ETHICAL MANAGEMENT IN THE PUBLIC SERVICE

MANAGEMENT: AN INTERNATIONAL PHENOMENON12

Dadan Sidqul Anwar3

Centre for International Administration Studies4
National Institute for Public Administration Studies, Indonesia

Telp./Fax. 62-21-3504658; Email: Dadan_sa@yahoo.com

Paul R. Leonard, Lt. Governor of Ohio said:

“Ethics must come first. Without it, there is little or no respect for elected officials.
Without respect, there is no credibility. Without credibility leadership is impossible. And
leadership is necessary to address the tough issues in the years ahead.”
(http://www.alaska.net/~jdonahue/ethics.htm)

Introduction
The growing concern of new public management (NPM) reforms in developed and
developing countries has been seen as a positive direction toward better services for the
public. However, it has also been realized that its existence is not enough in assuring
better public services because it might be seen as still ‘value free’. Even the fundamental
values might be undermined by the reforms (OECD, 1996). High degree of autonomy in
public management, for example, might be beneficial for improving public services only
if the officers’ effort is maximizing the autonomy for their public interest. On the
contrary, it might be unbeneficial or even costly if the officers maximize it only for their
own interest. Sometimes, civil servants also might be in ‘dilemma situation’. The civil
servants might see the truth but the organizational environment might not allow them
present it. It is there fore the idea of ethic5 has emerged and even implemented in many

1
This paper is written in a Book “Bureaucratic Reform in Indonesia: Unrealized Hope” (Reformasi
Birokrasi di Indonesia: Harapan yang Tak Kunjung Bergulir), published by Lembaga Administrasi Negara
(National Institute of Public Administration), Jakarta, 2005. Page 379-389.
2
For Knowledge and Wisdom Lovers
3
Researcher and Advocator in the field of ethics in Government Management at Center for International
Administration Studies
4
Pusat Kajian Administrasi Internasional-LAN
5
In Indonesia’s terms: Etika, Etika Pemerintah, Etika PNS, Etika Pelayanan Publik.

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countries including United Kingdom, Australia, and New Zealand in which the new
public management have been pioneered. It seems that in some developed countries the
idea of “E”-government (ethic-government) essentially is seen to be important because it
might be the soul of public management. However, there are some other countries in
which ethical dimension of public management have been neglected compared to the
political, legal, technical and financial dimensions (see Kernaghan, 1993).

This paper would be looking at: What are the real and potential effects of NPM reforms
on ethics in the public sector? Why codes of ethics necessary and what are are its
infrastructures?

The effects of NPM reforms on ethics in public sector

Despite NPM reforms have been done significantly in many countries, especially
developed countries, the reforms may have unintended on ethics in public sector which in
turn may undermine the performance of public servants and their quality of services. The
reforms have resulted in some new environments may affect the ethics of public sector.
The new environment includes: working with limited resources; the increase of citizen
demands; restructuring the public sector; a devolved and discretionary management
environment; working in a fishbowl; changing social norm; and changing international
environment (OECD, 1996). Each of those aspects in the real practices might have
consequences on ethical pressure and contradiction which would be elaborated in
following parts.

Working with limited resources

The reforms have forced public sector to be efficient by reducing public expenditure.
However, despite it may indicate organizational success, it also may imply more limited
budget for public sector in producing the same or more burden of services. It might also
be reflected in downsizing policy which has happened in some countries including in the
United Kingdom. Furthermore, its phenomena may make the public servants feel
insecure, underpaid and in the risk situation which in turn may affect their morale. As it
has been quoted by OECD from Gilman that in United States’ experience:

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 “Downsizing creates insecurity to the extent that Federal employees view their
positions as being at risk. Reduced resources may create greater work demands.
Tighter agency budgets may mean delayed promotions or compensation levels
that fall behind those of the private sector. All of this may have an adverse effect
on employee morale.”

In such situation, some less morale (unethical) behaviors may be done by the public
servants. They might do a minimalist effort in job and have another job for extra money
(moonlight phenomena). The downsizing might also result in post-employment
restriction and potential conflict of interest (OECD, 1996). Specifically, in the course of
privatization or contracting out, retired employees may give inside information to the
private.

