ASSESSING PERFORMANCE ACCOUNTABILITY BY EXECUTIVE AGENCIES TO THE PUBLIC IN TANZANIA

By

Hanif Tuwa

M.A. (Political Science and Public Administration) Dissertation University of Dar es Salaam June, 2009

i i

ASSESSING PERFORMANCE ACCOUNTABILITY BY EXECUTIVE AGENCIES TO THE PUBLIC IN TANZANIA

By

Hanif Tuwa

A Dissertation Submitted in (Partial) Fulfilment of the Requirements for the Degree of Master of Arts (Political Science and Public Administration) of the University of Dar es Salaam

University of Dar es Salaam

June, 2009

DEDICATION For My Children, Thuraiya and Saleem

TABLE OF CONTENTS Dedication Table of Contents Abbreviations and Acronyms List of Tables and Figures Acknowledgements Abstract

CHAPTER ONE: INTRODUCTION THE PROBLEM OF ACCOUNTABILITY IN THE TANZANIAN PUBLIC SERVICE …………………………………………………………………...……….1 1.1 1.2 1.3 1.4 1.5 1.6 Context and Background of the Problem …………………………...………..1 Research Problem ……..…………………………………………………..... 5 Objectives of the Study ………………………………………………………6 Research Questions …………………………………………………………..6 Justification of the Study ………………………………………………..……7 Organization of the Study ……………………………………………………7

CHAPTER TWO: LITERATURE REVIEW THEORETICAL PERSPECTIVES ON “AGENCIFICATION”, ITS EFFECTS ON AND IMPLICATIONS FOR ACCOUNTABILITY.......................................9 2.1 2.2. 2.3 Introduction …………………………………………………………….……9 The Executive Agency Model ……………………………………………...10 Perspectives on ‗Agencification‘, its Effects on and Implications for Accountability in the Public Sector …………………………...………….. 13 2.4 Conceptual Framework ………………………………………………….. 20

CHAPTER THREE: RESEARCH METHODOLOGY..……………………….27 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Introduction …………………………………………………………………27 Qualitative Research Design ……………………………………………….27 Scope of the Study ………………………………………………………….29 Target Population and Characteristics of Respondents ……………………..29 Data Collection: Sources of Data and Methods of Collection ……………..31 Data Handling and Analysis ……………………………………………….32 Limitations and Challenges Encountered …………………………………..33

CHAPTER FOUR: FORMATION, ORGANIZATION AND AUTONOMY OF EXECUTIVE AGENCIES UNDER INVESTIGATION ………………………………………...34 4.1 4.2. 4.2.1 Introduction ………………………………………………………………....34 Institutional Characteristics of Executive Agencies under Investigation…..34 Case I: The National Housing and Building Research Agency (NHBRA)…34

4.2.2 Case II: The Tanzania Foods and Drugs Authority (TFDA)……….…….....36 4.2.3. Some Comparative Notes on the Two Agencies …………………………...38 4.3. Relative Autonomy of the Two Agencies …………………….…………….38

4.3.1. Financial Independence of the Two Agencies ……………………………...39 4.3.2. Operational Discretion of the Two Agencies ……………………………….42 4.3.3. Authority and Control over the Employees ………………………………...46 CHAPTER FIVE: 5.1. 5.2. 5.3. STATUS OF VERTICAL ACCOUNTABILITY …….…50

Introduction ……...……………………………………………………........50 Monitoring Performance of the Two Agencies ……………………………51 Performance Reporting by the Two Agencies …………………………….56

CHAPTER SIX:

THE “AGENCY-PUBLIC” INTERFACE AND THE STATUS OF HORIZONTAL ACCOUNTABILITY …...61

6.1. 6.2. 6.3. 6.4. 6.5.

Introduction …………………………………………………………………61 Interface of the Two Agencies and the Public ……………………………...62 Extent of Agencies‘ Responsiveness to the Public ………………………....75 Potential of the Public to make the Two Agencies Accountable ………..….80 Propensity of the Public to make the Two Agencies Accountable …………83

CHAPTER SEVEN: CONCLUSION AND RECOMMENDATIONS 7.1. 7.2. 7.3. 7.4. Introduction …………………………………………………………….…...85 The Impact of ‗Agencification‘ on Performance Accountability ………..…85 Factors Affecting Levels of Accountability of the Agencies...88 Recommendations …………………………………………………………..90

BIBLIOGRAPHY………………………………………………………………….92

ABBREVIATIONS AND ACRONYMS ACEOs ADDO CSRP DAP DFID DUCE EAP ESRF GOT MAB MDAs MLHSD MOHSW NHBRA NHBRU OECD OPRAS OPSR PO-PSM PSRP QMS TFDA URT Agency Chief Executive Officers Accredited Drug Dispensing Outlet Civil Service Reform Programme Director of Administration and Personnel Department for International Development Dar es Salaam University College of Education Executive Agency Programme Economic and Social Research Foundation Government of Tanzania Ministerial Advisory Board Ministries, Departments and Agencies Ministry of Lands, Housing and Human Settlement Development Ministry of Health and Social Welfare National Housing and Building Research Agency National Housing and Building Research Unit Organization for Economic Cooperation and Development Open Performance Review Appraisal System Office of the Public Service Reform President‘s Office Public Service Management Public Service Reform Programme Quality Management System(s) Tanzania Foods and Drugs Agency United Republic of Tanzania

LIST OF TABLES AND FIGURES LIST OF TABLES Table3.1: Respondents …………………………………………………….………. 30 Table.6.1: Information Delivery Channels of the Two Agencies…………………. 63 Table6.2: Feedback Mechanisms Available in the Two Agencies ……………..…. 69 Table6.3: Rate of Use of NHBRA‘s Construction and Consultancy Services ….. 72 Table6.4: Customers‘ Ranking of Service Delivery Improvements…………..…. 75 Table6.5: Customers‘ Satisfaction with Services of the Two Agencies……...……. 76 Table6.6: Customers‘ Satisfaction with Specific Attributes of Service Delivery by the Two Agencies ……………………………………………..……….. 78

LIST OF FIGURES Figure1.1: The Legal-Institutional Framework for Executive Agency Accountability in Tanzania…....................................................................................... 25

ACKNOWLEDGEMENTS I thank my supervisor, Prof. Samuel S. Mushi, for his help to shape the raw ideas and his confidence in my ability for independent thinking.

I acknowledge the contribution of my colleague, Bruno Godfrey, for sharing with me the agonies of academic life throughout the Masters‘ programme. I thank even more deeply, my soul mate, Mwanahamisi Salimu for her love.

My appreciation is to the Head of Political Science and Public Administration Department at the Dar es Salaam University College of Education (DUCE), Mr. Frank Mateng‘e, for his patience and understanding of the need for thinking space outside my work station, especially during the write-up stages.

I thank the Chief Executive Officers of the National Housing and Building Research Agency (NHBRA) and the Tanzania Foods and Drugs Agency (TFDA) for granting the permission to interview their staff and access some of their documents and publications. I recognize the facilitative roles by Mr. Mazanda (NHBRA), and Mr. Usingizimali P. Matagi and Mr. James Ndege (both of TFDA). The same goes to the officials from the Ministry of Lands and Ministry of Health for their cooperation.

I wish to express my deepest gratitude to all of the respondents who took time to provide their views as requested by the researcher.

ABSTRACT Despite the increased visibility of executive agencies in Tanzania, the key question about their accountability to the public remains unanswered. To fill the gap, the study assessed the extent to which agency autonomy has affected performance accountability of two agencies, namely the National Housing and Building Research Agency (NHBRA) and Tanzania Foods and Drugs Agency (TFDA), to the Government and the public. Data was collected through documentary analysis, a small survey of agencies‘ customers, and interviews with agency managers and staff, as well as officials of the Ministries of Lands and Health. This study established that the process of ―agencification‖ has increased autonomy of the two agencies but it has not contributed to enhanced agencies‘ responsiveness to their customers. Instead, ―agencification‖ has weakened ministerial control over the agencies, attributable to faulty framework stipulated in the Executive Agencies Act of 1997 and little interest shown by the Ministries to monitor the agencies effectively, which also has not been reinforced by customers‘ (or public‘s) willingness and ability to make the agencies responsive. The overall low levels of performance accountability have been influenced by weak accountability framework, commitment of agency leadership to make their organizations responsive, and customers‘ dispositions towards exerting pressures for the agencies to perform.

It is recommended that incentives for agency performance and disincentives for Ministries‘ disinterest in effective monitoring need to be devised; Parliament should play a more active role in oversight of the agencies, and public disclosure of information on agency performance should be made obligatory to all agencies.

1 CHAPTER ONE INTRODUCTION

THE PROBLEM OF ACCOUNTABILITY IN THE TANZANIAN PUBLIC SERVICE

1.1.

Context and Background of the Problem

The ways governments organize themselves to undertake their functions have always been changing in response to changing needs and demands (Rugumyamheto, 2004:437). In the immediate post-independence period, the Government of Tanzania (GOT) adopted reform measures that addressed three important needs: First, there was need to create a machinery to handle new responsibilities occasioned by the country‘s independent statehood, hence the Ministry of Foreign Affairs and Ministry/Department of Defense. Second, the need for the Government to spearhead socio-economic development in response to the citizens‘ expectations. This entailed setting new organizational units at the centre and local levels as well as establishing service delivery points. Third, the need to build from scratch a cadre of public service personnel to occupy new and expanded functions so as to create an adequate human resource capacity (Rugumyamheto, 2005:6).

During this period (1962 to early 1970s), the civil service was small, but efficient, effective, and less vulnerable to administrative vices than today (Mukandala, 1990). After the country adopted socialism in 1967 and state-controlled economy became a strategy for its development, GOT became the key provider of social services and actor in socio-economic development. As GOT over-stretched its capacity to provide

2 services free of charge or at subsidized prices, the quality of those services received less attention than the broader goal of achieving equity among various groups in the society. Eventually, by late 1970s, performance and integrity of the civil service had begun to drastically degenerate partly due to dysfunctional accountability system which allowed widespread embezzlement, corruption and other administrative vices (Shelukindo and Baguma, 1993; Teskey and Hooper, 2003; Therkilsen, 2000).

In its attempt to reverse the deteriorating economic situation in the 1980s, GOT seen an urgent need for wider institutional reforms to speed up the recovery process. Reform of financial institutions, the public enterprise sector and the civil service became a government priority (Ntukamazina, 2001). There emerged a ‗consensus‘ among Tanzania‘s development partners that the shift towards a free-market economy, where the private sector was to serve as engine for growth, needed to be reflected in the structure and size of the nation‘s public service. This consensus informed the Civil Service Reform Programme (CSRP) whose implementation spanned the period 1993 to 1999 with the support from basket funding by development partners. The CSRP focused on cost-containment, re-definition of Government‘s role and functions, and restructuring of the Government.

Despite the achievements recorded under CSRP, it was realized that there was still a need to translate the structural and institutional reforms into improved service delivery to the people (World Bank, 1999). Three arguments were put forth for a more comprehensive program which has longer-term perspective. First, the nature of the problem changed because after downsizing and achieving macro-economic

3 stability, the need to impose further cost-containment lessened. Second, political pluralism amplified citizens‘ demands for improved service delivery, which begged for a broader focus. Third, as public expenditure collection increased, cost-cutting became less relevant. These changes led to a need for a reform initiative that would focus intensively on service delivery improvements (PO-PSM, 2008). The Public Service Reform Programme‘s (2000-2011) strong focus on service delivery improvement and emphasis on institutional pluralism in the delivery of public service provided the basis for continued implementation of the Executive Agencies Programme (EAP) which began as part of the restructuring initiative under CSRP. The EAP aims to transform Government structures and role by placing its non-core functions to semi-autonomous executive agencies within the ambit of the Ministries. Implementation of the EAP began in 1996 with support from the development partners, especially the United Kingdom Government‘s Department for International Development (DFID) following the Cabinet‘s approval. The Executive Agencies were given a mandate ―to act as means for the Government to improve the delivery of public services which lead to better quality and greater efficiency, more value for money and augmented capacity for continuous improvement‖ (URT, 2001: 22). The formation of Executive Agencies was based on the argument that it was effective for addressing perceived problems of democratic accountability and increasing efficiency in delivery of public services. Politically, the agencies are seen as one method for creating more flexible and responsive public services in order to maintain popular support for the government. In policy terms,

4 agencies are viewed as rationalizing tools because they specify the goals and means of policy implementation (Talbot, et al 2000).

Lessons drawn from many countries reveal that executive agencies raise serious governance challenges. This is partly because there are often diverse motives underpinning agency creation, and upon their establishment some significant changes tend to occur to the traditional notion of accountability in the public service. Some other motives include: the need by state leaders to create conditions for political patronage outside the normal civil service rules (Varela, 1995), the desire by public managers to escape political scrutiny by yielding more autonomy (Laking, 2002), and to benefit from training opportunities and attractive remuneration packages that comes with the agency status (ESRF, 2004:14).

On the one hand, these diverse motives for agency creation indicate potential risks that can jeopardize the mission of achieving an efficient and effective public service, especially when the system of accountability is inappropriate or dysfunctional. On the other hand, the changes in accountability system have raised concerns, whether they have positive or negative impact on government accountability to the public. The GOT considers executive agencies as critical part of its efforts to reform the Public Service because they are assumed to bring about clarity of roles and functions, management of financial and human resources and lines of accountability. These attributes are assumed to cause improved access to services, speedier delivery of services than before, service with customer-focus, and participation of the public in service improvement through feedback. The GOT anticipates executive agencies to

5 become a model for the rest of the public services in client orientation, resultoriented management and public accountability.

However, the PSRP has so far produced mixed results. While service delivery levels for many executive agencies are reported to have increased, the increase is only moderate without adequate evidence of service quality improvement (PO-PSM, 2005a). Moreover, delays in service provision and low quality results are still very prevalent and rate of citizens‘ dissatisfaction is relatively high. Ethical conduct within the Public Service is ranked very low due to corruption and selfinterestedness of public servants (PriceWaterhouseCoopers, 2006).

The Public Service Reform Programme (PSRP) has delegated substantial authority of Government Ministries to the executive agencies. This raises serious concern given the risks involved such as rent-seeking, monopoly, abuse of power and so forth (Posner, 2007). Thus far, there has not been an in-depth inquiry to assess the impact of ―agencification‖ on public accountability in Tanzania. To fill this research gap, this study analyzes the appropriateness of the legal and institutional frameworks in facilitating accountability of the agencies, and explores the effect of autonomy on accountability of two selected agencies charged with the responsibilities of protecting and promoting public health (TFDA) and providing quality, low-cost shelter (NHBRA).

1.2.

