1.2 Public Sector Reform in International Context
1.2.1 Public Sector Reform in The United Kingdom
The most important public sector reform in the United Kingdom took place in
1970s, when Ms. Margaret Thatcher was Prime Minister, with the application of the
following sequence of procedures (Office of Permanent Secretary for Interior, 2005:
45-51).
1) In 1979, an organization called the Efficient Unit was established
to monitor, supervise and examine the efficiency of the public sector’s performance,
with the focus on cost saving, as recognized and agreed by the organization’s Chief
Executive Officers (CEO). The procedures applied consisted of size-reduction of
organizations in the public sector and privatization of state enterprises.
2) In 1982, the Financial Management Initiatives (FMI) project was
conducted to cut costs in the public sector and to use the budget to measure the
efficiency of the public sector. The administrators at all levels needed to work with
clear objectives and achievement indicators, which authorized and built up the chief
officers’ deft budget arrangements.
3) In 1988, the Next Step Initiative project was conducted to develop
the efficiency and effectiveness of public administration, with the focus on the fiscal
value of resources and quality of services. Moreover, the size of organizations was
also adjusted along with their performance, with self-management authority. For
example, each ministry was asked to consider arranging their own autonomous
agencies to do specific activities. The administration also imitated the business
administration with autonomy in defining the organizational structures and
compensation system, with self-support through income and service charges.
However, the performance and services had to meet the same requirements as the
private sector, with the preparation of officers for good service through training.
4) In 1991, the Citizen’s Charter project was carried out, aiming to
develop the services the government organizations provided for the public and to
allow the public to complain about the services these organizations provided. In
doing this, the public sector had to announce the prevailing standards of services,
provide some information and news, offer alternative access to services, provide
14
services with courtesy, and with amendments and explanations in case of any
misconduct.
5) In 1998, the British government launched the Modernizing
Government Reform Programme, having the organizations in the public sector
consider their performance in meeting the customers’ requirements as their priority.
This was in order to help the customers gain the services the public sector provided
more easily, and also to improve the services and develop the service quality, via E-
Government, development of performance and joined-up service provision across the
boundaries between organizations or departments, and sharing best practice.
In brief, the public Sector reforms carried out according to the Modernizing
Government Reform Programme led to the following changes (Best Practices: Public
Administration Reform, 2013)
1) Service-led organizations turned into customer-led organizations.
2) The focus on inputs was shifted to outputs and results.
3) The traditional professional bureaucratic culture was changed into
a more corporate culture.
4) The role of providing services turned into facilitating and enabling
services.
5) The performance focus on the minimum standard was shifted to the
efficiency and effectiveness of service costs.
6) The working culture with no competition became more
competitive.
1.2.2 Public Sector Reform in The United States of America
Public sector reform in the United States of America has been applied in
different periods, but with the same purpose to improve administrative efficiency.
The contemporary American public sector reform (1993 – Present) was called the
public sector reform of reinventing Government. This reform adapted the concept of
public sector reengineering proposed by David Osbourne and Ted Gaebler into the
public sector reform, with serious action taken from Bill Clinton’s period onwards.
The organization called the National Performance Review (NPR) was established to
study and present some guidelines and standards of public sector reform, which led to
15
a report called From Red Tape to Results: Creating a Government that Works Better
& Costs Less. The NPR recommended the Government change the administration
ofh “Bureaucratic Government” into an administration of “Entrepreneurial
Government”. In doing this, the government organizations have to eliminate
administrative inefficiency and wastefulness, so as to make this meet the public or
customer’s requirements, as well as adjusting the human resource system, corporate
culture and developing the government officers’ competency and decision-making
skills.
The development of efficiency in the American bureaucratic system consists
of the following methods (Office of Permanent Secretary for Interior, 2005: 37-45):
1) The red tape was cut to focus more on the outcomes than to strictly
follow the regulations. So, the procedure the American government applied includes:
(1) Adjustment of the budget process, such as top-down policies,
budget arrangement regarding the priority of policy importance and budget allocation
according to organizational tasks, budget arrangement and approval in two-year
periods, cancellation of budget reimbursements at different times, and specification of
description and objectives of expenses.
(2) Decentralization of personnel administration for recruiting and
selecting employees for all positions, adjusting the position classification and
compensation systems, evaluating performance and discharging officers for
misconduct and loss of working ability.
(3) Streamlining procurement for deftness and rapidity,
authorization of procurement of information technology as appropriate for the
organizations’ size, with no bids in cases of budgets not exceeding US$100,000.
(4) Reorientation of the Inspector General’s roles, by assigning
additional roles and developing the monitoring system to put more emphasis on
outcome-based administration.
(5) Elimination of regulatory overkill by being less strict with the
internal control or cutting unnecessary expenses.
(6) Increasing the federal and state governments’ authority by
amending some regulations or laws which hampered the governments’ performance
16
and assigning the governments to manage small-sized projects with budgets not
exceeding US$10 million.
