What are the implications of decentralisation for human resource management? How have governments in East Asia addressed the issue of civil service management in relation to decentralisation? Using case studies, this book chapter from the World Bank examines human resource management in decentralised contexts. It argues that human resource management should be seen as a central component in the design of decentralisation rather than a separate stand-alone process.
East Asia’s experience with administrative decentralisation highlights both the opportunities and challenges of devolving responsibility for civil service management to lower levels of government. Decentralising the management of human resources can improve the responsiveness and resourcefulness of local government. Yet, without careful design, devolution can also bring fiscal imbalances, negative incentives and confused accountability at the local level. There is no single formula for successful civil service management in a decentralised context.
The experience of East Asian countries in managing the capacity, incentives, autonomy and accountability of the subnational civil service provides valuable lessons for other countries:
- Implementation of devolved functions in Indonesia and the Philippines is running up against the limited staff capacity in local administrations. Decentralisation has also affected incentive structures, creating incentives towards overstaffing, for example.
- Decentralisation in the Philippines and Indonesia significantly boosted the authority of local managers. However, limits on local authority have led manages to bypass regulations, risking reduced accountability and vulnerability to corruption.
- China and Vietnam have made training for civil servants a priority, but local administrations continue to lack the capacity to manage resources. Furthermore, incentives are skewed against prudent supervision of local budgets.
- Restricted autonomy in setting staffing and wage levels in China and Vietnam makes controlling administrative expenditure difficult for local managers. Lack of clarity on roles and responsibilities hinders the accountability of local civil servants.
- In Thailand and Cambodia, central governments fear that local administrations do not have the capacity to take responsibility for service delivery. Both countries have therefore set up decentralised structures without devolving significant authority.
- The limited autonomy of subnational governments in Cambodia and Thailand poses important challenges for local accountability.
The experiences of East Asian countries also highlight several issues that governments must address in designing policies and institutions for administrative decentralisation and sequencing reforms:
- Both centralised control and decentralised management can provide benefits for service delivery. It is critical for decentralisation policy to achieve a rational equilibrium between these opposing but valid considerations.
- The degree to which a country devolves authority for civil service management has implications for uniformity across the civil service. In its ideal form, a country’s civil services will be uniform but not unified.
- In devolving responsibilities, central governments must consider the capacity of small civil services to undertake certain tasks, and avoid the proliferation of unviable local administrations.
- While decentralisation can help to build capacity, low capacity at the local level can mean a sharp deterioration in public services. The critical challenge is to maintain momentum towards decentralisation while balancing capacity considerations.
- Countries should consider explicitly the link between civil service reform and decentralisation, in order to avoid replicating national flaws at the local level.