The Research Problem

Despite the growing presence and importance of executive agencies in provision of public services and regulation in Tanzania, whether and the extent to which these

6 agencies are accountable to the public remain not only unknown but also uncertain due to the potential risks stated above. This study therefore sought to assess the extent to which ―agencification‖ has improved the accountability of the Public Service.

1.3.

Objectives of the Study

The general objective of this study was to investigate whether and to what extent the executive agencies in Tanzania are accountable to the public.

More specifically, the aim was to: 1. Establish whether the governance frameworks of executive agencies in Tanzania have facilitated performance accountability of the two agencies;

2. Assess how increased autonomy of the executive agencies has affected performance accountability of the two agencies (whether positively or negatively);

3. Explore salient factors that affect accountability of the agencies; 4. Recommend ways to improve public accountability of the executive agencies.

1.4.

Research Questions

To achieve the objectives stated above, the following three questions guided the inquiry: 1. What is the impact of increased autonomy on accountability? 2. What factors determine the levels of accountability of the agencies?

7 3. Do the existing legal and institutional frameworks facilitate or constrain agencies‘ accountability?

1.5.

Justification for the Study

In contemporary democracies, public administration is an essential tool for good governance (Carlos, 2005). The importance of this study stems foremost from the fact that it deals with accountability which is among the widely accepted principles of effective public administration. The GOT has made numerous efforts to improve governance in the past two decades, the most recent of those efforts being formation of the executive agencies. Experiences from other countries have however revealed variability of what the executive agency can or cannot achieve. These experiences do not show conclusively that ―agencification‖ improves or does not improve accountability of the public service. This study sheds more light on the ―agencification‖-accountability equation, at least in the Tanzanian context.

1.6.

Organization of the Study

This dissertation has seven chapters. Chapter one has introduced the study by a way of contextualizing the problem of deficit performance accountability in the Tanzanian Public Service. It has also stated the research problem and provided study questions. Chapter two presents the theoretical literature on the ―agencification‖accountability relationship. Chapter three discusses the methodology of the study. Chapter four gives details on the formation and organizational characteristics of the two case studies, and examines their relative autonomy. Chapter five analyzes the legal and institutional frameworks, under which vertical accountability of the

8 agencies is examined. Chapter six examines the interface between the agencies and their customers to determine its implication on horizontal accountability. Chapter seven makes a conclusion of the main findings of the study and the factors that affected the level of accountability of the two agencies, and recommends changes in the legal and institutional framework in order to improve accountability of the executive agencies in Tanzania.

9 CHAPTER TWO

LITERATURE REVIEW THEORETICAL PERSPECTIVES ON “AGENCIFICATION”, ITS EFFECTS AND IMPLICATIONS FOR ACCOUNTABILITY

2.1

Introduction

The way governments conduct their business has witnessed radical changes in the twenty-first century, with ‗agencification‘ increasingly becoming the most fashionable alternative service delivery strategy (Talbot, 2000; Office of Public Service Reform, OPSR, 2002). By mid-1990s, a number of European countries, especially members of the Organization for Economic Cooperation and Development (OECD) and North America, had opted for the agency model as the principal organizational type for public service delivery (James, 2003; Laking, 2000; OECD,
1997). Many governments in the developing countries have also taken up this New

Public Management-type of reform initiative (Polidano, 1999). Despite the apparent popularity of this new model, there is still a hot debate among scholars on whether ―agencification‖ enhances accountability.

Objectives of this chapter are twofold: first, to discuss the underpinning ideas of the Executive Agency Model. Secondly, to discuss the two contending perspectives on the impact of ―agencification‖ on accountability with a view to drawing a conceptual guide for empirical analysis of the Tanzanian case studies. We shall first look at the reasons for the entry of the executive agency model as a public service delivery tool.

10 2.2.The Executive Agency Model Civil Service has conventionally been a large, unified ministerial-type entity that handles diverse governmental functions. The unified system, being so big and diverse, imposed a serious handicap on the three ‗Es‘ of managerial efficacy, namely economy, efficiency, and effectiveness. The strains noted by governments in Europe during the 1970s include: work overload to ministers and top management staff; insufficient attention given to delivery of services; a lack of clear lines of responsibilities and accountability; and absence of sustained pressure to perform (OECD, 1997). These structural weaknesses led these governments to reassess which functions require to be undertaken directly within ministerial departments and which could work better if hived-off and run by separate entities outside ministerial structures, but subject to overall ministerial guidance.

From thence, executive agencies have been created to address those key weaknesses in the delivery of public services. They are seen as tools of unbundling the bureaucracy by separating policy from operations and then locating the latter in new structures outside the ministerial structure. The Executive Agency Model has now been adopted by many countries as strategy for public service delivery.

The Executive Agency Model is very flexible. Its main feature is autonomy: provided agency managers work within the strategic direction set by ministers to whom they are accountable for policy outcomes, the agency has adequate discretion over its operations and flexibility in allocation and use of resources (Efficient Unit, 1988). It thus provides greater delegated authority to the Agency Chief Executive

11 Officers (ACEOs), who take ultimate responsibility for the working of the Agency. Powers of the ACEOs include making input decisions, setting flexible rules and standards of operations, and controlling and disciplining the staff of the agency. Furthermore, the model gives the ACEO discretion in using resources and upgrading the financial and management systems and skills available within the agency. Thus the agency prepares its financial forecasts according to ‗generally accepted accounting practice‘, and with an obligation to provide financial statements to the minister at agreed intervals. In addition, the agency must produce and submit an audited record of the agency‘s performance in accordance with its approved corporate and annual business plans.

The model assumes that greater freedom and authority is indispensable to accountability and improved outputs. The overall responsibility for performance rests with the ACEO. It is assumed that the agency will be more customer-oriented than the ministerial bureaucracy and that it will remain accountable to the minister responsible for the service delivered (OPSR, 2002:5). The minister does not however interfere in day-to-day running of the organization. The model provides for ACEO‘s strategic engagement with the ministry so as to facilitate a shared understanding of overall and cross-cutting objectives, and to remove obstacles and restrictions on agency freedom to make effective choices for improved performance. Ministers retain the right to alter the system and reorganize the status of executive agencies, including power to abolish them (James, 2003).This authority is supposed to be a disincentive for low performance by the ACEOs and

12 staff of their organizations. Operationally, the ACEO acts as a contracted officer and the Permanent Secretary as the enforcer of performance agreement and reviewer of performance. Performance agreements replace the conventional public service ethic of trust, the failure to deliver the set outputs may lead to ACEO's removal. Staff accountability for operational performance within the agency rests with the ACEO.

Separating the agency from the traditional ministerial structure is considered important to allow specification and specialization of the government executive tasks. It is held that service delivery is a distinct function from policy making, which can be performed better if it does not compete for attention with policy issues (ADB, 2000). The agency can then focus on improving quality of outputs to meet public expectations. The agency, therefore, becomes responsive to its customers and the general public. The separation of policy from operational functions assumes two conditions. The first is that the function of service delivery should not give rise to policy issues that necessitate interventions from the government ministry. The second is that the policy on service delivery must be specified in sufficient detail and in terms that allow close monitoring of its implementation.

The executive agency model has at least three main weak points. First, it assumes a clear-cut separation of policy and operations. Secondly, it overlooks the likelihood that the separation could create a risk of agency capture by private interests, other than politicians and public servants who are its allies. Whilst separation of policy and operations can reduce the eminent risk of capture by public interest, it simultaneously creates a risk of capture by private interests. For example, Kozak and

13 McCartney (1987) established the dominance of corporate interest groups in the Congress policymaking, making most policies to be tailored to suit or accommodate corporate interests which compromise broader public interests. Thirdly, arguments behind the model are not well supported by hard evidence that multi-purpose agencies perform less well or are less readily held to account than the single-purpose agencies (ADB, 2000:191). 2.3. Perspectives on „Agencification‟, its Effects and Implications for Accountability in the Public Sector ―Agencification‖ implies substantial change in the framework and processes of accountability within the public service. This is mainly attributed to the shifts of control over operational matters from the ministry, which is left with responsibility over policy formulation and takes on oversight role (―hands-off, eyes-on‖), for a detached and increasingly autonomous agency. The model is built on theoretical assumptions that accountability is possible despite its autonomy, but researchers log horns when addressing the question whether after their formation executive agencies become more accountable for their performance to their key stakeholders and the general public.

Two perspectives have emerged, based on several arguments. The first asserts that policy-operations separation increases transparency. The first argument is that under the separation, tasks and responsibilities are clarified, which makes accountability easier as political principals (ministers) can maintain pressure for improvement (Efficient Unit, 1988). With the principals relieved from operational tasks, they can

14 more effectively monitor activities and performance and evaluate the outputs in the light of policy outcomes they set. Performance monitoring mechanisms like performance audits are said to be critical and helpful to ensure agencies do what they are required promptly, efficiently and in accordance with acceptable standards. As Cook (2003:14) asserts, a core aspect of the Agency Model, as practised in New Zealand, is the strong focus on performance audits, which has made it possible to hold agency managers accountable for the delivery of specified services.

The second argument is that separation of policy and operational functions reduces the risk of public organizations being captured by self-interests of politicians and bureaucrats, which is likely to happen when they exist within the same domain. By making agencies separate and independently working entities, without any political roles and ties with the ministries, save for general policy directions, public interests would be secured (ADB, 2000).

The third argument is that creation of agencies can improve accountability through performance contracting. The logic of performance contracting is that formal or quasi-formal contracts based on clarified roles, responsibilities, and explicit key performance targets allow the portfolio ministry to embed a results-oriented focus that supplants the traditional bureaucratic emphasis on inputs and procedures. An additional argument, drawn from institutional economics is that contracts make it possible to specify agency results in terms of outputs or outcomes which permit the portfolio ministry, the legislature and citizens themselves to look at the set performance targets and determine easily the extent to which they were achieved.

15

The fourth argument is that decentralized management brings the service providers and users within each other‘s easy reach (Kaul, 1997; OPSR, 2002). It provides opportunity for consumers of public services to exert direct pressure on the agencies towards increased responsiveness. The Service Quality Charters or Client Service Charters are increasingly used to bridge the gap between agencies and consumers of their services. Agencies' customer-focus orientation is made possible by consultative engagement with the public, thereby providing greater public access to their operations and performance. It gives agencies a chance to receive feedback through formal complaints procedures which provide the basis for improvement. As feedback increases, the agencies' responsiveness also increases.

The second perspective, in contrast with the previous one, sees organizational separation from ministerial structures and increased autonomy to agency managers as fragmenting the framework for their accountability to the Government and the public. McKinlay (2000:219) argues against the policy-operations dichotomy, stressing that it tends to disrupt feedback mechanism between policy makers and policy implementers. When these, practically interlocking and preferably complimentary activities are disaggregated into two separate domains, ‗a serious and continuous‘ accountability gap in the public sector is created.

The separation is seen as giving policymakers a chance to avoid responsibilities and find solace in blaming agency activities. As for agency managers, they may disregard policies from central ministries, sound or otherwise, which creates risks of corruption and other administrative vices. Segsworth (2003:6) illustrates this argument with a

16 concrete example from the United Kingdom (UK), where the Home Secretary refused to accept responsibility for a number of prison breaks and prison suicides and instead sacked the Director General of Her Majesty‘s Prison Service (an Agency). The Minister, Michael Howard, argued that the appointed Director General should be accountable for short-term operational matters while he, the Minister, should be held responsible for longer-term policy. It is further argued that ‗agencification‘ weakens the system of political control through the minister, as it compromises ministerial accountability to public institutions like the legislature (Pollitt, 2001; McKinlay, 2000). For many scholars in this perspective, clear separation of policy and operations is fictitious, and even when achieved, it causes problems in coordination. In its Agency Policy Review, the UK‘s Office of the Public Service Reform (OPSR) reported an increasing gap whereby the operations of executive agencies had become disconnected from the aims of their ministries (OPSR, 2002), thereby creating an accountability gap. Again, it is argued that executive agencies tend to undermine public accountability because they gain the upper hand while political principals like the legislature end up receiving vague information from the ministry. The shift of control over operational matters and information strengthens the agency managers to the extent of undermining the system of public accountability (Sterick and Scheers, 2003; James, 2004; Moynihan, 2004).

Gains (2003:64-65) who focuses on resource exchange between the Ministries, Departments, and Agencies (MDAs) supports this argument also. She argues that the

17 introduction of agencies has led to a huge transfer of financial, organizational and informational resources to agencies and devolved statutory authority which makes them very powerful in operational and resource allocation matters. Ministers, on the other hand, have only political resources derived from elected office and authority over policy goals and spending decisions. It is therefore possible for the two sides to 'struggle' for control of resources or for their principals (ACEOs, minister, principal secretary and other senior ministerial officials) to agree to cooperate in actions which are contrary to public interest (example rent-seeking behaviour).

The agency model is accused of strengthening the hands of agency management which undermines public accountability, especially when political principals are kept at the sidelines (Caulfield, 2003). Boston (1999) also criticises the logic of the agency model and concurs with the second perspective‘s position after showing that increased discretion encourages maladministration which puts the citizenry at a disadvantage. As evidence, reference is made to a (then) sharp rise of citizens‘ complaints against autonomous public bodies in New Zealand, whereby the rate of complaints against public managers submitted to the Ombudsman more than doubled since introduction of executive agencies.

According to its report on the assessment conducted between 1997 and 2001, United Kingdom‘s Select Committee on Public Administration revealed that public audit of executive agencies (―Quangos‖) fell from 81% to 64% and public access to these bodies remained low. They met only just a half of the accountability measures. More

18 strikingly, those advisory ―Quangos‖ dealing with public safety and the quality of people‘s lives were found to be largely closed and secretive bodies.1

Other scholars (example Schick, 1996) have questioned the extent to which internal control mechanisms are appropriate and adequate to ensure broad-based accountability in these organizations. Effective implementation of these systems is considered to be, technically, very difficult, and they contain inherent disincentives to the managers and employees of the agency. McDavid (1998:6) argues that performance measurement systems, for instance, make sense only at a general level as tools for improving accountability, but they tend to fail in implementation. Performance measures that were applied in Sweden hit the wall as the set performance targets turned out to be vague rather than explicit and most often were unrelated to results, of poor quality, or incomplete (Rexed, 2006). Flynn (2004) argues with concrete cases that instituting performance management system is often not translated into high satisfaction with public services.

