (July 2017 est.)1 years earlier, for help. In June 2017, Azerbaijan’s busiest court began 9.961 million piloting an automated system for dealing with the cases, partnering GDP PER CAPITA (current US$)2 E with several banks and a mobile phone operator. Citizens still had the 3,878.70 right to contest cases, but fast-tracking uncontested cases through the CASE STUDY 14 INCOME GROUP3 automated system freed up judges’ time to focus on litigating more complex and demanding cases. Upper middle income GOVERNMENT EFFECTIVENESS4 49.0% 1 CIA World Factbook, 2World Bank (2016), 3 World Bank (2016), 4World Bank (2016) IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 137 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Introduction While the crisis affected courts nationwide, the situation was particularly difficult in the country’s B etween 2012 and 2015, economic troubles in busiest court in Baku, Azerbaijan’s capital city. The Azerbaijan saw many citizens failing to pay judiciary chose that court, Baku Yasamal District their bills. Creditors, such as utility companies, Court, to pilot the reforms. Fortunately, the judiciary would often file dozens of cases against defaulting already had a strong Integrated Case Management customers at a time, and judges then had to spend System that served as a base for the new process. time manually processing these small and simple suits   instead of working on litigate cases. The number of incoming “order proceeding cases” (uncontested civil Learning from peers  cases such as claims filed by phone or utility companies   against defaulting customers) increased rapidly from The judiciary in Azerbaijan turned to Slovenia, which 20,964 in 2010 to 165,343 in 2015, making up about had had success solving similar problems a few years half of the total of all incoming cases. earlier. “We did not want to waste any time, and   because [the Slovenians] had already solved similar The cases clogged Azerbaijan’s courts, causing problems, we just customized their solution to our delays across the whole judicial system. According needs,” said Ramin Gurbanov, a judge on the Baku to Khayyam Bayramov, IT project manager at the Yasamal District court who led the reform, which was Ministry of Justice, it took three days or longer to dubbed the “Silk Way” project. process each order proceeding case, even though they   were uncontested. Filing each case was also a time- The World Bank, which is financing the Judicial consuming process for businesses; bulk filing of the Services and Smart Infrastructure Project in cases was not possible given Azerbaijan’s legislative Azerbaijan, a project that aims to strengthen and framework at the time. modernize Azerbaijan’s judiciary, helped foster collaboration between the Slovenian and Azerbaijan As the cases kept flooding in, judges’ workloads judiciaries by bringing Rado Brezovar, senior advisor increased dramatically. “From 2010 to 2016 the to the chief justice of Slovenia, to Azerbaijan. Brezovar workloads of the judges increased by 12 times due to was familiar with the situation in Azerbaijan owing these types of cases,” Bayramov said. Judges struggled to his work with the European Commission for the to cope with the unmanageable increase in their Efficiency of Justice, part of the Council of Europe, workload and began demanding that the judiciary an international organization promoting human take action to deal with the crisis. rights and the rule of law. Gurbanov is Vice President of that commission. Amitabha Mukherjee, who led the World Bank Response project, said Slovenia was the logical country to learn from. “Both Azerbaijan and Slovenia were members T o address the situation, the judiciary had to of the Council of Europe, and they both had civil law cope with internal pressures from overworked systems,” he said. “Slovenia had long been recognized judges, as well as external pressure from the as one of the leaders in judicial automation, innovation, companies filing the cases, while respecting citizens’ and efficiency in Europe.” rights to fair and transparent hearings. The judiciary wanted to increase the speed and efficiency of Slovenia had faced a similar crisis to Azerbaijan in E dealing with order proceeding cases by enabling bulk 2007, and over several years had developed and adapted CASE STUDY 14 electronic submission of claims by large commercial its system to solve the problems. “In Slovenia, we had filers such as mobile phone operators, banks, and started a similar initiative in 2007 to concentrate and retailers; automating the processing and submission centralize the process for these cases,” said Brezovar. of cases to judges; generating electronically signed “Now, instead of 44 courts across Slovenia processing judicial orders the same day the petitions were filed; these cases, all of the cases are concentrated in a and enabling parties and citizens to track the process dedicated department in one court… 99% of the cases and interact with the court online. are electronically filed, mostly in bulk.”27   138 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Gurbanov and his colleagues discussed with Brezovar the case being processed, and automatically mail an the steps Azerbaijan could take to implement a electronically signed order to the debtor. Crucially, solution. “We discussed the concept of how to defendants’ rights remained protected: if the defendant concentrate the process… and also how to engage objected to a summary order in favor of a commercial court staffers to take part in the process,” said creditor, the debtor could file an electronic objection. Brezovar. “We discussed how to change legislation In such cases, the system automatically designated to implement such a concept, how to make changes the case a ‘contested case’ and listed it for a hearing as in the case management system in order to enable with any other civil case. electronic filing, either in bulk or individually,   and how to reorganize the process to make it more With the five pilot companies in place, and the efficient.” Yasamal court set up to fast track incoming cases, the Silk Way project went live in June 2017. The project introduced standardized forms for cases, and Piloting the approach  the digitized process significantly reduced the time it took to process cases while also eliminating the To pilot the new system, the judiciary had to introduce possibility of human error. According to Bayramov, a new system to electronically process the cases, and uncontested cases were processed in one day or less then convince the companies filing the claims to by the automated system. The time savings allowed adopt the new system. Judges also had to work with judges to focus on cases that were more demanding the government to pass legislation allowing the pilot of their skills. reform to proceed.   Gurbanov, Brezovar, and others held discussions with banks, utilities, mobile phone providers, and other Reflections companies to explain the new approach and encourage B them to consider participating in the pilot project. y the end of May 2018, more than 16,000 The reformers targeted companies that were filing cases had been processed using the new hundreds or thousands of cases each year, making system. In late 2017 two new companies, them major contributors to the backlog of cases in the Pasha Bank and Azer-Turk Bank, joined the original courts. “Some of the companies were very receptive, pilot participants, and in early 2018 the International while others had higher priorities at the time,” said Bank of Azerbaijan signed on, meaning eight Brezovar. While the new process could present cost companies were participating in the Silk Way project savings for the companies, for example, by not having by mid-2018. The fast-track system benefited the to engage lawyers in the filing process, some of the seven banks and Azercell, the mobile phone operator, companies were working on other projects at the time because the companies could save time by filing and did not have the manpower to adapt their systems cases electronically in bulk. The system’s automatic to the proposed new processing. processing of uncontested cases helped relieve judges’   workloads. “With those cases taken care of, judges can After lengthy discussions, five companies signed on now focus on litigating more complex and demanding for the pilot project, including four banks: Rabita cases,” said Gurbanov. Bank, Kapital Bank, Unibank, and Bank of Baku, as well as AzerCell, a mobile communications company. Brezovar said that, while judges in Slovenia had E The pilot provided significant benefits for the initially been hesitant to embrace a new way of doing companies involved, including time and cost savings things, judges in Azerbaijan had been extremely CASE STUDY 14 on submitting the cases, and allowing them to track cooperative because they could see the benefits the the status of cases electronically. new system would bring. “Judges really supported this, because they realized it would relieve their The Baku Yasamal district court adapted its systems to workload,” he said. “They then have much more time accept cases in bulk and automatically process them. to focus on adjudication instead of simple cases.” The system was designed to validate data submitted by the companies, electronically notify the creditor of The pilot project indicated that in the future, IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 139 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE Azerbaijan could scale up the system to relieve judges it is necessary to [first] roll out the e-court system in across the country of working on minor uncontested all courts of Azerbaijan.” After the country’s courts civil cases, potentially reducing backlogs and delays have eliminated paper and switched to electronic and improving the efficiency of the judiciary as a systems, and necessary legislative changes have been whole. “The final goal of this reform is to implement made, the country could eventually expand the pilot the system country wide by centralizing the nationwide, increasing the speed and efficiency of jurisdiction for these types of cases,” said Gurbanov. judicial processes for judges, companies, and citizens “But to ensure the operation of a centralized approach alike. Success Drivers Azerbaijan’s “Silk Way” initiative to fast-track uncontested civil court cases reflects three of the five key dimensions for successful public sector innovation. Political leadership from the judiciary ensured that the reform had the necessary support for its successful implementation. Facing pressure from overworked judges and businesses that wanted to streamline processes, leaders from the judiciary set up the pilot initiative, negotiated political support to get the legal backing to launch the pilot, and maintained commitment through its execution. Because of the time savings the initiative created, judges in Azerbaijan enthusiastically supported the process. The judiciary in Azerbaijan built institutional capacity by learning from the Slovenian judiciary. This peer-to-peer learning, facilitated by the World Bank, helped the judiciary to quickly build the new automated system and train officials to use it. Technology formed the basis for the new system, using automatic processing of uncontested cases. Since this was shown to be viable in the Baku Yasamal district court, courts across the country are working to replace paper procedures with electronic ones so that the pilot project can expand nationwide. E CASE STUDY 14 140 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE CASE STUDY 15 Incentivizing Courts to Reduce Backlogs: Serbia’s Court Rewards Program Overview C onfronted with large delays and backlogs across the judicial system, Serbia’s Supreme Court of Cassation, the country’s highest instance court, decided to introduce a rewards system to encourage SERBIA individual courts across the country to improve their performance. The program, which began in 2016, gave prizes to the courts that made the POPULATION (July 2017 est.)1 largest improvements in backlog reduction and cases resolved per judge. 7.111 million As of 2018, it was too early to deem the program a success, but anecdotal GDP PER CAPITA (current US$)2 evidence suggested the program was beginning to have a positive impact 5,426.20 on Serbian courts. INCOME GROUP3 Upper middle income Introduction GOVERNMENT EFFECTIVENESS4 55.8% I n Serbia, citizens have long been frustrated by inefficiency, corruption, political influence, lack of transparency, and unending delays in the judicial system. A multi-stakeholder survey conducted in 2014 found that only one in four citizens had trust in the justice system (World Bank 2014d). Delays were the biggest source of frustration. “Courts did not pay a lot of attention to timeliness of their decisions,” said Srdjan Svircev, World Bank Public Sector Specialist. “Simple cases ended up staying there for quite a long time. There were many cases in the court system that had been there for three or four years, some even up to 40 years!” The large backlog of cases was not a new problem, and many countries in Eastern Europe faced similar issues. Even still, Serbia had a particularly large backlog compared to its neighbors, with millions of backlogged E cases clogging its courts. Further, there was wide variation between the performance of courts in Serbia. Some functioned well and made good CASE STUDY 15 progress on reducing backlogs, while others lagged behind. The World Bank’s 2014 Judicial Functional Review in Serbia found that the two biggest performance challenges facing Serbian courts were: • Low efficiency, as evidenced by long delays and backlogs • Unpredictability of decision-making, driven by excessive variation in performance (Decker et al 2014) CIA World Factbook, 2World Bank (2016), 1 World Bank (2016), 4World Bank (2016) 3 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 141 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE The variance in performance across the courts Response was perplexing. “There were big differences, but I it was difficult to find causality,” said Svircev. “The n early 2015, the World Bank team shared insights immediate response was that the courts wanted from the World Development Report 2015: more money and more people to fix the problem of Mind, Society and Behavior, about the power of inefficiency…but we knew that resources were not the recognition and incentives in driving performance problem. There were courts with lots of resources that among public sector employees. The team shared performed poorly, and courts with resource shortages examples of World Bank programs and empirical that performed well.” studies that demonstrated how a well-designed rewards program could make a difference. According Serbia’s Supreme Court of Cassation (SCC), the to Harley, “the SCC was receptive to the idea, and country’s highest instance court, had tried to improve the dialogue deepened about ways we could work the situation by providing performance incentives for together to incentivize judges and staff in Serbia.” individual judges. But the system had failed to result in better performance. “People thought the awards Members of the SCC endorsed the idea in late 2015. were based more on relationships than on merit,” said To roll out the program, the court had to decide on Svircev. what the rewards would be and an objective system to choose the winners. Next, the court had to promote The World Bank was engaged with the justice sector the idea around the country to get courts interested. through the Multi Donor Trust Fund for Justice Finally, it had to share the experiences of the Sector Support in Serbia (MDTF-JSS), a mechanism successful courts to encourage nationwide progress funded by a number of donors that were committed on backlog reduction. to strengthening Serbia’s justice sector reforms in support of the country’s plans to become part of the European Union. Among other efforts, the MDTF- Designing the program JSS wanted to find a way to get underperforming judges up to standard. “If the worst performers could It was critical to find a simple and objective way to reach the average – not be stars but merely perform measure court performance so that no one would at the average – delays and backlogs would be greatly question the results. “We wanted something easily reduced and performance would largely align with understandable; something based on numbers; EU benchmarks,” said Georgia Harley, Senior something that could be easily verified by anyone,” Governance Specialist at the World Bank. said Svircev. The team decided on two categories for rewards: Globally, the justice sector had been slow to adopt • The largest year-on-year improvement in performance incentives that many governments backlog reduction per judge had embraced as an important tool to encourage good performance. “There was this idea that the • The largest year-on-year improvement in the incentive mechanism in the court system should be number of resolved cases per judge the satisfaction in providing justice,” said Svircev. “But the truth of the matter is that judges are people Measuring performance on a per judge basis allowed like anybody else, and they appreciate rewards and the program to control for variation in court size, so recognition just the same.” smaller courts with fewer judges would have an equal chance of success. Awards would be decided based on E In early 2015, the World Bank encouraged the SCC to data from case management systems and verified by CASE STUDY 15 consider incentives and competition among the courts the SCC and the World Bank. To make the process – the main units for delivering justice – as a way to fully transparent, the scores and results were available boost court performance. The World Bank envisioned online. a program that would reward courts based on how much they improved each year, putting all courts on a The MDTF-JSS provided funds for the prizes. In level playing field and encouraging teamwork among each category, the first prize was €5,000 (about judges. US$5,600 at the time), the second prize was €3,000, 142 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE and the third prize was €2,000. “Through analysis, The SCC organized a gala dinner to present the we decided on prize money that was sufficiently awards, and the World Bank’s local communications attractive to motivate behavioral change, but not team helped to ensure widespread Serbian press so lucrative as to generate perverse incentives,” said coverage of the ceremony. “We made a big splash!” Harley. Winning courts could choose to spend their said Vesna Kostic, senior communications officer rewards on either: at the World Bank. “The idea was to ensure the awards conveyed a degree of prestige on the winners, • ICT hardware (computers, monitors, printers, and openly recognized the hard work of those who scanners, servers etc.) were committed to performance improvement.” The • Office equipment (desks, chairs, shelves, high profile of the awards ceremony also helped to clocks, legal texts etc.), or encourage positive competition between courts and give judges something to aspire to the following year. • Court beautification (paint, plants, signage, repairs etc.) The prize-winning process helped foster teamwork and continual improvement. Courts were required Implementing the program to decide as a team how to spend their reward, and to explain how their choice of prize would further At the beginning of 2016, the SCC began improve their court’s performance. “Some of the communicating the new rewards program to courts, courts invested the prize money in periodicals they explaining the criteria that courts would be judged needed for their court library, others created a digital on, how they would be measured, and the prize information center in their court, and others used it to money available. Courts around the country quickly buy new ergonomic chairs for their staff,” said Svircev. got to work trying to improve their performance and reduce backlogs. It was up to the president of each individual court to Reflections come up with a work plan for the year. In those work A plans, the president would assign judges a certain s of 2018, it is too early to declare the initiative number of cases to take on. If one judge moved a success, as it has only been in operation for quickly while another lagged behind, the president two years. Still, over that period first-instance could reshuffle caseloads throughout the year. Judges court backlogs in Serbia reduced by more than 20%, sometimes expressed frustration about being shifted indicating the program may be having a positive to different cases, and it was up to the court president impact. “On average, courts are performing better to manage any complaints internally, and assign than they used to be,” said Svircev. “We have seen the judges in the most efficient way possible. In some ones at the bottom beginning to tick up, though there cases, court presidents brought in law students from is still lots of room for improvement.” local universities to assist in case preparation, which often helped speed up court processes and ensure The program encouraged competition between judges put their time to best use. courts, and awards bestowed a degree of prestige on those that performed well. Receiving an award at the ceremony and being mentioned in the media was a Rewarding top performers motivating factor for judges to improve performance. E “One of the winners said he had been in the system Through its case management system, the SCC could for 40 years, and this was the first time he received CASE STUDY 15 track every court’s progress on reducing backlogs any recognition,” said Svircev. throughout the year. It also published that data regularly so judges could see how they were doing The next step will be to share the success of the compared to their peers. At the end of the year, the winning courts, and encourage low-performing courts SCC and World Bank compiled the results, and to learn from those that had managed to improve invited the most improved courts to receive their their performance and reduce backlogs. Svircev said prizes. it was still too early to look at sharing lessons, but IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 143 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE that the SCC was beginning to look at the improved While the project was fully supported by the MDTF- numbers and procedures at the winning courts. JSS and the World Bank in 2016 and 2017, the SCC has begun taking steps to institutionalize the The program also created an opportunity for the justice initiative. “The SCC president has said the program sector in Serbia to improve its public perception. will be included in their budget in 2019,” said Svircev. Though Serbian citizens still lacked confidence in the Further, the SCC added the project to the “Book of justice sector and continued to complain about delays Rules” that the Serbian court system is governed by. and corruption, the rewards program presented an opportunity to put forth a different view of the Time will tell if the program is going to achieve its work judges have been doing to improve the system. aims, but as of 2018 the program appears to be an “The public are generally more interested in negative extremely cost effective and highly visible investment stories,” said Svircev. “But the SCC could use this that has been helping to improve how courts and program to shift the narrative and talk about the good judges organize their workloads. “It started as a things they have achieved.” tiny program, but is has created a ripple effect,” said Svircev. “Small programs like this often tend to have Compared to many other initiatives that aimed much more impact than big programs that try to do to reduce backlogs and improve performance, the too much.” Serbia Court Rewards Program was relatively low cost. The MDTF-JSS has spent about US$50,000 on the program each year, which covered the prizes, trophies, ceremony, and related expenses. Success Drivers Serbia’s introduction of a rewards program for its courts reflects three of the five key dimensions for successful public sector innovation. Lack of institutional capacity to reduce backlogs in Serbian courts was what motivated the Supreme Court of Cassation (SCC) to create the rewards program. The program incentivizes courts to look for creative ways to improve their capacity to reduce backlogs; it also encourages underperforming courts to build capacity by learning from better-performing peers. In some cases, courts were able to increase capacity by bringing in additional help for judges to prepare cases, while other courts have redesigned their business processes to optimize judges’ caseloads. Incentives are a key performance management tool, but judiciaries have been slower to adopt them than other parts of the public sector. Serbia’s court rewards program sought to change that. Prizes for winning courts are set at a level that aims to motivate behavioral change without creating perverse incentives. As well as the monetary prizes, the annual ceremony to celebrate prizewinners acts as an additional incentive for courts to optimize resources and improve performance. Transparency in how prizes are awarded was critical to the success of the program. The SCC uses E its case management system to track progress on reducing backlogs, and regularly publishes data online so that each court can easily compare its performance with others. In addition, measuring CASE STUDY 15 performance to determine the winners had to be a fully transparent process, so the SCC chose the reward categories in which performance was easily quantifiable and verifiable. 