Citizen Demands
The pressure to be clients oriented also may result in unintended situation. In the real
practice, the clients’ expectation for public services may be more than government can
provide because of its economic limits. It might be worsened by the publication of
expected service standards (Citizen Charter, for example) which in fact, it may not be met
by provided public services.

The conflict might also occur in internal provider. On one side, public servants might feel
they have to serve their real customers which are citizens, on another side they must serve
their seniors within their organization. It would be problematic when the seniors’
objective is not customer orientation.

In those conditions, the public servants are in dilemmatic situation between to produce
the expected services (customer oriented) or to produce services under their economic
limits (provider oriented); to serve their real customers (public) or their seniors (in case,
there is a conflict of orientation). Furthermore, it may undermine the quality of services
and the government may experience less integrity and confidence in carrying its role.

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Restructuring the Public Sector
The new structures such as corporatisation, privatization and autonomous agencies have
been produced through the reforms. However, moving to the new structures may mean
the public servants should adjust their behavior to the new values which may collide with
the pas values. The new values (which may be more private values) may not
accommodate public’s norm and ethics which have been adopted in the past. Deciding
which one is the better is still debatable. But, at least, the public servants should know
which value (it may be a synthesis between the new and the past) they should refer to
needs to be clarified For example, in the United Kingdom, the duties and responsibilities
of operators at arm’s length from government has been set up by the Treasury Code of
Practice of Board Members of Public Bodies.

A Devolved and discretionary management environment

Another part of NPM reform is the devolution of decision making in resource allocation
from central government bodies to line ministries or departments and agencies; from the
top to bottom line within ministries; from central to local governments; and from
government to private. It might true to say that in some countries devolution has resulted
in the improvement of managerial accountability, result oriented and a better use of
resource. However, the greater of managerial flexibility might also result in the greater
erosion in traditional values. The new adopted values might not accommodate the good
ethos of past values. There fore, for assuring the adoption of public ethos (or national
ethos), the general guidelines need to be set up. in some countries as derivations from
national ethos. For example, New Zealand has overall Public Service Code as general
guidelines for line ministries to set up their code according their particular task.

Beside the implication of erosion in traditional values (which may have a good ethos), a
devolved and discretionary management environment may also result in unclear public
accountability. There might be ethical conflict confronting the administrator whether he
should act obediently towards his superior, while at the same time it is he who ultimately
is responsible for action (Larsen, 2000). Besides, public servants are not only facing
increasing public accountability but are also facing the dilemma of reporting of wrong

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doing of others (OECD, 1996). There fore in devolution, the public accountability should
be supported by the mechanism to expose unethical activities. For example, in the case of
challenger disaster in the US, 1986, it was not only because technical matter but also
unclear public accountability of some agencies (Hult and Walcott, 1990).

Public/Private Sector Interface

The direct and indirect contact between public sector employees and private might also
have an impact on unethical behavior. In making any contracts, for example, the public
and private employees may be tempted to do corruption, collusion or nepotism (usually
because it is related with the money). Usually, the contract that may offer more
opportunities for getting more money is procurement’s contract. It may attract private and
public employees to do corruption. As Nyarko (2003) has pointed out that :

“Corrupt ties between government and business are usually formed or created at
the interface between government and the private sector typically over
procurement, which also feeds into political party financing and bureaucratic
corruption. The players are usually public servants, politicians, business people
and multinational businesses”.

Another form of interaction between public and private sectors is competition in

providing public services. Public sector may be forced to compete with private sector as a
mean of improving efficiency. But, it may not be achieved as long as the same level of
playing field as well as ethical behavior does not exist. Adopting almost the same as
private values may be unethical for government to do so. In privates, for example, they
may bribe or offer gift to others to influence others’ decision which in public sector it is
misconduct and unethical. Another important thing is the new employees in public sector
who are recruited from private sector may have different value and norm from the
standard value and norm of public sector.

There fore although private sector may also have good value, involving them in public
sector activities should be bridged by internalizing the value and norm of public value.

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Working in a fishbowl
The public servants are working in more transparent environment. They seem like a
fishbowl, their actions could be seen by the public and media. As a consequence the
government should be accountable because their performance is easily watched and
criticized by public and media. For example through UK Citizens’ Charter, the public
may challenge the government in equity, fairness, or any other values. Another example
is despite the truth of misdeed is still questionable, Indonesia the government of
Indonesia has been criticized not only by local media but also international media. As it
has been reported by The Jakarta Post (2005), Indonesia purchased a controversial villa in
Geneva, Switzerland, which its price is over $8 million. Many, particularly Swiss media,
have raised concerns over the price amid financial difficulties faced by the country
especially in the aftermath of the tsunami disaster.

