SHOULD BRAZIL ABOLISH PUBLIC SERVICE JOB SECURITY? A LESSON FROM OECD COUNTRIES
Thais Helena Semionato Bernardes
Masters supervisor: Prof. Dr. David Giauque Expert: Prof. Dr. Yves mery
June 2013
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To Jesus Christ, my source of hope, meaning and love. May this degree glorify You.
My deepest gratitude goes also to my husband Tiago, whose love and support was essential to the completion of this Masters.
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Abstract Civil servants were once seen as the agents of the state sovereign power, with their special status held as synonymous of an independent and stable public service. This no longer seems to be the case, at least for the most part of OECD countries, where NPM-inspired reforms have sought to normalise employment conditions in public and private sectors, stripping civil servants of their traditional job security and even of their status altogether. Within this context of de-privilegisation, a few OECD countries appear to be resisting reforms, and civil servants job security remains unscathed in places such as Germany and France. The present work points at institutional factors as the explanation for the differences in reform outcomes, and seeks to draw lessons from the OECD experience in order to determine whether job security will and should continue to be a reality in South Americas largest emerging economy: Brazil.
Rsum Autrefois considrs comme des agents du pouvoir souverain de lEtat, les fonctionnaires du secteur public et leur statut spcial taient considrs plutt comme le synonyme d'un service public indpendant et stable. Cela ne semble plus tre le cas, du moins pour la plupart des pays de l'OCDE, o les rformes s'inspirant du NMP ont cherch normaliser les conditions d'emploi dans les secteurs public et priv, en enlevant la traditionnelle scurit d'emploi des fonctionnaires et mme leur statut spcial. Dans ce contexte de d- privilgisation, quelques pays de l'OCDE semblent rsister aux rformes, et la scurit d'emploi des fonctionnaires reste intacte dans des pays tels que l'Allemagne et la France. Ce travail attribue aux facteurs institutionnels le rle principal pour expliquer les diffrences dans les rsultats des rformes selon les pays. Il cherche aussi tirer des leons de l'exprience de l'OCDE dans le but de dterminer si la scurit d'emploi sera et devrait continuer tre une ralit dans la plus grande conomie mergente de l'Amrique du Sud: le Brsil. 4
Table of contents
Abstract .............................................................................................................................................. 3 1. Introduction ................................................................................................................................ 5 2. The public servant status: tradition and reforms ................................................................... 6 2.1. The traditional civil servant status ............................................................................. 6 2.2. Issues regarding job security ....................................................................................... 9 2.3. The civil servant status: a trend towards flexibility? .............................................. 12 2.4. NPM-driven reforms ................................................................................................. 16 2.5. A new ideal-type: post-civil service ......................................................................... 19 3. Public service job security in OECD countries: an outlook .............................................. 23 3.1. Public service in OECD: a heterogeneous mix of countries ............................... 23 3.2. Reforms in public service status in OECD countries ........................................... 29 3.3. Analysis of the different reform trajectories .......................................................... 36 3.4. The abolition of job security in OECD countries public service ...................... 46 3.4.1. Abolition of job security in New Zealand ........................................................... 46 3.4.2. Abolition of job security in the United Kingdom .............................................. 47 3.4.3. Abolition of job security in Sweden ..................................................................... 49 3.5. Job security maintenance in OECD countries....................................................... 51 3.5.1. Job security in France ............................................................................................. 51 3.5.2. Job security in Germany......................................................................................... 52 3.6. Concluding remarks regarding job security in OECD ......................................... 54 4. Should Brazil abolish public service job security? A lesson from OECD countries... 57 4.1. An overview of Brazilian public service ................................................................. 57 4.2. Job security in Brazilian public service: origin and trends ................................... 63 4.3. Career civil servants and political appointments in Brazil ................................... 66 4.4. Reforms in Brazilian public service ......................................................................... 70 4.5. Lessons from the OECDs civil service reforms for Brazil ................................. 72 5. Conclusion .............................................................................................................................. 74 Bibliographical references .............................................................................................................. 76 ENGAGEMENTS DE LAUTEURE DU MEMOIRE ........................................................ 81
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1. Introduction Once seen as agents closely connected to state sovereignty, and to notions such as the rule of law and the principle of equality of treatment (Demmke and Moilanen, 2012), the image of civil servants has taken a dramatic turn for the worse in recent decades. Today, civil servants are the target of heavy criticism, mostly linked to the differences in their employment conditions, which are perceived as a preferential treatment (Demmke, 2005). Very often, civil servants are regarded as protected groups, separated from the rest of the world (Demmke and Moilanen, 2012). But perhaps the most marked distinction between labour law employees and civil servants - and probably the most obvious target for criticism - lies in the advantageous job security of the latter. As opposed to their private sector counterparts, civil servants are traditionally not linked to their employers through ordinary labour law contracts: their relationship is unilaterally established by a public law statute, and working conditions are often constitutionally anchored (Bossaert, 2005). This means that civil servants enjoy a special status, usually including life-time tenure that renders dismissal highly unlikely. When first established, job security was based on honourable grounds. By granting civil servants a special status along with its accompanying rights, legislators intended to shield them from political influence and to guarantee stability in the public sector. Career systems aimed to prevent patronage and nepotism, and tenure was seen as a means to ensure a loyal and neutral staff, all in accordance to Weberian bureaucracy principles. Suddenly, however, the same bureaucratic principles that guided public administrations all over the world began to lose momentum. Stability and tenure became terribly old- fashioned and were replaced in academic and political rhetoric for principles such as flexibility and performance. Citizens, media and politicians alike became increasingly opposed to government officials alleged lenient labour conditions, and began pressuring for change. The legitimacy of such difference in treatment was also called into question. The huge debate that ensued regarding public sector job stability was merely part of a bigger picture, one that characterized mainstream reform initiatives and which gained strength in the early 1990s. It was the dawn of the New Public Management (NPM) paradigm. As a response to criticisms, NPM-inspired reforms brought a series of hardships on civil services all over OECD countries. One may even say that the current reform environment that characterizes modern public administrations has never been as unfavorable for civil servants. Such reforms have mostly intended to align working conditions in the public and private sectors, encouraging the change, deconstruction and decentralization of the civil service (Demmke, 2005). In the present work, we shall discuss the origins of the debate around public service job security in the context of NPM-inspired reforms, and its consequences for OECD countries. Afterwards, we shall analyse the implications of similar developments in South Americas largest emerging economy: Brazil. Our aim in this research is to ascertain whether job security is still desirable in Brazilian public service. 6
In order to assess this, the present work has been structured with the following research methods: firstly, we shall proceed to an extensive literature review on the subjects of traditional public service features, job security, public management reform, and reform initiatives particularly related to civil service. With this information at hand, our next step will be to investigate literature regarding public service reforms in OECD countries and the trends identified within this group. The third part of our literary review shall focus on Brazilian public service, assessing the changes that have occurred in the past decades in public service and attempting to identify a trend for the future of the countrys civil servants. Our analytical framework will be focused mainly in institutional factors, which will provide a basis for comparison between the different countries, and, later on, between Brazil and OECD countries. Therefore, the approach presented in this work is that of neo- institutionalism, in which the design of political institutions and the context of established norms, values, relationships, power-structures and standard operating procedures is of paramount value in the analysis of reforms in the public service (Hill, 2005; March and Olsen, 1984). Our hypothesis here is that OECD countries and Brazils public service reform trajectories will differ depending on the different institutional configurations that either favoured or discouraged changes in the traditional public servant status. This comparative analysis will be especially useful to demonstrate the occurrence of marked differences according to each countrys specific institutional features. Thus, the present work is divided into three chapters, the first one exploring the traditional civil servant status and its inherent job security, as well as reforms that have tended to suppress it. In the second chapter, our focus will be on the experiences of selected OECD countries, which provide a rich patchwork of different institutions, as well as different legal and administrative cultures. The third and final chapter will present Brazilian public service, the origins of job security in this country and how the traditional public servant status has been shaped by different reform initiatives over the years. Finally, we will attempt to compare the developments in OECD to those found in Brazilian public service, in an effort to draw lessons that could point to the most probable trajectory for Brazil in this matter.
2. The public servant status: tradition and reforms 2.1. The traditional civil servant status Intrinsic to public management reform, as authors Pollitt and Bouckaert (2011) insightfully indicate, is the tendency to associate novelties with good things, while the ancien rgime is linked with nothing but negative features. While this works in rhetoric, empirical evidence seems to contradict the notion that only good things have come with change. But before analysing the content and the impacts of public sector reforms, and those initiatives specifically related to human resources, it is important to clarify what characterizes traditional public service. 7
First of all, one should define the term civil servant. According to the OECD (2005), public servants or civil servants refer to government employees of central government organisations under core public service rules and paid from public funds. (OECD, 2005:159). Although in theory this is a fairly simple definition, in practice there are several complicating factors. After all, as we shall see throughout this research, not all government employees are civil servants, although paid from public funds. Furthermore, it is very difficult to delimitate what the OECD calls core public service rules, and even core activities of the public sector have become hard to define. For the purposes of this research, the use of the term civil servant will be related to a specific set of rights and obligations that are granted to a share of the workforce in public administrations, which bear what we call a civil servant status. In summary, we refer to those whose relationship is unilaterally established by a public law statute, which grants them a specific set of entitlements and obligations that usually differ sharply from ordinary private sector labour conditions. Authors Demmke and Moilanen (2012) have traced back the origins of civil service in Europe. According to their research, the first civil servants in European history were knights. Posteriorly, civil servants were the servants of the sovereigns and of the nobility then, they had no rights and could be dismissed at the will of their masters. As for the public law status, the authors believe it goes back to the French revolution and to the writings of Friedrich Hegel (Demmke and Moilanen, 2012:35-36). But of course, civil services modern origins lie in the ideal-type of rational/legal bureaucracy proposed by Max Weber (Weber, 1947, cited by Pollitt and Bouckaert, 2011:71). Basically, traditional civil service was linked to the authority of the state, and it was characterized by a set of conditions that aimed to produce a certain ethical status for civil servants, who should be committed to the public good, neutrality, impartiality and to observing confidentiality and displaying expertise (Demmke, 2005:43), since they were agents entrusted with the task of working for the common interest. According to the OECD (2005), all OECD countries have special arrangements for employees in the core public service designed to promote or preserve values that societies consider important for those engaged to enforce the law or otherwise carry out the collective will (OECD, 2005:160). These special arrangements usually meant that the recruitment of civil servants was to be conducted through impartial means, often consisting of standard testing and placement systems, the famed concours, in which candidates would submit to entry-level exams in order to work for government. Once appointed, civil servants were entitled to a career and, after undergoing a probationary period, they would be granted life-time employment. Furthermore, as mentioned, civil servants employment relationships would not be established by contracts, but by unilateral public law statutes. The statute would establish a special bond between the person and the state, binding her to a public interest (Demmke, 2005:55). Often, employment conditions would be regulated by special laws or even by the constitution, meaning that changes in legislation would be required in order to modify them. All of this implied that dismissal was virtually excluded, only possible in rare 8
occasions and with a right of appeal before a specific, often administrative court (Bossaert, 2005:6-24). The typical or base-case civil service is summarized in the table below:
Table 1 Base-case of civil service Recruitment - Specific recruitment procedure, usually through a standard testing and placement system. Employment conditions - Tenured, career-based systems, with no political influence in appointment, and very limited possibility of dismissal. - Public servants are expected to stay in public service more or less throughout their working life. - Employment conditions are part of a specific framework (statute), which also establishes specific ethical obligations. - Separate, specific social security system. Promotion - Promotion is based mainly in terms of seniority and qualifications. - Promotion occurs within the organisations fixed career system. Dismissal - Dismissal is more or less excluded. - Right of appeal against dismissal decision exists and is exercised before specific courts. Source: based on Pollitt and Bouckaert (2005), Demmke (2005), Bossaert (2005) and OECD (2005).
Probably one of the most striking features of civil service consists in its job security. Emery, Clivaz et al. (1997) claim that security of tenure is the feature par excellence of the civil servant status (Emery, Clivaz et al., 1997, cited by Emery and Wyser 2005:4). In spite of the fact that life-time employment may be regarded as a privilege today, this institute was introduced with the noblest of intentions: to protect civil servants against political influence and to guarantee a neutral and impartial civil service. Not only that, but tenure would also guarantee continuity and stability in the public service, once civil servants were not threatened by dismissal (Bossaert, 2005:9). According to Demmke (2005:9), job security principles intended to protect existing public employees from changes in government and lobbying from the private sector, thus guaranteeing equity, transparency and security. No one could argue against that. Or so was thought. Soon, enough, however, researchers began to question these traditional civil service claims. Demmke (2005), for instance, seemed sceptical about the alleged neutrality of civil servants. The author wrote that () like employees in the private sector, public officials are never neutral in their work. They bring their social origin, socialization experience, attitudes and behaviour (Demmke, 2005:52). He then reformulates the term neutrality, seen as inadequate and perhaps not even possible at all, for the absence of corruption and political indoctrination. Even when politicization is concerned, the author does not seem convinced that a career system alone would be enough to guarantee the absence of political 9
influence. With these questions at hand, Demmke (2005) is reluctant to accept that Webers bureaucrats do actually exist, and is unsure that administrative culture alone would be enough to create the typical Weberian civil servant.