144 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE NOTES 1. There is no single definition of innovation. For a good World Bank Doing Business Indicators available at https:// starting point, see: https://www.ideatovalue.com/inno/ data.worldbank.org/indicator/IC.TAX.DURS?locations=CN nick sk i l l icor n /2016/03/innovat ion-15-e x per ts-sha re- innovation- definition/ 15. SPAN, which is Indonesia’s financial management information system, is the acronym for Sistem Perbendaharaan dan 2. Interestingly, one-third of the selected cases were supported Anggaran Negara. by a relatively new Bank instrument – results-based lending. 16. For more information, please visit Portal De Serviços, 3. The importance of CoG is underscored by the fact that Part Secretaria Municipal De Finanças, Prefeitura De Manaus at II of this report focuses solely on policy and inter-agency https://semefatende.manaus.am.gov.br coordination, a core function of the CoG. This section focuses on innovations to drive results from the CoG, while Part II 17. For example, Open Data Kit, managed by the University of delves into the technical details of the coordination function Washington; Kobo by Harvard University; and Computer of CoG. Assisted Personal Interviewer (CAPI) by the World Bank, to name three among many. 4. Performance contracts have been adapted by many countries (e.g., Chile, Costa Rica, Dominican Republic, Kenya, UK, 18. In a different part of the world, a randomized control trial New Zealand, and others). The concept of performance (RCT) shows the power of transparency in improving service contracts emerged in Europe in the 1960s in the context of delivery. In Punjab, Pakistan, performance rating information public enterprises, particularly in France. They were later used about insemination delivery by government veterinarians in the UK and New Zealand in the 1980s and expanded to was collected, rated, and circulated back to the farmers. This Pakistan, Korea, India and elsewhere (OECD 1997). The helped increased efforts by the government veterinarians: Rwanda Imihigo case should be viewed in this broader context. the insemination success rate went up by 33 percent, and the farmers were also 27 percent more likely to return to a 5. Imihigo is the plural Kinyarwanda word of Umuhigo, which government worker for the insemination service after the means to vow to deliver. Imihigo also includes the concept ratings were circulated. of Guhiganwa, which means to compete among one another. Imihigo describes the pre-colonial cultural practice in Rwanda 19. See Punjab Health Survey (2016) available at http://open. where an individual sets targets or goals to be achieved within punjab.gov.pk/evaccs http://open.punjab.gov.pk/evaccs a specific period of time. The person must complete these 20. An evaluation, conducted in June and July 2014, of a stratified objectives by following guiding principles and be determined sample of 22,088 respondents from some 7 million who had to overcome any possible challenges that arise. been contacted by the government across 11 government 6. Blue Ocean Strategy is a business theory pioneered by W. services and 36 districts in Punjab by that time, showed that Chan Kim and Renée Mauborgne, professors at INSEAD and if the citizen recalled receiving a robocall or SMS through co-directors of the INSEAD Blue Ocean Strategy Institute the CFMP, this tended to reduce the perceptions of three key (Chan and Mauborgne 2005). Based on a study of 150 cases parameters by which service delivery quality was judged: poor spanning more than a hundred years and thirty industries, perceptions about attitude of staff were down by 11.9 percent, the authors argue that companies can succeed by creating delays by 9.3 percent, and corruption by 8.5 percent. “blue oceans” of uncontested market space, as opposed to “red 21. Parts of this case study draw from “Calling Citizens, oceans” where competitors fight for dominance. The analogy is Improving the State: Pakistan’s Citizen Feedback Monitoring that an ocean full of vicious competition turns red with blood, Program, 2008–2014,” authored by Mohammad Omar Masud, while a blue ocean where everyone can prosper is calm and published in February 2015 by Innovations for Successful symbiotic. Societies, a research program at Princeton University. https:// 7. Parts of this case study draw from “The Promise of Imihigo: successfulsocieties.princeton.edu /publications/calling- Decentralized Service Delivery in Rwanda, 2006–2010,” citizens-improving-state-pakistan’s- citizen-feedback- authored by Daniel Scher and Christine Macaulay, published monitoring-program-2008 in May 2010 by Innovations for Successful Societies, a research 22. For more information, please visit the Citizen Feedback program at Princeton University. Monitoring Program website by the Punjab Information 8. Interview conducted by Daniel Scher of Princeton University’s Technology Board, Government of Punjab at http://www. Innovations for Successful Societies. pitb.gov.pk/cfmp 9. Ibid. 23. For more information, please visit Digital Punjab: Enhancing Public Services Through Technology, 2012-2017 on the 10. Life expectancy data for Rwanda is taken from the World Punjab Information Technology Board, Government Bank database available at https://data.worldbank.org/ of Punjab website at http://booklet.pitb.gov.pk/mobile/ country/rwanda Flipbook.aspx#p=1 11. Health data for Mozambique is taken from the World Bank 24. Ibid. database available at https://data.worldbank.org/country/ mozambique 25. For more information about Polio in Punjab, please visit the End Polio Pakistan website at http://www.endpolio.com.pk/ 12. For the purposes of this report, the term civil service will be polio-in-punjab used broadly to include not only those government workers who are under a specific civil service regime, but also those 26. See Chemin, Harley, and Panter (2017) for details on all employed by the government as teachers, health workers, country cases cited in this paragraph. police officers, and others in the broader public service. 27. For more detail on Slovenia’s reform, see Gregor Strojin’s 13. For more information, see the State Administration of “Building Interoperability in European Civil Procedures Taxation of the People’s Republic of China website at http:// Online: Case Study Slovenia, April 20, 2012” available at www.chinatax.gov.cn/eng/ http://www.irsig.cnr.it/BIEPCO/documents/case_studies/ COVL%20Slovenia%20case%20study%2025042 012.pdf 14. “Time to Prepare and Pay Taxes (Hours)” is taken from the IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 145 PART I – GLOBAL TRENDS IN PUBLIC SECTOR PERFORMANCE REFERENCES African Development Bank. 2012. Performance Contracts and Social Robinson, Nick. 2012. “Right to Public Service Acts in India: The Service Delivery – Lessons from Rwanda. Rwanda Field Office Policy Experience from Bihar and Madhya Pradesh,” AI Policy Briefs, Brief. https://www.afdb.org/f ileadmin/uploads/afdb/Documents/ November 2012. 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In Search of Results: Performance Management Practices. smarter-lessons- amazon Paris: OECD. 146 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 147 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Why Coordination Matters and Why it is Difficult A s the responsibilities of government institutions, such as cabinets and sub-cabinet working have grown in volume and complexity groups, many OECD countries also benefit from over the past decades, policy and relatively dense networks of inter-agency working program coordination have become ever more groups and ad-hoc sub-committees at various levels of challenging. The stakes have also never been government, addressing everything from high-level higher. On the one hand, government ministries, policy to low-level operational coordination. Indeed, departments and agencies (MDAs) have expanded in many social problems that require government size and mandate to serve a growing population that attention and action are not easily structured and demands more and better services – a phenomenon contained, requiring that agencies with different that applies to both rich and poor countries alike. mandates and missions work together to coordinate As bureaucracies have grown, coordination within their activities for the common good. MDAs also becomes more challenging, as more players and a greater array of interests now need to A network analysis of SDG goals to the be brought into the decision-making process. Larger functional units of government that contribute bureaucracies in turn lead to greater separation to them serves to highlight the complexity of between the citizens and those who are supposed relationships (Figure 9). For example, progress on to serve them, contributing to a growing feeling of Goal 14, involving sustainable use of the oceans, alienation from government. seas, and marine resources, will require integrated effort on a range of fronts, from reducing phosphates While the size of government has grown, the and agricultural runoff, to improving sewerage and responsibilities have also become far more complex wastewater treatment, to curtailing plastic waste in the and the traditional silo approaches to governing maritime environment, to the better management of are proving inadequate. Solutions to public service fish stocks and increased investment in oceanographic delivery often require more joined-up and inter- research. Or to cite another example, the achievement connected responses than was previously thought of Goal 3.6 to halve the number of fatalities from necessary if they are to deliver results. Reducing road accidents will involve coordination between the non-communicable diseases, for example, may traffic police, road transport engineers, ambulance require interventions under the traditional purview services and emergency care providers, as well as of ministries of education, commerce, food and educators, automobile manufacturers, and drivers agriculture, as well as health. Moreover, different themselves. If such challenges exist in relatively elements of the service may be delivered by different discrete areas, how much more so in efforts to target tiers of government who have their own priorities complex, multifaceted spheres of engagement such as and political incentives. This means that coordination poverty and inequality. needs to take place not only horizontally (across sectors), but also vertically across levels of government. Such challenges are often magnified in emerging economy contexts. Inter-sectoral policy A survey by OECD found that inter-agency outcomes are a perennial challenge in bureaucratic coordination was viewed as the most pressing environments where information f lows and challenge to implementation of the Sustainable accountability relationships are structured vertically Development Goals (SDGs). Nearly three-quarters along organizational lines. The central coordination of those surveyed ranked this as their number one mechanisms in emerging economies can be much challenge – and this among governments with some weaker; information flows are often more rigid and of the most effective and well-functioning cabinet hierarchical in nature, and subordinate employees systems in the world (OECD 2016). Beyond their apex are often not empowered to share information with 148 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION FIGURE 9 Network Analysis of SDG Goals Gender 5.3 16.7 11.4 16.4 16.1 4.2 3.3 5.2 4.3 16.5 11.3 3.1 4.6 4.1 6.2 Peaceful and 5.6 3.5 16.10 Inclusive societies 3.7 5.1 Cities Health 3.2 5.5 5.4 3.6 16.9 10.7 1.4 11.5 Education 3.4 16.2 16.8 4.5 3.8 2.2 11.7 16.3 10.2 4.7 6.1 13.3 1.2 11.1 16.6 10.6 10.1 11.2 3.9 1.1 6.5 10.3 10.4 11.6 1.3 Water 8.7 10.5 7.2 Infrastructure and 6.3 9.5 7.1 Industrialization 4.4 Inequality 2.1 9.1 12.8 7.3 12.4 13.1 6.4 9.4 2.3 1.5 9.3 Hunger 8.8 15.6 9.2 SCP 12.3 6.6 Climate change 2.5 8.2 15.3 8.4 12.1 13.2 Growth and Employment 12.5 15.2 8.3 14.1 12.6 8.1 12.7 12.2 Terrestrial ecosystems 14.7 Oceans 2.4 8.6 15.8 8.10 8.5 14.3 14.5 8.9 15.9 15.7 15.5 14.6 14.4 14.2 15.1 15.4 Source: Le Blanc (2015) employees from other ministries; and the dense example, air travelers are forced to have their network of coordination mechanisms at the working bags screened electronically at two identical level is thin or non-existent. stations in immediate succession, with each being manned by staff from different agencies. Although it is difficult to calculate the costs Better coordination could help to exploit of poor coordination on a government-wide synergies, save costs, and make more efficient basis, they are likely to be substantial. The most use of government assets. obvious result is that poor decisions are made on the basis of inaccurate, biased or incomplete information, Ef fe c ti ve i nte r - a g e n c y c o o rd i n a ti o n or that decisions need to be delayed or deferred until mechanisms can reduce the compliance burden more information becomes available. among citizens, who in the example above were forced to queue twice for what was essentially Other consequences of poor coordination the same function. This is particularly true with include: regard to the data-sharing that takes place within business process reengineering, where customers • Decisions are simply not implemented. An ideally would only need to input data once throughout analysis of government decision-making in a given process, such as registration and/or application Sub-Saharan Africa, for example, found that as procedures, instead of responding to similar requests many as two-thirds of decisions brought before for information by multiple agencies. Many of the cabinet were ultimately not acted upon, as they most challenging requirements in creating customer were not properly vetted for their cost, legality friendly interfaces for citizens involve getting and consistency with established policy (Haid different agencies (who may possess different legacy et al 1999). IT systems) to share data and streamline and combine their requirements. When such efforts are seen • There is needless waste and duplication through to their successful completion, the results can of effort. In one South Asian country, for produce significant efficiency gains and time savings, IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 149 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION as was the case with Egypt’s creation of a one-stop Together with credible commitment and shop for business licensing (see Box 3). cooperation, the 2017 WDR considered coordination to be an essential institutional Another important benefit of improved function for making policies effective. This was coordination is that it helps to ensure that part of a larger argument in the WDR that advocated disparate agencies are pulling in the same the focus on the function, rather than on the form direction. Many government decisions often involve of the institution. In the WDR context, coordination the delicate weighing of priorities against each other. is presented as a high-level concept; for example, How should a government in the Middle East, for institutions solve market failures by coordinating example, best balance the need to diversify non-oil investment decisions and expectations of market revenue sources through increased visa fees with its participants; or laws serve as a focal point for broader desire to increase tourism? How should a large individuals to coordinate and behave in certain ways, municipality in Africa manage major investments such as driving on the right side of the road. Another in water, sanitation, and land management in an related function highlighted in the WDR – indeed, integrated and holistic manner? How can business one of its “3Cs” – is cooperation: institutions that and environmental regulations in a country in foster cooperation help avoid free-rider problems, or Eastern Europe best be streamlined to promote inclusivity in policy-making, so that those affected by growth without putting public health or safety at policies have a say in their design. These functions are risk? Without appropriate forums to weigh these vital for safety and economic growth. policy and operational tradeoffs, agencies can often work at cross-purposes. At best, they may fail to fully This report makes a similar argument for exploit the opportunities for service improvements policy and inter-agency coordination among or efficiency gains that present themselves. At worst, government agencies. In a sense, policy and inter- they may actively undermine each other. agency coordination is a combination of WDR’s Efficiency Gains in Egypt through the Creation of a BOX 3 One-Stop Shop for Business Registration In 2001, Egypt was facing a serious challenge in attracting investment, which had declined from 2.5 to 3.0 percent of GDP to less than 1 percent. Companies hoping to invest could wait for up to a year and faced a mountain of paperwork. Launching a new investment could involve as many as 22 ministries and 79 government entities. In total, 349 services were required from investors (including approvals, permits and licenses both in the establishment and the operating phases), and there were 200 regulations covering business licensing. Egypt’s General Authority on Investment and Free Zones (GAFI) subsequently embarked upon a series of far-reaching regulatory and institutional reforms to streamline and simplify licensing processes to reduce the burden upon investors. Many reforms involved the sharing of data electronically and direct coordination by GAFI among the relevant agencies, including the Capital Market Authority, the Public Notary, and the Public Union for Trade Chambers among others (Stone 2006). More recent achievements include the launch of an online option for business registration in 2017, and reforms to industrial licensing, including a mandate for low-risk permits to be granted in 10 days. As of 2018, the average amount of time that it takes to start a business in Egypt has more than halved to 14 days from 34 days in 2001 (World Bank 2017). Source: Stone (2006) 150 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION BOX 4 Coordination: Linkages between Part I and Part II The importance of coordination is evident in the cases discussed in Part I of this report. One of the emerging themes among the featured cases was driving performance from the CoG where policy and inter-agency coordination happens most often. In particular: • Case #1 (Rwanda) detailed the coordination between the central and local governments at a critical time for this nation’s post-conflict rebuilding and development. • Case #2 (Malaysia) has illustrated how coordination may involve breaking down silos among line agencies to achieve better service delivery outcomes for all. • Case #3 (Mozambique) focused on coordination between the Ministry of Economy and Finance and line ministries to improve health and education outcomes. At the same time, cases illustrating coordination mechanisms in Part I are not confined to the CoG theme. In particular, effective service delivery often requires downstream coordination. For example: • Case #10 (India) highlights the establishment of one-stop shops as part of the implementation of the PSGA, in which inter-agency coordination greatly increases convenience and citizens’ access to public services – similar to the example of Egypt highlighted in Box 3. Source: Authors game-theoretic concepts of collaboration and Weber and tracing the expansion of the government’s cooperation. Policy and inter-agency coordination has functions. We also address the methodological the most direct effect on making policies effective. challenges stemming from difficulties in assessing Without effective coordination among MDAs, public and measuring coordination. With this background sector performance suffers, as do overall development in mind, we set out to systematize what we know outcomes. As we argue below, the institutional form about coordination mechanisms using three lenses. of the specific coordination mechanisms must be context-specific and fit-for-purpose – in other words, • Lens 1: The broader environment and the social function takes precedence over form. and political dynamics that will encourage or retard government coordination; The importance of coordination is evident in the cases discussed in Part I of this report. The • Lens 2: The formal coordination mechanisms 15 case studies provide a number of examples of how that may operate across government as a whole successful implementation was accomplished through (which typically involve policy coordination) coordination, either at the CoG or downstream (see or between two or more government agencies Box 4). (which are often more focused upon operational coordination); and Through its focus on coordination, this part of the report deepens the analysis in Part • Lens 3: Other government procedures and I of driving performance from the center of approaches that, while targeted at other government. We first take a historical detour and objectives, may also have an impact upon look at the literature, highlighting the issues of coordination. coordination, starting with the seminal work of Max IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 151 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION We then consider both the global experience for delving deeper into Malaysia’s experience with with enhancing coordination and a specific coordination, highlighting both the successes and country experience, differentiating between challenges of selected coordination mechanisms, and upstream reforms (policy coordination) and linking to a particular case in Part I of this report. downstream efforts (whole-of-government Finally, we offer some lessons and conclusions: what M&E). The global overview, which is based on the works, what does not, and where there is a need for work of the Bank’s frontline staff, provides a backdrop more systematic knowledge. How We Got Here: Recent Developments in Light of the Literature M any scholars and practitioners system, to protecting the environment, advancing now believe that the demands of space exploration or combating cyber espionage – all a 21st century administration are tasks that did not exist in the United States