Changing social norm

The dynamic change of social norm may also influence the standards and values of public
sector. In many countries, the issues of sexual harassment, racism, pluralism have
become some forces of redefining the standard and values in public sector.

Changing international environment

The public servants have also been pressured by international environment. They have to
interact with public servants from other countries as well as multinational companies’
workers who have different values. For example, even though they may have different
values, they have to agree certain standards of values in contract agreement. They also
have to build the trust through sharing common value, for example in combating bribery,
the many countries have agreed to put good governance as their common value.

In short, as noted earlier, implementing NPM reforms in the public sector is not operating
in the vacuum environment which would result as good as intended. Instead, some
aspects of reforms such as the limited resource, the increase of citizen demands;
restructuring the public sector; a devolved and discretionary management environment;
working in a fishbowl; changing social norm; and changing international environment

6
may result in blurred standards and values of public sector. It might place the public
servants in conflicts of interests and objectives especially when the guidelines is only
few. In the worse condition, it may imply on the erosion of ‘sense of public morality’
(Staat cited by Denhardt, J.V. and Denhardt, R.B., 2003).

The necessity of code of ethics

Many literatures in the ethics of public services believe that the exercise of discretionary
power is the entry point of ethics in public service (Chapman, 1993). As Rohr (cited in
Chapman, 1993) argues that ‘the bureaucrat’s discretionary power has become the pivotal
justification for the consideration of public service ethics’. In their practices, the
bureaucrats or ‘public servants exercise discretionary power in their everyday work in
several ways; in their stewardship of public resources, at the interface with citizens, and
in the context of their policy making functions (OECD, 1996). It seems that NPM
reforms have also resulted in more discretionary power. It may work and has been
designed under assumption that the ethical perspective as a consequence is not needed to
be considered because the public servants would do in ethical manner as it is the
paradigm of de-ontological theory of ethics (see Lawton, 1998). As it is argued that:

“A core, but unstated assumption underlying theoretical work on the role of the
public sector is that public sector officials (both policy-makers and civil servants)
are knowledgeable, neutral and impersonal in their pursuit of the social welfare.
But are they? What do officials see as the pursuit of the social welfare and what
do they, themselves, consider to be "corruption"? And what of their willingness--
or otherwise--to take action against it? These questions are all too seldom asked”.
(http://www.transparency.org/sourcebook/02.html )

However, as it has been elaborated earlier, the reforms have positioned the public
servants in ethical dilemma and uncertainty. It is in line with Chapman’s (1993) argument
that:

“Despite problems associated with questions of bribery or the ideological

commitment of officials having been resolved, there still remains a large area of
the work of government where officials having been resolved, there still remain a
large area of the work of government where officials encounter ethical dilemmas
and where they are responsible for the judgments they make as part of their
regular work in government.”

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Furthermore, in ethical dilemma situation where there are no guidelines how to act within
the organization, the public servants may decide to choose the way in which they can get
more benefit even if it is unethical behavior. It may happen, for example, when, on the
one side, the public servants are employed under the contract which no certainty that they
would be employed again in the next period of contract. On another side, they have more
discretionary power. In such situation, they may maximize their limited opportunity to
get rent as much as they can. It may lead to unethical behavior such as corruption and
collusion in public sector. In the real practice, it happens in many countries. For example
corruption, it is not only becoming the developing countries’ problem as it has reported in
much media but also developed countries. It happened in many countries including
United States, United Kingdom and Italia (see in http://www.gdrc.org/u-gov/doc-
business_gg.html).

Those matters have made many countries including some OECD countries are not
confidence in delivering public services (see Whetnall, 1995; Maas, 1995; Jones, 1995
and Gilman, 1995). For example, UK government has been shocked that ‘in 1994, 64%
of people in a survey agreed that "Most MPs make a lot of money by using public office
improperly", while only 28% agreed that most MPs have a high personal moral code"; in
1985 the proportions had been 46% and 42% respectively’ (Whetnall, 1995). It motivates
many countries to create and maintain confidence in their government management as it
has been indicated by Maas (1995) that:

……."The government either has integrity or it does not. You can't just have a
little integrity. An administration stands or falls with the integrity of the
government; any diminution of the integrity of the government means that the
government loses the confidence of the public. And without the confidence of
the public, democracy cannot work. Then there is no more democracy. That is a
frightening picture."