Internal control systems that are devised and supposed to be operated by the agency managers are discredited by some scholars who argue that it is often not in the best interest of these managers to enforce accountability in an effective manner. For, there is conflict between what the public value and what these managers see as important for their entity to survive and secure of their interests. It is argued that, since agencies often compete for government resources, they are less likely to institute effective control system because exposition of poor performance jeopardizes agency‘s potential success in getting resources. It is this conflict of interest that
1

see www.democraticaudit.com

19 belongs to the second line of thinking, which makes increased autonomy to the agency managers unlikely to enhance accountability to external stakeholders like members of the public. Scholars whose ideas fall into the second perspective about ‗agencification‘ share the idea that accountability is not a welcome idea among those who have to render the account. These scholars are of the view that increased autonomy reduces propensity of the agency managers to become transparent about their performance and related matters. With resource transfers as explained by Gains (2003:65), agencies become less dependent on the ministry, and wield much discretion which may likely culminate into secrecy rather than transparency. As Cook (2003:26) found out, ministers could not fulfil their oversight role because after the agency reforms in New Zealand, the policy implementers (ACEOs) increasingly resorted to withholding information on their performance.

The second perspective, therefore, sees the agency model as having a built-in disincentive. With increased autonomy over their operations and decision-making processes, agency managers are expected to consider transparency and complete accountability to the public and ministerial political principals as curtailing their freedom and are most likely to manipulate rather than strengthen those internal control systems to their own advantage. Notwithstanding their different perspectives on the impact of ‗agencification‘ on accountability, these scholars agree on certain things which are necessary for an effective system of accountability. Cook (2003) and Segsworth (2003) explain that

20 disclosure of information through various ways of dissemination is necessary to support governance of executive agencies. But this is achievable where the consumers of agency services have a 'voice' to make high-sounding demands (Paul, 1991; Flynn, 2004). For Sterick and Scheers (2003), and Rexed (2006), what matters more than having clearly-defined role is the principals‘ capacity to exert pressure through close monitoring and detailed evaluation of agency performance.

Pollitt (2005) uses experiences from Sweden, Finland, and Netherlands to demonstrate that success of effective accountability is determined by the attitude of those responsible for oversight of executive agencies. In these countries, though there was clarity of tasks and lines of accountability, ministers showed little interest in their oversight role. They limited their intervention to setting targets, without subjecting agency performance reports to scrutiny or pushing them hard to improve performance.

In the debate on reforms of public service, a widely-agreed idea is that political and institutional setting of a given country has a significant influence on the New Public Management-type reform initiatives. Thus, the various differing arguments about the impacts of executive agencies on accountability are considered ‗theoretical‘ in the sense that they need validation in the political and institutional context within which ‗agencification‘ has actually taken place.

2.4.

A Conceptual Framework

The idea of ‗agencification‘, as used in this study, is borrowed from a work by Colin Talbot, Christopher Pollitt, Karen Bathgate, Janice Caulfield, Adrian Reilly, and

21 Amanda Smullen. These researchers have explored the idea in a context that perfectly matches our own, as ―the idea of creating autonomous, or semiautonomous, agencies within the public sector, in order to improve, in some way, how government works‖ (Talbot et al, 2000:2). This definition of ‗agencification‘ points to a conceptual link between disaggregation and increased ‗autonomy‘, which is the core of the whole process of ‗agencification‘. As large-scale bureaucratic, ministerial-type organizations are disaggregated into agencies, they tend to acquire freedom and discretion in their operations and managerial affairs. Agency ‗autonomy‘, refers to a situation where the organization has discretionary authority, and enjoys a range of freedoms from the usual ministerial interventions in its day-to-day operations. To put the concept in more operational terms, we identify its three dimensions; institutional, managerial, and financial autonomy.

The basis for institutional autonomy of an agency is the process of disaggregation, whereby large, ministerial-type organization is broken-down into separate entities with their own governance structures. A body fulfilling executive functions needs to be able to lead a separate existence (OECD, 2007), without sharing its governance structure with the previous structures.

Upon acquiring the agency status, the executive agency shifts its focus to performance and operates like a business entity which requires maximum discretion to allow for greater flexibility in decision making and putting its own plans and strategies into action. It is at this point that the agency needs its managerial autonomy, that is, to have high degree of latitude in making decisions and implementing its action plans and strategies

22 based on independently-set operational targets. This dimension embodies sufficient control over personnel resources, because they are core to agency operations.

The third financial dimension of agency autonomy is certainly the most complicated. As a public organization, usually an agency receives subvention from the Government to add to its own sources for its operations and development activities. This intergovernmental transfer of financial resources makes financial autonomy restricted to the relative latitude to prepare (determine) its own budget and decide on efficient ways to allocate and use financial resources towards achieving its performance targets. Though this autonomy is very relative to the parent ministry and other institutions, especially the Ministry of Finance, it requires the agency to be able to withstand undue political interference which might be exerted through budgetary pressures. ‗Accountability‘, on the other hand, is a broad, ever-expanding concept (Mulgan, 2000) which makes it far more complex. Typical of a broad concept, accountability has been defined as being called upon to account for your actions to someone, but the definition is not uniformly agreed across or even within disciplines and even same organizations (see Bovens, 2005; Ayeni, 1998; Brinkerhoff, 2001; Lawson and Rakner, 2005). Besides the controversy, such a broad and vague definition makes the concept less amenable to empirical analysis and thus not useful to achieve the aim of this research.

In this study, we understand accountability as a relationship in which one party, having the obligation to inform, explains and justifies its conduct to another party, the holder of accountability, who is expected to investigate or scrutinise the actor‘s

23 actions with possibility of invoking sanctions. Accountability of public organizations is designed to be enforced both within Government and between Government and citizens. It is understood also as a situational concept, in that it needs to be specified in context: who is accountable to whom and for what?

As for executive agencies, the accountability relationship and arrangements exist at two different but complimenting levels (Verhoest, et al., 2005). The first (horizontal) level is the interface between executive agencies as service providers on the one hand and on the other hand, services users and other citizens. The second (vertical) level involves executive agencies responsibility to several principals from the Government institutions such as ministries, the National Assembly, the National Audit Office, and others. The study‘s attention rests on performance accountability, which is both processbased and results-based kind of accountability. Under process-based accountability, the agency is responsible for adhering to the set Government principles, standards and regulations related to its performance and to share results with stakeholders. As for results-based accountability, the agency is responsible for producing outputs/outcomes, on time and in sufficient quality.

To start with horizontal accountability, the customers and the citizens are the stakeholders who have the right to seek for information, scrutinize decisions and actions in the light of performance results, and finally pass judgement through ―exit‖ or ―voice‖ options (Paul, 1991). If performance results are to their dissatisfaction when matched against their own standards or expectations, the consumers and public

24 at large may decide to find alternative service provider or submit their complaints to the concerned executive agencies or directly to the responsible persons, who should, hopefully, use the feedback information to improve their performance for achieving more satisfactory results. As a process, accountability is an interactive one with both the executive agencies and the service users and citizens being proactive.

The vertical accountability, on the other hand, is about executive agencies and the ACEOs specifically, to be answerable to the minister whose ministry sets a policy framework and Permanent Secretary who is responsible for its strategic direction. The minister possesses a mandate to monitor and ensure that the executive agencies are answerable for those policy-related outcomes. Usually, ACEOs enter into Performance Agreements with the Minister or the principal official at the parent ministry to facilitate monitoring and evaluation on the basis of explicit, preset benchmarks.

Based on this conceptualization, an executive agency is accountable when it is adequately responsive, in a political sense, to the minister, or in civil sense, to the service users and citizens. The two-dimensional view of accountability and related processes of agency accounting to the Government (Ministry and Parliament), customers and the public is presented in figure 1.1.

25 Figure1.1: The Legal-Institutional Framework for Executive Agency Accountability in Tanzania

PARLIAMENT Enquiries

Vertical Accountability to Parliament (via Minister) Performance Reporting

PARENT MINISTRY
Minister, Permanent Secretary, Ministerial Advisory Board

Performance monitoring

Vertical Accountability to Parent Ministry Performance reporting Pressure Downwards EXECUTIVE AGENCY Horizontal Accountability
Information sharing, Complaints handling Response Voice

PUBLIC Customers and Citizens

Source: Author, 2008 The model demonstrates two centres of accountability for the executive agency. As key benefactors of agency performance, both the parent Ministry and the public are assumed to be interested and able to be proactively engaged in the accountdemanding process. On behalf of the Government, the Ministry pressurizes for results that would contribute towards positive policy outcomes whereas the service users and the citizens demand the performance of the agency that meets their expectations and standards.

The model suggests that executive agencies need to become transparent about their performance and bring the service users and citizens closer to them through some

26 consultative mechanisms. A conical element here is reliable information flow that would enable citizens and customers to evaluate and give comments about the agency performance. These comments and complaints act as impetus for the agencies to reach their threshold as they stand for promoting more quality, standards and value of the public services (Osborne, 2007).

On the other side, the ministry effectively monitors the agency performance by ensuring there is regular reporting and that the results are measured (assessed) using an agreed-upon performance targets as benchmarks. In a complete framework for agency accountability, the vertical accountability extends to include accountability between the ministers and the Parliament. As the minister is given responsibility for specific agencies, he becomes responsible for their conduct and results and could face parliamentary enquiries. Chief executive officers and managers of the agencies are expected to be responsive to policy priorities, and work to preserve its integrity and professionalism.

Independent and Dependent Variables The conceptual framework has allowed for identification of independent and dependent variables. Based on the framework, the autonomy which the agency gains following its separation from the ministry is presumed to cause the agency to become more accountable for its performance. The independent variable is, thus, ‗autonomy‘ and the dependent variable will be ‗(performance) accountability‘. The criteria for examining and comparing these variables are explained in detail in the specific relevant chapters dealing with those issues.

27 CHAPTER THREE RESEARCH METHODOLOGY 3.1 Introduction

The way in which research is conducted may be conceived in terms of the research methods employed and the research instruments utilized in the pursuit of a solution to a research problem and/or a goal (research objective). The purpose of this chapter is firstly to expound on the adopted research methods and to introduce the research instruments used to collect data for analysis in order to provide answers to the set research questions and thus fulfil the research objectives. The considerations behind the choice of the methods and instruments of data collection are explained as well.

3.2.

Qualitative Research Design

Qualitative research is the approach to understanding the essential nature of a phenomenon, within a particular context. This kind of research design was found appropriate for this study for a number of reasons. Firstly, its purpose is not generalization, but rather, to produce evidence about the impact of increased autonomy on the executive agencies' responsibility and responsiveness to the Government and public, without imposing biased preconceptions. Secondly, the task of analysing governance of executive agencies is a complex one. It is assumed that effectiveness of these organizations depends on the institutional context within which they exist and operate (Schick, 1998). Through qualitative research approach, we can examine the executive agencies within their unique institutional contexts thereby ensuring the ecological validity of the research and better understanding of their governance.

28

In addition to that, qualitative research approach provides grounds for getting sufficient and trustworthy information through the use of multiple methods of data collection for meaningful results. It frees the process of data collection from constraints of some predetermined categories of analysis, allowing for a level of depth and detail that quantitative strategies can't provide (Patton, 2002). The use of multiple data collection methods generates sufficient data for analysis.

Qualitative research offers four types of methods: experimental, longitudinal, crosssectional and case studies. Case studies are considered as prime designs of qualitative research due to its interpretive approach to data and consider the subjective meanings that people bring to their situation2. Case study is a qualitative method for an in-depth, empirical inquiry that investigates a phenomenon within its real-life context that produces context-dependent knowledge (Yin, 1989). What made the method appropriate is that it allows asking ―how‖ and ―why‖ questions so as to understand more comprehensively the accountability processes taking place between the executive agencies, government ministries, customers and other citizens. It was also taken into consideration that ‗accountability‘ being so broad in scope cannot be comprehensively investigated. By employing the case study method, the scope is narrowed down as the research involves investigation of one or two cases. Rather than generalization, this method provides for an effective approach for falsification (Flyvbjerg, 2006); which in this study happens to be falsification of the assumptions of the agency model.
2

See http://www.nyu.edu/classes/bkg/methods/005847ch1.pdf.

29

Research experts advise the use of multiple cases to make the findings ‗generalisable‘, but they insist that there are instances where even a single case is instructive.3 For comprehensive investigation two executive agencies were selected.

3.3.

Scope of the Study

This study investigated two case studies from Tanzania, namely NHBRA and TFDA. The field work was done in Dar es Salaam, which is the centre of business of the two agencies and their ministries. Further details on the cases are found in chapter four. 3.4. Target Population and Characteristics of Respondents

Governance of executive agencies involves interaction among concerned officials from the ministries, agency managers and staff, and the public. To ensure inclusion of appropriate number of people in the research, probability samples or nonprobability samples are used. Miles and Huberman (1994), Weiss (1998) and Flyvbjerg (2006) argue that non-probability sampling which is information-oriented and involves a small sample is the most appropriate for the study as it allows indepth examination and analysis while maintaining a high degree of validity. From the three broad categories of stakeholders, namely Ministries, Agencies, and the Public, a total of 61 respondents were selected. The size of the selected sample was found to be manageable considering time constraint faced by the researcher, but also representative of the target population especially for the case of customers that were randomly selected from a constructed sample frame. Table 3.1 gives the categories and number of selected respondents from each of the three categories or levels.

3

See http://www.is.cityu.edu.hk/staff/isrobert/phd/ch3.pdf.

30 Table3.1 Respondents from the Ministries, Agency and Public Level Type Respondents Studied Agencies NHBRA TFDA 3 2 2 1 25 31 2 1 25 30 Number of Respondents Total 5 4 2 50 61

Ministry Agency Public Total Managers Staff Customers

The Ministry officials (5) from the Ministry of Lands and Ministry of Health were selected on ‗knowledge‘ and ‗relevance‘ criteria which was based on their designate positions and as suggested by the Director of Administration and Personnel (DAP). From the two agencies, four respondents were selected from the managerial and operational cadres, using the ‗knowledge‘ criteria also. The 50customers were selected using clientele lists obtained from agency (NHBRA) or constructed4 (TFDA). The set of questions that were prepared for and asked to the respondents differed among the Ministry officials, Agency managers, agency staff, and the customers.

Besides the basic demographic data on gender and age, it was important for the case of interviewed customers and the citizens to include level of education because it is one of the theorized factors influencing the extent to which the public can hold service providers accountable. The demographic data shows gender imbalance whereby males accounted for 90% of the 50 customers. Most of the customers fell under the middle-age categories (54%) or youth (30%). Overall a few (8) customers

4

TFDA‘s Clients‘ Service Charter delineates its clients and customers under various categories. The reviewed document provided the basic guide for the selection of clients.

