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The Bureaucracy Lab, part of the World Bank, has been researching public and civil services across the globe, for the past five years. We use micro-data on the characteristics of public officials and their organizations to inform and improve the public sector. Too often, we think, reforms and changes are not based on hard data. We seek to change that, by using rigorous survey data, micro-data (at the individual level), and field experiments (RCTs). Here are some of the things we have asked ourselves in our research over the past five years, and the answers we found. For a more elaborate discussion of these and other findings, take a look at our report ‘Innovating Bureaucracy for a More Capable Government’.
What increases public sector productivity?
Many factors either contribute to productivity, or deteriorate productivity. Here are some that we found were of particular importance in civil services:
• Merit in recruitment matters
Organizations where selection and promotion are more meritocratic are likely to have more motivated staff. In Pakistan, we found that organizations that were self-assessed by civil servants as being more meritocratic in promotions also had staff that were more satisfied with their experience in the service. This correlates with other research that found that civil servants who reported that they were hired through political connections were less motivated to work hard and serve the public or were less satisfied with their jobs. All of this implies that civil and public servants hired because of merit, will be more productive.
• Performance pay can improve productivity through better management
Evidence from our survey in the Philippines suggests that performance incentives can improve management. Interviewees noted that the performance bonus scheme had motivated management to be more focused on target setting and monitoring. All in all, this evidence suggests that performance pay created improvements in management that can over time help create a performance culture in the bureaucracy. This, in turn, can boost productivity.
• Better managed public sector organizations are more productive
Our work in Ghana has shown how management can impact productivity. As shown in the figure below, better managed organizations tend to be a lot more productive in the completion of projects. This has potentially huge implications for public services and the national economy at large. Analysis of the Ghanaian management and productivity data, for example, implies that a single standard deviation increase in the quality of public management would increase GDP by 8 percentage points. In addition, this graph shows that there is incredible variety in productivity and performance across the public sector.
How does public sector employment interact with the overall labor market?
The public sector is, in many countries, by far the largest employer. This means that the effect of its characteristics can be felt far outside of its own sector, and impact how private companies behave and fair in the economy. The World Wide Bureaucracy Indicators investigate exactly how the public and private sector interact.
• Public sector wage premiums can impact where people will look for work
Overall, we find that in many countries jobs in the public sector are better payed than similar jobs in the private sector. This ‘public sector wage premium’ can have significant distortionary effects on the broader labor market. This premium can skew individual employment preferences toward the public sector and away from the formal private sector. It can even impact individuals’ education choices away from science, technology, engineering, and mathematics fields, given that many public sector jobs seek more other skills. Although wanting to work for in the public sector is of course not a bad thing in itself, if too many talented individual prefer the public over the private sector for the wrong reasons (money instead of intrinsic motivation), this can hamper private sector growth.
• The public sector is a better employer for women than the private sector
Three facts are worth highlighting here. First of all, in most countries, the share of women working in the public sector is higher than the share of women working in the formal private sector. Secondly, the gender pay gap is ten percentage points lower in the public sector than the formal private sector. This means that women get payed better in the public sector, than for similar jobs in the private sector. And finally, the public sector pays a higher wage premium to women than to men. A more elaborate discussion can be found in this blog.
How can we improve civil servant motivation through HRM mechanisms?
Motivation, as was already established, is strongly linked to productivity. Motivated civil and public servants are also likely to go the extra mile and stay in their job longer. All these factors make is worthwhile to look at HRM tools that might increase motivation.
• Pay inequity in the public sector can hurt motivation
We mentioned before that the public sector often offers better wages than the private sector. This wage premium is, however, not resulting in more motivated bureaucrats. There are two reasons from this. First, surveys of civil servants reveal that only 40 percent of respondents across seven coun¬tries were satisfied with their pay lev¬els, despite a significant wage premium in each of these countries. A possible explanation could be the considerable pay dispersion and pay inequity within the public sector. Second, even bureaucrats who are satisfied with their wages do not have higher levels of self-reported motivation. Money, it turns out, is not a great motivator once people have gotten the job.
• Recruiting staff with high levels of public service motivation
Public service motivation can be defined as the desire to serve the public interest. Research has found that employees with high levels of public service motivation perform better. Bureaucrats in the Philippines and Pakistan (SRB) listed job security and future career ambitions as the two main reasons for joining the government, ahead of public service and mission (see figures below). This shows that it is especially important to recruit the right type of people into the public service.
Self-reported reasons for joining the public sector:
• Encourage the “right” attitudes in the job
To create a more motivated workforce, several actions can be taken by management. First of all, it should be clear to employees what the goals are they should try to reach, and these should be in line with the goals of the organizations. Secondly, performance appraisals and regular feedback are important in this regard as well. Thirdly, well-designed and relevant trainings can create a motivation boost. And fourth and final, more motivated employees tend to have been given the autonomy to carry out their tasks.
Where to go from here?
This is only a snapshot of what we have learned about public services over the years. And yet, even more remains to be learned. With the use of surveys, micro-data, and experiments, we continue to discover more about how public services function and can be improved. Our focus on developing countries is especially relevant, given academics tendency to focus on more developed countries. If you want to learn more about our results and findings, or about our work, don’t hesitate to contact us.
By Wouter van Acker [wvanacker[at]worldbank.org]