2.2. Issues regarding job security As we have seen, job security consists in a very important feature of the civil servant status, traditionally linked to concepts such as the rule of law, state sovereignty and the principle of legality (Demmke and Moilanen, 2012). In its base-case, civil servants who enjoy job security are entitled to a life-time job in their organisation, and can only be dismissed under very difficult circumstances, that usually entail serious misconduct, and do not include economic downturns, budgetary pressures or even poor performance in some cases. There have also been claims that job security would be a form of compensation for generally lower salaries in the public sector in comparison to private sector employment, although Demmkes (2005:121) comprehensive study found no evidence of the kind, except for top management positions or senior-level pay. But this institutes source of legitimacy really is the alleged differentiated public sector environment that, in Demmke and Moilanens (2012:1) words, justified the need to produce a certain ethical status for civil servants. Henceforth, job securitys purpose would be to provide protection against individual and political pressure, as well as to provide continuity and stability in the execution of public organisations tasks. Life-time tenure would protect civil servants independence, shielding them against political patronage and other interferences:
Writers on public administration have long suggested that without a specific status, legal protection, life-time tenure and special ethical rules our societies would be open to terrible corruption () and this would undermine the capacity of the state to rule society. (Demmke, 2005:102)
Career, tenured systems would thus carry precious public service values, such as predictability, stability, rationality and equitable treatment (Demmke, 2005: 25). Naturally, a few questions do arise in this matter. The first one to be addressed is who exactly should benefit from this status. The answer to this question has traditionally been related to issues such as the nature of the tasks conducted, the duties and the exercise of sovereign powers. But as Demmke and Moilanen (2012:88) put it, today, public administrative jobs range from the exploration of outer space to sweeping the streets. The argument is certainly valid for groups such as police officers or judges, but does not hold for many civil servants, who do not exercise public powers and often carry out merely technical tasks (Demmke, 2005:37). This leads us to enquire whether a special status is necessary for the entire range of civil servants. In practice, there are as many answers to this question as there are case studies. In some states, only civil servants employed in core functions such as regulation, monitoring, 10
auditing and functions of sovereign and external representation are granted a special status (Demmke, 2005: 102). Other states are more prone to include various categories of staff into this group, and in some there are even differences in status among the same class of professionals, leading experts to question whether it is even reasonable for civil servants to have a specific status, given that employees and civil servants alike perform the exact same tasks. A second question pertains to the so-called public service ethos. Demmke (2005) sustains that traditional positions in literature elevate public employees motivations and maintain they are more ethical than private employees (Demmke, 2005:62). Supporting that claim is a multitude of papers on Public Service Motivation, with empirical evidences of differentiation between public and private sector motivation, and which sometimes fail to convince. Formal theories about Public Service Motivation can be traced back to 1990, when Perry and Wise crystalized an ancient and widespread sentiment that civil service was not necessarily driven by self-interest into an alternative theory about public servants motivation: PSM. Subsequently, in an article dated from 1997, Perry studied the antecedents of PSM, by formulating a series of propositions in order to support his theory. A few years later, Perry (2000) refined this theory, proposing it as an alternative for existing motivational theories, and empirically demonstrating its explanatory power in the public sector by integrating the PSM concept into US national surveys that seemed to corroborate his hypothesis. Following that, a series of studies ensued, presenting results that reinforced the usefulness of PSM in more commitment from employees, whistleblowing behaviour, among others. Basic Public Service Motivation theories sustain that civil servants are intrinsically rather than extrinsically motivated, that is, more drawn to the characteristics of their tasks than to external factors, including financial rewards. But PSM is not a simple theory, as human motivation is a very complex phenomenon itself. And early on, the PSM method and measurement were put to the test by scholars such as Bradley E. Wright (2001), who by using an Occams razor approach to PSMs explanatory power, sought in other (perhaps simpler) motivational theories the answer for outcomes in public service. In the aftermath, although some of the theoretical aspects of PSM were deemed too complicated, Wright acknowledged that the PSM theory had its merits and added value to the motivational literature. Complicating this discussion is the fact that several authors have found that civil servants have security-minded personalities and are attracted by job security in public service. Considering that job security is in itself an extrinsic factor, it is hard to make up a coherent conclusion to this discussion. The fact is that job security is definitely an attractive feature of public service, and as Demmke (2005:71) writes: () job security is an essential motivational factor when applying and working in the public service. Basically, it remains an important factor in attracting and retaining staff. A third and final question in this matter is related to the issue of performance. Attacks on job security are partly based on suspicions that it may negatively affect performance, () 11
since employees do not fear dismissal or sanctions in the event of poor performance (Demmke, 2005:104). A study by Ichino and Riphan (2004) even found a correlation between job security and absenteeism in Italy, claiming that tenured employees would present significantly higher absenteeism compared to workers who do not enjoy a similar degree of job protection. And even a brief look into the OECDs (2010) numbers on absenteeism (Table 2) indicate that countries where job security is very limited, as Australia, Sweden, New Zealand and the Netherlands present considerably lower figures in comparison to countries where job security is still well preserved, as in the case of Germany, Belgium and France. As absenteeism is an indicator for worker effort and productivity (Ichino and Riphan, 2004:3), it certainly has an effect on performance.
Table 2 Average number of working days public employees are absent on sick leave per year (2009 or latest available year)
Source: OECD (2010)
In spite of these attacks, Demmke (2005:15) highlights that very few studies have actually been conducted in order to compare performance in public and private sectors, and that existing studies do not provide solid evidence that private organisations have better performance in comparison to public ones. In fact, Demmke (2005:15) writes, public organisations score better in regards to respect, non-discrimination, equality and dignity in the workplace (). Comparing performance in both sectors, is of course, quite challenging, considering the variety and specificity of government tasks, but existing studies encounter serious difficulties in proving that these problems exist (Demmke, 2005:100). But when performance is concerned, we come, once again, to the issue of motivation. Performance is closely related to motivation, and the latter has not yet been convincingly explained by a single theory. Existing theories are highly disputed, making it truly challenging to provide a satisfactory assessment of a direct link between the possibility of lay off and performance. Nonetheless, Demmke (2005:105) sheds some light on the issue, 12
by bringing evidence that fear of dismissal would not be a very good basis for motivation as positive incentives seem to be more effective in this purpose. Founded or not, notions that job stability are negatively connected to levels of performance have guided public service reforms that aimed to provide more flexibility to the employment relationship in public sector, rendering the possibilities of dismissal fairly easier as before. Flexibility, as Virtanen (2000:44) writes, is considered to be, in part, a means of increasing efficiency, reducing costs, obtaining value for money, raising the quality of service and bringing about a stronger customer orientation. It assumes, nonetheless, a view of public employees as essentially self-interested, and in a constant search for job security, higher rewards and advancement opportunities (Virtanen, 2000:44).
2.3. The civil servant status: a trend towards flexibility? To understand the claims that flexibility is a trend in public sector employment, one must first turn its attention to the concept of labour market flexibility itself. In this sense, authors Farnham and Horton (2000) explained that regulated labour markets are truly a novelty. Until much of the early 20 th century, labour markets were mostly unregulated and flexible. It was only after World War II that regulations regarding employment relationships were generally introduced in most European countries (Farnham and Horton, 2000:4). This was not different for European public sectors in general, where a special legal status was granted to public officials, and laws specifying work conditions were enacted. Contemporary to employment regulation was the rise of the welfare state in European societies. After the Second World War, several European countries took over an expanding welfare role, fed by rising public expenditure, increasing taxes and growing levels of public debt. This, of course, led to an increase in the number of public servants, in order to implement the vast range of social policies, and to execute ever-increasing tasks. According to Demmke (2005:4), public employment reached a peak in most European countries around the late 1970s and early 1980s. Nowadays, governments are much bigger than they were in past decades a study by the OECD (2011) shows that on average they account for over 45% of the GDP (4% more than before the 2008 economic crisis). A few decades later, with the advent of meagre growth rates and with the rise of the global competitiveness imperative, governments saw themselves obliged to adopt retrenchment policies and to decrease expenditure levels. In this environment, flexibility made its way back into political discourse (Farnham and Horton, 2000:18). Basically, labour market flexibility presented itself as a much required alternative to market rigidities that hindered growth and optimum employment rates, and it promised greater efficiency and competitiveness, guaranteeing spontaneous market adjustments to structural economic change (Farnham and Horton, 2000:7). The rationale behind flexibilisation implied that both governments and market suffered from the same malaises and should thus turn to flexible working conditions in order to improve performance, productivity and efficiency (Farnham and Horton, 2007:8, 17). In essence, pressures for flexibilisation, as put by 13
Bossaert (2005:9), were essentially tighter public finances, from one side, and the pursuit of greater efficiency and increased performance, from another. Amidst the human resources flexibilities debate, Atkinson (1984) famously proposed the flexible firm model, characterized by the segmentation of an organisation into a ()primary core workforce, conducting the organisations key activities, surrounded by a cluster of secondary, peripheral groups with a range of alternative contractual and working time arrangements (Farnham and Horton, 2000:8). From that came the notion of a core group with greater employment security, while nonetheless functionally flexible, followed by marginal groups that granted numerical flexibility. It was not long before reforms proposing more flexible working practices were proposed for the public sector, including fewer constraints in hiring and dismissing employees, greater mobility and others. Consequently, traditional civil service, seen as the prototype of bureaucratic rigidities, was to be the target of heavy criticism. In fact, civil servants have been criticized since they were first instated, as a few authors recall. Reputed lazy, self-interested and plainly inefficient, it seems that the old stereotypes about civil service could not be dissipated even after over 5,000 years of existence (Demmke, 2005:20; 47). In fact, these prejudices constitute a true myth in public imaginary (Emery and Giauque, 2005:686). There is, of course, a gap between the opinions of experts and public opinion. Demmke (2005:100), for instance, has provided evidence that the notion that public service suffers from excessive poor performers is unfounded. Not surprisingly, major criticisms are often associated with the said privileges of public employment, and above all with job security (Emery and Giauque, 2005:686). As Demmke (2005:4) noticed, job security and other advantages of civil service contributed to the attractiveness of public sector jobs, but did nothing to improve the image of civil servants. Although some authors have run to the defence of civil servants, and claimed negative popular views of bureaucracy were completely unjustified, the fact is that those critical voices have become more audible in recent decades, to the point that one could speak of a crisis of legitimacy of the civil servant status (Demmke, 2005:8). The civil servants image as a protected group, set apart from the outside world was sharpened within a matter of years (Demmke and Moilanen, 2012:50). As an answer to such legitimacy crisis, a series of on-going reform measures have brought change, deconstruction and decentralization of traditional civil service patterns. As Pollitt and Bouckaert (2011:95) point out, there is an unequivocal trend towards de- privilegisation and away from the original trusteeship that characterizes civil service. In this sense, the current global economic crisis has done anything but help. As Pollitt and Bouckaert (2011:89) write, it () ushered in hard times for many civil servants in many states. In recent years, civil servants in crisis-struck countries have had their salaries cut, frozen, have had their pension rights mitigated and have seen their numbers reduced by downsizing. With severe budget constraints and the perception of staff as cost factors according to data from the OECD (2011), public sector salaries account for on average 24% of government expenditures and 11% of the GDP - reforms have brought tough 14
times on civil service in many countries (Demmke and Moilanen, 2012:2). In summary, the pressures brought by the crisis put public finances under strain and public sector employment under scrutiny (OECD, 2011). Figure 1 presents an outlook of fiscal consolidation requirements in OECD countries, showing that reducing government expenditures is a concern even to countries with moderate sized governments.
Figure 1 Fiscal consolidation requirements are unrelated to the size of government
Source: OECD (2011).
With this, a few researchers have observed that the traditional concept of public service as a single, unified employer is vastly disappearing (Demmke, 2005; Pollitt and Bouckaert, 2011). Some have claimed that clear distinctions between public and private sector tasks no longer exist (Demmke, 2005:6). What empirical research actually demonstrates is basically a difficulty in defining civil service today, due to the variety of employment conditions in OECD countries public sectors. Demmke (2005), for instance, notes that many times, it is possible to observe differences in status for a same profession in a given country, as is the case with teachers in Germany, where while some are civil servants (Beamte), others are merely public employees or workers (Angestellte or Arbeiter) that lack tenure and other specific statutory benefits granted to their peers. Situations such as these have led many to question the legitimacy of a public servants special status. As it seems, the distinction between public and private sector employment (whether they are actually that different from one another) is at the heart of this debate. In a report by the OECD (2005:159), researchers claimed that while wider governance values justified distinctiveness in civil service in the past, many areas of public employment have lost their uniqueness and have thus become quite similar to private sectors general employment. As Demmke (2005:4) writes, it is less and less clear why civil servants occupying positions in fields such as education, research and social security need to be treated different than those workers in the private sector. 15
In the same trail of thought, Farnham and Horton (2000:5) write that as the public sector expanded and employment increased, different employment statuses were created, some of which were not regulated by public law but by civil law, as in the private sector. The differentiation of employment regimes within public sectors meant that the boundaries of specific civil service tasks became increasingly blurry. There are several arguments in favour of and against alleged differences between public and private sector employment, and they are mostly related to the controversy of whether public and private sector organisations are more different than alike. Emery and Giauque (2005:689-691), for instance, advocate for the existence of such differences. According to these authors, the content and meaning of public employment is the basis for differentiation of public sector employment and the grounds for its specificities. Their basic argument is that, due to its specific tasks, environment, and purpose, the public sector cannot be managed in the same manner as the private sector. Their argument is a valid one. One does not have to look very far to find evidence that the public sector is run by a different, political logic. Some services, as argued by the authors, may not be profitable, or even cost-effective, but they simply cannot be abandoned, or at least in the short run, since public policies must be in principle accessible to all in an equitable manner. This is the case of a hospital or a school in a small municipality, for example. Furthermore, many of civil services tasks cannot be submitted to competitive forces, as they constitute prerogatives of state, and such is the case of tax collection, police and justice (Emery and Giauque, 2005:691). Of course, there is great difference even between public organisations, as Demmke (2005:9) highlights, () a ministry works in a totally different work climate and under different parameters than a police station, a judicial court, an inspection body or a local authority. Another argument raised by the authors relates to their claim of the existence of a specific public service ethos. According to them, strong values linked to the common interest would form the core of public servants professional identities, differentiating them from private sector employees (Emery and Giauque, 2005:692). This specific ethos, with clear and distinctive ethical obligations of civil servants, was thought to be of utmost importance to ensure that public service would not be an instrument for the political elite (Demmke, 2005:55). Such claim is nonetheless contested by Demmke (2005:9), who questions the alleged disparities in work ethos and work motivation in the public and private sectors, arguing that there are more similarities than differences between them, although admitting to the existence of differences. As far as the differences are concerned, Demmke (2005) mentions specifically those connected to accountability; the fact that public service is aimed at public interest and not primarily at financial gain; the greater submission to legal and political constraints; the greater possibility of direction and intervention from political actors and authorities; and the distinctive internal and external pressures, such as the political situation, new legal developments and stakeholder pressure. He also acknowledges distinctions in time perspective, public scrutiny, the role of press and media, and the legislative and judicial impacts (Demmke, 2005:12-18). 16
Nevertheless, the author believes that boundaries between public and private organisations are becoming less and less defined, following that it has become more difficult to defend differences in organisational structures. He writes that () for a considerable time, organisational structures were very different in the public sector, and the need for specific civil service was undisputed. Demmke (2005) cites authors such as Max Weber and Herbert Simon as advocates of this point of view. According to him, these authors have often stressed the commonalities among organisations and have suggested that public agencies and private firms are more alike than different (Demmke, 2005:9). Present conditions have seen an erosion of these differences, especially due to a change in principles, and to a lesser extent, in values (Demmke, 2005:45). This change of principles and valuation will be the object of our analysis in the following section. Our claim is that the main force behind this paradigm shift is NPM ideology.