Because the huge discretion of power may not free from unethical behavior and the
governments need to maintain their confidence, the discretion of power needs to be
checked and balanced. At this point, the ethics may have an important role because it is
‘concerned with systematic thought about character, morals, and right action’ (Adam and

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Balfour, 1998) . So, ethics could become a checker and balancer for the unethical
behavior of the public servants. Implementing NPM without character or ethics may trap
the public servants into ‘dehumanization and destruction in the name of public interest’
(Adam and Balfour, 1998). ‘When the character of nation is lost, the nation has lost
everything’ (Soepomo as quoted by Anwar, 1996).

The term of ethics might be used interchangeably with ethos, values and conduct.
However, in the context of public service, it has been defined by OECD (1996) as
follows: ethos is the sum of ideals which define an overall culture in the public service;
values is the individual principles or standards that guide judgment about what is good
and proper; ethics is the rules that translate characteristic ideals or ethos into everyday
practice, and conduct is the actual actions and behavior of public servants. Hence, to be
operational, the ethos in public service should be derived into the code of ethic and then it
should be conducted in public servants’ daily activities.

As a derivation from ethos the ethos, in its implementation, the code of ethics may have
some contributions. It is not just contribute to monitoring and policing behavior, but also
promoting integrity and good conduct, seeking some consensus on what is good behavior,
and giving public servants some guidance as to how they should act, make decisions, and
use discretion in their everyday work (see OECD, 1996). The ethical code may also be
not only guidance but the spirit in its implementation. As it has been a justification in
building ethical code in Canada. Afterwards, it may promote public trust and confidence.

In short, it is clear that NPM reforms should be complemented by code of ethics.

Otherwise, the public servants would be in dilemmatic situation among to be accountable,
transparent and more clients oriented, but also working under limited resources, private
public partnership values and the pressure from international values. So, if there is no
some behavioral guidance from the management of ethics, they may do for their own
profit which may undermine the quality of service. Instead, the ethical code may not
only give the guidance but also the spirit to be more confident in managing public
services.

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The infrastructures of ethics in the public sector
A comprehensive effort needs to be addressed in order to ensure that the code of ethics in
the public sector would meet current and future values and ethics challenges as
consequences of NPM reforms. The challenges may cover various aspects which depend
on the context of countries. However, OECD (1996) has identified some important
functions to be considered in implementing code of ethics based on literatures and
references from OECD countries. Implementing ethical value may be built based on three
important building blocks (infrastructure) of functions which are control, guidance, and
management.

Control
It covers three elements: a legal framework which ensures independent investigation and
prosecution; effective accountability mechanisms; and public involvement and scrutiny.
The legal framework limits public servants behavior through laws and regulations
which are enforced through the system of investigation and prosecution. For example,
criminal codes in the UK are implemented for dealing with public servants’ serious
illegal actions including bribery or theft. Whereas accountability mechanism, it is not
only set up through legislation and regulation but also through administrative policies and
procedure which controls day-to-day public servants’ activities. It has role as preventive
control (e.g. regulations and procedural guidelines) and performance-related ex-post
control (e.g. internal and external audits and investigations as well as internal and
external reporting and appeals process). It also has role in clarifying competing
responsibilities and Objectives, and integrating ethics into a management framework.
Control is also could be functioned by public involvement and scrutiny. It may become
a powerful disincentive to public services’ corruption and misconduct behavior. In public
involvement and scrutiny, the accessibility of laws information is needed as a mean in
encouraging public involvement in policy process. For example, the laws of “government
in the sunshine” in the USA force the public servants to consult their policy to their
stakeholders through public hearings, focus groups, client satisfaction surveys, etc.