31 fell under the old age category, 5 being NHBRA customers and 3 TFDA customers. On levels of education, it was found out that the majority of the customers had attained adequate education. Out of 50 customers 31 had reached a tertiary level, 13 secondary level, and 6 were degree holders. There was slight difference when comparison was made between the customers of the two agencies. Out of 25 customers of NHBRA, 18 had reached tertiary level, 4 university level and 3 secondary level; compared to 13, 2 and 10 customers of TFDA that reached those three educational levels, respectively.

3.5.

Data Collection: Sources of Data and Methods of Collection

The bulk of the data used in the study came from written documents and to a much lesser extent, online publications. Published and unpublished documents obtained from the agencies themselves and elsewhere enabled us to exploit rich information about the studied agencies. Also, various government documents, research reports and those commissioned for the studied agencies were used.

The field data was collected through interviews and questionnaires to augment the reviewed documents. The data was in the form of views/opinions based on respondents‘ actual experience as well as details that support documented facts.

The interviews with the managers and clients of the cases were formal but involved open-ended questions listed in an interview guide. This format was considered appropriate for collecting facts, details and respondents‘ views. It helped to understand the respondents‘ points of view about the central issues that the study aimed to address.

32

The other kind of method was a focus group discussion. Patton (2002) argues that it is a highly efficient qualitative data collection technique, which allows the participants (respondents) to hear each other‘s responses and, as a result, be encouraged to make additional comments beyond their own responses. It is, thus, fairly easy to assess consistency in the shared views among the participants. In the study, the focus group discussion involved Government Officials at the Housing Division at the Ministry of Lands. Besides those advantages, the technique was used because the respondents themselves found it less time consuming and it was more convenient to the researcher than the preview kind of interview.

Lastly, questionnaires were used to solicit the views, understandings, experiences and attitudes of randomly selected citizens, as a segment of the general public. For ordinary Tanzanian, decent shelter and food safety are very basic needs. Based on this belief, the researcher approached people randomly in the streets for questioning. The use of a variety of data sources and multiple techniques to study the problem of accountability of executive agencies made triangulation possible which is important for ensuring the validity of information used for analysis.

3.6.

Data Handling and Analysis

This study was based on qualitative research. The science of qualitative research depends on the organization and analysis of rich and complex qualitative data without the statistical tools that dominate the world of quantitative analysis. This makes coding a crucial stage of qualitative data analysis. The bulk of unsorted structured and unstructured data was post-coded using the typology technique. This

33 coding technique allowed for organization of the data into these main categories: agency autonomy, ―Agency-Public‖ interface, vertical accountability, horizontal accountability, and factors affecting levels of accountability. These categories were created based on the conceptual framework and the specific objectives that the study aimed to achieve.

3.7.

Limitations and Challenges Encountered

Most often, limitations and challenges that social science researchers face when investigating a phenomenon is methodical, or related to data collection. This study was not exceptional; the researcher did not get access to the Director General of TFDA and the Chief Executive Officer of the NHBRA who could probably supply more accurate information about the relationship between them and the Permanent Secretary, Ministerial Advisory Board, and the Parliament on the other hand. Alternatively, we interviewed managers that constitute the Management Team of the two agencies, who proved to be knowledgeable about those issues of concern.

It was also difficult to obtain complete data because access to some important documents was restricted, especially in TFDA. The researcher had to consult the Librarian of TFDA whose assistance made it possible to access some of the reports meant for internal uses. In the case of NHBRA, some of the important documents that we requested could not be easily found because of the poor conditions of its library and improper management of records making. These challenges meant that our research took longer than we had planned, but at the end we were able to assemble adequate information to make this study possible.

34 CHAPTER FOUR FORMATION, ORGANIZATION AND AUTONOMY OF EXECUTIVE AGENCIES UNDER INVESTIGATION

4.1.

Introduction

The exploration of the research problem involved two case studies, namely NHBRA and TFDA. This chapter provides some basic institutional characteristics of the two agencies which include origin of their formation, organizational structure, and governance. The aspect of agency autonomy is more thoroughly examined under a separate section. These institutional characteristics are presented under an individual agency, after which some comparative notes are inserted. 4.2. Institutional Characteristics of Executive Agencies under Investigation

4.2.1. Case I: The National Housing and Building Research Agency (NHBRA) Tanzania, like other developing countries, has been facing shortage of quality housing for decades. Both pre- and post-independence governments realized the housing problem and the urgency to solve it. Thus Cabinet Paper ECC No. 7 of 1970 established the National Housing and Building Research Unit (NHBRU) as a division under the then Ministry of Lands, Housing and Urban Development to address the problem of high cost of building construction which were unaffordable to the majority of the people. Under the Public Service Reform Programme (PSRP), the GOT redefined the Unit‘s role and objectives so as to meet the present needs of Tanzanians. In accordance with

35 the Executive Agency Act No. 30 of 1997,5 the NHBRU was transformed into a Government Executive Agency in August 2001 and renamed the NHBRA that operates commercially for the benefit of its customers, taxpayers and its own employees (NHBRA, 2001a:2). With this transformation, NHBRA‘s business portfolio has expanded to include more services and products. It is now able and ready to act in partnership with local communities, Non-Governmental institutions, Government Ministries, Departments, and Agencies (MDAs), Donor organizations and private sector in order to carry out and fulfill its mission. The new roles of NHBRA are threefold: (1) to ensure research results and technical information on human settlements and development issues are made available to all who need them; (2) to promote affordable and durable local building materials and associated technologies, and appropriate housing construction techniques; and (3) to provide building research consultancy services. These are in line with the National Human Settlements Development Policy of 2002, the National Housing Development Programme, 2002, the Habitat agenda of 1997, and Tanzania‘s vision for 2025 (NHBRA, 2001A:6).

The governance structure includes the ACEO who is appointed by the Minister of Lands for a term not exceeding five years. The ACEO is charged with the overall management of the organization. There are three line managers, who head the business support, research and development, and consultancy department, and together with the ACEO constitute the Senior Management Team. The ACEO is

5

under the establishment order 2001 section 3(1) of the Government Notice No. 355 (Subsidiary Legislation of the Government Gazette No. 42, Vol. 82)

36 directly answerable to the Permanent Secretary, who oversees the interests of the ministry and the government in general and is responsible for policy and strategic management of the agency. The overall personnel size is 56, which is 6 personnel short from the needed capacity, and their quality is relatively high partly because of periodic training in short and long courses they undertake.

4.2.2.

Case II: The Tanzania Foods and Drugs Authority (TFDA)

The TFDA is a regulatory body under the Ministry of Health and Social Welfare but has executive agency status also. It was established under section 4(1) of the Tanzania Foods, Drugs and Cosmetics Act No. 1 of 2003 and its operations commenced on 1st July 2003 in accordance with the Executive Agency Act, 1997. The legislation repealed the Pharmaceutical and Poisons Act No. 9 of 1978 and Food (Control and Quality) Act No. 10 of 1978 to enable merging of the Pharmacy Board and the National Food Control Commission into one regulatory body with the status of an Executive Agency as per PSRP objectives.

The core functions of TFDA as a regulatory agency include: (1) to regulate importation, manufacturing, labelling, distribution, storage, promotion and sale of foods, drugs, cosmetics and medical devices; (2) to inspect manufacturing facilities, product outlets and inlets, to verify compliance, to set standards, and practices; (3) to prescribe standards of quality, safety and effectiveness for food, drugs, cosmetics and medical devices; (4) to issue licenses and permits for dealing in regulated products; (5) to collect data on adverse health effects related to the use of the regulated

37 products; and to educate and provide unbiased information to the stakeholders and the public on products it regulates.

The wide variety of these regulatory functions has led to a broad, multi-layered and complex organizational structure. At its establishment, TFDA had a four-directorate structure but which could not provide for effective and efficient delivery of service due to fragmentation of related functions and imbalance of responsibilities and workload among sections. In consultation with the Permanent Secretary and approval by the Ministerial Advisory Board (MAB), TFDA has been restructured with the new Public Relations and Customer Care units attached to the Director General‘s Office and zonal offices established in Mwanza, Arusha and Mbeya in an attempt to strengthen its regulatory services.

The Director General is the head of the authority and takes executive responsibility for strategy, operational management and service delivery. As the accounting officer, he is answerable to the Permanent Secretary of the Ministry of Health. The Director General together with the Departmental Directors constitutes the management team. The total number of staff at the time of research was 118 6. These were found to be qualified and well-trained to handle the technicality of the agency‘s key activities.

In accordance with section 5(2) of the Tanzania Foods, Drugs and Cosmetics Act of 2003, the TFDA maintains a system of cooperation with a number of public and private institutions. For example, it collaborates more closely with the Regional and Local Authorities in implementation of the Public-Private Partnership initiative
6

recruitment of additional staff was underway

38 called the Accredited Drug Dispensing Outlet (ADDO) program in Rukwa, Ruvuma, Morogoro, and Mtwara regions.

4.2.3. Some Comparative Notes on the Two Agencies The examination of the two agencies has revealed several differences between them. Firstly, the genesis of the two organizations is different. The TFDA resulted from merging the defunct Pharmacy Board and the National Food Control Commission, which were independent authorities, while NHBRA existed as a departmental unit within the Ministry of Lands. Secondly, the two agencies belong to different types of executive agencies. The NHBRA is a ‗mainstream‘ agency which makes it fundamental to the main policy orientation of the parent Ministry, whereas TFDA is a regulatory agency that has a more vivid organizational identity. The third difference lies in their structure and their size. To start with, the NHBRA has a flat organizational structure with only one level of hierarchy separating the ACEO at the top from the employees at the bottom. On the other hand, the TFDA‘s organizational structure is more hierarchical because its line-and-staff structure has far more sections under staff specialists and lengthier chain of command. Moreover, TFDA has twice as many (118) employees as NHBRA (56). 4.3. Relative Autonomy of the Two Agencies

It is stipulated in the legislation that executive agencies are ―semi-autonomous‖ organizations within the ambit of Government Ministries charged with the responsibility to provide public services in selected areas. Pursuant to the study

39 objectives outlined in chapter one, this part presents findings on the extent of autonomy possessed by the two agencies relative to their Ministries and make a comparison between them. The relative autonomy was measured and compared using three variables: financial independence, operational independence, and autonomy over personnel issues. Financial independence was indicated by the

degree of authority and discretion over agency‘s revenues, assets and liabilities. The indicators of autonomy to operate were twofold: (1) discretion to set objectives, priorities, and strategic plans and (2) non-interference in the day-to-day operations. Lastly, the indicators of autonomy over the personnel issues were: (1) authority over personnel management and (2) presence of appropriate internal controls over the performance of the employees.

4.3.1. Financial Independence of the Two Agencies The legislation stipulate financial powers, procedures and specific guidelines, which are further clarified under the Framework Documents, to be used for the purpose of achieving the strategic objectives of the two agencies while maintaining financial integrity. Both agencies have mandate to charge and collect fees or commissions for the provision of goods or services, and even borrow monies in order to meet expenditure in accordance with their strategic frameworks. The revenues collected by or payable to the two agencies become their property. But Section 12(3) of the legislation empowers the Minister after consulting the Minister of Finance ―to determine the amount of revenue which shall remain the property of the agencies, and the amount which shall be treated as public funds and credited to the Exchequer Account‖.

40 It was learned that, the amount of revenue which may be credited to the Exchequer Account depends on three factors: the capacity of the agency to generate its own income, whether it can become self-financing, and the financial implications of its plans and budgets. In simpler terms, the agencies which are more capable of generating income and have potential to become self-financing are more likely to have more latitude compared to those agencies with low capacity and lack of potential. These conditions impose limitations to the financial autonomy of the two agencies because they contain potential to discourage the agencies to strengthen their income-generating capacities as it would imply losing their revenues.

Caulfield (2003) argues that an expectation in Tanzania that all agencies, after a time, will become financially self-sufficient is elusive. Our findings concur with those of Caulfield (2003). The two agencies remain financially dependent on the government. For instance, review of Cash flow statement of NHBRA which was found in the Business Plan for the period July 2008–June 2009 revealed that Government Grant worth Tshs 1.4 billion was expected to be the largest source of its cash inflow followed by the PSRP‘s Tshs 510 million and NHBRA‘s own Tshs 385 million sources (NHBRA, February, 2008).

It was found out through a review of Framework Documents that the ACEOs of the two agencies have substantial authority in relation to the capital expenditures. The ACEOs have powers to authorize capital expenditures on capital projects, to transfer funds allocated from one budget item to another, and to carry over to the next financial year unspent funds (in full) on capital provision from the previous financial

41 year. Moreover, with regard to assets and liabilities, the ACEOs can authorize special payments, disposal of assets, and expenditure on individual consultancy services.

These budget flexibilities and financial delegation suggests that the two agencies enjoy a high degree of financial autonomy. But it was found out during the interviews with managers of the agencies (two from each agency) that the two agencies are ‗non-immune‘ from close supervision and scrutiny by the Ministries and less ‗free‘ as it may seem. A manager of NHBRA explained that there were countless occasions when the agency had to keep ‗begging‘ for timely release of funds from the Ministry. Another manager (from TFDA) argued that despite increased freedom in other areas of their operations, bureaucratic tendencies of the Ministry imposed restrictions on them to access subventions.

It was found out that the Ministries are keen about financial performance of the two agencies which was indicated by desire to scrutinize their financial accounts. The legislation under Section 14(2) empowers the Controller and Auditor-General to conduct audit or to appoint a qualified person to do the task on his behalf. Moreover, the internal auditors in the Ministries are empowered under the Framework Documents to perform auditing in the agencies in order to give independent assurance to the Permanent Secretary. Further scrutiny of accounts is guaranteed under the statutory requirements of performance reporting by the agencies under Section 15(1-a) which stipulates that a copy of the audited accounts of the agencies,

42 together with the auditor‘s report on those accounts, must be attached to the annual performance report.

In the words of an official from the Ministry of Lands during the focus group discussion, financial scrutiny is necessary to ensure that the agencies do not manipulate the relationship with the ministry to wield autonomy beyond government‘s control. We agree that financial scrutiny is critical to avoid embezzlement and misappropriation of public funds, but the rationale needs to be more than desire of the government to control the agencies and the efforts will be meaningful if similar emphasis is put on performance results (outputs) of the agencies.

4.3.2. Operational Discretion of the Two Agencies The Framework Documents were found to set out key aspects of the operations of the two agencies, among those found being the aims, roles, strategic objectives, and key performance standards. In accordance with legislation under Section 3(1)-(2), the creation of an executive agency is a decision of the Minister based on the opinion that it can more effectively carry out the functions of a department of the ministry.