2.4. NPM-driven reforms In their seminal book, Pollitt and Bouckaert (2011) identify different waves of public management reform. The first wave, tracing back to the late 1960s and 1970s, was characterized by a modernist optimism that focused on planning and rational strategic policy-making as the solutions for a more efficient public administration. A somewhat disillusioned second wave followed in the 1980s, as a result of the global economic downturns of the late 1970s. The basic doctrine behind it was that governments had become overloaded and that Western welfare states had become unaffordable, ineffective, and overly constraining on employers and citizens alike (Pollitt and Bouckaert, 2011:6). This second wave of reform became widely known as New Public Management (NPM), and it was felt throughout many OECD countries. Despite claims that directions of reform are incoherent, authors Pollitt and Bouckaert (2011) aggregate it as a two-level phenomenon. According to them, NPM is, at the higher level a general theory of doctrine that the public sector can be improved by the importation of business concepts, techniques and values, while at the lower level, it is a bundle of specific concepts and practices, characterizing the loose and multifaceted nature of NPM (Boston, 2011:17). Within NPM thinking are a greater emphasis on performance; the measurement of outputs; the substitution of hierarchical structures by contracts; the introduction of market-inspired mechanisms such as performance-related pay and competitive tendering; the change from the user paradigm to a customer of public services approach, among others (Pollitt and Bouckaert, 2011:10). In terms of its ideological sources, Bach and Bordogna (2011) write that NPM is based on public choice theory, principal-agency theory and transaction cost economics, which share an assumption that all individuals are self-interested and seek to maximize their own utility (Bach and Bordogna, 2011:2282). According to the authors, four basic policy components can be identified in the NPM orthodoxy: first, a redrawing of efficient boundaries of the public sector, marked by privatization and outsourcing of services; second, a structural reorganisation aimed at shifting internal governance from bureaucratic and hierarchical to 17
market-type mechanisms, in which the creation of agencies managed by contract-based forms or regulation are one of the highlighted features; third, a set of measures aimed to empower public managers through managerial techniques and practices from the private sector; and fourth, measures that sought to reform regulation of the employment relationship (Bach and Bordogna, 2011:2284). The latter will be the object of more detained analysis for the purpose of the present research. New Public Management found the reasons for slowness and inflexibility in the law- governed nature of bureaucracy, and its structure was deemed responsible for the alleged poor performance levels (Demmke, 2005:44). Indeed, it can be said that great part of the slowness in public organisations is due to the fact that they function under specific procedures that aim to produce accountability in terms of budget, fairness (as is the case of competitive tendering) and due process (Demmke, 2005:23). Bureaucracies, writes Demmke (2005:24), will never be able to compete with private-sector companies in terms of flexibility, because they are designed as a guarantee for legal certainty, standardised treatment and correctness. Centralisation, hierarchy and rigidity were now seen as supporting organisational and individual poor performance (Demmke, 2005:10). In terms of human resources, NPM doctrine sustained that traditional bureaucratic structures produced a bureaucratic personality (Demmke, 2005:46-47). It sought inspiration in the private sector for new tools, instruments and methods in human resources management and organisational restructuring (Bossaert, 2005:4). Simply put, traditional principles of personnel administration are no longer seen as sufficient incentives for a civil service that places stronger emphasis on individual and organisational performance (Bossaert, 2005:10). According to Emery and Giauque (2005:681), public sector employment has been transformed by pressures exerted by NPM in almost all OECD countries, and transformations have had a qualitative and a quantitative effect (Emery and Giauque, 2005:684). The first effect can be summarised by the assertive that public and private sector employment conditions are aligning, in a process of so-called normalisation. This means that an increasing percentage of civil-law regulated employees can be observed in many countries, and that changes have been made in the content of statutes, which are now more aligned with private sector conditions (Emery and Giauque, 2005:685). The second effect is translated in the decrease of civil servants numbers in most OECD countries, which has ranged between 1 and 4% between 1990 and 2001 (Emery and Giauque, 2005:681; 684). Figure 2 shows that decrease in public employment is expected in 26 of OECDs countries in over 50% of agencies and ministries.
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Figure 2 Anticipated changes in employment levels in more than 50% of agencies and ministries (2010)
Source: OECD (2010).
Similarly, Bossaert (2005) identifies specific trends in human resources management, among which are a greater flexibilisation of personnel management and the reduction or even straightforward abolishment of a separate legal status of civil servants overall less job guarantee, planned paths and job security (Bossaert, 2005:11). Another common development identified by the author is the introduction of instruments such as evaluations which render possible the termination of civil servants employment on the grounds of poor performance (Bossaert, 2005:19-22), evidencing a shift to enhanced and individualised accountability (OECD, 2005:158). Finally, mobility is identified as a major trend in reforms as a means to prevent loss of motivation by staff who stay too long in the same position (Bossaert, 2005:37). Again, this normalisation process is driven by the alleged superiority of private sector employment conditions over public sector ones, as NPMs philosophy is based upon the belief in supremacy of market mechanisms, and in competition and self-interest as the drivers of work motivation (Emery and Giauque, 2005:689). As Bach and Bordogna (2011) write, NPM sought to dissolve these differences and could be expected to challenge many features of public service employment relations (Bach and Bordogna, 2011:2285). In this context, the authors anticipated a double process of convergence in the reform agenda, the first being between public and private sector employment relations within each country, and the second consisting of convergence in the public sectors of different countries, but in reality they verified that nave expectations of convergence have not been confirmed (Bach and Bordogna, 2011:2282). In terms of reform implementation, we come before a widely heterogeneous scenario. A report by the OECD (2005) tells us that arrangements produced radically different results, because of variations in national context, institutional and constitutional arrangements, culture, leadership and management (OECD, 2005:160). Emery and Giauque (2005:686) and Bossaert (2005:4) also attribute the differences in developments to political- 19
administrative culture, claiming that reforms had a deeper penetration in countries where the philosophy of NPM found a related public sector culture, while this was much weaker in those places where it was less compatible. In chapter 2, we shall further analyse the differences in reform implementation as well as possible explanations for this phenomenon. The fact is that the authors generally point towards a trend of normalisation in OECD countries, consisting of a shift in the direction of more flexible private law contracts with less job security and away from traditional public law statutory civil service (Bossaert, 2005:7). However, alignment faces problems linked to the irreducible specificity of public service tasks, as researchers verify that public and private sector do not resemble one another as much as anticipated, despite claims that the challenges faced by both sectors are more or less similar (Bossaert, 2005:9). The result of this process, it seems, is the emergence of a great deal of confusion and paradoxes (Emery and Giauque, 2005:689).
2.5. A new ideal-type: post-civil service Changes in civil service brought by NPM-inspired reform have been so drastic that some authors, such as Emery and Wyser (2005:2) have announced the rise of a new ideal type one might call post-civil service (Emery and Giauque, 2005, cited by Emery and Wyser, 2005:2; Schedler and Proeller, 2000). But are we in fact entering a post-civil service era? In chapter 2, we shall analyse empirical data that should confirm or reject this hypothesis. For now, it is important to discuss the new dilemmas, trade-offs and paradoxes that may arise in introducing flexibilities in human resources management. For once, an interesting aspect is that of civil servants psychological contracts. According to Emery and Wyser (2005:4), () similar to the legal contract, the psychological contract consists of a certain number of expectations, often implicit but fundamental in the reciprocal commitment of the parties to the negotiations, which the employee develops towards his employer and vice-versa. Generally speaking, a psychological contract is the outcome of a more or less consensual agreement, although informal, unwritten and open to interpretation. From the psychological contract arise a series of expectations from both parties, which will be evaluated according to experiences in the employment relationship (Emery and Wyser, 2005:4). In this psychological contract, the obligations are not defined by the organisation, but subjectively by the individual, who observes the organisations actions and interprets them unilaterally (Lemire, 2005:6). A breach of the psychological contract, as write Emery and Wyser (2005), can happen when one party believes that their expectations have only been partly, or not at all met by the other party (Emery and Wyser, 2005:4). What scholars have recently claimed is that the psychological contract as we knew it has been significantly transformed in past years (Sharpe, 2003, cited by Lemire, 2005:4). Lemire (2005) tells us that until the 1990s, stability reigned in most hierarchically organized and 20
bureaucratic organisations, and employees were assured a permanent job in return for their loyalty, their commitment to work and reasonable levels of performance. Furthermore, employees could count on job security, career progressions and raises in salary from time to time. In summary, the old psychological contract was pretty clear:
en change de sa pleine et entire participation au meilleur fonctionnement de lorganisation, celle-ci offre lindividu la possibilit dy construire progressivement lensemble de sa carrire, le travail satisfaisant ou suprieur entranant ponctuellement des promotions auxquelles se conjuguent de nouveaux dfis et de nouvelles responsabilits (Capelli, 1999; Lemire et al., 2003; Sims, 1994). (Lemire, 2005:4).
From that it follows that the new rules governing employment in public and private sectors have brought an abrupt shift of the previous conditions toward more precarious work relationships, altering psychological contracts as well. Ethical issues can also arise. So far, researchers have not been able to determine whether the special status of civil servants and job security in particular, are strongly related to loyalty, neutrality and impartiality, meaning that losing the first could seriously compromise the latter. Demmke (2005) does not seem to believe so. In his empirical research, he found that in states where the civil servant status had been abolished, this had no impact on loyalty (Demmke, 2005:36). Disagreeing to his position are Emery and Giauque (2005), who believe that the public ethos is in striking contrast with neo-liberal philosophy, producing contradictions and conflicts of interest (Emery and Giauque, 2005:690). The normalization of working conditions would thus bring ethical, philosophical and political problems, and the introduction of market values would contribute to a complete redefinition of public servants identities. To the authors, public service values are simply not compatible with the new ideology. This is also the view of authors Emery and Wyser (2005:9-12), who predict reform outcomes to be: a broken future; the loss of a frame of reference; chaotic organisational principles; short-term activism that prevents all planning, excellence of management becoming an end in itself; a disrupted control system; a disputed system of recognition, among others. They also point to a survivors syndrome in countries where severe downsizing has occurred, and where staff must do more with less (Emery and Wyser, 2005:3). The arising of new dilemmas was also brought up by Demmke (2005:10), who writes that if a public organisation were to function like a company, the principles of democracy, legality, equality, fairness and non-discrimination would suffer and other values would become important. On the other hand, private organisations do have a moral dimension, and () business ethics and public sector ethics share at least some basic values and 21
norms (Van den Heuvel et al., 2002, cited by Demmke, 2005:50). This is also Virtanens (2000) view, according to whom:
Paradoxically, emphasis on motivation based on self-interest may open ways to intentions and behaviours that are in contradiction with many values of the public service ethos which is still supported throughout the public services. It is clear that the new entrepreneurial culture engendered by NPM can encourage unethical behaviour. (Virtanen, 2000:44)
As appealing as the concept of flexibility may be, it may also bring uncertainties. Eliminating traditional career systems would mean that recognition could be inequitable or simply lacking (Emery and Wyser, 2005:14). The new system could possibly produce much dreaded patronage and political favouritism. When impacts are concerned, there is a thick layer of scepticism surrounding reforms. Empirical data shows that above all, there are several uncertainties and inconsistencies, and that less bureaucratic structures are not necessarily more efficient (Demmke, 2005:25; Demmke and Moilanen, 2012:41). Concerning impacts on performance, as mentioned, it is difficult to ignore the problems with the proposition that a threat of dismissal would constitute a good way to ensure higher performance (Demmke, 2005:105), and it needs further investigation by research. This is also the position of Bossaert (2005), who claims reduction of employment security is not an efficient instrument for increasing performance in the great majority of civil services. What cannot be denied is the fact that the attractiveness of the public sector as an employer may be severely jeopardised after reforms (Demmke, 2005:22). For all we know, job security is still a great selling point of public sector employment (especially in times of economic uncertainty) and a very important extrinsic factor of motivation (Demmke, 2005:64). Other possible consequences raised by Bossaert (2005) are uncertain salary and career development, excessive turnover, lack of organisational continuity, and a threat to traditional civil service values (Bossaert, 2005:33). According to Virtanen (2000), this uncertainty appears to be affecting public servants commitment to work and public service in general. The author writes that although the salaries of higher public servants have not been competitive in western countries for several decades, compared to salaries in the private sector, public servants drew part of their motivation from the security related to their careers, as well as morally and politically challenging work. (Virtanen, 2000:42-43). As a result, when the flexibility mechanisms of new HRM make work resemble more the work done in the private sector without similar prospects in terms of salary improvement, commitment may weaken. (Virtanen, 2000:43). Loss of commitment, Virtanen (2000:43) writes, could produce negative outcomes such as a reduced quality of public services, a reduced attractiveness of public service to the most able members of society, and even a reduced performance, which is clearly a contraction if we consider that to enhance 22
performance was a huge driver behind reforms in the first place. Nonetheless, empirical data confirming those suspicions is still very scarce. As for the question of whether government and business values are contradictory, there does not seem to be a convincing answer at hand either, due to lack of empirical evidence to validate any of the hypotheses. Demmke (2005:50) writes that if they are in fact similar, intermingling would not pose a threat, as interaction would not lead to a loss of integrity. But evidence to contradictory effects (for instance in declining morale and work satisfaction) does exist, and cannot be denied (Demmke, 2005:98). What is certain is that many reforms have produced new problems, while not necessarily solving old ones (Demmke, 2005:56). Demmke and Moilanen (2012) also warn that too much flexibility and decentralization may be detrimental, and unlimited mobility of officials may have negative effects in building competence, mutual trust and long-term commitment (Demmke and Moilanen, 2012:6-7). In other words, there is a need to find the right mix. Finally, the OECD (2005) provides very sound advice, when stating that () if countries look to the private sector for models in modernising public employment they must not forget that the fundamental purpose of the public service is government, not management (OECD, 2005:160). It is easy to get lost in the means and to throw out the baby with the bath water when it comes to human resources management reforms. And at least for the moment, there has been more rhetoric than results (Farnham and Horton, 2000).
