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MANAGING BUREAUCRATS: Evidence from the Nigerian civil service

  • Published Date: February 2018

Management practices that are effective in the private sector may not be suited to public sector bureaucracies, according to research by Imran Rasul and Daniel Rogger, published in the February 2018 issue of the Economic Journal.

Their study of completion rates of government projects in Nigeria finds that greater autonomy for civil servants is associated with higher completion rates, whereas performance monitoring and incentive schemes seem to backfire.

Around the world, civil service reform is viewed as necessary to deliver public services effectively and to foster development. But evidence is thin on how the management of bureaucrats affects the provision of public services. The new study provides insights into this relationship by studying the correlates of effective public service delivery in Nigeria.

The authors combine data sources linking the outputs of government bureaucracies with details of how bureaucrats are managed. For public service outputs, they use project level data measuring the completion, quality and complexity of over 4,700 public sector projects implemented by organisations in the Nigerian civil service, including government ministries and other federal agencies. These projects relate mostly to construction projects such as roads, buildings and small-scale dams – essentially the ‘nuts and bolts’ of rural infrastructure in Nigeria.

Project completion rates were assessed by independent teams of engineers and members of civil society. Completion rates are scaled between zero and one. They provide an accurate measure of the extent to which public projects are completed relative to what was originally prescribed by the National Assembly in the technical documents for each project. Two striking features emerge:

• First, 38% of projects never even start.

• Second, only 31% of projects are fully completed. The study explores how these project completion rates correlate with measures of the management practices under which bureaucrats operate.

The results confirm that two dimensions of management practice for bureaucrats matter above all. First, there is a significant positive correlation between the provision of autonomy to bureaucrats and public services delivered.

This finding provide support to the notion that public agencies ought to delegate some decision-making to bureaucrats, relying on their professionalism and resolve to deliver public services. The evidence is less supportive of the notion that when bureaucrats have more agency or organisations are more flexibly structured, then they are more likely to pursue their own objectives that diverge from the interests of society as a whole, resulting in fewer public services being delivered.

In the Nigerian context, a strong prior might have been that granting civil servants more autonomy would necessarily lead to more graft and less effective public service delivery. This is not the case. Hence corrupt practices, while prevalent and important drivers of public service delivery, are not the entire story.

The second finding about management practices is that the use of incentives for subjectively-determined ‘good performance’, the collection and use of key performance indicators, and efforts to monitor bureaucrats, all tend to decrease public service delivery as measured by project completion rates.

The broad use of incentive schemes tends to backfire in this public sector setting because well-targeted incentive schemes are nearly impossible to construct without creating other distortions. These distortions arise because bureaucrats are engaged in complex tasks, the relationship between bureaucratic inputs to outputs is uncertain and there is considerable ambiguity in the design and implementation processes for many public projects.

Hence the incentive systems may place excessive regulatory burden or ‘red tape’ on bureaucrats, say through the use of mis-targeted key performance indicators. Such distorted incentives have long been argued to lead bureaucrats to misallocate effort towards less productive activities.

Alternatively, the measured management practices related to performance incentives and monitoring might also pick up elements of subjective performance evaluation that lead to other dysfunctional responses among bureaucrats – especially engagement in influencing activities to curry favour with senior management.

These findings sound a note of caution for the good governance agenda of reforming civil services throughout the world. Whilst some practices such as increased autonomy for bureaucrats might be encouraged, other dimensions such as the use of explicit incentive schemes or the drive towards ‘payment-by-results’ schemes might not be optimal, and could even backfire.

In short, there should be no simple import into the public sector of management practices that have proven to be effective in private sector settings. The nature of tasks varies between the private sector and bureaucracies, the objectives of bureaucracies are far less clear-cut than those of private sector firms and there are fundamental differences in the contracting environment more generally.

One difference that is especially relevant is the lack of specialisation seen across civil service organisations in Nigeria. Civil service organisations are often tasked with implementing multiple project types, so that the same ministry might well be responsible for the construction of buildings, boreholes and small-scale dams.

For each type of project, the best management practices in terms of autonomy or incentive provision might well differ. Hence this lack of specialisation suggests that organisational project portfolios might simply be too wide for them to be able to fine-tune their management practices optimally for an individual project.

This non-specialisation may be optimal given complementarities in the production function of public goods. But their varied workload may make the effective management of bureaucrats more difficult.

The new research also highlights other aspects of civil service architectures that are likely to interact with the effectiveness of management practices for bureaucrats. These include the process by which individuals are selected into the bureaucracy and the labour market rigidities that characterise the civil service. The bureaucrats studied typically enjoy long tenure within organisations, with little movement across organisations. Such immobility can hinder the spread of best practices.

Finally, a lack of competition and lack of price signals across organisations delivering the same project types reduces incentives for organisations to improve their management practices.

ENDS


Notes for editors: ‘Management of Bureaucrats and Public Service Delivery: Evidence from the Nigerian Civil Service’ by Imran Rasul and Daniel Rogger is published in the February 2018 issue of the Economic Journal.

Imran Rasul is at University College London. Daniel Rogger is at the World Bank.

Their research was funded by the Federal Government of Nigeria, the International Growth Centre, the Economic and Social Research Council, the Institute for Fiscal Studies and the Royal Economic Society.

For further information: contact Romesh Vaitilingam on +44-7768-661095 (email: romesh@vaitilingam.com; Twitter: @econromesh); Imran Rasul via email: i.rasul@ucl.ac.uk; or Daniel Rogger via email: drogger@worldbank.org