It may seem that the two agencies are creatures of the Ministries but collected facts revealed that their establishment was based on their own, rather than Ministers‘ initiatives. For the case of TFDA, the current Director General was the founder of the organization after successful initiative to merge the defunct Pharmacy Board and the National Food Control Commission. It was learned from the officials at the Ministry of Lands the proposals to transform the Building Research Unit into a separate and

43 more autonomous agency (NHBRA) were prepared and successfully presented by those that currently occupy the top positions. In both cases and others not under this investigation, the Ministers have been receptive on the formation of agencies. ESRF (2004) thinks it is because they wanted to reduce their workload to focus more on policy roles. Other analysts have associated speedy formation of agencies with motives of the would-be top leaders to earn more pay and enjoy other privileges. We argue that, since the creation of agencies had been accepted as a new policy direction by the GOT and donors have ensured her resources, Ministers on the one hand had nothing to lose by being receptive and the would-be leaders had a lot to gain by their initiatives. After creation of the two agencies, as it will be explained in detail under chapter six, the Ministers have escaped political accountability and ensured a degree of autonomy which Caulfield (2003) found to be more than what the legislation prescribed.

It was learned that, there have been significant changes in the structure and extent of jurisdiction on the side of TFDA. The Director General of TFDA had successfully initiated and carried out (with approval of the Minister) restructuring of the organization on the ground that the previous four-directorate structure was inappropriate for efficient and effective service delivery. The shortfalls of the old organizational structure included fragmentation of related functions, centralization of functions at the headquarters and imbalance of responsibilities and workload (TFDA, 2008). While this move can be interpreted as reflecting a strong commitment of TFDA‘s leadership to improve service delivery (which is commendable), it also

44 indicates its high degree of autonomy (which may have negative implications for vertical accountability).

Moreover, TFDA was found to use its legal and leadership capacities to protect and at times to extend its jurisdiction which indicates its higher autonomy than that of NHBRA. Using the Legal Service Unit, the leadership of TFDA spearheaded the review of the Tanzania Dairy Industry Act 2004 which led to drafting of the new Dairy Regulations which omits provisions for regulating quality and safety of milk by the Tanzania Dairy Board (TFDA, 2008), and thereby allowing TFDA to extend its regulation mandate by including milk products under its list of regulated products. This move has led to extension of TFDA‘s areas of jurisdiction, wielding power and autonomy7. This kind of bold decision when supported by some visible achievements had made good impression to the minister at the Ministry of Health which helped in wielding more power and discretion from the ministry.

With respect to discretion over routine operations, the legislation promises that the agencies should not be subjected to interference in their routine operations. The overall responsibility to discharge day-to-day activities of the two agencies and accountability thereof lies with ACEOs following delegation by the ministers. Of course to discharge this responsibility necessitated the Chief Executive Officer of NHBRA and the Director General of TFDA to use their statutory powers to determine the number and responsibilities of the managers and directors who

7

TFDA is now deeply engaged in fighting all sorts of counterfeit products not just drugs, medicines, cosmetics, and medical devices as prescribed by the legislation; but even electronic products like televisions.

45 constituted the top leadership (management team) of the two agencies in accordance with the business needs.

Data obtained from various studies revealed that the creation of agencies in Tanzania has led to a substantial shift of power through delegation of authority and institutional separation between the ministries and the created agencies, which result into the latter‘s increased autonomy as well. A study by Tella (2003) found that after the transformation and acquisition of agency status there was substantial internal delegation of authority within the 5 agencies studied and increased discretion in decision-making relative to their ministries. Most of the staff who were interviewed argued that the oversight role of the ministry had no interference with day-to-day management of those agencies. Also, ESRF (2004) analyzed the institutional framework and management systems of some 12 agencies and reported that agencies were operating free from bureaucratic and political control8. The field data that were collected through interviews with agency managers and Ministry officials reaffirmed the previous findings.

All of the managers and officials that we interviewed agreed that the two agencies operate without bureaucratic and political interferences from the ministries. The assessment of these respondents was that they have become relatively more autonomous than they had been under the previous arrangements. However, there were variations in the perceptions about the degree of autonomy of the two agencies. Managers of TFDA thought that the degree of autonomy of their organization was
It was noted, however, the high demand of the Tanzania Roads Agency‘s services led to bureaucratic and political interference a ―management nightmare‖ because all politicians want to improve roads in their constituencies (ESRF, 2004:9)
8

46 adequate and one of them confidently associated that situation with their achievements. The NHBRA‘s managers had expressed less satisfaction with the degree of organizational autonomy. On the contrary, interviewed officials from NHBRA's parent Ministry, that is the Ministry of Lands, thought that NHBRA has been granted ―too much‖ freedom. It was explained that, while the drive for efficiency was a valid reason for disaggregating NHBRU from the Ministerial structure, the need for more freedom and discretion was even more pressing for those that occupied the top positions therein.

4.3.3. Authority and Control over the Employees The review of legislation revealed that the ACEOs have adequate authority for personnel management, organization, control, and discipline9 of the employees in the agency. In accordance with that mandate, the ACEOs of the two agencies were found to possess and have used their authority to appoint employees as they considered necessary. The procedures for recruitment give the Minister power of approval of those recruited which is partly because the salaries of agency employees are paid by the Ministry (case of NHBRA). It was learned from the interviews with the Business Support Manager (a de facto Human Resource Manager) of NHBRA and Human Resource Manager of TFDA that this arrangement is a formality because the recruitment process were initiated and controlled by the agencies themselves without any form of involvement of persons from the Ministry.

9

It is stipulated in the legislation that the ACEO can terminate the appointment of an employee for misconduct and incompetence.

47

Of course, the recruitment process is supposed to be done in accordance with the Public Service Employment Policy (1998) which emphasizes openness and competitiveness for appointments and promotion within and outside the public organization. We did not find it relevant to explore if those principles of recruitment were observed because this would have not helped to achieve the study objectives. However, researchers can explore the propriety of human resource practices which may offer alternative explanation to variation of levels of service delivery across executive agencies in Tanzania.

In terms of organization of the employees, the ACEOs were found to have used their delegated authority to place different types of employees at various levels and to make job descriptions so that each job could contribute to the achievement of their missions. Both agencies have Schemes of Service10 which seek to clarify and define lines of responsibilities and were found to be appropriate as tools for hiring and promoting their employees. The ACEOs have authority to introduce changes deemed necessary to maximise the agency‘s efficiency and effectiveness. It was learned from the interviews with the Business Support Manager of NHBRA and Human Resource Manager of TFDA that the two agencies were in the process of revising their Schemes of Service in order to meet the arisen needs. The NHBRA was at the initial stage of the process while the Director General of TFDA had already produced a draft amendment document to be submitted to the Workers‘ Council and after there

10

The TFDA‘s ‗Scheme of Service and Salary Structure for the TFDA Staff‘ and the NHBRA‘s ‗Scheme of Service‘ were prepared, respectively, in March and February.

48 to the MAB for further action. The approval powers of the Schemes of Service for both agencies lie with the PO-PSM.

In addition to the mandate to design and revise the Schemes of Service from time to time, the ACEOs of the two agencies have authority to determine the terms and conditions of service for the employees. These terms and conditions were based on the Executive Agencies (Personnel Management) Regulations of 1999 and because of the status of their employees (public servants) the ACEOs are required to consider directions of the Minister responsible for the Civil Service. With respect to internal controls of its employees‘ performance, the relevant mechanisms were found in place for both agencies. These mechanisms have striking differences. The Business Support Manager of NHBRA explained during the interview that the performance of employees at all levels is appraised through the Open Performance Review Appraisal System (OPRAS) as per section 34 of the Public Service Act, 2002, Regulation 22 of the Public Service Regulations, 2003, and the Public Service Circular No.2 of 2004. In TFDA, performance appraisal of employees is no longer done using OPRAS. It was explained by TFDA‘s Human Resource Manager in an interview that implementation of OPRAS revealed several shortcomings that rendered the system less useful to manage performance of its employees. The mentioned shortcomings included: reducing mutual trust and confidence between the supervisor and subordinate due to the presence of third party in the appraisal process; feedback is not provided to the appraised employee; rewards and sanctions for performance and

49 non-performance are excluded; and there is room for activities outside the work plan (which he argued were many and critical). In the light of these shortcomings the TFDA designed an alternative appraisal system which would address these problems but remain within the same legal framework. The interviewed manager refused to explain about the new appraisal system because it was at its infancy stage of experimentation, but informed the researcher that the PO-PSM had approved the system and highly commended their innovativeness. The innovativeness showed by the TFDA has earned the agency trust of its portfolio Ministry and other relevant authorities which provide potential for increased autonomy over its operations.

50 CHAPTER FIVE STATUS OF VERTICAL ACCOUNTABILITY

5.1.

Introduction

In Tanzania, executive agencies are required to observe three operational principles: efficient and effective service delivery, high standard of financial management and accounting, and high responsiveness to customers‘ needs. To enforce the principles, Act No. 13 of 1997 and the Framework Documents provide for the legal and institutional framework for governance of the agencies under which hierarchical accountability relationships between the agencies and key government actors are stipulated. This chapter assessed the extent of (vertical) accountability of the two agencies using data from reviewed key documents and interviews with Ministry Officials and agency managers.

It examined two activities (variables): viability of Performance Monitoring and viability of Performance Reporting. The choice of these variables took into account the fact that while performance targets are critical to sound management, they make sense only when subjected to systematic monitoring and reporting which can make those responsible individuals accountable (PO-PSM, 2004:61-62). The indicators for viable monitoring are twofold: (1) proactive Ministries‘ supervision over the agencies; and (2) sufficient and appropriate incentives to facilitate accountability of the agencies. While viable reporting is indicated by: (1) appropriate reporting requirements; (2) extent of compliance by the agencies; and (3) high quality reports.

51 5.2. 5.2.1. Monitoring Performance of the Two Agencies Ministerial Supervision of the Two Agencies

The vertical accountability relationship between the Ministry and the two agencies involves four key actors: the Minister, the Permanent Secretary, the MAB and the ACEO. But contrary to the United Kingdom‘s Model which our own is supposed to emulate, Ministers‘ role is only nominal as they are sidelined from the actual processes of performance monitoring. Caulfield (2003) has noted that the agency model strengthens the bureaucracy rather than making it more open to political and public scrutiny. We concur with her findings, because this framework for

governance of the agencies can undermine democratic principle of ministerial accountability and findings revealed that the public lacks access to these agencies (this is discussed in chapter six). It is our view that if the Minister was to face political scrutiny from the Parliament and subjected to public scrutiny, it could push the Minister into taking a more proactive role in making the agencies accountable. The legislation provides that a MAB for each executive agency consists of Minister‘s appointees from within and outside the public service. The MABs advice the Minister and Permanent Secretary on various substantive issues which include: review of strategic plans, business plans and performance reports; setting up of objectives, priorities and annual performance targets for the Agency; approval of plans, annual reports and accounts; development and maintenance of a strategic framework.

52 These advisory bodies have potential that cannot be neglected. Ministers can use MABs to make the agencies more responsive to the customers because he has powers to appoint persons who are representative of the interests of the Agency's customers. Presence of these persons in the MABs can help the agencies take more consideration of the demands and preferences of their customers. However, a deeper examination of the legislation revealed that the potential of the MABs to exert pressure on the two agencies is seriously limited. In the first place, their mandatory function is advisory rather than executive. The agency managers who were interviewed admitted that the role of MABs is only marginal due to absence of incentives for the Board members who are not answerable to the Minister. It was learned that most often MABs meet once or twice per annum.

The MABs do not seem to have taken their role seriously because despite the low quality of NHBRA‘s reports and unexplained mismatch between performance targets and results, the managers did not recollect any incidence where their performance reports were rejected. In some few cases the MAB approved agency budgets but the Ministry sent the budget back to the agency for reworking. There was not a case where MAB facilitated responsiveness of the two agencies to customers and the public. Also, despite statutory powers of the Permanent Secretary to seek information or explanation about agency performance, it was learned through the agency managers that none of them recalled a formal request for information or explanation on submitted reports from the Permanent Secretaries. This showed ministries‘ disinterest in becoming proactive in supervision of the agencies.

53 The four managers (two from NHBRA and two from TFDA) who were interviewed had different explanations for the overall low interest shown by the parent Ministries to monitor their agencies‘ performance. Ministries were more concerned with the input side (that is finances). Some argued that financial issues, unlike performance issues (that is output), affect more directly the Ministry‘s own budget which implies the Minister can more easily come under political scrutiny by the Parliament and by the media. Indeed, after reviewing TFDA‘s performance reports (2003-2008) and NHBRA‘s performance reports (2003-2007), it became apparent that value for money (quality) from the customers‘ perspective is not treated as among the critical performance indicators, and the Ministries have never raised queries regarding the extent to which the performance satisfy the customers and clients.

A manager from the NHBRA believed that performance monitoring is a managerial and very complicated activity, one which the Ministry cannot perform because of the bureaucratic orientations and avoidance of responsibilities by the senior officials. He said the technical aspects of the NHBRA can also be a factor that may discourage close monitoring. Another manager (from TFDA) argued that minimal intervention was ‗part of the deal‘ (agreed principle of the executive agency model). He reasoned that interference by the Government has always resulted into unnecessary delays and the blame returns to them. He stressed that TFDA‘s status as free standing regulatory agency is what explains its success within a relatively short time.

Officials from the Ministry of Health expressed high trust in the capabilities of TFDA‘s top leadership and professionalism of its staff and thus the Ministry was less

54 concerned about scrutinizing the organization. The Officials said they were not worried about the autonomy of the TFDA because it was a professional body and results of its activities do not require written evidence. More specifically, they referred to TFDA‘s success stories in spotting and destroying counterfeit products to protect public health11. The successes of TFDA were used as pretext for the disinterest shown by the ministry in scrutinizing agency‘s performance.

It was found out that the discretion with which the monitoring process is supposed to be handled by the Ministries has done little to facilitate accountability of the two agencies. In Sections 6(c)-(d) and 7 of the Executive Agencies Act, No.13 of 1997, exclusive oversight powers and responsibility are delegated to the Permanent Secretary and MAB. It was learned from the focus group discussion at the Ministry of Lands that despite the presence of adequate experts in the Housing Division, these are not usually consulted by the Permanent Secretary. Though the legislation

specifies and clarifies the lines of responsibility and accountability, we argue that the arrangement overlooks the fact that the Permanent Secretaries have far more overwhelming duties as top executives at the ministry and there are sufficient incentives to members of MABs which create loophole for the two agencies to avoid effective scrutiny.

5.2.2.

Incentives to Make the Agencies Accountable

Incentives constitute the critical element in any effective system of accountability. Analysts (Mulgan, 2000; Strom, 2003) agree that potential of sanctions (as
11

It was reported in that TFDA has exposed and destroy unfit drugs worth 786,148,786/- and cosmetics worth 24, 267,200/- and approximately 4,600 metric tons of unfit food worth 1bn/- (Daily News; Monday, June 30, 2008).