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3. Public service job security in OECD countries: an outlook 3.1. Public service in OECD: a heterogeneous mix of countries Traditionally, greater job security was granted in public employment rather than in the private sector. In fact, according to the OECD (2005), guaranteed life-long employment used to be the norm in OECD countries public sectors. But is this still the case? The present chapter aims to investigate changes related to job security that have occurred in the past decades in OECD countries public employment. Of course, one has to acknowledge the incredible diversity between the different OECD countries, given that they did not share the same conditions prior to the changes brought by reforms, and, as we shall see later in this chapter, neither did they converge into a single model, especially in regards to job security. An interesting feature for the purpose of this analysis is the share of public employment as a percentage of the general labour force. As can be seen in Figure 2, the average employment in general government for the OECD is a little below 15% of the labour force, but with considerable differences within OECD. While countries such as Switzerland have public employment figures slightly over 5% of the labour force, almost a third of Swedens workforce is employed in its enlarged public sector.
Figure 2 Employment in general government as a percentage of the labour force (1995 and 2005)
Source: OECD/CEPD and Labour Force Survey (2006).
It can also be inferred from Figure 2 that public employment has generally dropped in comparison to the general labour force in OECD countries from 1995 to 2005, although at different paces. As Pollitt and Bouckaert (2011) write, different countries entered the 1980s with contrasting legal and cultural assumptions about the nature of public service () yet despite differences of starting line, most countries suffered similar pressures, and 24
were obliged to find some response (Pollitt and Bouckaert, 2011:88). The fall in public employment can be attributed to some extent to the mentioned pressures, resulting in a series of measures (including downsizing) in an attempt to tackle issues of budgetary constraints and flexibility in human resources management. The countries structure of public employment is also quite different, as can be seen in Figure 3. Whereas in countries with a unitary structure, such as New Zealand, government employment at the central level reaches figures close to 90%, Switzerland, with its fragmented federalism, has less than 10% of its public sector workforce employed by the central government.
Figure 3 Distribution of general government employment between the central and sub- central levels
Source: OECD (2011).
As for the size of the public sector, figures for the general government expenditures as a percentage of the GDP also indicate differences, with considerably smaller public sectors in Australia, New Zealand and Switzerland, as presented by Figure 4.
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Figure 4 - General government expenditures as a percentage of GDP (2009) in selected European countries
Source: OECD National Accounts Statistics (2011). Data for the other major economies (excluding Russian Federation) are from the IMF Economic Outlook (April 2011).
The differences within the structure of public service itself are even sharper. By assessing the situation in European Union member countries, studies by Bossaert (2005), Demmke (2005), and Demmke and Moilanen (2012) paint a very interesting picture of European public service. For instance, in the United Kingdom, Slovenia and Finland there is no entitlement to life-long employment in civil service whatsoever. In Sweden, less than 1% of the public sector workforce enjoys life tenure, mostly restricted to judges. The same is true for the Netherlands and Denmark. Furthermore, in virtually all European Union member countries there are differences among workers in the public sector translating into different status and employment regulation. This means that not all public employees are civil servants under a public law status, but many are under ordinary labour law regulation as contractual staff. In fact, there is great diversity in the contractual forms in the public sector, those being unlimited, fixed- term, ad-hoc or even seasonal contracts, not to mention discretionary political appointments. Lifetime tenure is a privilege extended only to statutory civil servants, though, at least formally speaking. In OECD countries, there are marked differences in terms of the percentage of civil servants. Some states employ only a small percentage of their public employees as civil servants, while other states have almost exclusively civil servants in their national public services. Figure 5 below presents the percentage of statutory civil servants with entitlement to lifetime tenure in European states. When differences between employment conditions of civil servants and other public employees are concerned, the table below (Table 3), elaborated by Demmke (2012), provides an interesting outlook on European public service. 35,30 54,22 56,25 55,99 47,50 50,86 51,87 51,40 41,91 46,24 55,16 33,74 51,64 42,18 38,76 0 10 20 30 40 50 60 A u s t r a l i a B e l g i u m F i n l a n d F r a n c e G e r m a n y I c e l a n d I t a l y N e t h e r l a n d s N e w
Z e a l a n d O E C D 3 2 S w e d e n S w i t z e r l a n d U n i t e d
K i n g d o m U n i t e d
S t a t e s B r a z i l % 26
Figure 5 - Percentage of statutory civil servants with life-long employment in selected European countries
Source: Bossaert (2005).
Table 3 - Main differences between civil servants and other public employees by issue and Member State (1 = different, 2 = similar)
At one of the extremes, German civil servants work conditions completely differ from those of contractual peers; at the other extreme, British civil servants work conditions are no different than those of British public employees. It seems quite curious, though, that there should even be a distinctive civil service status in that case. On the same direction, the possibilities of dismissal of civil servants can vary considerably in European countries. Termination for economic or structural reasons, for instance, is possible in Sweden, Finland, the Netherlands, the UK, Denmark and Estonia, where civil servants do not have security of tenure. On the other hand, civil servants cannot be dismissed due to economic or structural reasons in countries such as Germany, France, Spain, Greece, Ireland and Luxembourg, where security of tenure is alive and well (Bossaert, 2005:24). As for dismissal in the event of poor performance, many countries have adjusted regulations in order to allow it in this case (as is the case of France, Belgium and Greece), but in several countries (including Germany, Spain, Ireland and Luxembourg) dismissal is done solely according to disciplinary regulation, meaning that only acts such as severe misconduct are acceptable as grounds for termination, whereas in countries with no life tenure dismissal in case of poor performance is quite similar to what is practiced in the private sector (Bossaert, 2005:22). The table below provides an interesting summary for the employment status in selected OECD countries, including differences in status between public and private sector employees, levels of job security and type of employment, proving that conditions are indeed very diverse depending on the country.
Table 4 Comparative Analysis on Employment Status Issues Criteria Countries Legal status on employment (different rules in public and private sector) Yes Australian, Canada, Finland, France, Hungary, Japan, Norway, Netherlands, Poland, Switzerland, United States No New Zealand Job security (compared with private sector) Dismissal difficult but possible France, Japan, Poland Dismissal possible under certain conditions Canada, Finland, Hungary, Norway, Netherlands, United States Similar line with private sector practices Australia, New Zealand, Switzerland 28
Type of Employment Job for life, fixed term France, Japan, Poland Permanent, fixed term Australia, Canada, Finland, Hungary, New Zealand, Norway, Netherlands, United States Fixed term Switzerland Source: based on OECD (2001). Finally, Demmke and Moilanen (2012) elaborated a continuum of traditional bureaucracy versus post-bureaucracy, ranking European countries according to a set of indicators, including legal status, career structure, recruitment, salary, and tenure systems.
Figure 6 Traditional bureaucracy: post-bureaucracy continuum score for selected EU states (0= traditional bureaucracy; 100= post-bureaucracy)
Source: Demmke and Moilanen (2012), p.41.
The authors thus deem Scandinavian countries and the UK as the ones closest to a post- bureaucracy type, while countries where traditional civil service features are still strong are classified as being closest to the traditional bureaucracy type. Our next step is precisely to identify the trends and reforms that lead to such differences in the public servant status in OECD.
0 10 20 30 40 50 60 70 80 90 29
3.2. Reforms in public service status in OECD countries In the first part of this research, we saw that a series of reforms have swept over OECD countries in the past decades, in order to achieve two goals: to make public administrations more effective and efficient for service delivery, and to contribute to fiscal consolidation plans through the reduction of operational expenditure (OECD, 2011:36). We also saw that the inspiration for many of the changes concerning human resources management in public sectors came from the belief in the superiority of private sector practices. As Farnham and Horton (2000) wrote, there was a () wide-spread acceptance by many political authorities that private-sector management practices are good and efficient, while public service ones are bad and inneficient and that traditional bureaucratic systems of public administration should move closer to the private management model (Farnham and Horton, 1996b, cited by Farham and Horton, 2000:19-20). Reducing public service job security and introducing a range of labour flexibilities was part of the New Public Management proposition for a more efficient and responsive public sector (Virtanen, 2000). As Ridley (2000:31) writes, () flexibility involves dismantling barriers, in law and practice, allowing managers greater freedom in posting and above all opening career choices for staff. Inherent to the NPM managerial discourse, flexibility is all about empowering managers: () the debate about flexibility has largely focused on ways in which organisational structures, work processes and employment practices can enable managers to increase their own control over human resources in the workplace (Ridley, 2000:33). To Pollitt and Bouckaert (2011:91), the directions of change () were to make careers less secure and to encourage larger inflows and outflows of staff so that a smaller and smaller proportion of civil servants were lifers (). This type of normalization, however, has not been followed by all countries, as the authors indicate, as countries such as France, Germany and Belgium remain resistant to those tendencies, with civil servants still being a distinct category legally, culturally and politically (Pollitt and Bouckaert, 2011:94). Furthermore, we mentioned in Chapter 2 that NPM-inspired reforms have produced quantitative as well as qualitative effects. As to the first, empirical evidence indicates that, in most OECD countries, there is a clear trend toward reducing public employment. Table 5 shows, for instance, the share of public employment over the labour force of several OECD countries, most of which presented considerable reductions in a ten-year period. Of course, the reduced shares of public sector employment in the general employment could also mean the growth of private sector employment, which is the case for a few countries, but Table 6 confirms that, in fact, there have been active government efforts in order to reduce staff numbers in many OECD countries. More than 5% decrease in public employment has been observed for instance in Australia, Germany, Finland, New Zealand and Sweden.
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Table 5 Share of the public employment over the labour force (%)
Source: OECD (2002).
Table 6 Evolution of total public employment from 1990/91 to 2000/01
Source: OECD (2002).
Thus, as far as the quantitative dimension is concerned, the trend is confirmed by the OECD (2002; 2005) and by Farnham and Horton (2000:19), who observe that () throughout western Europe and the US, the size of the public sector workforce has tended to fall during the last 20 years, although the decline varies widely. This numerical reduction has been achieved through a series of measures, including privatization, contracting out, and non-replacement of staff on retirement or exit and greater numerical flexibility, as the authors write. Interesting, though, is the fact that Demmke and Moilanen (2012) found that the group of workers suffering the most reductions is that of civil servants. On the other hand, the percentage of labour law employees in public sectors is 31
rising, at least in European countries. Civil servants positions are being reserved for core areas, according to the researchers, resulting that generally, the civil servant status is becoming more and more restricted. As to the qualitative dimension, Bossaert (2005:33) points to the growing significance of fixed-term contracts. A major difference being that temporary staff is not only restricted to less qualified work in the public sector, but consists today also of qualified professionals for expert advice. Demmke and Moilanen (2012) point to the fact that as many employees take tasks that traditionally were related to civil servants exercise of public power, and as this concept becomes very difficult to define, questions arise about the legitimacy of the civil servant status and the fairness of treatment. Examples of qualitative changes in civil service brought by reforms are abundant. Table 7 provides a summary of reform initiatives undertaken in OECD in the past decades as well as the current developments in civil service status.
Table 7 Reforms and current development of civil service status in selected OECD countries Country Reform initiatives Current development of civil service status A U S T R A L I A
- 1983 Amendment of the Public Service Act; - 1987, 1993, 1995 Guidelines or Official Conduct of Commonwealth Public Servants; - 1990 Guidelines on Appraisal of Performance of Senior Executive Service; - 1999 Public Service Act. - The ratio between ongoing and non- ongoing employees is more or less the same since 1996. Neither ongoing nor non-ongoing employees are guaranteed life-long employment. Ongoing employees may be retrenched if they are not needed following a change in workplace needs. N E W
Z E A L A N D
- 1988 State Sector Act; - 1989 Public Finance Act; - 1991 Employment Contracts Act. - By 2005, 93% of staff were on open-term contracts, and 7% on fixed-term contracts. - All members of the Senior Executive Service have to reapply for their own jobs after five years (except for the heads of ministries) and are bound by performance-related contracts. 32
U K
- 1992 Civil Service (Management Functions) Act; - 1993 Civil Service Management Code; - White Papers The Civil Service: Continuity and Change (1994) and The Civil Service; Taking Forward Continuity and Change (1995). - The civil service makes use of both fixed- term and casual appointments alongside its permanent staff in order to give managers flexibility to meet genuine short-term needs sensibly and economically. - In the central public administration there is no right for lifelong employment. U S A
- 1978 Civil Service Reform Act (including the creation of a senior Executive Service); - 1994 Federal Personnel Manual abandoned; - 1994 Federal Workforce Restructuring Act; - After 2001 President G. W. Bush introduced new private sector forms of employment for staff in the Departments of Homeland Security and Defence. - American civil service is still a mix of highly professionalised and depoliticised civil service at its lowest levels, and highly politicised and rather volatile officials at the top, characterising its typical spoils system. I T A L Y
- Reforms of public employment law in 1993 and 1997; - 1998 decree allows political bodies to make top official appointments; - 2009 tightening of rules to enforce annual performance rankings. - The reforms from 1993 contractualised the basis of most civil servants employment, meaning that staff would from then on be governed by private labour laws. - Some categories of professionals remain however under a public law status and were excluded from the privatization process (e.g. judges, state advocates, military personnel, police officials, diplomats, prefects and to some extent professors and researchers). 33
F R A N C E
- Basic general public service statute revised in 1983, but not in an NPM-inspired direction; - 1989 Prime Ministerial circular on public service renewal included some personnel reforms; - Mid-1990s proposed personnel reforms helped provoke extensive public sector strikes; - In 2007 a series of reforms were launched by President Sarkozy, designed to ensure, inter alia, that only 50% of those civil servants who were retiring would be replaced. - Modernisation of French public service is not like that carried out in other countries. Not much change has taken place, and in some degree rights related to the civil service status have been extended to contractual staff, since contractual staff is even subjected to the framework of administrative law. B E L G I U M
- 1994 new civil service statute; - 1997 introduction of a personnel appraisal system; - 2000 Copernicus reform plan includes many aspects of personnel management. - Steps were taken to reduce difference between public sector and private sector employment, but to limited extent. - Six-year mandate system for managers (Director General, and two levels below) was implemented. G E R M A N Y
- 1989 law amending working provisions for civil servants; - 1994 Public Service Reform Act introduces possibility of working part-time; - 1996 amendments to the law relating to federal civil servants. - Administrative reforms in the early 1990s were driven by fiscal deficits due to the reunification and its consequent need to make savings through downsizing, but reforms so far have proven to be rather soft when it comes to personnel management. - Despite attempts to increase flexibility in personnel management practices, the German system is still relatively rigid compared to other countries, and the prospects of fundamental changes in the German public service are rather limited due to constitutional characteristics. - The traditional dual employment structure of German public service remains in place, with civil servants (Beamte) under public law and public employees (Angestellte) and public workers (Arbeiter) subject to private sector law and public sector industrial relations. 34
S W I T Z E R L A N D
- 2000 Federal Personnel Act enters in force in 2002; - 2012 Amendment to the Federal Personnel Act is proposed.