2) The customer was considered the priority, with specification of
standards of service, adjustment of services to be fast and complete at one point,
evaluation of customer satisfaction, eliminating service monopoly by the public
sector, bringing other organizations into competition in service provision, allowing
the organizations to be self-supporting and assigning private organizations to provide
some services instead.
3) The employees were empowered to get better results, by
empowering the government officers’ authority in decision-making and cutting some
monitoring steps. The government officers have to be responsible for the achievement
of performance by accurately defining objectives and goals, providing the officers
with essential knowledge and devices to perform their duty, developing the tools to
promote performance efficiency and quality of work.
4) The concept of Cutting to Basic was used to produce better
government for less. Unnecessary steps were removed, such revision to terminate
redundant or currently useless projects or organizations, focusing on earning more
income and collecting debts for performance development, outsourcing some
assignments to the private sector with some benefits to get the private sector involved,
and emphasizing investment to increase products etc.
The overall image of the American public sector reform of reinventing
government can be shown in the following figure 2.1.
17
Figure 2.1 Public Sector Reform by Reinventing the Government
Source: Office of Permanent Secretary for Interior, 2005: 45.
1.2.3 Public Sector Reform in Australia
The public sector reforms in Australia aimed to update the government’s
performance, and to develop performance processes rather than performance
outcomes. This reform officially started in 1983, with the following public Sector
reform procedures (Office of Permanent Secretary for Interior, 2005: 52-56):
1) Structural Reform: With organization restructure through
streamlining work processes and promoting business-like organizational performance,
allocating top-down authority of decision-making related to personnel and finance and
decentralizing authority to other related government offices.
18
2) Industrial Reform: Adjusting government officials’ payment and
fringe benefits to be compatible with the private sector; promoting security and career
progress and developing performance flexibility with part time work.
3) Human Resource Management Reform: Developing high-ranking
government officials by providing administrative and specialist training, developing
executive officials by providing training related to change management, promoting
progress on women’s and native’s equality and applying performance appraisals to
evaluate and compensate personnel.
4) Financial Reform: Assigning government offices to allocate budget
project by project and approving budget for operational expenses project by project
with evaluation based on performance outcomes regarding project aims and
efficiency, rather than cost saving alone, and approving additional benefits for the
government units which can save costs due to performance efficiency.
5) Commercial reform with use of charges. This follows the concept
that the cus
1.2 Public Sector Reform in International Context
1.2.1 Public Sector Reform in The United Kingdom
The most important public sector reform in the United Kingdom took place in
1970s, when Ms. Margaret Thatcher was Prime Minister, with the application of the
following sequence of procedures (Office of Permanent Secretary for Interior, 2005:
45-51).
1) In 1979, an organization called the Efficient Unit was established
to monitor, supervise and examine the efficiency of the public sector’s performance,
with the focus on cost saving, as recognized and agreed by the organization’s Chief
Executive Officers (CEO). The procedures applied consisted of size-reduction of
organizations in the public sector and privatization of state enterprises.
2) In 1982, the Financial Management Initiatives (FMI) project was
conducted to cut costs in the public sector and to use the budget to measure the
efficiency of the public sector. The administrators at all levels needed to work with
clear objectives and achievement indicators, which authorized and built up the chief
officers’ deft budget arrangements.
3) In 1988, the Next Step Initiative project was conducted to develop
the efficiency and effectiveness of public administration, with the focus on the fiscal
value of resources and quality of services. Moreover, the size of organizations was
also adjusted along with their performance, with self-management authority. For
example, each ministry was asked to consider arranging their own autonomous
agencies to do specific activities. The administration also imitated the business
administration with autonomy in defining the organizational structures and
compensation system, with self-support through income and service charges.
However, the performance and services had to meet the same requirements as the
private sector, with the preparation of officers for good service through training.
4) In 1991, the Citizen’s Charter project was carried out, aiming to
develop the services the government organizations provided for the public and to
allow the public to complain about the services these organizations provided. In
doing this, the public sector had to announce the prevailing standards of services,
provide some information and news, offer alternative access to services, provide
14
services with courtesy, and with amendments and explanations in case of any
misconduct.
5) In 1998, the British government launched the Modernizing
Government Reform Programme, having the organizations in the public sector
consider their performance in meeting the customers’ requirements as their priority.
This was in order to help the customers gain the services the public sector provided
more easily, and also to improve the services and develop the service quality, via E-
Government, development of performance and joined-up service provision across the
boundaries between organizations or departments, and sharing best practice.
In brief, the public Sector reforms carried out according to the Modernizing
Government Reform Programme led to the following changes (Best Practices: Public
Administration Reform, 2013)
1) Service-led organizations turned into customer-led organizations.
2) The focus on inputs was shifted to outputs and results.