55 incentives) makes the difference between non-committal disclosure of information and being held to account. After reviewing the legislation we found out that the incentives at the disposal of the parent ministry to make the two agencies accountable are insufficient. Unlike other laws which clearly stipulate penalties against specific faults, the legislation is silent about such explicit sanctions.

In the legislation the Permanent Secretary has mandatory powers to discipline and control the chief executive officers of the agencies, and can even recommend for their termination for misconduct or incompetence.12 Indeed, these powers can be used to keep constant pressure on the ACEO to improve his performance in a consistent manner. However, the use of these powers for purposes of holding the agencies accountable for their performance was found to be very low due to various reasons that we point out below.

First, the ministries were found to be disinterested to engage in a proactive monitoring of the two agencies. In the interviews, agency managers admitted not to recollect any incidence where the Permanent Secretary raised queries about their performance. We reviewed NHBRA‘s performance appraisal reports and found discrepancies between performance targets and reported results but the two managers who were interviewed did not recollect their agency and ACEO being pressurized to give detailed explanation. Without a close and proactive monitoring the ministries cannot have accurate and unbiased information of the agencies‘ performance which impose limit on to control.

12

Under Section 5(2), and 9(6)

56 Second, the institutional set up for vertical accountability of the two agencies is inappropriate. Review of the legislation revealed three contradictory roles of the Permanent Secretaries: firstly as responsible for strategic management of the agencies, secondly as the principal accounting officer to be accountable for performance of the agencies, and thirdly as chairperson of the MAB which evaluates the agencies‘ performance and advices him and the Minister. This arrangement creates a situation in which the account holder (Permanent Secretary) is biased and not independent from the actor (ACEO), thereby imposing limit on unbiased monitoring of the two agencies.

The third factor is related to the political context under which the two agencies exist and operate. In Tanzania holding public officials accountable has not been a culture of the bureaucracy. This culture is only now being promoted by the opposition political parties, the private media, and the donors. As McDavid (1998) and Mihyo (1986), argue bureaucrats tend to resist or avoid any form of full accountability because this would shift power and discretion away from them. With the minister and Parliament taking a background role in the monitoring of the agencies, to expect that the Permanent Secretary will effectively hold the ACEO accountable is to neglect the mutual interest that they share (to avoid blame from politicians).

5.3.

Performance Reporting by the Two Agencies

Monitoring makes sense only if results will be reported and disseminated; for reporting ―drives‖ monitoring. We reviewed the legislation and Framework Documents to capture the statutory requirements and obligations of executive

57 agencies and five Ministry officials were interviewed in order to determine compliance of the two agencies.

5.3.1.

Reporting Requirements and Extent of Compliance by the Two Agencies

In accordance with the legislation, it is the statutory obligation of agencies to report about their operational performance and financial accounts, for the purpose of facilitating accountability of those who are responsible. Reporting requirements are with respect to two aspects: contents of the report, time to submit the report and dissemination of the reports. We look at these aspects in turn.

Section 15(1)-(2) of the Executive Agencies Act of 1999 provides for a general format of the annual performance reports of all executive agencies in the country. The annual report must contain: (1) a copy of audited accounts of the Agency, together with Auditor General‘s report on those accounts; (2) a report of performance against key targets and any other related information; (3) a report on the operations of the Agency during that financial year; (4) such other information as the Permanent Secretary may require; and (5) the Annual Performance Agreement between the Permanent Secretary and the ACEO. Once a report contains all these items it was considered complete and marks the end of reporting process. We found this process not ―complete‖ in a sense that it is not adequate to make the agencies accountable. Though the Permanent Secretary can inquire or demand any information from the agency, there were no evidence that this power was being utilized effectively to enforce accountability of the agencies. Once submitted, the

58 reports were simply regarded as credible by the ministries and efforts were never made to verify the information contained therein. In the interviews with the agency managers, it was learned that none of the two agencies had received a request or directive from the ministry to provide any extra information besides that contained in their reports. The general disinterest showed by the ministries was found to reduce potential to facilitate accountability of the two agencies through the reporting system because the agencies were not expecting any inquiries or questions, which indicated non-accountability.

In the same law section 15(2), specific timeframe within which the agencies are required to prepare and submit those reports is not stipulated. The time to submit the performance report depends on the kind of reports. Agencies are required to submit their annual performance reports within two months after the end of each financial year. Besides the annual reports, the agencies are required to report their performance twice a year (bi-annually). However, no sanctions for non-compliance were found out in the legislation, and this limits the usefulness of reporting as a means to hold the agencies accountable. While interviews with officials from the Ministry of Health confirmed that TFDA‘s reports and financial accounts are, usually, timely, it was found out that NHBRA‘s final annual accounts and financial statements for three consecutive financial years (2002 to 2004) were submitted not less than a month after the stated deadline.

Related to time requirements, the legislation requires that the agencies publish and circulate their performance reports among the relevant authorities. Once the

59 performance reports are prepared the agencies are required to send them to the MAB and the Permanent Secretary for approval before they go to the minister. Moreover, the minister is directed by the legislation to ensure a copy of the annual reports of the agencies is laid before the National Assembly not more than two months after receiving the reports. Although the involvement of the National Assembly is commendable, its role in facilitating accountability of the two agencies was found to be only nominal. This was attributed to sidelining of the ministers from governance of the two agencies which seem to have replaced ‗political‘ accountability (Minister as answerable) with ‗administrative‘ accountability (ACEOs as answerable).

Moreover, legislation fails to provide for dissemination of these reports to the public which has kept the agencies from serious public scrutiny. The existing system of performance reporting system continues to be inward-looking because the public, to whom the agencies are supposed to be responsive, was not identified by legislation as an important stakeholder like the government authorities. The failure of the legislation to require that the agencies publish and disseminate their performance reports has imposed informational barriers against the public which have hindered the use of ‗voice‘ against the two agencies.

5.3.2

Quality of the Performance Reports by the Two Agencies

Also, the legislation is silent on the quality of the performance reports which downplays their potential to help Ministries hold the agencies accountable. The review of the annual performance reports of the two agencies revealed significant

60 qualitative differences of those reports between the two agencies. The annual performance reports of TFDA (2003 - 2008) that were examined were found to be well-written, reader-friendly, and contained sufficient information, explanations and even some justifications for all actions taken by the top management which affect its performance outputs. By having these qualities, the TFDA‘s performance reports revealed potential to help the responsible ministry officials and other stakeholders to make sound judgement about its performance. Performance reports of NHBRA (2004 - 2007) were substandard both in terms of substance and style, but we did not come across ministerial queries on them.

61 CHAPTER SIX THE “AGENCY-PUBLIC” INTERFACE AND THE STATUS OF HORIZONTAL ACCOUNTABILITY

6.1.

Introduction

Horizontal accountability can be considered to be complete and thus potentially effective when the customers and citizens have substantial influence on the agencies, and when the agencies recognize and provide the customers and public with formal or informal avenues through which to get feedback in order to know their needs, demands, preferences and even disappointments. It is assumed that a closer interface between service provider and service user promotes information exchanges and performance-based accountability. The chapter thus focuses on two related issues, namely ―Agency-Public‖ interface and ―horizontal accountability‖ (for

performance). To examine the ‗agency-public‘ interface three indicators were used: (1) degree of transparency; (2) presence of appropriate feedback mechanisms; and (3) rate of customers‘ use of the services. To analyze ‗horizontal‘ accountability we examined two main variables: first, service ‗effectiveness‘ and second, customers‘ propensity or potentiality to improve responsiveness by the agency. To determine service effectiveness two indicators were used: (1) perceived service improvements and (2) customers‘ satisfaction. On the ―demand-side‖, we examined the potential of the public to hold the two agencies accountable whose indicators include: (1) public expectations of service improvement; (2) presence and potential use of ―exit‖ options to make the agencies

62 responsive; and (3) rate of public demand for better services. In close relation with the potentials of the customers to make the agencies responsive, we assessed their actual propensity which was indicated by the rate of submitting complaints.

6.2.

Interface of the Two Agencies and the Public

6.2.1. Transparency of the Two Agencies to the Customers Transparency is instrumental to effective accountability (Bovens, 2005) because provision of sufficient, accurate and relevant information by the actor lays ground for the account holder to make judgement about the actor‘s conduct or performance. In line with this fact, the information delivery systems of the two agencies were examined to establish whether the interface has greater transparency of the two agencies measured by the extent to which the agencies provide access to information about the service and performance.

The study revealed that there were information delivery channels in both agencies and some exclusively used by TFDA, but even these differed in the degree of appropriateness and effectiveness as tools for enhancing transparency and accountability to the customers and the citizens. Table 6.1 outlines the information delivery channels that were found in the two agencies and it shows that a higher number of channels are present in TFDA than NHBRA.

63 Table. 6.1: Information Delivery Channels of the two Agencies

No Means of Information Delivery NHBRA TFDA 1 2 3 5 6 7 8 Library Client Service Charter Media Public Relations Unit/Office Internet/Website Exhibition Sensitization seminar Total score out of 8 Source: Field Data, 2008 The information delivery channels available in both agencies include library, website, media, sensitization seminars, and exhibitions. Yet, there was a huge difference in the appropriateness of these channels and TFDA has additional ways to inform its customers and the citizens about itself. x x x 6 x x x x x x x x x 8

The library of NHBRA lacks sufficient, up-to-date and relevant materials, and personnel to run the library. The library is stocked with local newspapers and old written materials without there being the annual performance reports, which makes the library unsuitable as a resource centre for low cost housing as it was supposed to be (NHBRA, 2006:14). Instead of obtaining the documents from the library the researcher had to ask for print-outs from the Business Support Manager‘s office. This indicated lack of quick and easy public access to information. In contrast, the library of TFDA is operated by a professional Librarian with his Assistant, and it was possible to retrieve the annual performance reports for the past five years with their help. Other documents found were the various reports and market surveys that had

64 been conducted by the agency or their consultants. By visiting the library, the customers and citizens can obtain relevant information about the activities and performance of the agency since its establishment.

The second information delivery channels found in both agencies was internet website under these addresses: www.tfda.or.tz (TFDA) and www.nhbra.go.tz (NHBRA). By visiting the homepages of the two agencies, the public can obtain information on the background, organizational structure, function and objectives, and services and products which are offered. The NHBRA‘s website contained no additional information. For the case of TFDA it was found out that the website offers more details about its activities, previous and upcoming events, publications (but not the annual performance reports), public alerts about adverse cosmetics, drugs and medicines in the market, regulations or guidelines on registration, and public education programmes among others. It can thus be said that TFDA‘s website is more appropriate as an information delivery tool as it offers detailed and relevant information to the customers and citizens alike.

To reach out to the public, the two agencies have used media for commercial advertisements and provision of information about matters intended to inform only. Under its Publicity or Promotional Programme, NHBRA has used print media and electronic media for advertisements for the purposes of raising public awareness of the agency‘s services and products (NHBRA, 2007). The types of media include print media like newspapers, brochures, and journal13, as well as electronic media

13

Ministry of Lands publishes a journal titled ―Ardhi ni Mtaji‖ in which information of its other agencies including the NHBRA were found.

65 like television and radio. Despite these channels being repeatedly mentioned in the Performance Appraisal Reports, there were no adequate details to ascertain their actual use by NHBRA. On the other hand, it was found out that the TFDA publishes the ―Drug Information Bulletin‖ every three months to inform healthcare providers within the country and abroad on quality, safety and effectiveness of drugs. The bulletin seeks also to promote rational prescribing, dispensing and use of drugs. Also, TFDA has used radio (especially Radio Tanzania Dar es Salaam and Radio One14) as its key media in dissemination of information and education covering various programmes including: organization and functions of TFDA, procedures for obtaining permits and license from TFDA, rational use of Antiretroviral drugs, monitoring of Adverse Drug Reactions and many others.15 Review of the Five-Year Annual Performance Report revealed that the Public Relations Unit had organized 2 press conferences, issued 20 press releases, and published 72 newspaper articles in 2006 alone (TFDA, 2008).

The fourth information delivery channel used by both agencies was sensitization seminars. The review of NHBRA‘s Performance Appraisal Report (2007-2008) revealed that sensitization seminars and demonstrations on low cost, affordable housing and using appropriate technologies were conducted in Ruvuma, Tabora, Iringa, Mara, Arusha, Manyara and Dar es Salaam. On its part, TFDA had conducted zonal sensitization seminars to inform and educate stakeholders on the Tanzania Food, Drugs and Cosmetics Act 2003 and the organization and functions of the
14

These two radio stations (Radio Tanzania Dar es Salaam is now Tanzania Broadcast Corporation) have the widest national outreach than any other in the country. 15 www.tfda.or.tz

66 TFDA. Participants of such seminar include manufacturers, importers, wholesalers and retailers of food, drugs, herbal drugs, cosmetics and medical devices. Others are City/Municipal/Town/District Executive Directors, law enforcers and representatives from government and non-government organizations. These sensitization seminars have been conducted in the following zones: Eastern zone (2003), Central Zone (2004), Northern Zone (2004), Lake Zone (2004), Southern Highlands Zone (2005), Southern Zone (2005), and Dar es Salaam (2005). The sensitization seminars in these zones (except Dar es Salaam) the stakeholders were sensitized on Fees and Charges Regulations & Delegation of Powers Regulation16.

Exhibitions were used also by the two agencies to provide information to the customers and citizens about their activities, objectives, achievements, services and to respond to their questions. According to the Performance Appraisal Report (20072008), the NHBRA carried out five exhibitions for the 2007/2008 period as follow: Farmers Day (August 2007), Intellectual Property Exhibition (August 2007), Tanzania Public Service Week (June 2008), Engineers Day (2008) and Dar es Salaam International Trade Fair (July 2008). The TFDA had also participated in exhibitions such as Tanzania Public Service Week (June 2008) for the purpose of increasing awareness of its stakeholders and citizens on: Tanzania Food, Drugs and Cosmetics Act 2003; organization and functions of the TFDA; procedures for obtaining license and permit from TFDA; safety and quality of food, drugs, herbal drugs, cosmetics and medical devices; rational use of food, drugs, herbal drugs,

16

www.tfda.or.tz

67 cosmetics and medical devices; and health hazard associated with the use of food, drugs, herbal drugs, cosmetics and medical devices like adverse drug reactions17.