- As from January 2002, there are no more civil servants. Federal Personnel Act was accepted by popular vote on 2000 and entered into force in January 1 st 2002, bringing more flexibility with 5-year maximum fixed-term contracts as well as indefinite term contracts. Reforms brought work conditions in the public sector close to those in the private sector. All federal staff has employee status with the exception of a small category of personnel such as members of federal appeals commissions. - An amendment to the Federal Personnel Act was accepted by the Parliament on December 2012, proposing more flexibilities in dismissing employees and more harmonization with ordinary civil law. T H E
N E T H E R L A N D S
- 1992 privatization of the general pension fund for public employees; - 1993 delegation of detailed negotiations on labour conditions from ministry of Home Affairs to eight sectors (state, judiciary, municipalities, etc.); - 1998 extension of Senior Public Service terms to all 1,500 top management positions. - 1998 publication of an Advice Relating to Civil Service Status report, recommending further normalisation in the civil service. - In the Netherlands major social services were traditionally provided not directly by the government, but by not-for-profit organisations funded by the government, due to the countrys pillared society. - In the central public administration there is no right for lifelong employment, civil servants being dismissible in case of redundancy. - In the early 1990s steps were taken to normalise the status of government employees. - The Netherlands has civil service laws and civil servants are employed on a basis of unilateral appointment. However, labour relations are highly normalised, meaning public employment has as much conformity with the applicable market regulations as possible. - A unified civil service no longer exists, following a decision in 1999 to divide the public sector into 12 sectors. 35
F I N L A N D
- 1994 State Civil Servants Act confirmed civil servant status as the primary form of employment in state administration but also aimed at converging conditions of service between civil servants and contracted employees; - 2005 pensions for state employees brought closer to system for private sector pensions. - In jobs of permanent nature, permanent contracts/employment relationships are used, but there is no tenure, i.e. there is always a possibility to give notice if there are legal grounds (such as economic and productive reasons). There is also a possibility to use fixed-term contracts if needed on operational grounds. - In the central public administration there is no right for lifelong employment. - Only a few differences remain between civil servants and contracted employees, related to appointment procedures, official appointment and promotion criteria, the legal versus the contractual base of task definition, legal responsibilities and possibilities for employment continuation. S W E D E N
- 1990 modification of Public Employment Act; - Public sector pensions made more like private sector pensions. - Traditional bureaucracy system prevailed until the mid-1960s (with tenure being constitutionally guaranteed until 1965), after which it has been transformed into a flexible post-bureaucratic structure. - With the exception of very few positions (such as judges), all lifelong employment in the Swedish Government administration has been replaced by employment on a permanent contract basis. This means that government employees are under the same legislation for employment protection as any employee in Sweden. - More than 95% of government staff is employed under a permanent contract basis. Source: based on Pollitt and Bouckaert (2011), pp.88-95, OECD (2005), Burnham (2000), Murray (2000), Ridley (2000), Rber and Lffler (2000), Demmke and Moilanen (2012) and data from the Swiss Confederations official website.
Looking into the table, two groups are clearly distinguishable. The first one is that in which public service conditions have been normalized to such an extent that they have become quite similar to those of private employment. The other group consists of countries which have proposed modernisation in public service, although to very different extents, and never completely aligning with the severity of measures proposed by the first group. 36
Generally speaking, when it comes to civil service reform in OECD, we are in agreement with Pollitt and Bouckaert (2011:95), who argue that there is a strong, dominant (although not universal) trend towards de-privilegisation and away from trusteeship. Of course, as the authors highlight, in virtually every system, a few groups are exceptions to the trends as is the case with judges, prosecutors and diplomats, who have not been affected in their status in several countries. In the following sections, we shall identify this trend more carefully, in an effort to identify a clear pattern, and in doing so, we shall investigate reforming countries in the OECD that best embody the different groups of reform mentioned above.
3.3. Analysis of the different reform trajectories In table 7, we could see a small sample of the different scope and depth of reforms in OECD countries, specifically in the realm of public service, but the differences are also quite remarkable for administrative reform as a whole, as argued by Pollitt and Bouckaert (2011) in their seminal book Public Management Reform. In it, the authors provide a thorough assessment of the different reform approaches and outcomes in several countries and try to find an identifiable pattern for administrative reforms. Farnham and Horton (2000:17) agree to this approach when writing that throughout the public services in all OECD countries, the full range of flexibilities () are in evidence, although there are differences reflecting the varying types of political system and the varied contingencies of public organisations, leading to different civil service structures. To the authors, a series of variables would explain distinctions in reform trends and style in different countries, such as culture, political institutions, legal framework, public service traditions and managerial structures and style. In essence, the different features of a countrys politico-administrative regime would definitely account for a great part of the differences in public sector reform. In order to assess these differences, we shall first proceed to an analysis of public management reforms in general, to then specifically study reforms in personnel management, and finally, to reforms in job security in OECD countries, in a search to find common ground for the differences in all three aspects. Pollitt and Bouckaert (2011) resort to five key features of public administration systems in order to identify and explain the contextual differences of reforms in the different countries, and these features will guide our work as well. The first two features are those of state structure and the nature of executive government. Pollitt and Bouckaert (2011) consider them to be very important features defining reform outcomes. To the authors, the more majoritarian and the more centralized a country is, the greater the speed and scope of public sector reform (Pollitt and Bouckaert, 2011:55). In table 8, selected OECD countries are classified into these groups.
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Table 8 State structure and the nature of executive government
NATURE OF EXECUTIVE GOVERNMENT Majoritarian Intermediate Consensual
STATE STRUCTURE Centralized (unitary) New Zealand UK
France Italy The Netherlands Intermediate Sweden
Finland Decentralized (federal) Australian Canada USA Belgium Germany
Source: Pollitt and Bouckaert (2011), p.55, based on Lijphart (1999).
However, the recent changes in the political landscape of a few of these countries have brought a great deal of confusion when attempting to classify them. The United Kingdom, for instance, is no longer as centralized as it was in the past, with the recent devolution of power to Scotland and Wales, and the creation of a Scottish Parliament and a Welsh Assembly, that resulted in a semi-federal structure in Britain, within a constitutionally unitary framework (Flinders, 2005: p.78-79). Similarly, The Netherlands has presented very marked changes towards a more majoritarian system (Hendricks & Michels, 2011). These developments in political systems show that placing countries into fixed categories such as these can prove a very difficult task. Moving on to administrative culture, Pollitt and Bouckaert (2011) recall the existence of two strong models, first brought up by Pierre (1995): the Rechtsstaat and the Public Interest model (as well as the Napoleonic model as a sub-family within the Rechtsstaat model), as an important factor for differentiating of the countries reform trajectories, showing just how different these can be. Table 9 below summarises the main characteristics of both types of administrative culture.
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Table 9 Main characteristics of Rechtsstaat and Public Interest administrative culture models Rechtsstaat Public Interest Prototypical countries: Germany, Belgium and France Prototypical countries: New Zealand, Australia, the UK, USA State as a central integrating force within society; Focal concern of the state are the preparation, promulgation, and enforcement of laws; Most senior civil servants are trained in law; Creation of a large, separate body of administrative law; Bureaucracy is rule-following and precedent-based; Actions of public servants and citizens are set in a context of correctness and legal control; A hierarchy of administrative courts performs oversight; Important values include respect for the authority of law, attention to precedent, equality before the law. Less extensive and dominant role of the state within society; Government regarded as a necessary evil, with powers preferably reduced to a minimum; Ministers and officials must constantly be held to public account; Law is in the background, it is not the focal point; Senior civil servants are generalists, qualities such as flexibility and pragmatism are highly valued; Civil servants are seen as citizens that work for government, rather than a cadre with a higher mission to present the state; Process of government is oriented towards public interest and seeks to obtain public consent/acquiescence; The government plays the role of a trusted referee mediating competing interest groups; Important values include fairness and independence of the play of sectional interests. Source: based on Pollitt and Bouckaert (2011), p.62.
As the authors write, these two distinct administrative cultures translate into very different public sector reforms: in countries following a Rechtsstaat logic, reform would face resistance and would generally be slower than in Public Interest countries, and, in fact, empirical data seems to confirm this especially for the prototypical countries listed in Table 9. The reason for this is the fact that Rechtsstaat systems face a great deal of difficulty in switching from legalistic procedures to a managerial and performance-oriented perspective, meaning that any restructuring would require considerable changes in legislation that sometimes are politically unviable or simply undesirable (Pollitt and Bouckaert, 2011:63). 39
The greatest problem with this kind of classification is that its perspective is perhaps too black and white. In their revised edition of Public Management Reform, Pollitt and Bouckaert (2011) admit that categorizing states within Rechtsstaat and Public Interest models of administrative culture is no longer as useful or even interesting, since most civil service systems are mixtures today (Demmke and Moilanen, 2010:9, cited by Pollitt and Bouckaert, 2011:63). Examples of mixed countries include the Netherlands, Finland and Sweden. Most importantly, while several countries have shifted away from this legalistic form, they seem to have migrated to a system different than that of Public Interest, as we shall discuss later on in this chapter. Other important features of politico-administrative regimes raised by Pollitt and Bouckaert (2011) are Minister/Mandarin Relations and the Diversity of Political Advice. The first can be thought of as the type of bargain between the two groups. To the authors, there are two possible ways to treat civil servants they can either be treated as trustees or independent technocrats, or as agents for the politicians. Figure 7 below shows how these bargain relationships can develop in different countries. To the authors, bargains of the B2a type have become more common, while those of B1a and B1b (the French civil service being an example hereof) are not as usual as before. As mentioned before, the trend of reform is generally to shift away from trusteeship, and toward more a civil service of accountable agents entrusted with direct responsibilities.
Figure 7 Some types of public service bargain
Source: Pollitt and Bouckaert (2011), p.96, elaborated by Hood and Lodge (2006), p.21.
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As for Diversity of Political Advice, this feature refers to the main channels through which the ideas that fuel public management reform come (Pollitt and Bouckaert, 2011:49), whether being from a small elite or from various sources. Table 10 summarises all of these features for a set of OECD countries, showing that the various differences between them present a great challenge to identifying distinctive patterns that may determine the paths of public service reform.
Table 10 Types of politico-administrative regimes: five key features of public administration systems in twelve selected OECD countries State structure Executive government Minister/ Mandarin Relations Administrative culture Diversity of Policy Advice AUSTRALIA Federal Coordinated Majoritarian Separate Mildly politicized Public interest Mainly civil service until 1980s NEW ZEALAND Unitary Centralized Mildly fragmented Majoritarian (until 1996) Separate Not politicized Public interest Mainly civil service UK Unitary Centralized Coordinated Majoritarian Separate Not politicized Public interest Mainly civil service until 1980s Recently think tanks, consultants, political advisers USA Federal Fragmented Intermediate Separate Very politicized Public interest Very diverse: political appointees, corporations , think tanks, consultants ITALY Unitary Increasingly decentralized Coalition Politicized Rechtsstaat A broad mixture 41
FRANCE Unitary Formerly centralized Coordinated Intermediate Integrated Fairly politicized Predominantly Rechtsstaat Mainly civil service. Some consultants since 2000. BELGIUM Federal Consensual (though becoming more polarized) Politicized Rechtsstaat Mainly consultants and universities GERMANY Federal Coordinated Intermediate Separate Fairly politicized Rechtsstaat Mainly civil service (plus a few academics) SWITZERLAND Federal Fragmented Consensual Separate Mildly politicized Rechtsstaat A broad mixture THE NETHERLANDS Unitary Fairly fragmented Consensual Separate Fairly politicized Originally very legalistic, but has changed to pluralistic/ A broad mixture: civil servants, academics, consultants, other experts FINLAND Unitary Decentralized Fairly fragmented Consensual Separate Fairly politicized Used to be Rechtsstaat but now more plural Mainly civil service SWEDEN Unitary Decentralized Intermediate Separate Increasingly politicized Originally legalistic, but has changed to corporatist A broad mixture. Corporatist processes bring in academic experts, business people, and trade unions 42
Source: Pollitt and Bouckaert, (2011), p.50. Canada was replaced by Switzerland. Additional data on Switzerland based on Klti et al (2007). Considering all of the features and the reform trajectories, Polllitt and Bouckaert (2011) do see distinctive patterns that they crystalise in the form of a classification. For starters, the authors do not feel that all of the countries have followed the NPM path of reforms. They write: Clearly, many of the developments we have cited in this process possess an NPM-ish flavor, especially moving towards private sector types of employment contract and the introduction of performance-related pay. Yet at the same time we have noted the reluctance of some states Germany, for example, and to a lesser extent France and the Nordic states to go very far down this road. In those cases the vision has seemed to be more NWS-ish: that it is important to keep the public service somewhat distinct from private sector employment and to continue to endow at least some parts of it with special status and protection. (Pollitt and Bouckaert, 2011:95)
Their interpretation is thus that in the case of continental Europe, the countries would not constitute laggards of the NPM reform, but a distinctive reform model could be seen in these countries, a model denominated by them as the Neo-Weberian State (NWS). In summary, the NWS would represent a particular instance of path dependency, one in which the image of a strong state is still well placed and that still can be used to generate positive political returns (Pollitt and Bouckaert, 2011:120). This model would bear distinctive features that differentiate it from the NPM model and to the familiar NPM recipe of disaggregation plus competition plus incentivisation (Dunleavy at al., 2006:97- 102, cited by Pollitt and Bouckaert, 2001:119) as summarised in the table below:
Table 11 Elements of the Neo-Weberian State reform model Weberian elements - Reaffirmation of the role of the state as the main facilitator of solutions to the new problems of globalization, technological change, shifting demographics, and environmental threat; - Reaffirmation of the role of representative democracy (central, regional, and local) as the legitimating element within the state apparatus; - Reaffirmation of the role of administrative law suitably modernised in preserving the basic principles pertaining to the citizen-state relationship, including equality before the law, privacy, legal security, and the availability of specialized legal scrutiny of state actions; - Preservation of the idea of a public service with a distinctive status, culture, and to some extent, though perhaps not as much as in the past terms and conditions. 43
Neo elements - Shift from an internal orientation towards bureaucratic rule-following towards an external orientation towards meeting citizens needs and wishes. The primary route to achieving this is not the employment of market mechanisms (although they may occasionally come in handy) but the creation of a professional culture of quality and service; - Supplementation (not replacement) of the role of representative democracy by a range of devices for consultation with, and the direct representation of, citizens views (this aspect being more visible in the northern European states and Germany at the local level than in Belgium, France, or Italy); - In the management of resources within government, a modernisation of the relevant laws to encourage a greater orientation on the achievement of results, rather than merely the correct following of procedure. This is expressed partly in a shift in the balance from ex- ante to ex-post controls, but not a complete abandonment; - A professionalization of the public service, so that the bureaucrat becomes not simply an expert in the law relevant to his or her sphere of activity, but also a professional manager, oriented to meeting the needs of his/her citizen/users. Source: Pollitt and Bouckaert, (2011), pp.118-119.