when increasingly at odds with the 19th and 20th Weber published his seminal study “Bureaucracy” century bureaucratic institutions, structures, in 1922. Table 3 contains a breakdown of a few of and traditions, first articulated by the German the more notable functions that have been added to sociologist Max Weber.1 The critiques are many the U.S. federal government since the onset of the and varied, but a central theme maintains that 20th century, as government evolved organically in the inherent fragmentation of tasks into different response to public demand to take on more duties agencies and sub-units can significantly compromise and responsibilities in an increasingly complex the ability of government to act in a “ joined-up” environment. fashion (to borrow a phrase from Britain’s Labour government in 1997) (Barzelay 1992; Kettl 2016). A variety of mechanisms have been developed in both Commonwealth and Continental systems, and other administrative traditions as well, to combat fragmentation and deliver upon key government priorities. Yet the challenge persists. While inter-agency coordination has long been a pressing issue, it has assumed a new urgency in recent decades. This is partly due to the increasing proliferation of duties and responsibilities that governments themselves are being asked to perform, from managing large social welfare programs to maintaining an interstate highway 152 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION TABLE 3 Evolving Roles and Responsibilities within the U.S. Federal Government Agency Function Date Created Department of Commerce Support efforts to develop business 1903 Food and Drug Protect the safety of food and pharmaceuticals 1906 Administration To foster, promote and develop the welfare of wage earners Department of Labor 1913 and improve their working conditions Prevent unfair business practices, protect consumers and Federal Trade Commission 1914 promote competition Interstate Highway To create, fund and manage a divided lane, limited access System/Federal Highway 1956 and 1966 interstate highway system across the United States Administration (FHA) National Aeronautics and To support unique scientific and technological achievements in 1958 Space Administration (NASA) space flight, aeronautics, space science and space applications Environmental Protection To protect human health and the environment 1970 Agency Occupational Safety and To protect workers from harm on the job 1971 Health Administration To establish and oversee federal policy towards education, Department of Education coordinate federal assistance, collect data on schools and 1979 enforce educational laws regarding privacy and civil rights Source: Kettl (2016) Beyond the proliferation of new roles and The proliferation of roles and functions at the institutions, many existing agencies and federal and state levels has inevitably led to a departments have significantly expanded their massive expansion in the resources devoted to original mandate. The history of the U.S. Treasury government. Figure 10 below captures the growth is instructive in this regard. In 1800, the United in employment at the federal, state, and local levels in States Treasury Department employed 69 staff; by the United States, which has increased from around 2016, this number had increased to 82,566. Treasury 4 million in 1940 to 22 million in 2015. This increase was initially authorized by Congress to include the of around 550 percent was more than double the Secretary and an Assistant, a Comptroller, Register, population growth during that period. Spending at and Auditor. The U.S. Mint was added in 1792, the federal, state, and local levels during this period and the Internal Review Service was added 70 years went from 9.7 percent of GDP to 20.5 percent of later during the Civil War. Today, the Department GDP. Even if all other factors remain equal, such has 13 internal offices addressing everything from expansion in the size and scope of government has tax policy to legislative affairs, to terrorism and placed extensive demands upon the ability of federal, financial intelligence. It oversees the work of another state, and local jurisdictions to effectively coordinate 11 bureaus, including a number of large autonomous their activities to ensure that staff are productively agencies in their own right, such as the Alcohol and employed and resources are utilized efficiently for the Tobacco Tax and Trade Bureau, the Special Inspector common good. General for the Troubled Asset Relief Program, and, of course, the IRS and the U.S. Mint. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 153 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION In many emerging economies, the expansion Given this proliferation of new government of government’s role and function was even roles and institutions in recent decades in more pronounced. Prior to independence, India’s the developed and developing world alike, administration was centered primarily upon tax coordination has become both more important collection and law and order. These roles were and more difficult than ever. However, assessing embodied within a single individual, the District what effective coordination looks like is no simple Collector and District Magistrate, who served as task. Different countries with different constitutional the lynchpin around which the entire administrative systems will require different forms and extent structure was derived. There were relatively few of coordination. Coordination can take place at a state-owned enterprises (SOEs) beyond the railways, number of levels within government, ranging from telegraph and post office, the port authority, and a strategic policy coordination at the highest level handful of departmentally managed entities like salt through operational coordination at the working and quinine. Through major pieces of legislation, such level. It can take place on an on-going basis through as the 1948 and 1956 Industrial Policy Resolutions, formal mechanisms, or on an individual and ad-hoc the government expanded rapidly to occupy the basis through informal networks or contacts. It can “commanding heights” of the economy. By 2012, over focus upon horizontal challenges, such as the bringing 250 SOEs existed, spanning a vast range of activity, together of different agencies of equal status within from nuclear power and steel to pharmaceuticals, the same government around a common goal or goals. and to consumer products such as watches and bread Or it can focus upon vertical challenges, such as the (Gupta et al 2017). In addition to the proliferation of interaction of devolved or decentralized units at the SOEs, the federal and state governments significantly federal, provincial or local level. expanded their areas of engagement, moving beyond security and revenue collection to embrace economic Effective coordination can be viewed across development and poverty alleviation as core missions. a continuum of simple to complex. One of the By one count, as of 2017, more than 110 poverty first scholars to address the topic seriously was Les reduction and social welfare schemes were being Metcalfe, who developed a nine-tier scale in 1994, administered by the Government of India and various a modified version of which is presented below state governments.2 in Table 4 (Dogaru and Matei 2012). Metcalfe’s FIGURE 10 Expansion of Government Employment at the Federal, State, and Local Levels 24,000 22,000 20,000 18,000 Thousands of Persons 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Shaded areas indicate U.S. recessions Source: US Bureau of Labor Statistics Source: U.S. Bureau of Labor Statistics (All Employees), Government Federal Reserve Bank, St. Louis, MO (accessed April 17, 2018), https://fred.stlouisfed.org/series/USGOVT 154 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION scale has subsequently been refined and extended trajectory would look like. It also usefully underscores by others, particularly by the OECD in its work the fact that coordination falls across a spectrum of on policy coordination for development. It ranges activity, from complete autonomy to fully joined- from Level 1, in which ministries take independent up activity. However, it suffers from a number decisions and each minister remains autonomous of drawbacks, some of which are the fault of the and acts independently, to Levels 8 and 9, in which framework itself, and some of which are inherent governments establish clear central priorities as part in the complex nature of the exercise or the under- of a cohesive, overall strategy. developed status of the academic knowledge of the topic. The Metcalfe scale is a useful first-cut approximation for addressing inter-agency In practice, government coordination is not an coordination from a center of government integrated whole that progresses in a unified perspective. It allows observers to quickly manner, as captured in the Metcalfe model. understand the extent to which line departments Examples across many governments reveal a complex operate autonomously, as well as what the desirable mélange of coordination mechanisms on different TABLE 4 A Modified Metcalfe Scale Level Description Level 1: Ministries take independent Each minister remains autonomous in their public policy domain decisions and acts independently. Level 2: Communication with other Ministries inform each other about the problems that arise and ministries (information exchange) how they intend to act within their domain. Level 3: Consultation with other In the process of policy formulation, the ministries consult with ministries each other and provide feedback. Level 4: Avoid differences between A balanced perspective is maintained between different actors. ministries Players do not take divergent positions and government acts with one voice. Level 5: Finding inter-ministerial The inter-dependence between ministers and their mutual agreement interests is recognized to reach a consensus on complementary policies and the achievement of common goals. Level 6: Judging the divergences Actions are coordinated by a third actor (such as a central between actors agency) when various ministerial actors are unable to come to an agreement. Level 7: Setting the parameters for A central actor in the decision-making process has a more active organizations role, setting parameters on the discretional powers of other actors. Level 8: Governmental prioritization Clear government priorities are determined after collaboration, along with a defined path and direction to be followed by the line ministries. Level 9: Overall government A comprehensive government strategy is adopted, with clearly strategy defined roles and responsibilities for individual ministries and line departments. Source: Dogaru and Matei 2012 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 155 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION FIGURE 11 Increasing Complexity of Coordination Entities vs Interrelationships 200 180 160 140 120 100 80 60 40 20 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Entities Relationships Source: Authors topics and sectors that may more closely resemble stakeholders with disparate views will be involved, the network analysis provided in Figure 9. Some which may complicate or delay the process. Such areas, such as national security and foreign affairs, efforts may even increase the risk that initiatives may have tight and well-defined procedures for are compromised by those who are hostile to them. coordinating policy, whereas others (such as business On the other hand, such approaches increase regulation or social protection) may be much looser the probability that, once attained, the resulting and more fragmented. Established protocols may consensus will enjoy ownership among a wide range of allow operational coordination to occur consistently parties that will contribute to its downstream success. between different agencies and departments, whereas These tradeoffs have been appreciated at least as far broader policy coordination may wax and wane back as Machiavelli, who noted in his Discourses, over time. Conversely, policy coordination could “though but one person suffices for the purpose of be proceeding nicely, but the lack of well-defined organization, what he has organized will not last long operational protocols could mean that the activity of if it continues to rest on the shoulders of one man, but different agencies remains fragmented and disjointed. may well last if many remain in charge and look to its maintenance (Machiavelli et al 1996).” 4 To define what effective coordination means, it is important to consider that coordination comes at a cost. This requires careful consideration of the tradeoffs. Staff time and resources are involved in setting up and conducting review meetings. It can take effort and energy to forge a consensus, compromising government’s ability to respond adroitly to rapidly changing circumstances (Figure 11 below displays the mathematical relationship between the number of entities and the number of inter-relationships between them). 3 The broader the circle is drawn, the more likely it is that 156 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Toward Enhanced Coordination: Key Dynamics and Approaches I n practice, enhancing coordination will the table), make up only a relatively small proportion depend not only on the adopted formal of the diverse array of coordination mechanisms and institutional mechanisms, but also on approaches taking place within government. They are their interplay with the broader institutional important, in that they address the question of what environment and with other processes that government should do in a given domain or with a influence coordination. Table 5 presents a broader given set of challenges. Decisions reached at that level breakdown of the dynamics influencing government will have implications down the line. But much of the coordination. Forma l policy coordination actual work of coordinating government interaction mechanisms at the apex of government, of the type on a day-to-day basis takes place elsewhere. captured by the Metcalfe scale (highlighted section in The Broader Environment A s Table 5 indicates, coordination does of options. Others prefer crisp lines of authority not take place in a vacuum. A host and carefully structured choices. These approaches of broader political and social dynamics can vary between leaders and will have a significant influence how easy (or difficult) it will be to establish impact upon the extent to which established policy institutions and procedures that facilitate policy and procedures will facilitate coordination. Beyond operational coordination. Their precise interactions managerial style, societies themselves often differ have yet to be established empirically and are likely regarding the extent to which they are organized to vary significantly both from country to country as horizontally with a tradition of consensus-based well as over time within a single government. Yet they norms or hierarchically into patron-client relations; underscore the conclusion of the 2017 WDR that this will also influence the way in which decisions are the degree to which institutions are able to function derived and sustained.6 effectively is often dependent upon broader power relationships and social norms and dynamics that The second important factor is the existence operate beyond the formal scope of the institutions of shared national values and a national vision. themselves. The legitimacy of policies (and the institutions that advance them) plays an important role in whether they are adopted, shared, and implemented. Broader Societal Factors Legitimacy has several dimensions: (i) a procedural dimension – policies are legitimate if they are Socially, at least three factors will influence aligned with prevailing law and implemented by the the incentives for competition or collaboration designated authorities in the prescribed manner; (ii) a within government. The first is leadership utilitarian dimension, – they are legitimate if they are style. Leadership can be collegial, dedicated towards sensible and targeted towards resolving key national forging a consensus and moving forward.5 Or it challenges; and (iii) a normative dimension, – they can be visionary, articulating a clear goal or goals are legitimate if they are consistent with the values, and motivating staff to move in a unified direction. beliefs, and preferences of those who are advancing Some leaders thrive on institutional ferment and them. Cooperation will be easier to sustain if a given conflict, which allows them to choose from a variety policy is viewed as legitimate than if it is not; and IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 157 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION TABLE 5 Government Coordination: A Conceptual Map Broader Environment Political and Constitutional Factors: Social and Cultural Factors • Government Structure and Fragmentation • Leadership Style (consensual vs. hierarchical) • Single Party State versus Multi-party State • Legitimacy, Values and Vision • Coalition versus Unified Governments • Shadow of the Future (iterative versus one- • Cabinet versus Presidential Systems off engagement) • Political Party Composition at the National and Sub-National Levels Whole of Government Bilateral and Coordination (Primary Focus is Multilateral Inter- Mechanisms with Policy Coordination) Agency Mechanisms Sub-national (Primary Focus is Governments Operational (Both Policy Coordination) and Operational Coordination) Formal • Cabinet • Formal and informal • Fiscal policy, including Coordination inter-agency working taxes, grants and • Sub-cabinet Mechanisms groups, task forces, etc. transfer payments committees (conditional or non- • Dedicated liaisons and • Central agencies conditional) contact points (President, PM and • Regulatory practices Cabinet Office, • Established protocols and standard setting; Chancelleries) for communications league tables and information-sharing • Delivery Units (working level) • Voluntary and • Expert Panels and involuntary mandates Advisory Boards • Inter-governmental councils • National and regional associations Practices • The Budget Process • Reorganization, • Legislative or that mergers parliamentary • Government-wide M&E Influence bargaining Systems • Staff secondments and Coordination rotations • Joint training and • IT Systems preparation exercises • Joint distribution • Generalist/Executive lists, conferences and • Use of properties, Service Cadres retreats facilities and equipment • Transparency • Combined training and • Advisory services & staff development counseling • Professional networks • Joint messaging and associations • Media and social media networks 158 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION legitimacy will be easier to achieve in polities with a the result of any rational delineation of administrative shared set of values than in those that are politically roles, but instead reflect political bargains and the fragmented and polarized. effort to construct a governing coalition within a fragmented polity. The challenge of effective policy The third factor is the shadow of the future, and operational coordination will be vastly more which can have an important impact upon the difficult in such environments. extent to which collaboration occurs. This has been demonstrated in a wealth of research from the 2. Party Structures and Coalitions social sciences and game theory.7 Even in the absence of any central authority to enforce compliance, A second important factor is whether the scholars have noted that cooperation can emerge from country is a single party or a multi-party state. individuals who might otherwise be indifferent or As the example of Vietnam indicates (Box 5), in many even hostile. A key factor is the extent to which they single party states, policy decision-making can be are interacting in a one-off manner or on a routine centered within the party apparatus, with the state basis. In the former, a given transaction will be the playing a largely instrumental role in implementation only time that they are likely to deal with each other, (although in reality, the relationship between party while in the latter, they may be more willing to forgo and state organs may be more complex and nuanced). optimizing their immediate gains for the sake of Even in countries where electoral turnover is common, preserving a productive relationship over time. the nature of the government – whether it is formed by a single party or a coalition – can exert an important influence upon how coordination takes place. Single Political and Constitutional Factors ruling parties can rely upon internal party governance structures to rein in recalcitrant ministers and ensure Politically and constitutionally, at least five that they remain “on message” in ways that coalition major elements will influence how cooperation governments cannot. Coalitions must also live unfolds within government. They include: (1) the with the threat that, if they push too hard on their basic structure of the state, and the extent to which partners, it may ultimately compromise the political administrative units are unified or fragmented; (2) arrangements that brought them into power. the presence of a single party or multiple parties; (3) whether a state is ruled by a unified party or a In many countries, particularly those with coalition; (4) whether it operates under a cabinet or authoritarian structures or a dominant presidential system; and (5) whether different parties political party, policy coordination may take are in power at the national, regional, and local levels. place less within government than within organs of the ruling party dedicated for this 1. Administrative Fragmentation purpose. The most famous example is the politburo, which was the deliberative body within communist One of the most basic challenges is the parties responsible for political decision-making structure of government itself and its degree at the highest levels. Interesting work by Gehlbach of fragmentation. Romania, Burkina Faso, and and Keefer, for example, has demonstrated that Sri Lanka, for example, are all roughly the same size strong party institutions in countries like China have with a population of around 20 million. As of 2018, played a very important role in solving collective Romania’s cabinet has 22 ministries and 5 minister action problems and providing assurances of stability delegates. Burkina Faso has a cabinet of 30, including and consistency that have facilitated high levels of the Prime Minister and 23 other ministers, 2 minister foreign direct investment (Gehlbach and Keefer delegates, and 4 secretaries of state. In Sri Lanka, the 2011). Box 5 below lays out how policy coordination cabinet currently comprises 42 ministers, namely the functions are performed by the Communist Party of president, prime minister, and 40 cabinet ministers. Vietnam. Decision-making took place largely within In addition, there are 24 state ministers and 21 deputy party structures, and government was expected to ministers who are not members of cabinet. At one implement arrangements that had been decided upon point, the Indian state of Uttar Pradesh had a cabinet elsewhere. of over one hundred. Such outcomes are typically not IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 159 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION The Communist Party of Vietnam and Policy BOX 5 Coordination The Vietnamese Constitution enshrines the Communist Party as an uncontestable source of executive power. Vietnam is a unitary state, but characterized by both decentralized policy implementation and consensual decision-making. Governance arrangements are anchored around National Congresses (NC) held every five years. The Party’s 12th National Congress was held in early 2016. The NC elects the Central Committee (CC) and Politburo to implement the policies of NCs. The CC and Politburo are interlinked with other key cross-cutting institutions, such as the Prime Minister (PM) and his Office of the Government (OGG) to coordinate in effect a cabinet structure and a growing role for the parliament (National Assembly - NA). The 19-member Politburo operates on the basis of a collective decision-making process. The current Prime Minister is by default a member of the Communist Party and sits in the Politburo, but not as the highest-ranking member. Politburo members also contain representation from key agencies, organizations, and major provinces (e.g., Ho Chi Minh City and Hanoi). The Communist Party dominates the NA and therefore has significant sway, but not complete control over its decision-making. In practice, the interlinked roles of Vietnam’s key governance institutions (CPV, NC, CC, Politburo, NA, PM’s Office, mass mobilization organizations) provide for a web of collective decision-making coordination. Vietnam’s political system has also evolved over the past decades with an increasing role accorded to the NA to hold government more accountable (see Nguyen 2016:4). Vietnam’s achievement of middle-income status in 2016 has also highlighted some of the limitations of the current system, and brought responses from the Party leadership. Vietnam is also increasingly dealing with fiscal constraints, accumulated from high spending levels at the national and sub-national levels over the past decade. The growing challenge has therefore been to bring greater coherence to decision-making implementation, including in promoting more efficient policies and expenditures. The Party’s 12th National Congress in early 2016, and succeeding Central Committee sessions, have sought to tackle issues of excessive bureaucracy and Party integrity. The Vietnamese Communist Party has recently strengthened its anti-corruption drive, as well as efforts to streamline organizational structures. Source: London (2014); Nguyen (2016); World Bank and Ministry of Planning and Investment of Vietnam (2016c). As Box 5 notes, even one-party states have represented mounting problems. Political power are seldom monolithic in their decision- within Vietnam is fragmented across agencies and making. The Vietnam 2035 report identifies between the center and the provinces. The absence of some of the country’s key coordination and policy a clear hierarchy and distribution of authority creates implementation challenges (World Bank 2016c). 