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Guidance
It covers codes of conduct, and professional socialization and a well-articulated
commitment from political leadership. The codes of conducts may be in the form of a
legal document or administrative statement which sets public servants’ expected level
and performance quality. It may cover the organizational values and role including the
responsibilities of public servants as well as their legal obligations (e.g. declaring of
interest, restraints in making public comments, and restrictions on political activities) and
procedures including procedure for whistle-blowing and minimum performance
standards. According to its coverage, codes of conduct could be applied to the general
level of public service or individual level of departments or agencies. For example, in the
case of Australia and New Zealand, it exists either in general level (public service) or
individual agency levels (based on their organizational missions and functions). More
decentralized codes of conducts (departmental level) have been implemented in the
Nederland. In The UK, even it is incorporated into a public servant’s employment
contract. In its development, staffs participation should be involved in order that it would
be agreed and committed by all levels of public servants.

Producing codes of conducts is not enough. It needs to be socialized professionally.

Education and training as well as good role models (leading by example) at senior levels
are key social mechanism (Kernaghan, 1993). They may become the media of learning
the codes of ethics by public servants as well as promoting the ethics to various
stakeholders. Specifically induction training, it may be a revolving door between the
indigenous employees and the new employees who are coming from private sector. There
are various examples of professional socialization. As the have been reported by OECD
(1996) :
“In New Zealand, Chief Executives share with the State Services Commissioner
the responsibility to provide leadership in ethics and to model good conduct. In
Norway, courses in ethics and value-based decisional behavior are targeted to
managerial staff and others having responsibility for personnel and development.
In the Netherlands, public servants occupying managerial positions are charged
with the protection and promotion of ethics. As such, managers setting a good
example is viewed as the foremost socialisation mechanism. Special courses
are targeted at them.”

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The implementation of ethics would not start unless there is political commitment from
the top leader. The commitment could be expressed through rhetoric (speeches, public
announcements, written statements by leaders), performing an example, and allocating
adequate resources. It could be seen, for examples, in the process of establishing the
Nolan Committee in the United Kingdom (1994) and the President’s Council on Integrity
and Efficiency in the United States (1991).

Management
It covers public service conditions and coordinating ethics bodies. Public service
conditions may cover external and international conditions which make the environment
of ethics are conducive or not conducive. External conditions have been discussed earlier
which related to some forces of NPM reforms on ethical issues. As it has been discussed,
the external forces may have an impact on the demoralization of public servants who are
working under the pressures such as limited resources, public demand and accountability.
Internal condition is highly related with human resource policies. It determines the basic
life of public servants including recruitment, training, supervision, career development,
reward and discipline, pay and job security which may have a significant influence on
organizational culture as well as the morale of public servants. Another important part of
policy which may be categorized as crucial part because it may contribute to feeling
secure (or confidence) of public servants is the protection of whistle blowing in reporting
wrong doing. There fore, deciding which human resource policies may contribute to the
incentives or disincentives of good conduct is needed, because they may affect other
aspects of ethics infrastructure.

Coordinating Ethics Bodies may include various organizational stakeholders, parliament,

central agencies, departments, or independent agencies (for example, US Office of
Government Ethics) that have a responsibility to oversee ethical dimensions in public
service. They may have roles as watchdog, counselor, or promoter. Their influence could
be coercive in dealing with a scandal or a crisis; and educative in dealing with a general
ethic program.

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In short, the big challenge of implementing ethics is how to build ethics infrastructure (a
comprehensive approach) which should strengthen each others rather than partial
approach which may result in counter productive each others.

Conclusion
It is clear that NPM reforms should be complemented by code of ethics. Otherwise, the
public servants would be in dilemmatic situation among to be accountable, transparent
and more clients oriented, but also working under limited resources, new private public
partnership values and the pressure from international values Which may force them to
be demoralized. Besides, their discretionary power may also attract them to do unethical
behavior. There fore, the code of ethics as behavioral guidance is needed. However, in its
implementation, to be effective, the codes of ethics or conducts can not go alone. It must
be a part of comprehensive ethical efforts which may be called ethics infrastructure. It
covers not only control function but also guidance and management which should
strengthen each others. Otherwise, the ethical efforts would be useless and it may
undermine NPM reforms.

Reference

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Anwar, Dadan Sidqul (1996) “Building our character”. The report as The President of
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Hult, Karen M. and Walcott, Charles (1990) “Governing public organizations: politics,
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Jones, Mike (1995) “The management of ethics and conduct in the public service
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05

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