3) The traditional professional bureaucratic culture was changed into
a more corporate culture.
4) The role of providing services turned into facilitating and enabling
services.
5) The performance focus on the minimum standard was shifted to the
efficiency and effectiveness of service costs.
6) The working culture with no competition became more
competitive.
1.2.2 Public Sector Reform in The United States of America
Public sector reform in the United States of America has been applied in
different periods, but with the same purpose to improve administrative efficiency.
The contemporary American public sector reform (1993 – Present) was called the
public sector reform of reinventing Government. This reform adapted the concept of
public sector reengineering proposed by David Osbourne and Ted Gaebler into the
public sector reform, with serious action taken from Bill Clinton’s period onwards.
The organization called the National Performance Review (NPR) was established to
study and present some guidelines and standards of public sector reform, which led to
15
a report called From Red Tape to Results: Creating a Government that Works Better
& Costs Less. The NPR recommended the Government change the administration
ofh “Bureaucratic Government” into an administration of “Entrepreneurial
Government”. In doing this, the government organizations have to eliminate
administrative inefficiency and wastefulness, so as to make this meet the public or
customer’s requirements, as well as adjusting the human resource system, corporate
culture and developing the government officers’ competency and decision-making
skills.
The development of efficiency in the American bureaucratic system consists
of the following methods (Office of Permanent Secretary for Interior, 2005: 37-45):
1) The red tape was cut to focus more on the outcomes than to strictly
follow the regulations. So, the procedure the American government applied includes:
(1) Adjustment of the budget process, such as top-down policies,
budget arrangement regarding the priority of policy importance and budget allocation
according to organizational tasks, budget arrangement and approval in two-year
periods, cancellation of budget reimbursements at different times, and specification of
description and objectives of expenses.
(2) Decentralization of personnel administration for recruiting and
selecting employees for all positions, adjusting the position classification and
compensation systems, evaluating performance and discharging officers for
misconduct and loss of working ability.
(3) Streamlining procurement for deftness and rapidity,
authorization of procurement of information technology as appropriate for the
organizations’ size, with no bids in cases of budgets not exceeding US$100,000.
(4) Reorientation of the Inspector General’s roles, by assigning
additional roles and developing the monitoring system to put more emphasis on
outcome-based administration.
(5) Elimination of regulatory overkill by being less strict with the
internal control or cutting unnecessary expenses.
(6) Increasing the federal and state governments’ authority by
amending some regulations or laws which hampered the governments’ performance
16
and assigning the governments to manage small-sized projects with budgets not
exceeding US$10 million.
2) The customer was considered the priority, with specification of
standards of service, adjustment of services to be fast and complete at one point,
evaluation of customer satisfaction, eliminating service monopoly by the public
sector, bringing other organizations into competition in service provision, allowing
the organizations to be self-supporting and assigning private organizations to provide
some services instead.
3) The employees were empowered to get better results, by
empowering the government officers’ authority in decision-making and cutting some
monitoring steps. The government officers have to be responsible for the achievement
of performance by accurately defining objectives and goals, providing the officers
with essential knowledge and devices to perform their duty, developing the tools to
promote performance efficiency and quality of work.
4) The concept of Cutting to Basic was used to produce better
government for less. Unnecessary steps were removed, such revision to terminate
redundant or currently useless projects or organizations, focusing on earning more
income and collecting debts for performance development, outsourcing some
assignments to the private sector with some benefits to get the private sector involved,
and emphasizing investment to increase products etc.
The overall image of the American public sector reform of reinventing
government can be shown in the following figure 2.1.
17
Figure 2.1 Public Sector Reform by Reinventing the Government
Source: Office of Permanent Secretary for Interior, 2005: 45.
1.2.3 Public Sector Reform in Australia
The public sector reforms in Australia aimed to update the government’s
performance, and to develop performance processes rather than performance
outcomes. This reform officially started in 1983, with the following public Sector
reform procedures (Office of Permanent Secretary for Interior, 2005: 52-56):
1) Structural Reform: With organization restructure through
streamlining work processes and promoting business-like organizational performance,
allocating top-down authority of decision-making related to personnel and finance and
decentralizing authority to other related government offices.
18
2) Industrial Reform: Adjusting government officials’ payment and
fringe benefits to be compatible with the private sector; promoting security and career
progress and developing performance flexibility with part time work.
3) Human Resource Management Reform: Developing high-ranking
government officials by providing administrative and specialist training, developing
executive officials by providing training related to change management, promoting
progress on women’s and native’s equality and applying performance appraisals to
evaluate and compensate personnel.
4) Financial Reform: Assigning government offices to allocate budget
project by project and approving budget for operational expenses project by project
with evaluation based on performance outcomes regarding project aims and
efficiency, rather than cost saving alone, and approving additional benefits for the
government units which can save costs due to performance efficiency.
5) Commercial reform with use of charges. This follows the concept
that the cus
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