Other information delivery channels were found in TFDA alone, namely client service charter and public relations unit. On 27 January 2006 TFDA launched its Clients Service Charter which seeks to establish agency‘s commitment to the standards for which it strives to reach in providing services to its stakeholders. The Charter provides information about TFDA service delivery approach and its relationship with the clients in five areas: functions, communication, standards of service delivery, clients‘ rights and responsibilities, and channels for feedback or making a complaint. The Charter was found to be an important tool with potential to facilitate horizontal accountability in three ways: it clearly specifies quality of service that the customers should expect, and may use this commitment to demand better service; it allows customers to evaluate performance of services and give their feedback on the performance, which is critical for continuous improvement; and it provides a basis for making comparisons between agencies which offer similar services to that provided by TFDA, and this is a critical step towards the use of the exit option by the customers as a means of making the agency more accountable for its services. It was learned from the NHBRA‘s Business Support Manager that the agency had yet to officially launch its Charter as the PO-PSM had not released funds for the launch event. This explanation was found to be unsatisfactory partly because the reasons behind the failure of the agency management to secure funds for launching
17

www.tfda.or.tz

68 the Charter were not provided. It can be argued that the leadership of the agency has not been aggressive enough in the question of launching the Charter.

The other mechanisms for information delivery found in TFDA alone was the Public Relations Unit which operates under the Office of the Director General. The Public Relations Unit was established to strengthen the link between TFDA and the general public through organizing press conferences, issuing press releases, and publication of articles. It was reported in the Five-Year Annual Performance Report that during the 2006/2007 financial year 20 press releases were issued, 72 articles appeared in various newspapers, and 2 press conferences were conducted to clarify the results of TFDA inspection of cosmetics and medical stores in Dar es Salaam. For the case of NHBRA, there is no office charged formally and specifically to deal with public relations matters; instead, the Director General acts as the spokesperson and de facto public relations officer.

After tallying the number of available mechanisms for provision of customer and public information from the two agencies, TFDA scored higher than NHBRA. Also, a close examination of those mechanisms found in both agencies revealed that TFDA‘s information delivery tools are more institutionalized and had potentials to facilitate its accountability than those of NHBRA. However, out of 30 ordinary citizens (not clients) that were asked if they knew about the functions and services provided by the two agencies, only 3 professed knowledge of at least one function of TFDA, with 23 admitting that they had no such knowledge while 4 did not even answer the question. Despite the small size of the sample, the fact that these

69 respondents were a segment of the general public and randomly picked makes their low level of knowledge indicative of the extent to which the information delivery system of the two agencies has yet to reach the wider public.

6.2.2. Feedback Mechanisms As part of their information systems, the two agencies possessed a number of mechanisms through which they could obtain feedback from the customers and citizens generally. The common ways shared by both agencies to get feedback for their performance were four: letters, suggestion boxes, telephone, and exhibitions. The contact details of the two agencies which their customers and citizens could use to make a telephone call, send a fax, or send an email are available in the two agencies‘ websites, client service charter (TFDA) and publications. Exhibitions have been used to get feedback from stakeholders‘ assessment of the services and products demonstrated by the two agencies. Other mechanisms were available in TFDA alone. Table 6.2 outlines feedback mechanisms available in the two agencies. Table 6.2: Feedback Mechanisms Available in the two Agencies No Feedback Mechanisms 1 2 3 4 5 6 Suggestion Box Official Correspondence Internet/Website Exhibitions Customer Care/Public Relations Office Customer Surveys Total score out of 6 Source: Field Data, 2008 3 x NHBRA TFDA x x x x x x x x 6

70 The NHBRA has a website, but the homepage does not provide opportunity for customers and citizens to give any kind of feedback. On the other hand, TFDA‘s website has a ―Feedback Form‖ that allows any interested person to make a comment, or advice, or a complaint about the services of the agency.

As a measure to enhance implementation of Quality Management Systems (QMS) functions, the Director General‘s Office introduced a Customer Care Desk to attend all customers for purposes of improving service delivery (TFDA, 2006). The Customer Care Officer has the responsibility to receive public complaints or queries through physical visits and official correspondence and forward them to relevant Directories for necessary corrective measures. Moreover, TFDA had commissioned consultants or sponsored internal officers to conduct surveys for the purpose of soliciting perceptions, opinions, and attitudes towards its mission, objectives and performance in service delivery. These studies include 2004 Customer Satisfaction Survey (Excel Media 2004), Self-Assessment of the Performance of Tanzania Foods and Drugs Authority (Singonda and Sillo 2005), and Factors contributing to the Delay in the Drugs Registration Process at the Tanzania Food and Drugs Authority (Komero, 2006). The NHBRA had no customer care officer but the secretary to the Chief Executive Officer acts as a de facto complaints officer, and the only survey conducted was prior to its acquisition of agency status back in 2001.

6.2.3. Rate of Service Use by the Public The extent to which the agencies as service providers and public as service users was determined by focusing on the rate of service use, whereby the high or increasing

71 rate of service use by the customers was taken to signify greater or increasing degree of close interface as a potential stimulus for horizontal accountability, and the low or decreasing rate of service use signified lower or decreasing degree of closeness between agencies and the public.

Data used to determine the rate of service use by the public were obtained from interviews with a total of 50 customers (25 for each agency) and from the documentary sources, particularly TFDA‘s annual performance reports (2003-2008) and NHBRA‘s annual performance appraisal reports (2004-2007). The secondary data were used as baseline and compared to the results of the customer survey (2009). By the use of secondary and primary data it was possible to analyze the trends in the rate of service use. One challenge however was that the two agencies offered different kinds of services and so the analysis focused on those core services of the agencies without attempting to set some common criteria for comparison. The trends were studied separately with TFDA and NHBRA as independent cases and thereafter a general comparison based on the findings of each agency was made.

To start with NHBRA, we examined the rate of service, particularly its construction and consultancy services. According to a review of annual performance appraisal, the trend of service use has not been consistent and there was a significant variation between individual customers and other types of customers such as NonGovernmental Institutions. In table 6.3, the trend of construction and consultancy services use for the periods 2004/2005 and 2007/2008 show the inconsistency and variations between types of customers that used NHBRA‘s services.

72 Table 6.3: Rate of Use of NHBRA‟s Construction and Consultancy Services Customers Individual customers Central Government Institutions Parastatals/Other Agencies Non-Governmental Institutions Total 2004/5 2 2 1 4 9 2005/6 2006/7 2007/8 2 4 5 0 11 5 7 5 0 17

Source: NHBRA (2004, 2006, 2007) 18 The baseline data show a very low rate of construction and customer service use by the customers of NHBRA. There was a slight increase in the number of Individual Customers from 2 in 2004/2005 to 5 in 2007/2008, Central Government Institutions from 2 to 7 as well as Parastatals or Other Agencies from 1 in 2004/2005 to 5 in 2006/2007, but similar (or the same) number of customers used the services for the year 2007/2008. On the other hand, the number of Non-Governmental Institutions is shown to decrease from 4 in 2004/2005 to 0 in 2007/2008. Data for 2005/2006 could not be obtained. The baseline data suggest that the NHBRA has a relatively small customer base for its construction and consultancy services. Most of its customers were noted to be governmental institutions or agencies while individual customers were very few.

18

Data obtained from the Annual Performance Appraisal Reports between 2004/2005 and 2007/2008 raised a concern. It was noted that individual customers in 2004/2005 and 2006/2007 were 2, and Parastatals or Other Agencies that used NHBRA‘s services were 5 for 2006/2007 and 2007/2008. There is a possibility that these figures were ‗carried forward‘, because the names of the Individual Customers in 2006/2007 were not mentioned unlike the case in 2004/2005, and they could not be retrieved after the researcher asked for them. This however does not overshadow the general trend of service use by the customers of NHBRA.

73 To augment the secondary data analyzed above, 25 customers of NHBRA were interviewed. From their responses it was ascertained that consultancy services and building construction were the key services offered by the NHBRA, but more (17) of the customers had used consultancy services compared to only 8 who had used construction services. Asked to indicate how often they had used those services, all admitted that they had not used the services often or frequently. More specifically, 18 of the interviewed customers did not use NHBRA‘s services more than once and other 7 consulted the agency twice. Generally speaking, responses from the customers suggested low rate of service use which tallies with the data from the secondary sources.

The low rate of customer use of construction and consultancy services offered by the NHBRA can be explained as follows. Despite the fact that local materials used by NHBRA bring down the cost of construction, many customers seem to favour imported building materials as they are associated with social prestige in Tanzania communities, especially urban dwellers. Also, competition has increased as a result of economic liberalization which allowed proliferation of private firms that offer construction and consultancy services as those offered by NHBRA and have manipulated society‘s attitude to their advantage. NHBRA has to face competitive institutions even within the Government like the National Social Security Fund (NSSF) which has recently won tenders to build low cost houses for employees of various government institutions. Recently also NSSF has won the tender from the Ministry of Home Affairs to build houses for police officers at Kurasini area in Dar es Salaam.

74 In addition to researcher‘s interest to establish the rate of service use, the reasons for customers‘ decision to use those services were deemed important as well. Based on the customers‘ responses, it was found out that the most influential ‗pull‘ factor was affordability of NHBRA‘s services. Out of 25 customers who were questioned 16 argued that the costs for construction and consultancy services were much lower compared to those of private service providers. Other 9 customers said that they were more attracted by reliability of NHBRA‘s services which was (generally) attributed to the fact that the agency‘s interest was not just profit-making since it is a government institution.

From the interview of 25 customers of TFDA, it was found out that 17 of them interacted with the agency for the purpose of acquiring business licences or permits and the other 8 customers had used laboratory services. Also, most of the customers had used the services only once and a fewer number of customers used the services more than once. The low rate of service use can be attributed to the nature of services that TFDA offers which include issuance of licenses and permits which are sought after by customers when the need fore renewing the licenses or permits arise. The customers‘ responses to the question on the reasons for using the TFDA‘s services revealed that the number of customers attracted by reliability of the services was fewer (4) than for the case of NHBRA‘s customers (9). A majority (21) of the 25 customers argued that they could not obtain the licences and permits for trading in drugs, medicines and cosmetics which left them without an alternative source. It has been observed that customers were not attracted by the quality of services, which

75 suggests that quality of service has insignificant influence on the rate of service use by customers of TFDA and NHBRA. Extent of Agencies‟ Responsiveness to the Public

6.3.

6.3.1. Customers‟ Perceptions on Improvement and Satisfaction with Service Delivery In the survey, customers were asked to give their perceptions on the extent to which service delivery levels have improved after the formation of the two agencies. There was a variation in the customers‘ responses about their perceptions.

In the case of NHBRA, a majority of its 25 customers perceived improvements in service delivery as either low (11) or moderate (8). Other 4 customers gave no response. On the side of TFDA, more than a half of customers that were questioned expressed positive perceptions about its service delivery improvements. Out of 25 customers, 7 ranked the improvements in service delivery as high and 11 thought the improvements were moderate, while 7 customers believed the improvements were low. Table 6.5 compares customers‘ ranking of the perceived service delivery improvements by the two agencies. Table 6.4: Customers‟ Ranking of Service Delivery Improvements Studied Agencies High NHBRA TFDA 2 7 Perceived Service Delivery Improvement Moderate Low 8 11 11 7 18 DK/NR 4 0 4 25 25 50 Total

TotalSource: Field Data, 2009 9 19

76 Notwithstanding the findings that a relatively higher number of customers of TFDA had positive perception about its service delivery improvements when compared to NHBRA, the aggregated responses revealed that most customers found the improvements as either moderate (19) or low (18), and only a handful ranked the improvements as high. Generally, the aggregated responses suggest that the improvements in service delivery of the two agencies have been adequate.

A related question was asked to establish the extent to which the surveyed customers were satisfied with the services. The intent was to capture the extent to which the two agencies effectively respond to the service needs and preferences of their customers. Fifty (50) customers (25 customers from each agency) were asked to indicate whether their satisfaction level with services of the two agencies was high, moderate, or low, or if they were not satisfied with the agencies‘ services. Table 6.6 classifies the customers‘ responses along those three ranks, as well as indicates customers who were not satisfied at all with the services and those who gave no response. Table 6.5: Customers‟ Satisfaction with Services of the Two Agencies Studied Agencies NHBRA TFDA High Level of satisfaction Moderate Low Not Satisfied 3 8 Total 11 Source: Field Data, 2009 The findings indicated an overall low level of customer satisfaction with the service delivery of the two agencies. The aggregated responses show that a majority (23) of 12 11 23 7 2 9 2 3 5 Total DK/ NR 1 1 2 25 25 50

77 the customers expressed moderate satisfaction while only 11 customers they were highly satisfied with the service delivery by the two agencies. A considerable number of customers (9) expressed low satisfaction and a few (5) were not satisfied with the service delivery of the two agencies. There were no responses from 2 customers. The customers‘ level of satisfaction varied when the responses of TFDA‘s customers were compared to those responses given by the NHBRA‘s customers. It was found out that the number of customers who expressed high satisfaction with TFDA were twice (8) as much as those (3) customers of NHBRA, but the number of NHBRA‘s customers who expressed low satisfaction (7) were three times more than 2 TFDA‘s customers. There was only a slight difference in terms of customers who were dissatisfied, 3 for TFDA and 2 for NHBRA.

In order to determine which specific attributes of service delivery influenced the satisfaction levels of the customers of the two agencies, customers were asked to mention the aspects considered as satisfactory. Table 6.7 shows customers‘ satisfaction with five specific attributes19 of service delivery for the two agencies. Those customers who gave no responses are excluded.

19

These five attributes were adopted from the TFDA 2004 customer survey conducted by Excel Media experts. A comparative analysis between ‗baseline‘ and our own survey became impossible for both cases because NHBRA has not done a similar study.

78 Table 6.6: Customers‟ Satisfaction with Specific Attributes of Service Delivery by the Two Agencies No 1 2 3 4 Customer satisfaction with: Information Promptness Meeting customer expectation Perceived quality NHBRA 1 2 6 7 TFDA 2 0 5 9 Total 3 2 11 16

5 Trustworthiness/reliability 6 5 11 Source: Field Data Total 22 21 43 Out of 43 customers who responded to the question, 16 customers from TFDA (9) and NHBRA (7) considered quality of the services of the two agencies as the most satisfactory attribute of service delivery. Other attribute which were moderately rated as satisfactory was reliability of the services, and thus some said the service received met their expectations. These findings suggest only slight difference in the levels of customers‘ satisfaction with specific attributes of service delivery offered by NHBRA and TFDA, especially reliability (6 against 5) and services to meet customers‘ expectations (6 against 5). It is worth noting that TFDA‘s customers were more satisfied with reception of information about the agency services and quality of the services than NHBRA‘s customers. However, none of TFDA‘s customers expressed satisfaction with the promptness of the agency in service delivery compared to 2 of the NHBRA‘s customers who were satisfied with this attribute20. From the TFDA‘s self-assessment study, the most common aspects for which customers expressed strong dissatisfaction include lack of prompt responses and delays in the release of
20

If we were to make a comparison between the baseline data from TFDA‘s 2004 customer survey and our own survey, there is an increase in the level of overall customer satisfaction (42% of 606 customers as per baseline survey to 84% of 25 customers as per 2009 survey).