8 incentives for agencies to resist decisions perceived to While the Communist Party is empowered under be against their interests. This may result in gridlock the Constitution to promote national coordination, and/or narrow, parochial interests prevailing to the in practice both horizontal and vertical challenges detriment of the broader collective good. 160 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Formal Coordination Mechanisms 1. Apex Coordination Mechanisms to a manageable number, typically around 400 to 600 per year; and Many countries rely on a cabinet or council at the apex of government for coordinating policies • Decisions are dutifully recorded, disseminated, and decision-making across government. They and monitored. are typically chaired by the president, monarch or prime minister and consist of heads of government The institutions or units that provide support ministries. The role and composition of such organs to the Prime Minister or President are often can vary greatly. In presidential systems, cabinets critical to ensuring that the policy development may meet infrequently and play only a limited role and policy monitoring are well coordinated. in collective decision-making. George Bush held 49 While countries will have different names for these cabinet meetings during his eight years in office, or bodies, their function may be very similar. A Cabinet roughly one every two months. During his second Office, Chancellery, or General Secretariat should term in office, Barack Obama held only 12. Such have some established processes to make sure that meetings are often largely ceremonial in nature. In senior policy-makers across government are informed the words of Ted Sorenson, a former speechwriter for of the core legislative actions, funding proposals, President Kennedy, “no important decisions were ever new initiatives, or program outcomes that are likely taken, and few issues of importance were ever seriously to affect their ministry or agency (see Box 6 below). discussed (Kamen 2013).” Instead, decision-making Though the scope of government functions is too vast at the White House tended to be centered around for all initiatives to receive the same level of scrutiny, smaller groups of key stakeholders and advisors. it is vital, nevertheless, that careful consideration be given to when and where cross-sectoral coordination In Commonwealth and Continental traditions, is justified. Effective cabinet offices have established cabinets play an important role in determining criteria and procedures for determining when and policy and coordinating operations. The principle how to bring items onto the Cabinet’s meeting agenda of collective leadership applies, in which all members for review or decision. Well-functioning cabinets stand behind a given decision. Cabinet meetings create the space to coordinate on the matters that are are more frequent, such as weekly or bi-weekly. most important to the government’s agenda, while The mechanics of cabinet decision-making can vary recognizing the pressure that is created by weekly tremendously across well-performing systems. Some ‘emergencies’ or urgencies. cabinets allow principals only to participate; others allow delegates. Some follow a strict agenda; others allow a more freewheeling discussion. Estonia does 2. Sub-cabinet Committees both, having narrow focused meetings as well as longer and more open discussions. Beyond the details Beyond cabinet, countries typically have of their operations, certain basic principles underlie a number of cabinet committees or sub- effective cabinet operations: committees that help to coordinate decision- making in certain policy areas. These sub- • Cabinet agendas and proposals are carefully committees can be either standing or temporary. vetted beforehand for their cost and consistency In some countries, formal cabinet sub-committees, with established policy; often broken down by sector, play an important role in reviewing and vetting proposals before their • Agencies with a stake in the issue are consulted consideration by cabinet. (Such committees may prior to the meeting; involve either small groups of ministers or senior civil servants such as permanent secretaries.) In others, • Procedures are structured carefully so as to limit particularly within presidential systems, they can the number of decisions coming before cabinet serve as the forums through which actual decision- IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 161 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Functions of a State Chancellery: The Example of BOX 6 Latvia State Chancelleries have been set up in some countries with parliamentary forms of government to support the Cabinet in evidence-based decision-making and to aid in policy coordination. For example, in Latvia, the State Chancellery comprises the Prime Minister’s Office and departments, divisions, and individual units set up by the Director of the State Chancellery. The State Chancellery ensures that policy documents and draft legal acts of the Cabinet comply with the effective requirements; develops and implements policy action plans in various areas; presents opinions on policy documents and legal acts; and organizes the activities of the Cabinet of Ministers. The functions of Latvia’s State Chancellery include: organizing and making the necessary preparations for Cabinet meetings; ensuring that the Cabinet’s documentation is prepared according to the procedure set forth in the relevant laws and regulations; and being responsible for the management of the Cabinet’s documentation. Specifically, the State Chancellery is required to: • participate in the policy planning processes pursuant to the Cabinet’s guidelines and tasks assigned by the Cabinet; • coordinate the planning and implementation of the national policy through presenting proposals on priorities for national development in cooperation with ministries; • ensure elaboration of the development policy of public administration (incl. the state civil service) and coordinate and supervise its implementation; • when assigned by the Prime Minister, coordinate and manage enforcement of the decisions adopted by the Cabinet of Ministers and the Prime Minister; and • inform the public about the work and activities of the Cabinet of Ministers. Source: The Cabinet of Ministers of the Republic of Latvia making takes place. This can be true in cabinet but staffed by senior civil servants report to the systems as well. In the United Kingdom, for example, Cabinet Office. They include bodies such as the Joint the decisions of formal cabinet committees are viewed Intelligence Committee, the Permanent Secretaries as binding upon the entire cabinet. Management Group, and the Civil Service Steering Board. They can be permanent in nature, such as Box 7 below provides a list of current Cabinet those addressing national security issues, or deal committees and sub-committees in the United with important time-bound priorities, such as the Kingdom under the Government of Theresa European Union Exit and Trade Committee. Still May. Beyond these specific bodies, the current U.K. others, such as the Civil Service Steering Board, are government includes five implementation task forces responsible for managerial functions that cut across at the cabinet level on topics such as housing, digital, government as a whole. tackling modern slavery and people trafficking, immigration, and employment and skills. In addition, several committees that are not at the cabinet level 162 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Cabinet Committees and Sub-Committees in the BOX 7 United Kingdom (2018) • Economy and Industrial Strategy Committee »» Economy and Industrial Strategy (Airports) Sub-Committee »» Economy and Industrial Strategy (Economic Affairs) Sub-Committee • National Security Council »» National Security Council (Threats, Hazards, Resilience and Contingencies) Sub-Committee »» National Security Council (Strategic Defense and Security Review Implementation) Sub-Committee • European Union Exit and Trade Committee »» European Union Exit and Trade (Negotiations) Sub-Committee »» European Union Exit and Trade (International Trade) Sub-Committee »» European Union Exit and Trade (European Affairs) Sub-Committee • Parliamentary Business and Legislation Committee • Social Reform Committee • Social Reform (Home Affairs) Sub-Committee Source: The Government of the United Kingdom 3. Other Mechanisms for Horizontal Many OECD countries rely upon these dense Coordination networks of inter-agency working groups, at times working in combination, to play a vital As one moves down to the operational level, role in pursuing cross-cutting initiatives, MDAs have a range of mechanisms at their allowing agencies to engage simultaneously on disposal for fostering horizontal collaboration. both policy and operational coordination. An They include ad-hoc committees, task forces and interesting example can be found in the Government working groups, which may be permanent or of Sweden’s approach to SDG implementation. temporary in nature. Coordination may take place Sweden has been a strong supporter of the SDGs, either bilaterally or between a limited number of and its prime minister, Stefan Lofven, has been at agencies within a given sector, or it may involve more the forefront of the global sustainable development participants. (Within the U.S. Government, the movement. Sweden has developed an elaborate set Inter-agency Working Group on Youth, for example, of coordinating mechanisms at different levels of brings together 18 different federal agencies.) These government to take forward its SDG commitments, inter-agency mechanisms can be sector-based in areas which are highlighted in Figure 12. Various such as water, energy or public safety. Or they can deal organs supporting coordination include an inter- with cross-cutting problems, such as unemployment, departmental working group of four state secretaries disabilities or cyber security. At the working level, (from the ministries of Finance, Foreign Affairs, approaches may involve the use of dedicated liaison Enterprise and Innovation, and Environment and officers and/or the use of established protocols and Energy); an agenda 2030 coordination group to procedures for sharing information and coordinating support the state secretaries and coordinate inter- action. departmental processes and operations; and an IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 163 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION interdepartmental Agenda 2030 working group of may address important high-profile issues (the Social civil servants that includes representatives from all Security Advisory Board or Nuclear Waste Technical 11 ministries. Coordination efforts do not stop at Review Board), whereas others can be quite narrow in the inter-agency level but go down to the individual their scope and focus (the Citizens’ Stamp Advisory ministries themselves, which have their own internal Committee or the American Battle Monuments coordination teams. These efforts are supported by Commission). These entities serve a variety of two external groups involving think tanks, NGOs, purposes. They can serve as forums in support of both and other stakeholders, as well as a science council. horizontal and vertical coordination. They can help attain access to expertise and information that may The Swedish example highlights another not exist within government. And they can generate important dimension of policy coordination: broader political support and buy-in for particular the use of external expert panels and advisory causes or policy approaches. boards. Many governments make frequent use of such committees, which can consist of outside experts entirely or of a combination of government 4. Vertical Coordination and Sub- officials, academics and representatives of business National Governments and/or civil society, to help coordinate policy. The United States, for example, has over 40 such boards, Other mechanisms are utilized to support commissions, and committees at the federal level. vertical coordination between different levels Some address the needs of particular regions (the of government. Historically, national governments Appalachian Regional Commission or the Delaware have relied heavily upon two sets of mechanisms to River Basin Commission). Others tackle a specific influence provincial and municipal governments: issue (the Marine Mammal Commission or the financing and regulation. With regard to fiscal Medicare Payment Advisory Commission). Some incentives, a variety of inducements have been FIGURE 12 Sweden’s Coordination Mechanisms for Implementing the SDGs Start with a leadership team and a coordination structure... Political leadership • Stefan Lofven, Prime Minister - National & global engagement • Isabella Lovin, Minister for International Development Cooperation and Climate, and Deputy Prime Minister, Ministry of Foreign Affairs - International Dimension • Ardalan Shekarabi, Minister for Public Administration, Ministry of Finance - National dimension Interdepartmental state secretary group (4 ministries) • Ministry of Finance & Ministry of Foreign Affairs • Ministry of Enterprise and Innovation Two external/independent • Ministry of the Environment and Energy supporting functions • National delegation for Agenda 2030 (stakeholders) Agenda 2030 coordination group (4 ministries) • Science council for The core-team members (civil servants) sustainable development • Support the state secretary group • Coordinate interdepartmental processes & operations Interdepartmental Agenda 2030 working group (civil servants) • Representatives from all 11 ministries • In each ministry - an internal Agenda 2030 coordication team and coordinator/team leader Source: Lundin (2017) 164 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION utilized, including formula grants, project grants, Governments are increa sing ly seeking loans, guarantees, revenue sharing arrangements, and innovative ways to address challenges subsidies, to encourage sub-national governments of coordination at the sub-national level. to pursue policies and approaches that are aligned An interesting example is Guangxi Zhuang with national priorities. The use of conditional Autonomous Region in southern China, with a transfers is a particularly potent form of leverage, population of 48 million. Guangxi is a provincial as national governments can threaten to withhold administration consisting of four tiers of government resources if certain criteria (such as matching funding – 14 municipalities, 111 counties, 1,246 sub-district requirements or service delivery standards) are not offices, and 15,000 village committees. In the mid- met. 2000s, Guangxi, like the rest of China, embarked on a transformation, shifting its development strategy National governments also often rely upon from exclusively pursuing GDP growth toward their regulatory mandate, and particularly pursuing a more balanced approach. This entailed their ability to set safety, health, welfare, setting objectives that included the improved well- and environmental standards, as a means being of the citizenry, rural development, farmland to influence local compliance. It is common for protection, ecology, air pollution control, and equitable governments to establish (or to seek to establish) and efficient public services (education in particular). uniform national environmental, health and human The biggest challenge to successfully implementing safety and labor standards, as opposed to a patchwork the new approach involved issues of horizontal and of local regulations and practices. Such efforts often vertical coordination, as each department and locality involve attempts to articulate a minimum set of had its own unique objectives and priorities within standards, along with agreed-upon metrics and a the new development framework. common set of risk-based approaches to monitoring. Some countries utilize regional councils or advisory To meet this challenge, Guangxi introduced boards to provide forums for discussion and to a collaborative governance scheme based mitigate such issues, whereas others depend heavily on a performance management system. This upon their parliamentary representatives to negotiate scheme sought to facilitate collaboration along three compromises or exceptions with national agencies. dimensions: (1) horizontally among all functional agencies in the same tier of government; (2) vertically Efforts to coordinate policy vertically through among all tiers of government; and (3) cross-sectorally regulation frequently encounter problems between the government and other stakeholders when different political parties control including citizens, social organizations, and NGOs. government at the national and sub-national The system also sought to hold various government levels. Sub-national governments may argue that agencies and local governments accountable for national regulations are too strict or too lax, or are differentiated objectives. Its roll-out is highlighted in non-responsive to local needs and requirements. Box 8 below. A particular concern in many jurisdictions is the proliferation of unfunded mandates, which are often Throug h this mechanism , the Guangxi efforts to impose certain obligations upon lower government was able to achieve considerable levels of government without any compensatory success. Guangxi has fully implemented the financing mechanism. In Europe, a number of sub- government programs promised in its annual report national governments have expressed concern about on government work at all levels of administrative the burdens posed by unfunded mandates emanating units. In 2017, Guangxi broke down the macro- from the European Union and national governments. planning scheme in the government work report, In 1995, the United States passed the Unfunded key projects, and public documents into 5,875 Mandates Reform Act, which required prior performance targets, 98.7 percent of which have been consultation for any federal rule imposing a financial successfully accomplished. Public satisfaction with burden upon small governments or the private sector government performance has greatly improved over of US$100 million or more in any given year. the past four years from 73.9 percent to 87.7 percent. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 165 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION BOX 8 Vertical Coordination in Guangxi Province To address the challenge of reorienting its development approach, in 2008 Guangxi established a new agency, namely the Office of Government Performance Assessment, with offices in each tier of government to take responsibility for performance management among all administrative units. A performance management information system was developed in 2009 to assist with the implementation. The performance management system fosters collaboration through six implementing mechanisms and three support measures, the so- called “6+3 schemes”. The six implementing mechanisms include: (1) a mechanism for formulating strategic targets; (2) the breakdown and clear delineation of responsibilities between organizational units and sub-units; (3) the development of a comprehensive tracking system; (4) the employment of a public opinion firm to monitor citizen satisfaction; (5) the development of a system for monitoring innovation and identifying excellent practices; and (6) the linking of annual performance evaluations to the achievement of departmental targets. These mechanisms were, in turn, supported by three measures: (1) the development of a standardized system of performance indicators; (2) a manual clarifying the approaches and documents that are necessary for the performance system to function; and (3) the implementation of a linked performance management system that combines management processes, real-time monitoring, information disclosure, and long-term performance records. Source: Bank Staff Analysis Practices That Influence Coordination B eyond the formal mechanisms outlined bottlenecks around key deliverables, may also play a bove , po lic y a nd inter- a g enc y a facilitative role in selected areas. (A recent Inter- coordination can be further aided (or American Development Bank review indicates that hindered) by government practices that are they frequently play a role in facilitating coordination targeted at other objectives. For example, the in Latin American countries.)9 The same is true budget process exists to optimize the allocation of for how the civil service is structured and how its public funds, but it can also be organized in a way executive management corps is organized. The use of that facilitates coordination. Similarly, procedures information technology is also playing an increasingly for government-wide monitoring and evaluation, important role in influencing how governments are such as those employed to support the realization of able to coordinate their activities. Finally, some the SDGs or other national vision documents, can government reorganization efforts may be motivated be structured to help support joint accountability by the desire to improve coordination as well as to for results. Innovations such as Delivery Units, streamline operations or to generate cost savings. which are targeted at eliminating inter-agency 166 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION The Budget Process fostering policy coordination across ministries and agencies. The Australia federal government Budget process reforms have been used to has had more than two decades of experience using break down organizational silos and promote budget portfolios to encourage policy coordination greater coordination around shared objectives. and a more joined-up, strategic budget preparation Starting with the Planning, Programming, and process. As there are numerous ministries and Budgeting System (PPBS) introduced in the United agencies that span the public sector, there is a risk of States in the 1960s, governments have recognized fragmented budget planning. In Australia, multiple that budget process reforms can be a powerful budget entities are grouped under a single portfolio, driver to help institutions work together and assess with a single minister having responsibility. The lead priorities. PPBS’s emergence reflected an awareness minister assumes responsibility to coordinate across that government budgets could not continue to grow the entities to ensure that policy objectives are aligned incrementally each year without an appropriate and resources are optimized within the portfolio. This review of whether entities conducted activities that creates greater space to make tradeoffs within the were still needed and valuable to the government. portfolio and across traditional organizational lines. PPBS helped drive a shift from line item budgets linked to organizational units to a program-based M alaysia’s implementation of outcome- structure that regrouped resources under a common based budgeting (OBB) is one example of a set of policy objectives. It also instituted a robust budget process reform with features that set of requirements to push government officials to could contribute to greater cross-sectoral justify the continued utility/value of their programs. coordination. Under OBB, all programs within While the bureaucratic weight of PPBS requirements a ministry must be mapped to one of six national eventually made it unsustainable, the concept strategic priorities contained in the 11th Malaysia of program budgeting has endured as a valuable Plan (2016-2020) and one of the corresponding “focus alternative to traditional line-item budgets. It has areas” within each thrust. OBB was designed to show been enhanced by the introduction of performance cross-sectoral contributions to the national strategies budgeting, which encourages the specification of and make them more visible. Because there is greater performance indicators. visibility at the center over programs across the whole of government, planners and budget officials can The benefits of program budgeting for policy more easily identify potential overlaps or outdated coordination are usually confined to a single line initiatives. On the other hand, budgets are still ministry, and do not necessarily extend across controlled at the level of the ministry, department, ministries. Program budgets are developed to or agency. There is no individual or institution support the strategies and missions of a line ministry, that is responsible for the outcome of the strategic and the budget authority is given to the ministry thrust or the outcomes for the focus areas within head. Preparation of an over-arching medium-term it. Achievement of national outcomes is a collective national strategy document could in theory support responsibility, with each ministry contributing within coordination across sectors/ministries, but there are its domain and maintaining control over its own limits in practice because of the common separation budget. between the planning and budgeting processes. Even when there is an overall national development strategy, contributions of ministries are not necessarily Government-Wide Monitoring and linked to the individual strategies. Key performance Evaluation (M&E) and Delivery Units targets are usually set at the ministry level because it is consistent with budget appropriation decisions. Similar issues are currently playing out in the Furthermore, in some cases, the directorate generals context of government-wide M&E systems. and agencies under the ministry have a high degree Performance M&E frameworks and/or systems of budgetary autonomy, and ministry budgets are are now being introduced in a number of countries mainly a compilation of their subordinate parts. and provinces, including Botswana, Egypt, India, Saudi Arabia, and South Africa. Such systems, Portfolio budgeting is an initiative aimed at which are often linked to various long-term national IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 167 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Progress in Key Sectors through Integrated Performance BOX 9 Management: The Brazilian State of Pernambuco Basic Information The Brazilian state of Pernambuco is located in the northeast region of Brazil. Its population is around 9.2 million, and its GDP per capita places it 16th among Brazil’s 26 states. The Functional Problem In 2007, the state government in Pernambuco faced a variety of challenges in terms of improving results for its citizens, ensuring cohesion across the administration, and strengthening the accountability of managers for results across government (Alessandro et al 2013). The government developed an integrated system of centrally-led performance management built around formulation, implementation, monitoring and evaluation. A set of 12 priority goals were identified and funded. Each week, the Governor chaired monitoring meetings for two strategic objectives, covering all 12 during a six-week period. Certain high priority areas, such as security, health, and education, received additional monitoring. The Response The results have been impressive. Perhaps one of the most significant accomplishments has been the linking of investment to government priorities. A “strategy map” is developed with strategic objectives that are derived from the Governor’s political campaign. Each of the priority goals in the strategy map has a direct correspondence in the annual budget law. In addition, priority infrastructure projects are tracked through a dedicated project management office. As shown in the chart below, there has been a significant expansion in public investment since the new approach was rolled out in 2008. Pernambuco Public Investment, 2003-14 Pernambuco Public Investment, 2003-2014 3,697 3,096 2,894 2,332 2,407 1,836 1,059 689 621 411 421 496 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Noticeable improvements have taken place in terms of educational performance on metrics such as standardized tests and a reduction in the number of high school dropouts. There has also been a decline in deaths by preventable causes and a reduction in violent crime – other key priorities for the government. State officials have credited the system with providing real- time feedback that helped to play an important role in helping to detect and contain potential epidemics such as the Zika virus (Human Rights Watch 2017).10 In 2014, an assessment conducted by the Inter-American Development Bank identified a number of areas for further development (Alessandro et al 2014). They include establishing a better linkage between improvements in internal management and priority outcomes for the citizenry, which in turn will require greater coordination with state municipalities and the citizenry. Improved collective problem solving among sectoral secretariats is another priority. Source: Xavier Jr. (2016) 168 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION vision documents or, more recently, to SDG to keep implementation on track, often targeting the implementation, can struggle with the allocation of bottlenecks or problems falling between agencies, and responsibility for cross-cutting goals and objectives. they have occasionally been brought in to facilitate To facilitate accountability, ownership for such coordination in other areas, stretching beyond their goals is almost always assigned to a given ministry immediate mandate and focus. or department, with the understanding that others will play a contributing role. In many contexts, such systems are fostering greater inter-agency dialogue Information Technology and coordination over outcomes at the working level. To what extent are ongoing developments in In Pernambuco, a medium-sized state in Brazil, information technology likely to transform the government established the performance the challenge of policy and operational management system around a select number coordination? Some interesting experiences raise the of priority goals and integrated it into policy hope of transformational improvements. For example, formulation, as well as implementation and by outfitting garbage trucks to serve as mobile sensor monitoring. Priority goals had a direct link to the platforms, the Department of Public Works in annual budget law, with priority infrastructure Cambridge, Massachusetts can now be notified when projects also benefiting from a dedicated project accelerometers detect a pothole, thereby allowing it to management office. As Box 9 underscores, the respond directly and reducing the need to coordinate government views the system as helping it make manually with the Department of Sanitation. In a tangible improvements in public investment and the similar manner, cities such as Singapore and Boston quality of service delivery. There was also a significant are pulling together dashboards that allow the increase in public investment in the wake of system monitoring of KPIs in areas such as public safety, implementation in 2008, although it may have municipal services, human services, and economic declined in recent years. development on a real-time basis, with the goal of supporting more rapid and integrated decision- For a limited number of high-priority objectives, making. Chicago’s WindyGrid provides three some central governments have set up main functions in a geospatial interface: situational institutional innovations such as Delivery awareness and incident monitoring; historical data Units. The original Prime Minister’s Delivery Unit retrieval; and real-time advanced analytics. It has was established under Tony Blair’s second term of been a valuable tool in supporting a more integrated office in the United Kingdom, and has spread around approach among municipal agencies in everything the world, most notably Malaysia (PEMANDU), from parades to health and human safety, to extreme Australia, Indonesia, a number of countries in Latin weather events.11 America, and some sub-national governments, such as the state of Maryland in the United States. Delivery As these examples indicate, technological units are typically designed to focus upon a relatively changes are already having an important narrow set of cross-cutting priorities. They focus impact upon operational coordination. This more upon operational and delivery issues than policy has been taking place since the 1990s through coordination, and the units will carefully monitor the reengineering of business processes and the progress towards the government’s key objectives. digitization of data, which (as the Egypt One-Stop Although they are meant to complement, rather than Shop case demonstrates) has helped citizens to break substitute for other government-wide systems and down functional and organizational boundaries procedures (such as cabinet office, program budgeting and facilitated radical improvements in the quality or government-wide M&E systems), the central and speed of service delivery. Big data and artificial government may use a Delivery Unit to plug the gaps intelligence will accelerate these trends, providing in inter-agency coordination on a selective basis. In decision-makers with more accurate and detailed fact, a recent Inter-American Development Bank information for decision-making and allowing assessment noted that in many countries in Latin resources to be better targeted to where they are most America, Delivery Units were being used in this needed. Artificial intelligence is now being used for manner. It is not uncommon for them to intervene policing purposes in cities as well, identifying areas IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 169 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION more likely to be at risk for particular forms of crime capacity should best be targeted towards developing based on pre-existing patterns and sensor data.  basic country systems, capacity, and infrastructure, or directed towards more frontier issues such as While the impact of IT on policy planning integrated data monitoring systems instead. Beyond and coordination is less pronounced than at this, one will still require forums and established the operational level, it nevertheless has the procedures for bringing together stakeholders around potential to be quite positive. Improved data a particular course of action. All of the challenges analytics is likely to improve the quality, timeliness, – institutional rivalry, personal ambition and/or and reliability of data, and predictive analytics will animosity, and the difficulty in resolving disputes allow for the more accurate forecasting of future trends between separate agencies – will remain. – all of which, if used properly, should improve the quality of decision-making. (Their utility diminishes, of course, if decision-makers do not value or trust the Executive Service Cadres information they are receiving.) Communications technologies will facilitate the rapid dissemination The socialization of individuals within a given of information within and outside of government, organization can play an important role in both assisting and complicating the ability of shaping their perspectives, incentives, and decision-makers to shape the message. Information preferences. This will in turn have important technologies are also being employed to help monitor implications for how that organization functions agency performance through dashboards and the like, (Akerlof and Kranton 2005). Students of bureaucracy as well as to improve the quality of data presentation and public management have long argued that and data visualization. organizations play an important role in shaping the attitudes and values of their staff, both through Yet in many respects, these examples also attracting certain types of individuals as recruits and underscore how scaling up technology to the by socializing them into a particular institutional national level has limitations in facilitating outlook and/or world view. It has long been appreciated inter-agency coordination. At the local level, the that traditional generalist administrations (of the number of actors is limited; the cost of upgrades is type that existed in Britain and France up through manageable; and departments often report directly the 1950s and 1960s, and which still exist within to a mayor or city manager, who can pressure them countries such as India today) were able to rely upon towards greater integration. National governments informal networks among a senior management cadre have many more employees, who are also more to facilitate information exchange and coordinated dispersed, increasing the challenge in developing, activity in a way that is often not found today within rolling out, and maintaining IT systems. National OECD countries. Such sentiments are so strong that, governments are typically more focused upon broader in 2012, a senior British official publicly proclaimed policy questions than issues of day-to-day service that “mandarins matter” and lamented both the loss delivery. Furthermore, due to long delivery chains, of the administrative talent and the erosion in the the center may not be able to exert much influence ethos of civic association that they brought (Letwin over front-line service providers, particularly in large 2017). federal states. The virtues and vices of a generalist managerial While governments in emerging economies are cadre within the broader civil service have often slow to adopt new technologies, they also been extensively debated for decades (Potter need to address more fundamental challenges. 1996).12 On the positive side, such practices were This is particularly true in many low- and lower effective in building a shared managerial ethos that middle-income countries, where IT and data analytic had a strong sense of collective identity and service skills are scarce. Protocols for sharing data and to the broader good, which transcended the parochial information are often underdeveloped; data formats views of the department where a given official may be fragmented and/or incompatible; and formal happened to be posted. Frequent rotations, often correspondence must by law be paper-based. There lasting only two to three years, reinforced the sense of are legitimate questions as to whether limited IT identity and allegiance to cadre over agency. Elements 170 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION of this culture still remain in a variety of “high flyer” by leadership to view the organization holistically, programs, such as the Presidential Management to forcefully communicate the need for cooperation Fellowship Program in the United States or the Ecole among components, and to establish programs or Nationale d’Administration in France, or in various policies that ensure unity, even though such effort is a senior executive service corps. necessary precondition for unified action.”13 On the downside, such systems have been The example of Technical and Vocational critiqued for being inherently elitist as well as for Education and Training (TVET) in Malaysia failing to place administrators with technical represents another case where administrative expertise within their area of oversight. In some reorganization did not necessarily resolve respects, the debate is now becoming less germane, as challenges to coordination. Consolidation of the traditional “generalist” administrator is becoming institutional responsibility has been a building increasingly rare. The major thrust in public sector block used by Malaysia to enhance policy design, management in North America, Oceania, and coordination, and implementation of TVET. In Western Europe over the past several decades has 2007, the government merged two existing entities shifted to emphasize decentralizing human resource to form a single Malaysian Qualifications Agency management to the agency level and developing (MQA), under the Ministry of Higher Education, leadership from within the organization. to have responsibility for quality assurance in higher education for both the public and private sectors. MQA works in collaboration with the Department Reorganization of Skills Development under the Ministry of Human Resources to accredit technical and vocational One of the most common techniques to programs conducted by polytechnics and colleges. improve coordination and cooperation among Despite early efforts to consolidate responsibilities, an various government agencies is administrative independent study by the World Bank in 2014 found realignment. Such efforts may be driven by an effort that duplication and poor coordination continued to to reduce costs, eliminate redundant or unnecessary hamper TVET efforts. tasks, or consolidate back office functions. But they can also be motivated by the desire to improve policy For many emerging economies, one of the most alignment and operational coordination. Bringing prominent examples of reorganization has been together disparate agencies under a common the effort to develop a more unified approach organizational umbrella can help ensure that a senior to budgeting through the merger of finance decision-maker is empowered to sort out turf issues and planning ministries. During the 1990s, and monitor the quality of information sharing and there was a major push to bring these functions collaboration on a routine basis. (and the institutions that supported them) together for a variety of reasons. The principal goal was to Unfortunately, such reorganizations are often better integrate the recurrent and capital budgets. difficult and complex undertakings that do Planning without the discipline of a Medium-Term not always deliver their anticipated benefits. Expenditure Framework (MTEF) was viewed as an Many involve modest or superficial adjustments to inherently expansionary exercise that, left unchecked, organizational charts and reporting lines that de would inevitably create added fiscal burdens in future facto leave their underlying systems and structures years. There were concerns that: (i) formal planning unchanged. The mere lumping together of disparate procedures were overly technocratic and often agencies under an umbrella organization does divorced from the political give and take surrounding not guarantee the systematic integration and the annual budget process; (ii) the downstream rationalization of policy or operations, or even that fiscal implications of capital projects were not improved coordination will take place among the being adequately captured and costed; and (iii) the subordinate agencies. As a review of one such effort traditional five-year planning cycle often failed to in a major American government department noted capture the volatility that many emerging economies well over a decade after the reorganization had taken faced and did not reflect reality in the out-years. The place, “we have seen little evidence of proactive effort prevailing wisdom is that these issues would often IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 171 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION be better addressed through a single empowered ministry of finance with significant program review and analytic capacity, combined with a robust MTEF and a strong focus upon performance management and expenditure review. More recently, there are hints that greater nuance and flexibility may be appropriate. Merging two functions – that previously operated autonomously – under a single roof has not assured integration of business processes. The mergers have revealed that some of the underlying capacity constraints and differences in organizational culture are more difficult to change. A recent global review of the national planning function indicated that, in more than half the cases, it was embedded within neither the ministry of finance nor the ministry of economy or planning (Chimhowu et al 2018). Among institutions such as the World Bank and the IMF, a number of PFM professionals are now calling for a more varied and contextual approach depending upon a given country’s current developmental challenges, administrative capacity, and institutional structures and traditions (Allen 2011). Priority should be given to improving the business processes or core functions, regardless of where they are housed organizationally. Other Approaches and Techniques Beyond these approaches, other techniques have been developed to strengthen information sharing and collaboration between ministries. Many are intended to complement and not to supplant more formal mechanisms. They include joint distribution lists, informal meetings, retreats, conferences, and staff secondments. They can also include joint training activities or preparation exercises for natural disasters and the like. Staff can belong to professional networks that cultivate a shared orientation and world view and provide a regular forum to meet and exchange ideas. They can share property, facilities, and equipment. Increasingly, agencies can also draw upon the use of shared platforms and databases, which can help to ensure that they are working off a common set of facts. 