Tactics and Political Tactics and Political Dynamics of Public Dynamics of Public

Service Pay Service Pay

Lessons from Sub-Saharan Lessons from Sub-Saharan AfricaAfrica

Denyse Morin Kithinji Kiragu

May 25,2005Addis Ababa

Thanks & Thanks & AcknowledgementsAcknowledgements

• DFID and the World Bank• Cooperation and Support

– Governments– Trade Union Representatives– Academia– Civil Society Groups– World Bank Country Offices

OverviewOverview

• Pay is a Key Public Service Issue

• Pay reform is one of the most difficult areas of public sector reformComparatively poor pay has

remained a feature of most public services

Major feature of concern for public services in most countries

The ProblemThe Problem

Why have efforts made to bring about pay reform not resulted in more success?

Why have pay levels remained low?Why has implementation been

difficult?

Study ObjectivesStudy Objectives

Collect and organize data and information on public service pay policy experiences

Explore and describe the context and limits to which technical models have guided pay reform strategies and policies

Explore and explain the political contexts and rationales underlying pay policies and strategies adopted

HypothesesHypotheses

A successful strategy for public service pay reform is underpinned by choice of correct tactics and sequencing of the appropriate measures

Technical solutions to public service pay reform without due attention to a country’s politics are not sustainable

Approach/MethodologyApproach/Methodology

Two-stage process to see if there is a match between the technical choices, political developments, and pay policies and implementation:

First StageFirst Stage Map out in detail the pay policy choices, the

tactics, techniques and the sequences Identify & analyze the political context and

major political considerations and developments

Illustrate and trace implementation stages of public service pay policy changes including identifying implementation stages

Attempt to see if there is a correlation between the three variables mentioned above within each study country

Second StageSecond Stage

Compare the experiences of the countries under study on the basis of the three variables mentioned above

Establish if there is any correlation across countries along these variables

Draw out the lessons of experience and suggest strategic options in varying political environments

OverviewOverview

Pay Policy Tactics and ModelsPolitics and PayRole of institutionsStrategic Options

What is Pay?What is Pay?

Pay=salary+monetary benefits+ in-kind benefits [including retirement]

Nevertheless, salary remains the core element of pay

When salary is replaced by benefits and allowances there are explicit or implicit technical and/or political considerations

Salary trend is a good indicator to the decisions underlying pay changes

Trends in MedianTrends in Median Salary ($)Salary ($)

0

2000

4000

6000

8000

10000

12000

14000

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Year

Benin Botswana Burkina Faso Ghana Senegal Tanzania Uganda Zambia

Salary Compression RatiosSalary Compression Ratios

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Year

Ratio

Benin Botsw ana Burkina Faso Ghana

Senegal Tanzania Uganda Zambia

Nominal Wage Bill to GDP RatioNominal Wage Bill to GDP Ratio

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

1992 1993 1994 1995 1996 1997 1998 1999 2000

Year

Ratio (

%)

Benin Burkina faso Senegal Ghana Tanzania Uganda Zambia

General Pay Trends in 1990sGeneral Pay Trends in 1990s

Botswana: consistently high and decompression

Tanzania & Uganda: rising levels and decompression to a point

Ghana, Senegal & Zambia: overall deterioration, increased use of benefits

Bénin & Burkina Faso: declining salary levels and compression

Models, Tactics & TechniquesModels, Tactics & Techniques

Models Tactics and Techniques1. Corporatism National incomes policy, review

commissions, moderated collective bargaining

2. Salary indexation Politically preemptive, controlled collective bargaining

3. Wage bill & employment modeling

Invoking affordability constraints, controlling numbers

4. Pressure-driven /patronage

Ad hoc awards to politically strong or favored groups

5. Cost of living/MLW Emphasis on egalitarian objectives

6. Job evaluation /salary regrading

Job specification, workload assessment, emphasis on equity

7. Market benchmarking

Comparator studies, decompression

8. Performance-related

Performance management systems and productivity measurement

Models fall into 3 categoriesModels fall into 3 categories

Model Category

Characteristic Features

Technically rational (TR)

•Neo-liberal economics and/or HRM orientation (ideal)•Largely impervious to political pressures

Politically rational (PRA)

•Measured consideration to political factors (explicit or implicit)•Primacy of egalitarian concerns

Politically reactive (PRE)

•Predominantly driven by political pressures/exigencies

Mapping Models Against a Mapping Models Against a Rational FrameworkRational Framework

MODEL CATEGORY

MODELS

Technically rational (TR)

•Performance-related•Market benchmarking•Wage bill & employment modeling•Job evaluation and regrading

Politically rational (PRA)

•Cost of living/MLW•Salary indexation•Corporatism/consensus-based

Politically reactive (PRE)