In this context, the authors would identify two clearly different paths in terms of administrative reforms: the first, the NPM path, followed mainly by Westminster countries that were considered the marketisers of NPM, or core NPM countries; and the second, the NWS path, followed by continental European countries, generally called modernisers, although being divided into managerial modernisers and participatory modernisers. According to Pollitt and Bouckaert (2011), these two obvious groupings would nonetheless intermingle with hybrid cases and cases that are difficult to classify, the United States being a typical example thereof. Although the country presents some undeniably strong elements of modernisation, and at least in the field of rhetoric it is a marketiser, it does at the same time present legalistic and bureaucratic features, and a very incoherently reformed and rigid civil service, with a merit system that in theory () provides a national framework for recruitment and job classification, while in practice, only 15% of the federal governments new career employees enter through the systems standard testingand-placement procedure (Kettl et al., 1996, p.1, cited by Pollitt and Bouckaert, 2011:94). Of course, the USAs federal structure permits that the states adopt very different practices, providing researchers with a heterogeneous scenario. In the state of Georgia for example, in 1996, public service has undergone one of the most thorough transformations ever recorded. The entire public service has been privatized there, with preliminary evaluations bringing ambivalent results, to say the least (Demmke, 2005:110). 44
Other cases of hybridity to some extent are present in features of reforms in the Netherlands, Finland and Sweden, which although being clear NWS countries, have ventured into deeper NPM reform territory, even if in a selective manner. Continental European modernisers would hold the state as an irreplaceable integrative force in society with () an operative value system that cannot be reduced to private sector discourse of efficiency, competitiveness and consumer satisfaction (Pollitt and Bouckaert, 2011:117). Table 12 below shows the two distinct groups of reform trajectories, the countries that compose them, the general characteristics of reforms undertaken by each of them, and the trends perceived in civil service reform. When looking into the trends in civil service reform it is easy to perceive that for each of the reform trajectories there are different directions taken by reform. Our perception is that alignment has occurred more markedly in NPM marketisers, where currently public employees enjoy very similar conditions to those of private sector workers, and where security of employment no longer exists.
Table 12 Reform trajectories in selected OECD countries Reform trajectory Countries Characteristics Trends in civil service reform New Public Management (NPM) Marketisers: Australia, New Zealand, USA (to some extent), the United Kingdom - Marketisers: envisaged an entrepreneurial, market- oriented society, with a light icing of government on the top. - Alignment of employment conditions in public service with those of the private sector. - Abolishment of civil servants special status and of lifetime tenure.
Neo- Weberian State (NWS) Managerial modernisers: France, Belgium, Italy, Switzerland, Austria, Germany (at the local level) - Neo-Weberian states with emphasis upon the modernisation of management. - Central European NWS favoured a professional state, modern, efficient and flexible, yet still uniquely identified with the higher purposes of the general interest. - Reform has come later and more gradually to these - Maintenance of traditional civil servant status and tenure for the top, career civil servants. - Diversity of employment relations in the public sector (civil servants, public employees and temporary, contractual staff) with very different employment conditions. - Increase in numbers of contractual, flexible 45
countries. staff. Participatory modernisers: Finland, Sweden, the Netherlands - Neo-Weberian northern states with emphasis on citizen participation. Reform here has a stronger citizen orientation and a participatory flavour. - Northern NWS foresaw a citizens state, with extensive participation facilitated by a system of public law that would guarantee rights and duties. - Normalisation of employment conditions, bringing them closer to those in the private sector. - Public sector workers in central government enjoy similar employment conditions. - Tenure is either non- existent or restricted to a very limited category of civil servants. Source: based on Pollitt and Bouckaert (2011:94-120), Demmke and Moilanen (2012), Demmke (2005), and Bossaert (2005).
As for continental European, neo-Weberian states, we disagree with Pollitt and Bouckaert (2011) when they write that () they continue, in modern form, a high status for the top, career civil servants. It is our belief that managerial and participatory modernisers have had different trajectories in this matter, with changes in public service status being far more significant in the latter, and with huge differences even within each group. Switzerland and Italy are a great example of that. With Switzerlands 2002 abolishment of the traditional civil servants status and Italys 1993 almost complete privatization of civil service, these countries are perhaps closer to the NPM trajectory as far as civil service reform is concerned, although in public management reform as a whole they remain in their NWS managerial modernisers group. Discussing Italy in particular, authors Pollitt and Bouckaert (2011) highlight, nonetheless, that even though the terms of civil service employment have been brought somewhat closer to those prevailing in the private sector, there are still significant differences, especially for more senior grades and that marketising ideas in the country are volatile (Pollitt and Bouckaert, 2011:94). We also disagree with Pollitt and Bouckaert (2011) in regards to northern European states such as Sweden and Finland. To the authors, Finland and Sweden have made provisions for performancerelated pay, and for more decentralized and results-oriented styles of personnel management. Yet these countries have not more than marginally dismantled the essential unity of the civil service (Pollitt and Bouckaert, 2011:94). Our view is that changes in the unity of civil service in these countries have been anything but marginal, especially in Sweden, where it may not even be possible to talk of a unified civil service anymore. As Murray (2000) writes: there is no such thing as a civil service in Sweden. () A civil or public servant is employed by a specific agency or by a ministry, not by central government as such, and an agency employee has a job for as long as there is work to be 46
done at the agency (Murray, 2000:174). In Finland, after reforms of the mid-1990s, agencies have wide powers to both establish and abolish civil service and contracted posts within the limits of their budget (Kiviniermi and Virtanen, 2000:85). Another strong tendency is to restrict civil service to core activities, no longer employing them in sectors such as health and education. The final outlook is that there has been great diversity in reform trajectories, especially in civil service reform, and trying to group these trajectories in defined patterns can prove a difficult task. Pollitt and Bouckaerts (2011) classification seems to hold for the moment, although empirical analysis shows that the changes in public servants status and job security in OECD are perhaps too diverse to allow an optimum classification. As a result, individual reform instruments cannot be ascribed exclusively to a single trajectory, as Pollitt and Bouckaert (2011:124) warned. But overall, these trajectories seem quite distinct for the Anglo-Australasian-American core NPM enthusiasts, participatory modernisers in northern Europe and managerially oriented modernisers in central Europe. To quote Pollitt (2008): there is a kind of path-dependency, but there is more than one path (Pollitt, 2008:40-51).
3.4. The abolition of job security in OECD countries public service Several countries in OECD have abolished security of tenure for public service in the scope of reforms of the past decades. For instance, in Sweden, Denmark and the Netherlands, only judicial officers are appointed for life (Bossaert, 20005). In the United Kingdom, Slovenia and Finland there is no entitlement to life-long employment in civil service. According to Bossaert (2005:4), in Scandinavia and the United Kingdom there has been a very pronounced desire for more efficiency, productivity and competitiveness, where public and private sector have traditionally been more permeable and where the philosophy of NPM has encountered a related public sector culture. Switzerland is also a good example of complete alignment between the public and private sector employment conditions, with the abolition of the traditional civil servant status at the federal level in the early 2000s and with a new context of objective insecurity related to the employer (Emery and Wyser, 2005:6). In Italy, a decree adopted in 1993 determined that all civil servants (with the exceptions of judges, diplomats and a few others) would be governed by general labour law. In order to better understand how this process of normalization and abolition of job security in the OECD occurred, we have chosen a few interesting examples in order to assess this process and its outcomes: that of New Zealand, the United Kingdom and Sweden.
3.4.1. Abolition of job security in New Zealand New Zealand, as we have seen, is a major NPM marketiser, and is perhaps the country which has most enthusiastically implemented NPM-inspired reforms following the 1980s. 47
In regards to public service, as Bale and Dale (1998:105) recall, planners believed that the problem was not with bureaucracy (), but with the incentives themselves. Reforms consisted in an attempt to replicate incentive structures of the private sector in the public sector, and laws were implemented for that effect in the late 1980s. As a consequence, department heads lost their permanent tenure, and would from then on be appointed for five-year fixed terms, while public sector employees were placed under the same regulations as the private sector (Bale and Dale, 1998). Managers were empowered and were given as much autonomy as typical private sector CEOs, being able to hire and fire staff according to the needs of the department. The obliteration of different rules governing public sector employment meant that all employees would then be contracted, whether by open-term contracts or fixed-term ones. In general, the views regarding public service reform are positive. Authors Bale and Dale (1998), collaborating in a World Bank publication considered that human resource management had improved measurably in New Zealand (Bale and Dale, 1998:112) and deemed this experience a best practice from which developing countries could learn (Bale and Dale, 1998:118).
3.4.2. Abolition of job security in the United Kingdom Traditionally, the British public service was regulated by a system of public-sector employment contracts. The inexistence of a separate statute regulating public employment and providing a legal distinction between employment regimes in both sectors has made restructuring easier than in other OECD countries. It was only in 1991 that the British High Court decided that civil servants were employed by the Crown under contracts of employment, reducing some of the uncertainty regarding the legal status of civil service employment, but still with no civil service law. As Farnham and Horton (2000:5) write, these contracts were largely regulated by centralised, national collective agreements, which were incorporated into the individual contracts of employment of those working in the public sector. The system was extremely close to the practices of the private sector, and only a small minority of senior civil servants and armed forces were not included in it. This minoritys employment rules were not regulated by a public law statute, though, but by a very peculiar system of royal prerogative (Farnham and Horton, 2000:5). Until much of the 1970s, British public service was characterized by a highly centralized personnel system, standardized employment practices, paternalistic style of management and collectivist patterns of industrial relations (Horton, 2000:211). Furthermore, public service had and internal labour market that provided career structures and possibilities of promotion for staff. Another interesting characteristic of British public service prior to flexibility reforms and public organisations is that it would operate in excess of national minimum standards, seeking to act as model employers in order to attract and retain staff and set an example of good employee relations (Horton, 2000:211). Most importantly, there was high employment security even for contractual employees, meaning that () staff were not driven through patronage or fear of losing their jobs but rather by loyalty or 48
the realisation that by conforming they would eventually be rewarded with promotion (Horton, 2000:211). Ridley (2000) writes that although in in the UK () civil service never had security of tenure in law, as employment was at the will of the Crown, (it) had it in practice. Also, as there was no single civil service law regulating employment conditions, personnel policies were determined by several codes related to each public service. All of these traditional features were to be challenged throughout the 1980s and 1990s, with the NPM paradigm replacing the traditional bureaucratic model. In contrast to job stability, planned career pathways and employment security of the past, the public sector resorted to more open recruitment, and diverse modes of employment and working patterns (Fowler, 1993, cited by Horton, 2000:213). Also, the public sector no longer aspired to be a role model employer, eliminating job security and the former attractions of progression. There was a clear shift from a view of public servants serving the state and public interest to human resources which need to be used efficiently and effectively (Horton, 2000:214). Reforms in the 1980s and 1990s promoted a considerable downsizing of the British public sector and introduced a range of flexibilities including temporary and fixed-term contracts, as well as wider possibilities for dismissing underperforming managers to dispel the perception that civil servants have jobs for life (Horton, 2000:215). Analysing the outcomes of changes in public service, Horton notes that the former unified civil services have been fragmented, giving way to particularism, individualism and competition between rival businesses; that as individual contracts and performance management take hold, individuals become more organisationally oriented rather than committed to the service or their profession; that these changes are definitely affecting behaviour in the public sector, with the job-for-life expectation no longer being part of the psychological contract and with employees accepting greater uncertainty in their jobs and career structures () although not without high levels of stress (Horton, 2000:230). Moreover, the author highlights problems of coordination related to fragmentation, as well as high levels of dissatisfaction and low morale in public service. On the other hand, the author recognizes that there is evidence of greater efficiency due to elimination of over-staffing and praises the enhanced capacity to control costs (Horton, 2000:231). So there are mixed results regarding changes in public service in the United Kingdom. Finally, the table below shows how the United Kingdom responds to the allegations that differences are required in public service, drawn from a questionnaire elaborated by Demmke (2005), showing the nations current position in this matter.
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Table 13 Are differences between the public and private sector necessary? The case of the United Kingdom Where should differences remain between civil servants and private employees? Where are they necessary and where not? The case of the United Kingdom 1. Specific ethical requirements, e.g. taking an oath, specific principles, codes of ethics, rules on conflicts of interest, values). 2. Specific status and contractual situation, e.g. life-time tenure, more difficult to dismiss civil servants. 3. Pay and Social security, e.g. should civil servants be paid differently to comparable positions in the private sector? 4. Organisational structure, e.g. is there a need for a more hierarchical, bureaucratic and formal organisational structure? 5. Recruitment, e.g. is there a need for a specific recruitment system and procedure, specific knowledge and studies required? 6. HRM (need to centralise certain responsibilities in HRM), e.g. pay, right to strike, social security, working time. 7. Working conditions, e.g. should there be more variation in working time? 1. There are specific codes of ethics. However, all people have ethical requirements and must abide by the law. Other groups, too, e.g. bankers have other codes of conducts. 2. No life-time tenure, still no civil service act. 3. Recognition that public service is competing in the market, no further differences necessary. 4. Process of levelling of hierarchies in both the private and public sector. 5. Recruitment should fit the purpose but there is no explicit reason for differences. 6. Centralisation only in the senior civil service. 7. No need for specific working conditions, but civil service should lead, e.g. in fairness, equality, ethics, etc. Source: Demmke, 2005:59-60.