172 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Global Experience with Strengthening Coordination T his section draws on the experience of Besides these sectoral interventions, the the Bank staff in assisting governments Bank and other partners have been involved around the world to improve policy and in supporting a variety of reforms dedicated inter-agency coordination. It highlights a few to improving coordination at the center of examples of efforts undertaken by non-OECD government. This work has expanded markedly over countries to strengthen policy coordination. The the past 4–5 years in response to a rapid increase in examples are drawn from countries with varying country demand. The Bank is now active in more than degrees of institutional capacity (including post- 35 countries in supporting various reforms. Some conflict countries and EU member states) and varying initiatives seek to improve policy coordination by degrees of institutional complexity due to the size and strengthening cabinet offices, cabinet operations, or structure of the state. The boxes provide additional the ability of the Prime Minister’s Office to manage details to communicate the political economy context its work. Others focus upon strengthening the in which reform was undertaken, the functional ability of central agencies to address strategy issues, problem, the response undertaken by government, which typically involve long-term over-the-horizon and the relative impact. While in most cases tangible challenges, the preparation of vision documents, or benefits have been obtained from the reform, the similar strategic programs. Still others involve the cases also demonstrate that success is not guaranteed creation of Delivery Units to use the imprimatur and significant challenges may persist. of the chief executive to unblock pernicious delivery challenges. Finally, some of this work has Improving policy coordination has been a central focused upon the development of government-wide component of many of the Bank’s engagements monitoring and evaluation systems to track progress over the past decades, with a heavy focus on on key government priorities from the center of enhancing coordination at the sectoral level. government. Beyond these efforts, the Bank has A detailed review of the World Bank’s portfolio been involved in a wide range of efforts to improve based upon a key-word search of over 20 selected coordination among specific sectors. The next two phrases, such as “policy coordination,” “inter-agency sub-sections systematize these efforts and attempt to coordination,” and “inter-ministerial committees” tease out some lessons about what reforms work. revealed that over the past 30 years, the Bank has engaged in over 440 interventions that sought, in Effective policy coordination can take place whole or in part, to improve the quality of coordination either at the initial stage when policies are being within a specific sector. As of 2016, about 3.3 percent formulated or at later stages when agencies of Bank projects had this focus, up from 1.2 percent must collaborate in their implementation. In in 2012. The most prevalent way in which the Bank systems where cabinets are important and decision- supports governments in improving coordination making is collective, policy coordination takes is through development finance, where sector- different forms as compared to systems with an specific investments often include strengthening institutionally strong chief executive who has a the sectoral coordination function. Support may mandate to decide on policy directions. At the same include strengthening the institutional capacities and time, consultations across MDAs and with outside mechanisms for monitoring, planning, management, stakeholders are still important in systems with a and decision support systems in a particular sector; strong chief executive, as they create ownership or strengthening intra-governmental coordination and drive among the implementing agencies. These mechanisms between the federal government and countries often require assistance with strategy municipalities. Annex 2 provides more details on the and policy formulation that would include such results of the analysis. consultations. Other countries, in contrast, have IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 173 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION focused on downstream coordination, i.e., setting up of services. We consider both policy and operational mechanisms to monitor policy implementation, with reforms in turn. the aim of strengthening accountability for delivery Reforms to Improve Policy Coordination I n systems where cabinets pla y an agreement on how to implement these priorities. This important role in setting policy, their will then help ensure that processes at the ministry or collective decision-making capacity often institutional level move in the same direction. requires strengthening. Such strengthening includes building capacity for evidence-based policy- To support cross-institutional coordination making across the spectrum of state capability. For through the policy review processes of example, in Sub-Saharan Africa, the Africa Cabinet its Cabinet, Latvia established the State Governance Network provided assistance to Sierra Chancellery. The Chancellery was tasked with Leone in developing one of the basic building analyzing policy impacts and providing the weekly blocks for a functioning cabinet – the preparation input into cabinet decisions. Box 10 describes two of a cabinet manual. The manual articulated the different coordination mechanisms that have evolved essential principles of cabinet government – collective in Latvia. Latvia’s transition from a strong Policy responsibility, collaboration and consultation across Coordination Center (PCC) at the Chancellery to government, evidence-based decision-making, a more arm’s-length Inter-Ministerial Coordination and confidentiality. It elaborated the procedures Center (IMCC) under the Prime Minister illustrates to be followed in preparing and submitting cabinet that different political configurations and imperatives memoranda and provided basic document formats, will require different coordination mechanisms. emphasizing that proposals need to be made with Latvia’s accession to the EU and coordination of the accountability relationships, milestones, and sources acquis required the PCC to play a very active role. of funding identified. There is evidence that these As Latvia moved to a different stage of development interventions have managed to improve the quality of with new strategic goals, a similarly high capacity but decision-making. In a survey of cabinet office officials more removed mechanism became more desirable for in Sierra Leone, the percentage who felt that cabinet policy-makers. submissions were more evidence based shot up from 10 percent in 2013 to 60 percent in 2016. At the end The change in the coordination mechanisms of this period, the Secretary to Cabinet and Head in Latvia also illustrates efforts to achieve of the Civil Service, Dr. Ernest Surrur, argued that a balance between technical analysis and there had been a “paradigm” shift towards greater use political imperatives. It is understandable that of evidence in cabinet operations. political leaders may want to make decisions against the analysts’ advice, based on various political Policy coordination is much easier when incentives or commitments. Compromise is possible, cabinets function collaboratively with a shared but it must be negotiated among the political actors. vision. Cabinets consist of individuals – with their Instituting a rigid policy coordination mechanism own personalities and motivations – who must be that is perceived to replace political decisions with able to coordinate with each other and work together technical solutions may not be sustainable. toward a common goal. Towards this end, the Bank has provided assistance to cabinets through team- Examples abound of reforms aimed at enhancing building and coaching, as well as convening regular strateg y formulation and institutional meetings or occasional leadership retreats. This is strengthening, while ensuring the ownership particularly relevant in coalition governments, where of the strategy by various stakeholders. This individuals may represent different political factions. includes reviewing and improving the functions of the The underlying idea is to build ownership of the Prime Minister’s or President’s Office. For example, priorities set out in the government program, as well as in Armenia, the Bank assisted the government in 174 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION reviewing the operations of the Prime Minister’s by introducing regulatory impact assessments prior to Office (PMO) in relation to the strategy to streamline the adoption of new legislation (see Case 4 in Part and enhance its effectiveness. The review discovered I). In Botswana, the Bank provided support to the that roughly half of the issues coming before the National Strategy Office (NSO) within the Office PM involved taking decisions on business travel and of the President. The NSO required assistance in leave. When these areas were subsequently slated for formulating its Vision document and developing routing elsewhere, it helped to free the PMO from the performance framework for the National routine administrative tasks and release more time for Development Plan. This was done in an inclusive strategic decision-making. There have also been efforts fashion by involving the implementing MDAs and to improve the quality of policy-making in Armenia outside stakeholders. Policy Coordination in Latvia: BOX 10 A Tale of Two Mechanisms Basic Information Latvia is a parliamentary democracy with a multi-party system and a coalition government. Population: 1.9 mil (2017 est.). GDP per capita: USD 14,630 (2016; high-income country). Latvia joined the EU in 2004. The Functional Problem At the beginning of the millennium, policy coordination was considered a condition sine qua non for effective preparation of the country for EU membership, as well as to benefit from the future membership by virtue of being able to speak with one voice, as opposed to multiple voices pursuing sector interests. The Response In 2000, the Policy Coordination Center (PCC) within the State Chancellery was established. Any policy decision subject to Cabinet approval was vetted by the PCC at the analytical level. First, alignment with strategic documents was analyzed, then the evidence of inter-ministerial coordination was reviewed, and then the merits of the new policy were analyzed. On a weekly basis, an opinion was prepared for submission to the Prime Minister prior to Cabinet meetings. The PCC, which was also responsible for the implementation of the Government Plan and reporting to the Prime Minister, was headed by the deputy director of the State Chancellery, who had direct access to the Prime Minister. Policy coordination was led by the Director of State Chancellery at a weekly meeting of State Secretaries. If a new policy initiative was announced by a ministry, then a review of the new policy and its impact (environmental, economic, social, institutional, legal, and financial) was carried out by the PCC. Within two weeks, the policy was to be coordinated (and amended if needed) before its submission to the Cabinet for consideration. Only fully coordinated proposals reached Cabinet Meetings. When administrative coordination failed, the issue was referred to political coordination at the Coalition Council or Cabinet Committee. The policy coordination system enabled alignment of policy and budget planning (through fiscal impact assessment) and fostered implementation of government plans. This mechanism worked because it was supported by the cadre of high-capacity analysts at the PCC; it was also demanded by the Prime Minister. However, after several changes in the Cabinet, the decision was made in 2011 to remove the policy coordination function from the Chancellery, dissolve the PCC, and create a self-standing unit, the Inter-Ministerial Coordination Center (IMCC) that would report directly to the Prime Minister. The IMCC retains some of the PCC functions (e.g., coordination of the implementation of the Government Plan and other strategies). It also has a strong monitoring and analytical focus, and works more on demand from the Prime Minister. The IMCC does not provide weekly inputs into the Cabinet decision-making. Source: Authors IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 175 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION As the Serbia case shows in Box 11, creating strategic priorities. This approach has gained traction new institutions with formal procedures does and even survived the change of Prime Minister in not necessarily resolve coordination problems June 2017. Yet for this process to lead to permanent at the center. Though the Serbians had previously improvement in coordination capacity, an eventual had some success in creating new institutions consolidation of the fragmented institutional set-up (e.g., for EU accession), an approach that involves of the CoG and a change in the way coordination is formal procedures can also lead to unnecessary perceived by senior officials – currently as a box to be fragmentation. Their new approach is informal, ticked rather than an essential and important process based on the principle of collective leadership and of building alignment – will need to occur. anchored around themes laid out by government as Improving Whole-of-Government Coordination BOX 11 in Serbia: Thinking out of the Box Basic Information Serbia is a semi-presidential democracy with a multi-party system and a coalition government. Population: 7.111 mil (2017 est.). GDP per capita: USD 5,426 (2016; upper-middle income country). Serbia is a candidate country to join the EU and formally started the accession negotiations in 2014. The Functional Problem The EU accession process is a powerful motivator to improve coordination. In Serbia, it was strengthened by the Prime Minister’s realization in 2016 that the lack of alignment among cabinet members and lack of effective follow-through on agreed decisions were key impediments to the achievement of priority reforms. Over the past decade, Serbia has made numerous attempts to institute formal, “good practice” coordination mechanisms, but with little success. This involved efforts to streamline the organization of a fragmented CoG and strengthen formal inter-ministerial coordination structures, and the introduction of a ‘delivery unit’ to track the implementation of strategic projects and programs. An assessment by the World Bank completed in early 2016 maps all CoG units (Government Secretariat, Prime Minister’s Office, Legislative Secretariat, Delivery Unit, Public Policy Secretariat, European Integration Secretariat) and concludes that well-intentioned measures to enhance coordination have instead weakened it.14 This is because a fragmented CoG is consistently outmaneuvered by stronger line ministries. The Response Addressing these deep-seated issues required out-of-the-box thinking. In the summer of 2016, the Bank worked with the Serbian authorities to design a new approach, characterized by: • Accepting the institutional set-up as is, without modifying or adding to the existing arrangements. All the existing COG institutions are to be involved (so as not to create opposition), but without having any of them leading the process. • Building coordination between actors rather than institutions. Such coordination is at the level of the cabinet (between ministers and between the prime minister and ministers) and at the level of senior officials. The effort focuses on priorities set out in the government program, and seeks to build a joint vision and agreement on how to implement these priorities and how to ensure that processes at cabinet and at ministry/institutional level move in the same direction. • Creating platforms once agreement at the level of actors is reached. Discussion, alignment and follow-up can be conducted through these platforms (ministerial groups and senior official groups). The groups should also agree on indicators to track progress on goals. Source: Authors 176 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Reforms to Strengthen Whole-of-Government M&E T here is often a thin line between the Office in 2009. The Ministry’s policy position front-end policy coordination through draws on the existing M&E system and strategy development and strengthening expands its policy reach by introducing a specific the high-level performance M&E system at the focus on performance and monitoring of the center. For example, the Bank’s engagement in politically determined outcomes. The Bank has Botswana, which was centered around a high-level been assisting in building the capacity of the reform effort to enhance economic diversification, Ministry, especially with regard to evaluation. adopted an integrated approach across the public policy cycle. It incorporated reforms to enhance • In Rwanda , the government established a planning, budgeting, public service management, new office known as the Quality Assurance and M&E functions, with a pragmatic focus on Technical Team (made up of civil servants from performance. Reforms have benefited from high- the Ministry of Local Government and the level political leadership and an inclusive approach Ministry of Finance and Economic Planning) across government and beyond. Initial successes have to oversee the Imihigo system of performance opened up space for other public sector reforms. contracts. Its success shows how service delivery can be improved through CoG reforms (see International economic integration goals have Case #1 in Part I of this report). often driven efforts to improve coordination of policy implementation. In the countries that are Saudi Arabia has taken the creation of a new seeking to join the European Union, the cross-cutting performance measurement agency one step integration agenda is often the top strategic priority further through the creation of the National that warrants close coordination and monitoring from Center for Performance Measurement, or the center of government. For example, in Moldova, “Adaa”. Adaa, which means “performance” in the Bank has worked to strengthen the ability of the Arabic, has been created to monitor implementation State Chancellery to monitor several key functions, of the country’s Vision 2030 document, its National including the reform actions articulated in Moldova’s Transformation Plan, and other related programs. National Strategy 2020 and the Government Adaa has been exempted from traditional civil service Program 2016-2018, both of which were driven pay and recruitment practices, allowing it to recruit by the EU Association Agreement Action Plan. the best and brightest staff from the public and Similarly, in Serbia, the Bank assisted the Serbia private sectors within Saudi Arabia. The agency’s European Integration Office (SEIO), a coordination position directly under the Crown Prince and the office at the center of government, in developing an Council of Economic and Development Affairs M&E framework to track progress toward the acquis. (which he chairs) has given it a high profile and significant gravitas in working with line departments Institutional arrangements to strengthen to develop and monitor strategic and operational government-wide performance M&E sometimes KPIs. The agency has aggressively tapped into global include setting up a dedicated ministry or expertise in developing its monitoring framework and agency to support this agenda and drive cross- methodology, and the Bank is working closely with cutting priorities. Three examples are: Adaa in developing strategic indicators and reporting formats and reviewing its product mix. A key • In Serbia , the SEIO was disestablished in challenge is being able to go both “broad and deep” 2017, when the new Ministry of the European in performance monitoring; this entails covering a set Integration was created to take over the SEIO’s of narrow and selected topics for managerial decision- high-level coordination and M&E functions. making, while at the same time monitoring progress across the entire range of Vision 2030 and National • In South Africa , the government created a Transformation Plan indicators, as well as developing dedicated Ministry of Performance Monitoring capacity for performance monitoring among the and Evaluation (PME) within the President’s line departments. Agencies such as Adaa often IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 177 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION face the tension between engaging in performance adopted various other agile, semi-permanent measurement and performance management. Is structures at the center of government to drive their mandate simply to ensure that the monitoring the implementation of high-level cross-cutting framework is robust and consistent, or to intervene priorities.  to facilitate the achievement of key goals and targets? • In Pakistan, the Bank supported the design and Yet the efforts to create government-wide implementation of two innovative coordination M&E frameworks also have their limitations. mechanisms: Implementation Support Units The case of India is outlined in Box 12 below. In (ISUs) and the Rapid Response Facility (RRF). contrast to Pernambuco and other examples, the The ISUs supported the line departments and Indian monitoring system was far more ambitious public sector entities in leading implementation in its scope and was ultimately not sustainable. The of interventions. Similarly, the RRF – with a Performance Management and Evaluation System lead time of 42 days from the start of an idea (PMES) sought to standardize and build a unified to the start of implementation – enabled the performance management framework across the line departments to move forward quickly with country, including departments and ministries at implementation. the national and state level. It was housed in the Government of India’s Cabinet Secretariat and as of • Similarly, in Indonesia, an ad hoc unit named 2014 covered 80 departments within the Government TNP2K, an Indonesian acronym for the National of India and 800 Responsibility Centers. However, Team for Accelerating Poverty Reduction, the system did not survive the 2016 change in was created within the Vice President’s Office government for reasons that, as outlined below, to focus on a single top priority: poverty remain very much in dispute. eradication. TNP2K was heavily involved in the process and facilitated regular coordination Some countries have opted for a Delivery meetings with ministries in charge of the Unit (DU) to focus on monitoring and trouble- implementation (e.g., Ministry of Social Affairs) shooting a small number of top priorities. and also those who were involved in policy A common challenge confronting such units is coordination (e.g., BAPPENAS, the Ministry managing the balance between maintaining a focus of National Development Planning). TNP2K upon strategic priorities while responding to real- had some features of a DU (coordinating and time political demands for engagement on other trouble-shooting) and some features of a high- urgent issues. level think tank (providing policy advice and conducting impact evaluations of key poverty • In Albania , the Bank supported capacity reduction programs). building for the Prime Minister’s DU, first by facilitating leadership workshops to set the One key lesson is that the role of the center high-level priorities, and then supporting the of government in performance M&E should monitoring of their implementation by the DU. be clearly defined and focus on high-level The latter has been accomplished through a coordination issues rather than on micro- results-based lending operation focused on one managing the granular M&E, which is best done of the top cross-cutting priorities – improving by MDAs themselves. For example, in Bangladesh, citizen-centric service delivery.  