•Pressure-driven/patronage

Model Trends since 1960sModel Trends since 1960s

TR •Ghana

•Botswana•Uganda

•Botswana•Tanzania

PRA

•Burkina Faso•Benin•Senegal•Zambia•Botswana•Ghana•Uganda•Tanzania

•Botswana

•Senegal

•Zambia•Tanzania

•Botswana

•Senegal

•Tanzania

•Senegal

•Burkina Faso•Benin

•Uganda

•Senegal

•Burkina Faso

PRE

•Ghana•Burkina Faso•Benin

•Uganda

•Zambia

•Burkina Faso•Benin•Uganda

•Tanzania•Zambia•Ghana

•Benin•Ghana•Zambia

PERIOD 1960-75 1975-85 1985-90 1990-95 1995-2000

Politics MatterPolitics Matter

What constitutes the essence of politics is the constraints under which political actors operate and the strategic maneuvering that they occasion and that occurs within them

 Politics is a complex game of strategic calculations. Politicians often face the so-called “politicians’ dilemma” in deciding among a set of policy preferences:

Politician’s DilemmaPolitician’s Dilemma

Conflicting Objectives:

• To survive in office; to build a loyal political organization—no suicide

• To govern effectively & efficiently

Trade-OffsTrade-Offs

• Cultivating partisan loyalty

• Adopting technical solutions for effective performance

Institutions MatterInstitutions Matter

Variations among politicians’ preferences largely depend on:

• the nature of the political system

• the nation’s institutions.

ActorsActors

ADMINISTRATIVEINSTITUTIONS

• President Ministers Public Sector Bureaucracies and Technocracies

THE DONORCOMMUNITY

• Donor Agencies Consultants

MARKETINSTITUTIONS

• Private Sector The Business Community

POLITICS OF RESOURCE

MOBILIZATION AND ALLOCATION

(The BudgetaryProcess)

CIVIL SOCIETYINSTITUTIONS

• The ruling political party Political Parties in opposition Trade Unions Media Others

REPRESENTATIVE INSTITUTIONS

•ParliamentLocal GovernmentCouncils/Assemblies

THE POLITICAL SYSTEMTHE POLITICAL SYSTEM

Political MappingPolitical MappingVARIABLE BENIN BOTSWANA BURKINA

FASOGHANA SENEGAL TANZANIA UGANDA ZAMBIA

Political System

-Uncompetitive Pluralism

-Competitive

X

X X

X X

X X

X

Political Stability

-Unstable

-Unpredictable

-Fairly Stable

-Stable

X

X

X X

X X

X X

Regime Legitimacy

-Low

-Medium

-High

X

X

X

X X X

X X

Institutionalization

-Low

-Medium

-High

X

X

X X

X X

X X

Popular Base of Regime

-Factional

-National

X

X

X X X

X

X X

Relevance of Political Relevance of Political InstitutionalizationInstitutionalization

High

Low

Institutionalization

Technically rational

Politically rational

Politically reactive

Competitiveness of PoliticsLow High

Botswana, Tannzania

Senegal, Uganda, Burkina Faso

Benin, Ghana, Zambia

Institutionalisation & Institutionalisation & CompetitionCompetition

 Institutionalisation

High Uncompetitive Monopolistic

Uncompetitive Pluralism (i)BotswanaTanzania

Mature Democracy

Medium UncompetitivePluralism (ii)UgandaBurkina Faso

Weak DemocracyBenin; GhanaSenegal;Zambia

Low      

  Low Medium High

 

Competitiveness

Politics and Pay PoliciesPolitics and Pay PoliciesPolitical System and Reform Performance Political System and Reform Performance

CompetitionCompetition Variables Near-zero

CompetitiveModeratelyCompetitive

Competitive Pluralism

Dominant Political Dynamic

Tamed Politics

Moderate tension

High tension

Institutionalisation

High Medium Medium

Regime Legitimacy

High Low to Medium

Medium

Stability High Fair Fair

Dominant Pay Models

Technically Rational

Politically Rational

Politically Reactive

Beyond technical Beyond technical merit…merit…

•Politics matterPolitics matter• Institutions matterInstitutions matter

Politics, Institutions and Technical Politics, Institutions and Technical ModelsModels

Politics Matter. The nature of the political system, regime legitimacy and stability, and the dynamics of the political process are all critical variables in pay reform

Institutionalisation of political life and organizations matter. Acceptance and respect for rules of the political game by major political actors and the general citizenry is very important, especially for competitive political systems

Ultimately and ideally, technical models can fully and sustainably prevail in a competitive political system that is highly institutionalised, stable, and enjoys high levels of legitimacy.

Strategic OptionsStrategic OptionsPolitical & Political & Institutional Institutional EnvironmentEnvironment

Policy and StrategyPolicy and Strategy

Low Stress (low competition/strong institutions)

•Scope for technically-rational models•Watch for stress

Moderate Stress (medium competition and average institutions)

•Stick to politically-rational models•Strengthen institutions

High Stress (intense competition and fragile institutions)

•Long-term perspective•Consensus building

Therefore…Therefore…

• Need to understand and appreciate the political context and political variables critical to success of pay reform programmes

•Political system•Social structure•Nature and strengths of power

centres

Implications for the countries where you work?