3.4.3. Abolition of job security in Sweden To Demmke and Moilanen (2012), Sweden is the ultimate best practice model: a true example of a country that managed to introduce flexibility into its civil service without precarisation. Famous for its large public sector, Swedens public service could be characterized as a traditional bureaucracy until the mid-1960s. Public servants were granted security of tenure by a constitutional provision that was only amended in 1965 and since 50
then the country has undergone considerable transformations toward a flexible post- bureaucratic structure (Murray, 2000:169). Considerable efforts were made in the late 1970s in order to reduce pay differentials in public and private sectors and to render salary structures more flexible, since changes in pay were decided upon central negotiations and pay grades were very rigid. From 1985 onwards, a series of reforms were implemented in order to enhance political control of the administration as well as its efficiency, resulting in the provision of greater autonomy to agencies, controlled by performance requirements and measurements of results as the new focal points of accountability. This devolution evolved to such an extent that government agencies today are completely free to hire and fire staff and set pay rates at their own discretion (Murray, 2000:171). It may seem that the fact that there is no ceiling on pay rises and that pay raises are set individually could provide a favourable environment for patronage and feathering of ones own nests, but Murray (2000) explains that agency autonomy is the secret for the good functioning of the Swedish administration. To the author, the private enterprise model in Swedish government means that each agency head works as a true private sector Chief Executive Officer, and each agency must decide how much it can afford to pay and still make a profit, and training and incentives are provided in order to ensure this. One of these incentives is the reduction of the terms of service of agency heads and the possibility of removal by the Cabinet should they fail to perform (Murray, 2000:175-176). Furthermore, agencies are given a yearly limit for expenditure that is connected with the budget, and floor payments are negotiated collectively between the public sector unions and a special agency created specifically for this purpose, completely controlled by the other agencies (thus avoiding political involvement of the Cabinet in salary disputes). Public service employees today are subject to general labour legislation that is valid to both private sector and government alike. Although a special law for government employees exists, it does nothing more than add a few special rules for public sector activities. There is no unity in civil service, and even the term civil service can be misleading when describing Swedens public sector workforce, since there is no special procedure for recruitment (such as competitive entry exams), and civil servants are employed by a specific agency or ministry, and not by central government (Murray, 2000:174). There is absolutely no security of employment in Sweden with the exception of judges, which account for less than 1% of the public service, meaning that dismissal can occur for reasons such as shortage of work, misbehaviour on the employees part, and poor performance, but firing must always be based on objective grounds provided by clearly established rules (Murray, 2000:175). Contracts are usually permanent, with an indefinite term, although agency heads have six-year term contracts, which can be renewed for three years at a time. Finally, as Demmke (20005) puts it, in Sweden, organisational structures do not matter: () what is more important for establishing an efficient and effective civil service are good working conditions, an appropriate administrative culture, openness, accountability, fairness and legal correctness () (Demmke, 2005:58-59). And more 51
importantly, there is very little evidence that local services deteriorated because of the changing status (Demmke, 2005:56).
3.5. Job security maintenance in OECD countries Changes do not seem to be as dramatic as many have thought, however. Analysing the European scenario, Bossaert (2005) showed that the trends of alignment with private sector have not affected the life tenure principle in many countries, while recruitment and pay systems were increasingly influenced by private sector practices. At the time of her study, Bossaert (2005) found that only Austria and Estonia had plans for reform in this regard. Furthermore, with the varied conditions of workers in the public sector, job security does not pertain only to civil servants, but it is an issue even for non-statutory workers, as is the case of some employees under labour law whose conditions pertaining job security (at least in practice) are very close to those of civil servants in Germany, Luxembourg, and Belgium, for instance (Bossaert, 2005: 29-33). Demmke and Moilanen (2012) mention that civil servants still enjoy a very high degree of job security in countries such as Germany, France, Spain, Belgium, Ireland and Luxembourg, while Bossaert (2005:4) adds that reforms that deeply transformed civil service are not generally compatible with the existing culture in those countries. Since France and Germany are known as countries with highly effective and efficient public services, as well as a highly qualified personnel (Demmke, 2005:25), we shall focus on them when analysing countries that are maintaining job security in public service.
3.5.1. Job security in France France has a considerably large public service with about 25% of the countrys workforce being engaged in public employment. French public service enjoys a positive image and has a feeling of self-esteem (Burnham, 2000:98). Furthermore, for many, French civil service is an element of territorial cohesion in the Republic. As Burnham (2000) writes, moves toward more flexible structures occurred mainly in regards to public enterprises, and even then changes could only be successful when officials (in France Tlcom or the Post Office, for example) were guaranteed that their work conditions would not be worsened. Overall, modernisation of French public services is not like that conducted elsewhere in OECD countries, and the archetypical French public servant is still a full-time tenured official. Tenure in France means that the official is entitled to a permanent post, and should that post be abolished, then it is the administrations duty to find him a new post at the same grade (Burnham, 2000:101). Not all jobs in the French public administration are occupied by tenured civil servants, though. Exceptions are provided by the public service statute allowing discretionary appointments for individual or political preference. Employees appointed for these discretionary posts are given indefinite term contracts that can be revoked at any time. 52
Another exception is the provision regarding fixed-term contracts for temporary posts, which can be exercised by ministries and local government in case no existing corps is able to fulfil this function (Burnham, 2000:102). Jobs without tenure are nonetheless called emploi prcaire, which possesses a negative connotation, and Burhnam (2000) warns that such contractual arrangements can be so cumbersome in central government that they are not synonymous with greater flexibility, since in practice few contracts can be justified on the basis that no public servant can fill the post, resulting that only very specialised senior- level jobs fulfil these requirements, or they are used for basic, seasonal jobs with low wages. In essence, contracts are not generally used as a form of replacement for tenured officials (Burhnam, 2000:103).
3.5.2. Job security in Germany Reforms in federal German administration have been very restricted, with alterations in human resources management reduced to soft personnel management instruments, such as employee surveys, performance agreements, to name a few (Rber and Lffler, 2000). For Rber and Lffler (2000:116), reform in German public service is difficult to achieve, civil service is quite inflexible when compared to that in the United Kingdom, and the pace of reform is simply quite different. Of course, federalism and local self-government produce varied conditions and peculiar cultures within Germanys public administration. At the local level, financial pressures and direct contact with citizens provided more favorable conditions for modernisation of organisational structures, characterizing Germanys bottom-up process of modernisation (Klages and Lffler, 1995, cited by Rber and Lffler, 2000:120). Nevertheless, write Rber and Lffler (2000:117), the core elements of German civil service are relatively uniform for public servants at all levels of government. In fact, Germany has one single civil service, as opposed to the case in many federal states. Germanys civil service has what authors call a dual structure, meaning that part of the public sector workforce is under public law (the civil servants, or Beamte) while public employees and public workers (Angestellte and Arbeiter) are subject to private sector laws and public sector industrial relations (Demmke, 2005). It is, however, quite difficult to explain the varying work conditions of these groups, since sometimes the same type of professionals have different statuses. The conditions are, nonetheless, quite substantial, as can be seen in the table below, which compares civil servants employed under public law and employees under private law contracts:
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Table 14 Differences between civil servants employed under public law and employees under private law contract in German public administration Civil servants Public employees Legal regime Public law (Civil Servants Act) Private law Appointment Official announcement (Ernennung durch Hoheitsakt) Common labour law Employment regulation Regulation through law Regulation through contract and labour legislation Principle guiding working relationship Obligation to provide welfare rights principle (Alimentationsprinzip) Mutual exchange principle (Gegenleistungsprinzip) Right to strike No right to strike Right to strike, sometimes restricted for some categories of staff Specific ethical obligations Loyalty and neutrality No obligations set by law Job security Job for life Unlimited contract or limited contract Career development Career system System with other organisational characteristics Pension Special pension schemes General pension scheme Source: based on Demmke and Moilanen, 2012:22.
This dual employment structure is historically grounded, and may have made perfect sense in the past, but as Rber and Lffler (2000:118) write, it has become less and less relevant, since the boundaries between the two categories () have become increasingly blurred in practice. In spite of this, abolition of the civil service status is simply not an issue in Germany, and the countrys civil service system has proven very stable and resistant to major changes over the years. This can be attributed in part to the fact that modernising current conditions would require constitutional amendment, which demands a great deal of political will that is simply nonexistent in this case - adding to that, Rber and Lffler (2011) mention that civil servants are over-represented in Parliament, making matters even more difficult as far as change is concerned. The diagnosis given by the authors is that the system is likely to undergo only incremental changes and developments in certain elements and features (Rber and Lffler, 2000:123). 54
Overall, German public servants still have a high degree of job security, and this will most likely remain so.
3.6. Concluding remarks regarding job security in OECD In spite of the peculiarities that mark each country in OECD regarding reform in public service, we can borrow Demmke and Moilanens (2012:100) observation for European countries and expand it to the OECD as well: reforms have brought less government employment, different government employment and core government employment. Downsizing has affected virtually all OECD countries, even those on the conservative front of reforms such as Germany, where it was conducted through transfers from overstaffed authorities and with very few new appointments as the workforce aged progressively (Rber and Lffler, 2000:127). The differences between public sector and private sector employment are also lessening. For example, legislation is becoming more flexible and fixed-term contracts are becoming more prevalent. The employment status of civil servants is increasingly similar to that of employees generally in 16 OECD countries (OECD, 2004:3). As Demmke (2005) writes, whereas in most European countries, the status of civil servant has survived all reforms, the specific nature of such a status is diminishing (Demmke, 2005:118). This is related to the trend toward relaxation of job security for all sorts of employees in European states. There has also been a true proliferation of different types of personnel in many countries, such as career officials without tenure or under labour law, personnel hired on a temporary basis, or with contracts for an indefinite time period, as Demmke (2005:7) writes. By aligning with private sector practices, the public sector is gradually moving away from the traditional role of model employer. Not all authors seem to hold a negative view of this phenomenon, though. Demmke and Moilanen (2012:5), for instance, claim that perceptions that central administrations should be seen as havens of job security need revision in todays flexible world. As for the core government employment aspect, it is visible in figures that show that contractual employment is rising, while traditional civil service is decreasing and being limited to core activities. Ridley (2000), however, warns against considering the use of contractual employment in public service as a step toward more flexibility and less job security, at least when European countries are concerned. He writes: in continental Europe, contractual employment has often been used not to promote managerial efficiency, or make conditions of service more flexible, but to increase the size of personnel beyond what budget laws allow for established posts or beyond the numbers specified for particular categories or grades of officials in civil service laws (Ridley, 2000:28). This form of contractual employment would not, however, offer more flexibility than the statutory status, as in many cases, employees would have as much security as tenured peers, as well as the same level of payment and conditions of employment in countries such as Germany and Belgium. In France, he writes, contractual staff is even subjected to public rather than 55
labour law, meaning that disputes involving contract staff were decided by administrative courts. This goes to show that contractual systems are not to be automatically considered as allowing greater managerial freedom to fire undesirable staff: in much of continental Europe, where security of tenure until retirement age is guaranteed for career officials, employees seem to have acquired similar rights and it is often hard to distinguish the two groups in this respect. (Ridley, 2000:29). In terms of job insecurity, the private sector is certainly more experienced in this matter, as Emery and Wyser (2005:3) write, due to the nature of work relationship and frequent reorganisations they have to conduct in order to be competitive. This comes, of course, at a cost, since several studies, such as that of Burgard et al. (2009), indicate health risks related to employees feelings of insecurity toward their employment. As for the effort of identifying a common pattern of reforms, many authors believe this is no longer pertinent (OECD, 2005), as more and more countries fail to fit a category. As Demmke (2012) observes, national administrations no longer have a single coherent conceptual framework for public service. We, however, tend to think that Pollitt and Bouckaerts (2011) categories of reform for OECD countries still have explanatory value, since the groups of NPM marketisers, NWS-modernisers and NWS-participatory countries do seem to share similar characteristics when it comes to civil service reform as well. This view is in agreement to what Bach and Bordogna (2011) argue, that is, that variations in reforms cannot be simply conceived in terms of leaders and laggards, but in different directions of change. By investigating countries where civil service has undergone thorough reform, many lessons can be drawn. For instance, many would advocate the view that ensuring the promotion of specific values in public service does not depend on the existence of a civil servant status, a view that is perfectly defendable by looking into the case of Sweden, where labour law ensures the promotion of such values just as well as any other statutory public service state. As Demmke and Moilanen (2012:4) write, it is more important to have rules, working conditions and ethics-trust mechanisms in place that allow () efficient, effective, impartial and democratic public administrations () The status question is still linked to national tradition and national structures. Embracing this view, Demmke (2005) vehemently says that civil servants are not different because they are civil servants. The author attributes differences in mentality, motivation or job attitude to individual characteristics and to the sector in which people work, rather than to the existence of a specific legal status or work in a specific organisational environment. The specific features of public service, claims Demmke (2005:63), are not due to a specific legal status. It is not accurate to say, however, that these countries where bureaucratic structures have been replaced are quicker, more attractive, more effective and more efficient () (Demmke, 2005:25). As Demmke and Moilanen (2012) assert, there is no evidence pointing to a better public service performance in flexibility adopting countries. On the other hand, Demmke and Moilanen (2012:103) basically argue that countries like France and Germany have absolutely no compelling reason to abolish civil service status (and here we add tenure rights as well), apart from budgetary pressures, since civil service is 56
highly performing in these countries, where, according to Bossaert (2005:18), the advantages of life-tenure still seem to outweigh its disadvantages. In essence, we subscribe to the view of OECD (2005), that () there can be no ideal type of public employment because different societies face very different risks and problems (OECD, 2005:161). It is undeniable, though, that the policy environment has suffered considerable change in the recent decades. Pollitt and Bouckaert (2011) and Demmke and Moilanen (2012:1) agree, for instance, that from the notion of government, public sectors in OECD countries tend to shift to a more governance approach. As Demmke (2005:4- 5) writes, civil servants were once regarded as agents intended to uphold the rule of law and to implement government policies. However, as the author observes, public policies today are administered through increasingly complex networks, decentralised governance structures, PPPs and cooperative ventures, making it more challenging to fit the old notion of civil service to the new policy environment. Finally, OECD countries have yet to face considerable challenges with regards to public service, with a workforce ageing at a very fast pace (OECD, 20008), as well as severe recruitment and retention difficulties, with civil services that strive to maintain themselves as employers of choice, while pressures for more flexibility and normalization seem to push in an opposite direction. In the following section, we shall proceed to the analysis of Brazilian civil service, investigating job security in this country, as well as reform directions undertaken in the past decades. With the data concerning OECD at hand, we expect it will be possible to draw a few lessons from civil service reform for Brazil. Our hypothesis is that the trends observed in OECD regarding normalisation between public and private sectors will not be observed in Brazil, due to a recent past of patronage and nepotism that is linked with contractual employment. It is our expectation that Brazilian institutions of the post re-democratisation period are more in the direction of strengthening traditional meritocratic civil service and job security, in response to the negative image related to precarious employment. Furthermore, we suppose that existing institutional settings are hostile to reforms aiming to reduce job security and mitigate the public servant status, limiting the possibilities of reform in this area.