the Cabinet Office worked to improve monitoring performance across the whole of government. An • In Tunisia , the Bank is providing technical important part of this reform was to ensure consistency assistance to the DU as it works to improve between performance targets at the Cabinet level and communication in three areas: internally KPIs within the Ministry of Finance. As was true between ministries and the Prime Minister’s with Pernambuco’s experience, a key lesson from Office, among different stakeholders, and at the these engagements is the benefits of an integrated Cabinet level. approach that combines financial management and allocation decisions with a robust M&E framework. Aside from DUs, different countries have The more granular tasks are best left to the MDAs. 178 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Efforts to Improve Government-Wide Performance BOX 12 Monitoring in India: An Ambitious Effort Falls Short Basic Information India is a large federal state with a parliamentary democracy and multi-party system. Population: 1.3 billion (2017 est.). GDP per capita: US$1,709 (2016). The Functional Problem Government of India (GOI) spending on basic services increased at 11 percent per year in real terms from 2006 to 2012 – a faster rate of increase than GDP – but it did not fully translate into better services on the ground. Some estimates indicated that approximately half of India’s public spending on basic services did not reach the poor because of inefficiencies in governance and execution. Assessments of the performance management framework revealed a number of deficiencies, including: numerous institutions with different goals and objectives were overseeing various dimensions of government performance; several important initiatives had divided responsibilities for implementation, with the result that accountability for results was diluted; existing performance management tools suffered from selective coverage and time lags in reporting; and performance evaluation systems lacked a prioritization of goals and tasks (Trivedi 2017). The Response In 2009, to improve institutional effectiveness and accountability for results, the GOI created the Performance Management and Evaluation System (PMES), which sought to standardize and build a unified performance management framework across the country, including departments and ministries at the national and state level. By 2014, this system, which was located in the Cabinet Secretariat, covered 80 departments within GOI and 800 Responsibility Centers (which included subordinate offices, autonomous bodies, and the like). By 2016, PMES was no longer in use, having failed to survive the transition from the government of Manmohan Singh to Narendra Modi. The reasons for discontinuing the system vary. To its supporters, the effort was conceptually sound but suffered from flaws in implementation. It was implemented unevenly, as the GOI elected not to publish scorecards for some under- performing ministries that had not met their targets. The system was never enshrined into law, and decisions to eliminate it were in essence politically motivated. To its detractors, the system itself was flawed – a “completely unviable concept” as one senior official noted in 2016 (Economic Times 2015). In their view, it was not possible to reduce the performance of a ministry to a single quantifiable composite score or set of scores. Instead, they argued that frequent reviews of program implementation were likely to be more effective. Source: Authors IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 179 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Examples of Malaysian Coordination Mechanisms M a la y sia’s experience with the mandate to drive performance from the center implementation of the N ational and positioned it in the Prime Minister’s Transformation Programme (NTP) is Department for maximum effect. This delivery- a useful example of how a government drove focused structure was the Performance Management achievement of national policy outcomes by and Delivery Unit (PEMANDU), which was vested identifying the challenges to coordination with the political mandate and human resource and empowering a body to address them. In capabilities to make sure its guidance would be taken developing the NTP, the government recognized that on board by the MDAs tasked with implementing the its existing strategic documents – one for industrial NTP. PEMANDU also initiated the development of policy and the other for government processes – policy “labs” as a way to convene relevant stakeholders were not helping it to adequately articulate or meet and focus their attention on resolving specific the aspirations of its citizens. The NTP’s emergence problems. The lessons from PEMANDU’s successes therefore reflected a desire to focus on the government and challenges have been well-documented by delivery system through a more people-centered lens. various organizations, including in the World Bank’s More importantly, the government recognized that 2017 report Driving Performance from the Center: existing CoG processes for M&E may have been Malaysia’s Experience with PEMANDU.15 good overall, but they were inadequate to ensure that National Key Results Areas (NKRAs) would be The establishment of Urban Transformation achieved. Centers (UTCs), Malaysia’s more recent version of one-stop shops, illustrates the coordination The government therefore created an of government service delivery under one roof. institutional structure with a sing ular In UTCs, dozens of agencies come under one roof Lessons Learned in the Implementation of the BOX 13 National Transformation Programme Early ownership by the top political leadership: Prior to its establishment, Cabinet ministers, through a series of Cabinet workshops and retreats, had agreed on seven National Key Results Areas (NKRAs)16 under the GTP, as well as on performance indicators for each NKRA. This meant that consensus and ownership on cross-ministry linkages and a framework for performance targets had been secured at the highest level of government. This allowed PEMANDU as the delivery unit for NTP to quickly focus on executing its portfolio of spearheading the NTP implementation across ministries, departments and agencies (MDAs). Positioning of PEMANDU within the Prime Minister’s Department: As a result of its positioning, PEMANDU was able to invoke the Prime Minister’s authority when dealing with MDAs involved in implementing the NTP. Additionally, the Chief Executive of PEMANDU held the rank of Cabinet Minister (until August 2015), thus enabling him to address and clarify issues directly with lead ministers of NKRAs. The ministers could then better understand the rationale for action and give informed instructions to the MDAs under their jurisdiction. 180 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION to provide government and non-government services in the Prime Minister’s Department, with a status to citizens. Just like the example of Egypt in Box 3 comparable to federal ministries. Its mandate was to and India’s one-stop shops described in Case #10, the provide unified planning, regulation, enforcement, benefits for the citizens are significant in convenience and oversight over land-based public transport and access. In Malaysia, UTCs are open from 8:00 within and among cities. SPAD’s impact on the am until 10:00 pm every day, including weekends and sector was immediate. It developed a National Land holidays. Citizens can obtain their passports, renew Transport Masterplan (2012–2030) and teamed their vehicle registrations, receive medical services or with PEMANDU to oversee common results areas use gym facilities under the same roof in a convenient under the Government Transformation Programme location. (GTP) and Economic Transformation Programme (ETP) pertaining to public transportation. SPAD In a sector such as urban transport, coordination played a role in the implementation of transport among disparate stakeholders can be especially plans for both the national level and greater Kuala complex; Malaysia has begun to address Lumpur, established technical working groups across this challenge. Malaysia, like other countries in Peninsular Malaysia, and took over the licensing southeast Asia, has experienced rapid urbanization and regulation of numerous service delivery sectors. since the mid-1980s, and this has placed a heavy Perhaps its biggest achievement was the on-time, burden on existing public infrastructure and hiked high-quality delivery of the Mass Rapid Transit road congestion. With transport infrastructure often (MRT) project in metropolitan Kuala Lumpur, cutting across multiple jurisdictions, urban transport despite the highly fragmented institutional landscape. planning has been especially difficult. Traditionally, In May 2018, the new government disbanded SPAD, the urban transportation plan was under the authority and its functions were moved to the Ministry of of the Ministry of Transport, but in 2010, the Land Transport to further streamline policy coordination Public Transport Commission (SPAD) was created and implementation. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 181 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Lessons and Conclusions E ffective policy coordination is vital for effectively as coordination instruments. Coordination governments to deliver services and to can be enhanced through collateral mechanisms, fulfill the aspirations of their citizens, including program budgeting, government-wide and yet this is increasingly harder to achieve M&E systems, IT systems, delivery units, and in the 21st century modern state. Coordination restructuring and reorganization. There are also failures can place a heavy burden on citizens trying examples where informal mechanisms, such as civil to obtain basic services. This may include duplication service rotation policies, have been used to facilitate of processes and/or excessively long procedures. The knowledge exchange. However, as governments hidden cost can be especially burdensome for those in the West and the East find themselves needing in emerging economies. Yet, coordination is also to coordinate increasingly with actors outside becoming more difficult in some contexts. Demands central government, such as the private sector, civil of citizens on their governments have increased, society, and sub-national governments, even these and the functions of government have grown in mechanisms have limitations.  complexity. The SDGs reflect high-level national goals that cannot generally be achieved through Coordination has a cost, and expanding the efforts of a single ministry; rather, they involve the sphere of consultation and review can extensive inter-relationships among actors. The stakes significantly slow the pace of decision- are high and effective coordination is worth pursuing. making and action for those seeking to drive   policy development and implementation. Governments have a variety of tools that Formal coordination mechanisms may be valuable they can bring to bear in addressing the at the policy development stage, or at the point of problem. Commonwealth and European concepts implementation. In some cases, it is sufficient for of government structure have had influence around an MDA to simply be notified of the new policies/ the world in shaping public administration, but programs being proposed by others, so that they may these are not the only mechanisms used to achieve give constructive input or may confirm the absence effective policy coordination. Cabinet committees, of direct impact on them. On the other hand, there sub-committees, chancelleries, working groups, and may be instances where governments need to devote similar structures work effectively in many countries. administrative and political space upstream to plan There are also examples – such as in Vietnam and and collaborate intensely to avoid a situation in which China – where party structures are being used MDAs are working at cross-purposes with each BOX 14 Liberia During the Ebola Crisis: Low Tech, but Effective In some cases, the coordination mechanism can be even less institutionalized, but still serve a specific function. During the peak of the Ebola crisis, the Liberian government was confronted with the need to ensure that medical responses were well coordinated. The government made use of a simple but highly effective weekly meeting on Monday morning among government agencies, donors, and NGOs to coordinate its response, ensuring that all relevant stakeholders were gathered around the table for decision-making to take place. The participants would meet for as long as it took to resolve any outstanding issues for the week, and most relevant decisions were taken in the context of that meeting. 182 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION other. Public policy professionals should therefore What Has Worked? aim to help governments establish coordination R mechanisms that are adaptive and dynamic. The most eforms to cabinet procedures may effective CoG policy planning and policy monitoring encounter resistance upfront but, if apparatuses will be structured to do this. successful, can become self-reinforcing and part of the way in which cabinet business As a corollary of the point above, there is no is conducted. There are examples of reforms in the single institutional mechanism that works for late 1990s in countries such as Zambia that have all contexts. Consistent with the 2017 WDR, the endured for more than two decades despite several institutional form is less important than the function. changes in government (Garnett 2016). The country context is paramount: what works for a middle-income, high-capacity country may not work In contrast, reforms such as the creation in a low-income context with capacity challenges. of DUs are often closely connected with the Nor does the overall size of the investment appear personality and management style of the chief to guarantee success. Some countries have invested executive. They may be significantly reconfigured heavily in CoG reforms, including one in the Gulf or even terminated once he or she moves on, as was Cooperation Council who spent nearly US$100 the case with the DU in Tanzania and, to some million on an integrated set of reforms that ultimately extent, also TNP2K in Indonesia. Interestingly, failed. Other countries, such as those emerging from this was also the case with the original DU in the conflict, have made much more modest investments, United Kingdom. Originally created under Tony in the realm of a few hundred thousand dollars, Blair, it was reconfigured under Gordon Brown and yet been able to implement practices that have eventually abolished under David Cameron. At the significantly improved their ability to coordinate same time, this is consistent with the definition of policy. For example, in one Sub-Saharan African DUs as semi-permanent structures that are set up for country, all cabinet meetings would take place in a the implementation of the current government’s top room in which previous cabinet decisions were written priorities (Bellver et al 2014). One could argue that, on a blackboard. Simple coordination mechanisms, in the spirit of being fit-for-purpose, they cease to like the weekly Ebola meetings in Liberia discussed exist when their goals have been accomplished, or are in Box 14, can be very effective in delivering positive replaced by another, better fitting instrument. results without creating a separate institutional structure. The quality of leadership for these reform initiatives often matters greatly; political backing from the top has been cited in numerous analyses as being essential to their The country context is success. What is less often appreciated is that those paramount: what works responsible for heading reforms requiring improved policy coordination must be politically savvy and have for a middle-income, access to the most senior levels of government. (One high-capacity country scholar has argued that they need to be physically located close to their political sponsor; Gold 2017).17 may not work in a low- The person in charge of such reforms will need to be an effective manager to get the most out of their income context with subordinates and recruit talented people to support capacity challenges. the policy process. He or she will also need to be technically sophisticated to enjoy the respect of counterparts in line ministries and departments. It is often difficult to find an individual who possesses all of these skills, let alone in lower income countries or countries recently emerging from conflict. Yet if such skills are missing, the efficacy of the reforms could be compromised. IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 183 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Anticipate resistance and invest heavily in required, were a key link in the accountability chain. fostering “buy-in”. Efforts to implement more robust coordination mechanisms are seldom Reforms that are connected to actual decision- welcomed universally. Ministers may resent efforts to making have fared well. Pernambuco has been intrude upon their perceived prerogatives or to curb largely successful in improving public investment their ability to act individually. Senior officials in and making progress in addressing key government cabinet or the prime minister’s office may enjoy the priorities (see Box 9). Perhaps one of the most freedom to range across multiple portfolios and resist important dimensions of its success was its adoption efforts to move towards more technically structured of an integrated approach, including the close linkage job descriptions, which could limit their influence. of the M&E function with the investment budget. In More structured procedures for decision-making a similar manner, Botswana’s pursuit of an integrated could result in reduced access by ad-hoc or informal package of reforms through the M&E process has advisors, generating resentment and resistance. also supported a more comprehensive public sector Some of these challenges can be mitigated by careful reform agenda. PEMANDU’s close proximity to the preparation and robust change management practices, Prime Minister was one of the reasons for its ability which can help generate support and buy-in, as was to shepherd the NTP process. the case in Latvia and Serbia. Successful implementation of reforms is With reg ard to sectoral coordination , dependent on the provision of the necessary governments may need to develop new types of resources. In Malaysia’s experience with the coordination mechanisms to fit their specific establishment of UTCs (one-stop shops), participating objectives. Malaysia’s experience ref lects this agencies were able to optimize resources through the principle. Governments need to be adaptive because collaborative mechanism, coordinated by the NSU policy coordination in some domains will inherently within the Ministry of Finance. be more inter-sectoral than in others and/or will involve more relevant stakeholders. As noted earlier, The principle of “subsidiarity” should exist in government coordination is not an integrated whole inter-agency coordination, in that coordination that progresses in unison, as captured in the Metcalfe mechanisms should seek to involve the model. This adaptive – even experimental – nature of minimum number of units necessary to ensure policy coordination could not be better illustrated than the successful ownership and buy-in of a given in the case of Malaysia. Malaysia had invested heavily initiative. Malaysia’s UTC experience serves as an in CoG institutions and formal policy processes, but it illustration of this principle, in that it was a bottom- has also created new institutions when it determined up effort that sought to encourage ministries to them necessary to address pernicious obstacles. collaborate among themselves, on the assumption For example, PEMUDAH was created as a joint that they would be best positioned to know how to government and private sector task force to reduce structure such coordination. In other words, it is unnecessary bureaucracy, while PEMANDU was the important to empower the ministries to take decisions delivery unit used to support the implementation of whenever that enhances coordination, rather than the National Transformation Programme. concentrate everything at the center of government. This is consistent with the idea that the CoG should Two elements of Malaysia’s experience with only focus on strategic coordination decisions, while PEMANDU merit particular attention. The labs granular work is best done by the MDAs. provided an opportunity for multiple stakeholders to come together and diagnose the steps necessary to address a particular objective and the obstacles preventing its realization. Second, PEMANDU’s conduct of routine meetings – including escalation procedures if objectives were not being met – was essential in establishing responsibility for results among various line departments. The use of these meetings, and the actions and preparations they 184 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION What Has Not Worked? in Malaysia, for example, has been more challenging because roles are divided among institutions, and C omplex coordination mechanisms tend each works within its particular area of competence. to struggle. This principle is particularly An important observation here is that while it is true in Fragility, Conf lict, and Violence conceptually easy to define coordination mechanisms (FCV) contexts, but is likely to hold more generally as either whole-of-government or sectoral, neither is as well. Elaborate systems require the considerable categorically easier to achieve than the other. Some investment of political capital and staff and financial sectors are particularly challenging because of the resources, which are necessary to make sure that all range of external stakeholders involved, whether relevant stakeholders are fully on board, understand they are public and private entities or state and local what is expected of them, and are willing to play entities.  