79 laboratory results and long duration to register products (Sigonda and Sillo, 2005:34). The observed variations can be explained as follows. According to the TFDA‘s FiveYear Annual Performance Report, the reasons for its success in service delivery include changing mindset of staff towards delivering quality services, collaboration with stakeholders from both public and private sectors, and sufficient donor support from various international public organizations (like World Health Organization, and Foods and Agriculture Organization) and private foundations (like Bill and Melinda Gates Foundation). In addition to these factors the fact that the regulatory nature of activities undertaken by the two agencies favours TFDA than NHBRA when it comes to assessment of service delivery. Also NHBRA‘s Annual Performance Appraisal Reports for 2007/2008 that were reviewed revealed that the agency operates under-capacity because the current number of staff is below the human resource need and the necessary equipments are outdated.

However, it is our view that the levels of commitment of the top leadership which significantly differ between the two agencies have been the most decisive factor. It was found out that within the period of five years in its operations TFDA has undertaken important system development based on the results of several scientific and independent surveys into their stakeholders‘ perceptions and needs. In the first three years of its operations three surveys were conducted under the Director General‘s initiative and funding. Based on the research reports, the Quality Management System was created under which a Customer Care Desk was introduced

80 to attend all customers for purpose of improving service delivery. As a result, it was reported in the Five-Year Annual Performance Report that a total of 8521 customers were registered between January and June 2007 owing to courtesy and speed in handling the customers. These initiatives from the top leadership have proven to improve service delivery levels. It was learned that NHBRA had not taken initiatives even remotely similar to those of TFDA.

6.4.

Potential of the Public to make the Two Agencies Accountable

6.4.1. Level of Public Expectations for Better Services The GOT anticipate that the creation of executive agencies would improve efficiency and effectiveness of the delivery of public services. In order to determine whether the service users themselves have similar or lower expectations from the agencies as service providers, we asked 50 customers to state whether they expected improvements or indifference or decline of service delivery by the two agencies. This question was posed based on premise that the level of customers‘ expectation influences their attitude towards pressurizing service providers to become more responsive to their needs and meet their expectations.

It was found out that 41 out of 50 customers of the two agencies who were questioned had moderate expectations, 6 had high expectations and only 3 customers expected no improvements. Customers‘ expectations of improvement in service delivery were for the following service delivery attributes: low costs or affordability (20); quality (16); and increased speed (11). The three customers who did not expect any improvements argued that competition from private contractors (for the case of

81 NHBRA alone), continued use of old technology and relying on the same personnel cannot improve service delivery by the two agencies.

The reasons behind moderate and high expectations of improved service delivery differed significantly between the customers of the two agencies. Many of NHBRA‘s customers believed that the agency‘s mission of providing low-cost housing would appeal to many Tanzanians (especially residents of urban or semi-urban settings) because most of them live in rented houses, and other customers thought low-cost housing would be more preferable to expensive housing due to bad economic conditions and high prices of building materials. On the side of TFDA customers, they also expected increased public demand due to fast growth of trade in medicines and cosmetics in the country but others believed more advanced technology would have been applied to improve efficiency.

The findings established that unlike the Government of Tanzania, the expectations of the surveyed customers indicated low potential for their role as agents for improving of accountability of agencies. 6.4.2. Presence and Potential Use of “Exit” Option by Customers of the Two Agencies It matters whether the customers can or cannot find alternative service provider, because lack of alternative supplier discourages any active involvement of those customers to pressurize the monopolistic service provider to become more responsive. To establish the presence or absence of exist options to the service users,

82 50 customers of the two agencies were asked to state whether they had alternative sources of services.

It was learned from their responses that only 16 customers were able to access the same services they provided by the two agencies from an alternative service provider, but 34 customers admitted not to have alternative sources for services that the two agencies provide. The phenomenon of ‗service dependency‘ was dominant to TFDA‘s customers because none of its 25 customers who we questioned has alternative supplier of services. This is based on the fact that TFDA has monopoly as the sole regulatory authority with mandate to issue licences and permits for dealing with food and food supplements, drugs, cosmetics, herbal drugs, and medical devices21.

On the other hand, 15 out 25 customers of NHBRA claimed to have access to other contractors and consultants. Although the NHBRA has sole authority to control the quality and specification of building materials in the country but its commercialized services are widely supplied by other organizations from the public and private sectors alike which include public corporations, research institutes, building contractors, and registered consultants. This variation reflect the difference in the impact of economic liberalization to public organizations in the country whereby growth of private sector has increased the number of building contractors and consultants who become exit options for customers of NHBRA, but the increased

21

In addition to that, TFDA has taken several steps either to maintain this status or extend its jurisdiction.

83 inflow of counterfeit products has created incentive for TFDA to extend its regulatory activities which has made it a monopoly.

6.5.

Propensity of the Public to make the Two Agencies Accountable

The closer interface between agencies and their customers was assumed to help facilitate increased involvement of the customers in making the agencies more responsive to their needs and demands. We asked the surveyed customers whether they knew how to influence performance of the two agencies to their favour, in terms of achieving improved service delivery. It was found out that 39 out of 50 customers claimed to be aware of the ways to make the agencies responsive and other 11 customers admitted not to know how they can effectively influence performance of the two agencies.

Despite the majority of the customers claiming to know how to make the two agencies accountable, only 8 of those 39 customers had submitted formal complaints to either NHBRA (3 customers) and TFDA (5 customers). In the interview with the Secretary to the ACEO of NHBRA, she confirmed that customers do not submit their complaints through formal channels as they would rather express their dissatisfactions on site to the contractors. It was learned that the agency do not even have a file of complaints received.

On the side of the TFDA, the Customer Care Officer that we interviewed said that only few and minor complaints are occasionally received and these complaints are most often handled without involving higher authorities. The common complaints are about long duration of obtaining permits and the procedures and requirements for

84 registration of products. Customer often complained that the procedures and requirements were cumbersome and too demanding. The dismal number of formal complaints against TFDA was also captured in the 2004 survey report, whereby only 19 out of 596 customers and only 3 ordinary citizens had registered their complaints (Excel Media, 2004:23). The overall propensity of customers to forward their complaints was found to be generally low.

85 CHAPTER SEVEN CONCLUSION AND RECOMMENDATIONS 7.1. Introduction

In the context of the ongoing PSRP, the study investigated the extent to which the executive agencies in Tanzania particularly NHBRA and TFDA are accountable for their performance (service delivery) to the public. The specific objectives of the study were fourfold: to assess if the frameworks facilitate accountability of the agencies; to assess the effect of autonomy on levels of accountability of the agencies; to explore other factors that affect accountability of the agencies; and to recommend ways to improve the accountability system of agencies.

This chapter has three objectives: first, to draw conclusions on the impact of formation of executive agencies on accountability; second, to highlight the salient factors affecting accountability of the studied agencies; and third, to recommend the ways for improving the system of accountability for executive agencies in Tanzania. The Impact of „Agencification‟ on Performance Accountability

7.2.

The formation of the studied agencies was found to cause a substantial shift of power through delegation of authority and institutional separation between the ministries and the created agencies, which resulted into the latter‘s increased autonomy. The studied agencies were found to discharge their routine operations and strategic management functions without interference from their ministries, and the ACEOs had substantial discretion over the human resources and enjoy a relatively high degree of autonomy in financial management issues. With respect to financial

86 matters one limitation was found to be low degree of financial self-sufficiency which has made both agencies dependent on Government subventions and thus must conform to some bureaucratic procedures to secure funds.

The increased autonomy of the two agencies could not be established as a positive cause for their performance accountability because it has instead reduced ministerial control over the agencies without there being increased role of customers to make the latter more accountable. To a large extent its operations, strategic management and even the performance results of the two agencies have not been effectively monitored by the Ministries concerned. Ministries demonstrated low interest to monitor their agencies‘ performance partly because the ministers‘ role under the legal framework is only nominal and thus the whole process to take place outside political scrutiny. It was found out that there were no meaningful disincentives for the two agencies to fully comply with performance reporting to their ministries and thereby failed in several occasions to comply with the statutory obligations.

The second major impact of the formation of executive agencies was closer interface between the two agencies and their customers. We found out that three mechanisms have been commonly employed by the two agencies to get closer to their customers: client assessments, publicity or promotional programmes, and customer care practices. But there were variations in terms of appropriateness of the mechanisms and level of their institutionalization.

The TFDA had institutionalized its customer care practice by formation of the Customer Care desk under a professionally trained officer and recently established a

87 sophisticated system of obtaining and channelling feedback from its customers. In addition, its Public Relations Unit has been very active and effective to inform the public about the services and alerting its stakeholders about harmful products in the market. On the contrary, NHBRA has only ad hoc mechanisms for public relations, poor mechanisms to get feedback like Suggestion Box, and the agency relies on annual exhibitions to reach the public. Between the two agencies, it is only the TFDA that had conducted customer surveys and studies to understand the levels of customer satisfaction and their preferences. It can thus be concluded that, TFDA has managed to establish a closer interface with its customers.

The degree of closeness between the agencies and their customers correlated positively with the degree of responsiveness to the expectations and preferences of the customers. This was reflected by customers‘ perceptions about service improvement and the level of their satisfaction. The majority of NHBRA customers perceived improvements in service delivery as either low while more than half of TFDA customers that were questioned expressed positive perceptions about its service delivery improvements. With regard to customer satisfaction, a considerable number of customers expressed low satisfaction and few were not satisfied with the service delivery of the two agencies. However, the number of customers who expressed high satisfaction with TFDA was twice as much as those customers of NHBRA, but the number of NHBRA‘s customers who expressed low satisfaction was three times more than TFDA‘s customers.

88 7.3. Factors Affecting Levels of Accountability of the Agencies

The Executive Agencies Act of 1997 which provides for the external framework for agency accountability has several shortcomings that have been found to limit the role of Ministries and the public to exercise effective account holding of the studied agencies. Relocation of oversight powers from the departments into the office of the Permanent Secretaries and the Ministerial Advisory Boards (MABs) has faded the ministerial oversight over the agencies in both cases. In relation to this, the legislation provides for overload of the responsibilities and contradictory roles to the Permanent Secretary that has negative implications to the required objective and effective performance monitor and scrutiny.

The Framework Documents of the two agencies provides for an inward-looking rather than outward-looking performance reporting system. Under the current system of accountability, the service users and the public, to whom the agencies are supposed to be responsive, are not identified as the key stakeholders. It is only the Government authorities who are clearly recognized and to whom performance reporting is directed. Moreover, legislation fails to provide for dissemination of these reports to the public which has kept the agencies from serious public scrutiny. The failure of the legislation to require that the agencies publish and disseminate their performance reports has imposed informational barriers against the public which have hindered the use of ‗voice‘ against the two agencies. And, despite the existence of performance reporting requirements these are not supported by penalties for noncompliance which could act as disincentive for late submission and poor quality of the performance reports, as it has been seen with the case of NHBRA.

89

While the study findings establish that the closer the agency is to its customers the more likely it becomes responsive because such interface allows easy exchange of information between the service providers and the service users, it has been found that the impact of closer interface on responsiveness is limited by the low customers‘ expectations on service improvements and low propensity of the customers to demand for improved services. It has been found that majority of the questioned customers of the two agencies had only moderate expectations and few expected high improvements which indicate low potentiality to make the agencies accountable. On the other hand, the propensity of customers to make the two agencies more responsive was low despite most customers admitting that they were only moderately satisfied with the services. It can be argued thus, the disposition of the customers is the determinant of the level of accountability of the agencies.

The third factor which was found to influence the level of accountability of the two agencies was the attitude and commitment of the agency leadership to enhance responsiveness. Unlike the NHBRA, the leadership of the TFDA has shown to recognize the importance of public involvement in its activities and thereby has taken several initiatives to provide for increased public access and involvement. For instance, its annual ‗Stakeholders Forum‘ established in 2007 provides avenue through which the stakeholders, inclusive of the customers and ordinary citizens, give comments and advice the agency on how best to achieve what the customers and larger public expect from them. Therefore, while the external framework (the Executive Agencies Act of 1997) has encouraged the agencies to engage the public

90 in a consultative process, the study has established that it is the commitment of the agency leadership which determine whether this is done or neglected.

7.4.

Recommendations

Executive agencies need adequate autonomy to become more flexible and innovative in their operations but the agencies should not be absorbed in their narrow concerns. To avoid ministries and agencies becoming disconnected, a clear governance of the relationship between the ministries and the agencies is necessary to ensure there is shared strategic direction. Unless a Minister or Permanent Secretary is properly engaged in agency issues, a governance vacuum will occur. By being actively engaged, the Minister or Permanent Secretary can be aware of the agency‘s progress which can help build confidence that the agencies play their part in meeting strategic objectives. Furthermore, close relationship between ministries and the agencies can discourage undue interference that may constrain the agencies from realizing highlevel performance.

The MAB should provide strong support to the ministry in regard to strategic direction of the agency and the ACEO‘s responsibility for the delivery of expected performance results. However, to avoid role conflict, the Chairperson of MAB should not be the Permanent Secretary. Alternatively, the MAB should be chaired by head of the relevant policy directorate within the Ministry. As a focal point within the Ministry, the Chairperson should be able to use the chance to challenge the ACEO and facilitate his work in meeting excellent performance.

91 Also, there is a need to augment the role of ministries to oversee performance of the agencies as part of their executive responsibilities which should be judged by the National Assembly and specifically the Parliamentary Committees. It is therefore recommended that an unambiguous statutory provision be inserted into the Executive Act of 1997 to allow for a proactive parliamentary role because this would more easily create awareness to the public about the performance processes and results of the agencies whose activities impact on their lives directly or otherwise.

The facilitative role of the Ministry needs to be taken more seriously for the agency to achieve continuous performance improvement. Ministries need to ensure that the agencies‘ performance targets are challenging and responsive to customers‘ needs. The agency targets should not be retained if no longer relevant. The Ministry should subject performance targets of its agencies to regular reviews to ensure consistency with changing policy priorities and customer preferences.

Considering the centrality of information to accountability, it is recommended that deliberate efforts be taken to make the agencies more open and share with their customers and the larger public information about their performance. To achieve this, each agency should be required to publish and disseminate widely its annual report (or an abridged version) through various ways after the report has been tabled in the National Assembly.

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