by the rules. Institutions must be established with the requisite technical skills and political clout to Prior to introducing new institutions and coordinate activity across a large number of disparate innovations, any efforts to restructure central stakeholders. In upper middle-income countries such coordination mechanisms should involve a as Malaysia or oil producers such as Saudi Arabia, this careful stocktaking of how the CoG functions may be possible, but for many emerging economies are currently performed. More than a few the bar is simply too high. Conversely, relatively failed reforms have attempted to “tack on” specific simple fixes, such as the cabinet manuals developed institutional fixes without holistically understanding in Zambia and Sierra Leone or the Monday morning how they will fit within the broader CoG ecosystem. meetings in Liberia, have proven effective. As the example of Serbia illustrated, proliferation of new institutions within CoG was in fact weakening In a similar manner, composite or overly the center vis-à-vis powerful line ministries. It is complex KPIs are rarely effective in improving usually better to build upon what is already there than coordination. Composite indicators, such as the to create new institutions from scratch. Questions Bank’s Doing Business indicators, Transparency that require careful consideration include: What International’s Corruption Perceptions Index, or is the underlying legislation and what are the roles the World Governance Indicators on Government and mandates of the relevant institutions? How are Effectiveness have advantages, in that they are easy to these functions actually discharged in practice? What understand and as such can be useful in galvanizing is the nature of work that flows before the cabinet reform aimed at improving governance or reducing or prime minister’s office during a given month? Is corruption in general. However, aggregate indicators business typically transacted verbally or through themselves are seldom “actionable,” meaning they are formal documents? Are there informal coordination not specific or granular enough to prescribe specific, mechanisms that fill gaps in the formal process? fine-grained reforms to address the underlying problems they reflect. In addition, the weighting Institutional solutions that are uncritically systems that they employ to aggregate various data transferred from one context to another have points are often contentious. These problems were not worked well. There is a growing literature on the among the reasons that India’s PMES effort struggled. dangers of “isomorphic mimicry” within development, i.e., the uncritical adaptation of organizational forms Where institutional responsibility for a policy and structures from one institutional context to area is overlapping, fragmented, or blurred, another. Many CoG reforms have perfectly (though coordination is more challenging to get right. inadvertently) illustrated this broader point. Reforms Annual budgeting processes generally preserve a that were essentially “rational-bureaucratic” in the silo culture because resources are appropriated to a Weberian sense have been grafted into systems specific entity and they alone are accountable for the that were largely patriarchal, with predictable use of those resources. It is also possible that, because consequences. entities have broad mandates, there may be only a few (but important) areas that overlap with others. Either way, the impact of blurred accountability is often not good for public policy. TVET enhancement IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 185 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION What Has Worked? What Has Not Worked? High-level political backing is Complex designs often lead important for any reform to to faltering reforms. Simple enhance coordination, as is mechanisms often work best in the quality of leadership. The low-income countries and FCV person at the helm of the reform contexts. should be technically skilled and politically savvy, as well as close Overlapping functions and blurred to the chief executive. accountability make coordination difficult. This is often as important Flexible and adaptive in sectoral coordination as it is in coordination mechanisms work government-wide coordination. better than rigid and prescriptive ones, as they have a better chance Before introducing new to be sustained and become institutional coordination self-reinforcing even as leaders mechanisms, it is important change. to take stock of what already exists. Building on the existing The reforms that anticipated institutions tends to work better. resistance and invested in buy-in were most likely to succeed. Institutional solutions uncritically transferred from one context Routine reporting procedures, to another lead to isomorphic combined with a careful mimicry and rarely produce the assessment and monitoring of desired outcome. obstacles and measures to resolve them, are essential links in the accountability chain. Coordination of cross-sectoral priorities was most likely to succeed when there was an established link between these cross-institutional objectives and the budgetary resources allocated to them. Center of government functions best when it focuses on strategic coordination and leaves the granular upstream and downstream coordination tasks to the MDAs. 186 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION Drivers of Effective Policy Coordination S uccessful efforts to improve coordination • Incentives: As policy-making inherently at the center of government described in involves compromises and competing objectives, Part II share some common dimensions policy coordination around the Cabinet process with those identified in Part I: has to speak to the incentives and motivations of political officials. In many central and • Political leadership: Political leadership east European countries, the prospect of EU manifests itself in the degree to which the chief accession has been a singular catalyst to facilitate executive – Prime Minister or President – can give collaboration and compromise. Fiscal crisis and focused attention and follow-up to making sure post-conflict rebuilding have similarly provided that coordination happens. As a result, a delivery that motivation in other parts of the world. In the unit or comparable body within the Cabinet Serbia and Latvia cases, there was also compelling Office or Chancellery that has the political evidence that technocratic solutions alone (built backing and weight of the chief executive will see around work processes) do not necessarily produce its requests and actions taken more seriously by results. In both cases there had to be room for the MDAs. DUs fail when they are technocratic political exchange to work as well. Incentives may only and detached from those with the political be even more important downstream: there are clout to reward, punish, and unblock. Political abundant examples of where coordination at the leadership and focus also require limiting the point of implementation has been dramatically number of priorities that will be followed. India helped by the use of performance management PMES’s failure was in part due to its sheer dashboards accompanied by a set of formal breadth of scope. On the other hand, Malaysia’s and informal rewards for those who deliver PEMANDU found success in having backing on their agreed outputs or outcomes. Rewards from the PM, an agency head with the status of and sanctions may be targeted to individuals or a cabinet minister, and by limiting the scope of institutions. Incentives take diverse forms, and its mandate. Malaysia’s experience shows how institutions were motivated to accept support to break down silos between them to make services more • Institutional capacity building: Long-lasting efficient. coordination mechanisms are those that have established a set of work processes that contribute to the long-term capacity of CoG institutions • Transparency: Successful policy coordination at and where the processes have intrinsic value the CoG contributes to enhanced transparency. in improving performance. Government-wide Transparency may pertain to internal or external monitoring bodies are more likely to leave a stakeholders or both. Well-functioning Cabinet legacy if they are not designed merely as an ad hoc processes will make new policy proposals and effort to address a temporal (political) problem of their potential impact transparent to others performance. Effective coordination also needs in Cabinet who might be affected. It does not to take into account the existing institutional mean that every new policy must be shared with relationships and inter-dynamics across every MDA; rather, those who most need to ministries. Merging institutions rarely produces know receive visibility on the policies affecting the benefits to coordination that their designers their sector and have the opportunity to give promise. Moreover, DUs and similar bodies have feedback. Transparency – like good coordination better prospects for success when they empower mechanisms in general – needs to be fit for and enable the existing institutions, rather than purpose. Effective administration should ensure appear to circumvent them or take credit for their that information flows do not overwhelm the accomplishments. capacity of CoG bodies to absorb the information or respond to it. This is especially critical with IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 187 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION downstream coordination, where government- and the private sector experience the world, can wide reporting on performance indicators is a also exert palpable pressures for bureaucracies to two-edged sword. On the one hand, performance get with the times. management systems have been used successfully to communicate to public officials and citizens the performance standards that need to be met by MDAs. Pernambuco (Brazil), Manaus (Brazil), Driving performance from the center is Saudi Arabia’s Adaa, South Africa’s PME, and important in all countries, and political leaders Rwanda’s Imihigo are several examples of this. will find new and innovative ways to strengthen On the other hand, when there are too many accountability for outcomes when traditional indicators to monitor, important accountability institutions fail to do it adequately. One of the relationships are undermined because critical more encouraging findings of this review has been information cannot be processed and acted the willingness of governments to innovate and on in a timely manner. This type of “system devise new solutions to address the challenges they overload” contributes to the impotence of many are facing. Such innovation and adaptation will be the government-wide monitoring systems imposed key to devising solutions that are “fit-for-purpose”, as by the CoG, including those driven by ministries was emphasized above, which will in turn be key to of finance in the context of annual budgeting. enabling governments to manage these challenges effectively. Technology offers new tools to facilitate collaboration, but they must be applied judiciously so • Technology: While technology has been as not to create merely a façade of coordination. This instrumental in helping to improve service global review has sought to capture and disseminate delivery in the cases presented in Part I, its the lessons from the experience of many non-OECD importance to policy coordination at the CoG countries so that others may find guidance and is less prominent. The role of technology can inspiration in designing their own solutions. manifest itself in the enabling of one-stop shops by helping agencies share information more easily across service platforms and by making exchange of citizen information more seamless among agencies (e.g., Egypt’s one-stop shops created by GAFI). Technology takes a more prominent role in facilitating intra-sectoral coordination to improve last-mile service delivery. In the Mozambique example, a small-scale investment in technology (specifically in software) helped the health sector improve coordination among multiple stakeholders to slash supply chain delays. Similarly, simple software helped the ministries of education and finance better coordinate on the allocation of school-based grants – to the benefit of school children. Also, monitoring of KPIs from the CoG often relies on electronic dashboards, as does the data collection that feeds into these dashboards (e.g., through smartphones or simple SMS messages). But technological change, particularly as new and disruptive technologies are transforming the way citizens 188 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION NOTES 1. This discussion draws upon Max Weber’s work, “The Three 14. The study applies the Metcalfe scale and concludes that Types of Legitimate Rule” (Die drei reinen Typen der coordination capacity in Serbia is low, at level ‘2’, or ‘exchange legitimen Herrschaft). It was originally published in the of information among organization (communication)’. journal Preussische Jahrbücher 187, 1- 2, 1922, and an English 15. PEMANDU is now a private sector consulting f irm translation by Hans Gerth, was published in the journal incorporated under the name PEMANDU Associates. Some Berkeley Publications in Society and Institutions 4(1): 1-11, of its previous functions have been transferred to a public 1958. sector entity called the Civil Service Delivery Unit. 2. See Sarkari Yojana, “The Complete List of Schemes Launched 16. Six NKRAs were identified when the GTP was first launched by Prime Minister Narendra Modi.” https://www.sarkariyojna. in 2010. An additional NKRA was included in 2011. co.in/complete-list-schemes-launched-pm-narendra-modi/. 17. For a comparative discussion of Delivery Units, see Jen Gold, 3. The formula for calculating inter-relationships is “Tracking Delivery: Global Trends and Warning Signs in I=[N*(N-1)]/2, where n is the number of entities and I is the Delivery Units,” Institute for Governance (2017). number of inter-relationships. 4. See Machiavelli, “Discourses on Livy”, chapter IX. 5. For a study of the role of different styles of leadership in the making of American foreign policy, see Alexander George, Presidential Decisionmaking in Foreign Policy: the Effective Use of Information and Advice (New York: Routledge, 1980). See also Emily Stokes, “The Secret Behind Good Leadership,” The Financial Times, May 25, 2009. 6. See Robert Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton University Press, 1993). 7. See Robert Axelrod, The Evolution of Cooperation, Basic Books, 2006. 8. See Vietnam 2035 report, pages 58 and 350. 9. See Mariano Lafuente and Sebastian Gonzalez, Do Delivery Units Deliver? (Washington D.C.: Inter- American Development Bank, 2018). 10. Pernambuco authorities appeared to respond rapidly to the spike in infants born with microcephaly, which peaked in October 2015 shortly after it was detected. However, others have argued that chronic underinvestment in public water and sanitation has contributed to the outbreak. 11. See Sean Thorton, “Chicago’s WindyGrid: Taking Situational Awareness to a New Level,” https://datasmart.ash.harvard. edu/news/article/chicagos-windygrid-taking-situational- awareness-to-a- new-level-259 12. The topic is dealt with extensively in David Potter’s classic treatise on the Indian civil service, “India’s Political Administrators: From ICS to IAS.” 13. An interesting example of a reorganizational effort targeted at improving policy and operational coordination is the creation of the Department of Homeland Security (DHS) within the United States. DHS was one of the largest reorganizations in U.S. government history, involving 22 different agencies, including the National Guard, the United States Coast Guard, the U.S. Customs and Border Protection, Immigration and Customs Enforcement and the Transportation Security Administration among others. A report by the Inspector General for Homeland Security in November 2017 – 15 years after the Department was created – argued that lack of progress in reinforcing improved integration and coordination “translates into a missed opportunity for greater effectiveness.” The Inspector General’s report went on to note that, in the face of overlapping missions, operations, redundancy, and inefficiencies, the Department’s phrase “Unity of Effort” had yet to be fully operationalized. (Office of Inspector General DHS, 2017) IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 189 PART II – SPECIAL TOPIC: POLICY AND INTER-AGENCY COORDINATION REFERENCES Akerlof and Kranton. 2005. “Identify and the Economics of Organizations.” Kamen, Al. 2013. “What’s the Cabinet Got To Do With It?” The Journal of Economic Perspectives 19 (1): 9-32. https://pubs.aeaweb. 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The core team members were asked to review all nominations based on the common template shown below. The core team was asked to complete an evaluation. This evaluation required them to identify the specific cases they thought ranked in the “top 10” and those cases that seemed to be “below the bar”. Some team members chose to also identify “runner-up” cases which appeared worthy of consideration, though they were not in the top 10. The team was asked to use the criteria below to assess each case and to score it against a simple scale of High, Medium, or Low. The scoring was embedded in the excel file that summarized all the cases that had been received. The scoring itself was not for the final selection; rather, it was intended to be an input to the decision-making by core team members in their final ranking. Selection Criteria 1. Clarity, significance, and persistence of the problem to be addressed: Can we clearly and succinctly identify the public sector performance problem that was being addressed? Is it a problem that could be relatable to other countries? Is it substantial, and has it been a persistent problem? 2. Innovative in its approach: Is the intervention itself clearly and succinctly identifiable? Can we credibly say that the intervention was innovative in its approach? (Other countries may have addressed similar problems – e.g., passport delays – but is the approach at least innovative for the country context?) By innovative, we mean a new way of addressing an old problem. Is the role of the government – rather than the Bank or a consulting firm – clearly evident? 3. Evidence of impact: To what extent can we clearly identify the benefits of the intervention? Are the benefits significant and widely recognized by key stakeholders? Are the beneficiaries identifiable? (This doesn’t require the existence of a formal impact evaluation, but there should be some evidence that there is a demonstrable improvement in performance.) 4. Replicability: Does the intervention provide useful lessons that other countries may benefit from? Could it conceivably be replicated in other countries? Are the cost and scale of the intervention within the reach of other countries, at least those of a similar socioeconomic level? A summary of the “scoring” was compiled based on the “top 10” and “below the bar” lists submitted by the eight core team members who completed the evaluation in time. In total, 27 proposals were deemed to be of sufficient quality to merit consideration for the report. The remaining cases are those that received insufficient votes to be considered. A final selection of the 15 cases featured in the Global Report was made from within the 27 cases, based on further due diligence conducted by the team. As a next step, the team followed up with project teams and lead specialists (in collaboration with a case writer), to develop the cases in more detail for inclusion in the report. 192 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION ANNEX The Template Title of Submission: Country: Contact Person (Prepared By): 1 Please describe the innovative intervention that you wish to nominate: a What was it? b What was significant? c Why is the underlying performance problem a key challenge for this country? d How easy or difficult was it and why? 2 What was the lead implementation ministry or agency? Please add other important stakeholders as necessary 3 Year(s) 4 (Approximate) cost 5 What was the role of the Bank? Was this intervention Bank-supported? If yes, was this lending or ASA? Please provide the relevant P-number(s) 6 Who are the beneficiaries of the improvements in public sector performance resulting from this intervention? (e.g., general population, civil servants, urban/rural population, poor, vulnerable, etc.) 7 How are those benefits realized? Please address the following: a Usefulness b Replicability c Scalability d Value for money 8 What are the indications of impact? Has some of it already been realized and measured? If not, what is the expected impact and when? IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION 193 ANNEX Annex 2. World Bank: Strengthening Inter-Agency Coordination at the Sectoral Level W hile the work of the World Bank and other donors at the center of government has been growing and becoming more diverse over the past few years, the Bank’s work on coordination mechanisms that focus only on a specific sector is much more extensive. The Governance Global Practice recently conducted a detailed review of the World Bank’s portfolio based upon a key-word search of over 20 selected phrases, such as “policy coordination,” “inter-agency coordination” and “inter-ministerial committees.” One of the more interesting findings to emerge from this analysis is the extent to which inter-agency coordination at the sectoral level is an important area for Bank engagement. Over the past 30 years, the Bank has engaged in over 440 interventions that sought, in whole or in part, to improve the quality of coordination within a specific sector.1 Sectoral coordination efforts out-number the Bank’s center of government interventions by a ratio of nearly 10 to 1. As is true with center of government engagements, sectoral coordination efforts are also increasing rapidly. Figure 13 below lays out the number of project approvals by year with a focus on sectoral coordination. The vast majority of these interventions have taken place since 2000. The reasons for this expansion are not entirely clear, but it may reflect the shift to a more programmatic approach in Bank lending. As the Bank has moved away from its traditional focus upon infrastructure and investment-based lending and has sought to tackle more difficult and pernicious sector-wide problems, this transition may have placed a premium upon addressing issues of inter-sectoral coordination. A closer examination of the past five years shows that an average of 2.3 percent of Bank projects per year have had a focus on sectoral coordination in whole or in part. This percentage has increased steadily from 1.2 percent of all IBRD projects in 2012 to 3.3 percent in 2016. FIGURE 13 Sectoral Coordination Efforts within World Bank Projects Figure A-1. Sectoral Coordination Efforts within World Bank Projects Project Approvals by Year 50 40 30 20 10 0 1981 1988 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Year count Governance 1 The actual number of Bank sectoral operations with a coordination component may have been higher, as it is likely that a number of interventions sought to improve the quality of coordination between various agencies without explicitly identifying this as a project objective. 194 IMPROVING PUBLIC SECTOR PERFORMANCE THROUGH INNOVATION AND INTER-AGENCY COORDINATION ANNEX Regionally, sectoral coordination work has been concentrated most heavily in Sub-Saharan Africa, with 119 projects over that period. An example is the Shire River Basin Management Program in Malawi, a US$268 million project to advance sustainable development in the Shire river catchment area that was approved in 2012. As noted in Box 15 below, among other objectives (primarily investments in infrastructure and improving rural livelihoods), the 12–15-year project seeks to support an integrated approach to planning and to strengthen the institutions involved in coordination, planning, and monitoring. Efforts to strengthen inter-government coordination at the agency level have been particularly pronounced in sectors such as the environment and natural resources; social, urban, rural and resilience; and finance and markets. BOX 15 Improved Coordination in River Basin Management The overall objective of the Shire River Basin Management Program (SRBMP) is to generate sustainable social, economic, and environmental benefits by effectively and collaboratively planning, developing, and managing the Shire River Basin’s natural resources. The first phase of the SRBMP will establish coordinated inter-sectoral development planning and coordination mechanisms, undertake the most urgent water-related infrastructure investments, prepare additional infrastructure investments, and develop up-scalable systems and methods to rehabilitate sub-catchments and protect existing natural forests, wetlands, and biodiversity. Future phases will consolidate Basin planning and development mechanisms and institutions, undertake further infrastructure investments, and up-scale catchment rehabilitation for sustainable natural resource management and livelihoods. The Project Development Objective (PDO) of the SRBMP is to develop a Shire River Basin planning framework and improve land and water management for ecosystem and livelihood benefits in target areas. The project will: (a) strengthen the institutional capacities and mechanisms for Shire Basin monitoring, planning, management, and decision support systems; (b) invest in water-related infrastructure that sustainably improves water resources management and development; (c) reduce erosion in priority catchments and sedimentation and flooding downstream, while enhancing environmental services, agricultural productivity, and livelihoods; (d) improve flood management in the Lower Shire and provide community level adaptation and mitigation support; and (e) protect and enhance ecological services in the Basin.