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4. Should Brazil abolish public service job security? A lesson from OECD countries 4.1. An overview of Brazilian public service Brazil is a country of continental proportions with astounding 8,514,215 km2, making it the fifth largest nation in the world, and with about 190 million inhabitants it also has the worlds fifth largest population. A federative republic, Brazil has a total of 26 states and a Federal District located at the capital Brasilia, as well as over 5,500 municipalities. Brazils political system is presidential, with the President acting both as head of state and head of the federal government, elected for a four-year term, with the possibility of re-election for an additional term. Brazil is South Americas most influential country and emerging economic giant, and in spite of the global economic crisis of 2008, it has delivered a remarkable performance in economic, social and financial terms in recent years, due to continuing macroeconomic consolidation, an improved external liability position and an adequate short-term policy response (OECD, 2009, cited by OECD, 2010). The countrys economy has also been growing at a faster pace than developed, crisis-struck OECD countries, and improvements in social developments have been praised by international organizations. Data from the United Nations show that, from 1980 to 2011, Brazils Human Development Index (HDI) increased by 30.8 per cent. A report from the OECD (2010) attributes part of this success to Brazilian public service. To researchers, the Brazilian public sector has played a crucial role in promoting stability and setting up the conditions for economic and social development, even more during the two successive Lula administrations (OECD, 2010:11). In Brazil, total public employment accounts for 11% of the labour force, including state- owned enterprises, which is about half of the OECD average, and is a small figure even in comparison to neighbouring countries such as Argentina and Chile. Although modest in size, Brazilian public service has experienced a considerable increase in the past decades, growing a remarkable 15% between 2003 and 2007. Recent administrations have expanded public servants contingents in order to improve access to public service and overcome government capacity weaknesses, especially in health and education. The expansion occurred after several years of stagnation and restrictions on staff numbers and costs, and was only made possible by recent high levels of economic growth (OECD, 2010:22). The table below shows the interesting developments regarding civil service numbers since the 1990s.
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Table 15 Brazilian federal public administration from 1991 until 2010: evolution of figures for active civil servants, retirements and entry by public competitive exams Economic and political context Year Total active civil servants (military excluded) Retirements in that year Entry by public competitive exams in that year Variation (%) of active civil servants Crisis and stagnation (Collor and Itamar governments) 1991 661,996 46,196 - -2.8 1992 683,618 21,190 - 1993 654,723 14,199 - 1994 641,564 17,601 - State reform (FHC 1
Figure 8 shows the share of public employment over total employment and total labour force and population in selected countries, placing Brazil at the more modest side of the spectrum. Figure 9 indicates the share of public sector employment in total employment in
1 Refers to the government of President Fernando Henrique Cardoso. 2 Refers to the government of President Luiz Incio Lula da Silva. 59
Brazil over time, and Figure 10 shows the absolute numbers of Brazilian active public servants over the past two decades.
Figure 8 Public sector employment as a share of total employment, the labour force and population in selected countries
Source: OECD, 2010.
Figure 9 Share of public sector employment in total employment in Brazil over time 3
Source: OECD, 2010.
3 Data for 2005 are drawn from Pessoa, Eneuton et al. (2009), Emprego pblico no Brasil: comparao internacional e evoluo recente, Comunicado da presidncia, Instituto de Pesquisa Econmica Aplicada (IPEA), No. 19, 30 March. Data are for employment in both general government and public corporations, and are not differentiated. 60
Figure 10 Active federal civil servants 1991 until 2010
Source: Cardoso Jr. & Nogueira (2011).
As far as costs are concerned, Brazilian public service is expensive. According to the OECD (2010), Brazilian public service costs about 12% of the GDP, slightly above the OECD average, and accounting for 28% of all compensation costs of employees in the Brazilian economy (OECD, 2010:58). This high percentage is not merely representative of higher salaries in the public sector, but rather of a peculiar salary structure in Brazil, characterized by low remunerations in the private sector for a particular set of tasks, allied with a higher proportion of qualified positions in the public sector, and to a policy of higher salaries for certain categories of civil servants in core positions with the aim of attracting and retaining only the best professionals (OECD, 2010:21). The latter explains why Brazilian government is certainly an employer of choice, especially at the federal level. Figure 11 shows the compensation of general government employees as a percentage of GDP (data from 2006) and share of general government employment in total employment (data from 2005). As can be seen, although the compensation costs are quite similar to those of OECD countries, the share of general government employment over total employment is very low in relative terms.
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Figure 11 Compensation of general government employees as a percentage of GDP (2006) and share of general government employment in total employment (2005)
Source: OECD, 2010.
Table 16 shows the average monthly income of Brazilian civil servants in minimum wages by gender and for each level of government. The differences between the average salaries are quite striking, with salaries at the federal level being far superior to those at state and municipal levels. It is interesting to notice that, in 2011, the International Labour Organization calculated the Brazilian legal minimum wage to be of US$ 286.00 in purchase power parity (PPP) terms, making the gap between salaries at the different government levels even more striking.
Table 16 2010 average income of Brazilian civil servants by gender and by level of government (in minimum wages) Year 2010 Level of government Men Women Federal 11.1 12.2 State 6.2 4.6 Municipal 3.0 2.7 Average monthly income (in minimum wages) 5.5 3.9 Source: Cardoso Jr. and Nogueira (2011)
As for the distribution of public service within the different levels of government, active Brazilian public service at the federal level represents about 18% of total government 62
employment, while states accounts for over 46% of employment and municipalities employ a little over 35% of the public sector workforce. Table 17 shows the distribution of public employment in Brazil for each government level as well as the numbers of retirees and pensioners.
Table 17 - Employees, retirees and pensioners in Brazilian civil service (per government level) Government level Active civil servants Percentage Retirees Pensioners Total Federal 4 1,118,360 18.43% 529,563 448,376 2,096,299 States 5 2,793,050 46.03% 1,144,698 384,509 4,322,257 Municipalities 6 2,156,676 35.54% 401,793 151,111 2,709,580 Total 6,068,086 100% 2,076,054 983,996 9,128,136 Source: OECD, 2010.
In terms of the functional distribution of public service, Table 18 shows the division of civil servants at the federal level. Direct administration refers to the services located in the administrative structure of the Presidency and the ministries, the so-called central government. It is also possible to see the share of active, retirees and pensioners in the public administration.
Table 18 Percentage of civil servants at the federal level, according to the division between the different organs/units of federal administration and their situation Federal Governments division of powers Percentage of federal level civil servants according to division between different organs/units Total Active Retirees Pensioners Executive 51.9 27.4 20.8 100.0 Civil 48.2 31.1 20.7 100.0 Direct Administration 37.0 33.5 29.5 100.0 Public autonomous entities 60.5 29.0 10.5 100.0 Foundations 60.7 27.4 11.9 100.0
4 Data from June 2008; does not include public servants from State-owned enterprises or mixed economy societies. 5 Data from the states. 6 Refers to 1,900 municipalities with their own social security regime. 63
Brazilian Central Bank 47.6 48.4 4.1 100.0 Public companies 7 100.0 - - 100.0 Mixed economy societies 100.0 - - 100.0 Military 54.8 22.3 23.0 100.0 Federal Public Prosecutor 86.1 9.9 4.0 100.0 Legislative 72.3 20.3 7.3 100.0 Judiciary 80.9 14.4 4.7 100.0 Total 54.0 26.5 19.5 100.0 Source: MPOG (2012).
4.2. Job security in Brazilian public service: origin and trends The specialised literature tells us that, since immemorial times, Brazilian bureaucracy has been affected by commonplace contracting out of the merit system in order to fill temporary positions (dos Santos, 2009:11). Political appointments have been present throughout the entire process of formation of federal bureaucracy permanent staff, and despite efforts to reduce numbers of this kind of staff, dos Santos (2009) writes that those efforts were merely cosmetic and that discretionary positions have always been numerous and have become some sort of exchange currency in the governments search for political support. Also commonplace was the use of these positions for patronage and nepotism. The first civil service statute in Brazil was established in the late 1930s, and it brought rights and regulations for statutory civil service such as competitive entry exams as a requirement for admission, the stipulation of salaries and numbers of positions by law, and job security. Then, statutory civil service coexisted with several other contractual forms (de Arajo, 2007:151). In 1943, the Labour Laws Consolidation (CLT) - the main source of labour regulation for the private sector in Brazil - was enacted, excluding the application of its labour regulations to statutory civil servants, but regulating nonetheless employment of contractual staff in the public administration. Civil servants working conditions were regulated by a statute, first by the one enacted in 1939, then by a new one enacted in 1952, and finally, law n.6185 of 1974 established that only civil servants exercising activities of sovereignty (such as diplomacy, police, tax collection) would be regulated by a statute, all others being submitted to ordinary labour law. This led to a great increase in the number of labour law-regulated civil servants.
7 It is important to mention that employees of public companies and mixed economy societies are hired under labour law and are not entitled to job security. 64
Moreover, the new law established the prohibition of strike or unionization in public service. Soon enough, the extension of the labour law employment regime to the public sector led to the understanding that by hiring personnel under labour law, the administration would be in turn exempt from conducting competitive entry exams, offering plenty of opportunity for opportunistic behaviour, patronage and corruption. Furthermore, the absence of objective criteria determining exactly which careers would be under statutory civil service and which under labour law created a true dichotomy in the extent that personnel with the same attributions and functions had different employment regimes (de Arajo, 2007:157). With the enactment of the Constitution of 1988, a single legal regime for public sector employment was established (with levels of government being able to choose whether to adopt the statutory or labour law regime), although a few years later this disposition was revoked through constitutional amendment n.19 of 1999, that allowed all levels of government to introduce different types of regimes of employment, with the exception of a few careers which constitutionally must be regulated by a statute (Pietro, 2000). However, since 2008, the Brazilian Supreme Court (STF) revoked 8 constitutional amendment n.19, meaning that new recruitments in the public sector must be done exclusively under a statutory regime. All permanent positions in the public administration must thereby be under the statutory regime, and even temporary workers employment relationships must be regulated by a specific law enacted in each government level, since ordinary labour law can no longer regulate their employment relationship after the mentioned Supreme Court decision. It should be mentioned that all employees who had been recruited under labour law before the said decision continue to be submitted to it, as the Courts decision is valid ex nunc (thus not retroacting). In summary, Brazilian civil service regulation has suffered several alterations throughout the years, and the current legal provision is that all civil servants must be submitted to statutory regulation, the single legal regime having been re-established by the Brazilian Supreme Court in 2008, in which labour law regulation was discarded as a regulatory instrument for public sector employment.
Table 19 Historical background of public service job security in Brazil Historical event Situation Socio-economic context Federal law n. 2942 of 1915 Civil servants employed for over ten years can only be dismissed through an administrative procedure. Structuring of the Brazilian public administration, aiming to support the country's industrial modernisation.
8 The decision was proferred in the context of a precautionary measure (medida cautelar) in the scope of a direct lawsuit of inconstitutionality (ADI) n. 2135-4/DF. 65
The 1934 federal Constitution Job security is guaranteed to every civil servant employed for over ten years or two years for those who entered public service through competitive examinations. Authoritarian, populist regime. Structuring of the labour regulation in Brazil. Decree-law n. 200 of 1967 Expansion of the government- owned enterprises. Creation of the legal entities of foundations and autarchies. More flexibility in the procedures of contracting and dismissing public employees - establishment of a separate labour law regime. Military regime promotes political and administrative centralization. Implementation of government policy of "substitution of imports" and protectionism. The 1988 federal Constitution Job security is granted to civil servants admitted through competitive examinations with over two years of employment. Job security is extended to those with five years of employment, despite not entering civil service through competitive examinations. Institution of a single legal regime for all civil servants, government levels being able to choose which legal regime they would apply. During discussions in the constituent assembly, suggestions were made to abolish civil service job security, but no vote has been conducted on the matter. Political opening. Fiscal crisis of the State. Decentralization of the public administration. Growth in political participation and higher demand for social policies Increase in the civil servants' esprit de corps. President Collor government/ 1990-1992 In order to contain public sector expenditures, positions are suppressed in public administration, but a decision of the Supreme Court grants "redundant" civil servants a right to their full salary. Worsening of the fiscal crisis. Efforts to decrease size of the public sector. Large numbers of civil servants file for retirement. Constitutional revision of 1994 2% of the total amendment suggestions by Brazilian citizens and 2.5% of those from elected officials referred to the matter of job security. Due to an agreement between government and parties no change was promoted on this matter. Worsening of the fiscal crisis. Economic globalization. 66
President FHC government/ 1995-2002 Proposals are made to grant public employment more flexibility and to suppress job security altogether, but fail to be implemented. Instead, probation period to achieve job security goes from two years to three years of employment. Introduction of performance management evaluations and tools, as well as other NPM-inspired management instruments. More mobility is granted to civil servants. Redundant civil servants are remunerated proportionally to the time of employment. Few entry exams are promoted and civil service figures drop. Globalization. Containment of public expenditures. State reform. Suppressing of the State's role as enterpriser. Privatizations in the public sector. Constitutional amendment of n.19 of 1999 The Constitutional provision that established a single legal regime regulating employment in the public sector is revoked, allowing government at all levels to apply statutory and labour law regimes simultaneously. This provision would be cancelled by the Supreme Court in 2008, and the single legal regime would be re- established, extinguishing the possibility of all new labour law regulated employment. The possibility of dismissal in case of insufficient performance is established. Efficiency is included in the list of constitutional principles regarding public administration. Same as above. President Lula government/ 2003-2010 State capacity is enhanced especially in sectors of education and health. Increase in entry exams with large numbers of recruitment. Salary increases. Greater rigor for temporary contracting in public administration and enforcement of the merit system. Economic recovery and improvement of the macroeconomic outlook. Further development of social policies. Source: based on Machado and Umbelino (2001).
4.3. Career civil servants and political appointments in Brazil In Brazil, as highlighted by Bueno de Azevedo & Loureiro (2003), the traditional bureaucratic model is often perceived as a healthy alternative to the patronage and nepotism that characterized Brazilian public administration in the past. In order to break with the pattern of corruption and patronage that prevailed until the end of the 67
authoritarian military regime in the mid-1980s, clear advances have been made in Brazilian legal framework favouring the merit system, and sure enough, many of them have been anchored in the 1988 Constitution. The 1988 Constitution is the most important legal instrument regulating civil service in Brazil. It establishes the rights and duties of Brazilian public service, and it contains extensive provisions regarding competitive entry examinations (article 37, subsections I to III), pay (article 37, subsections X to XV), retirement benefits and pension schemes (article 40), job security (article 41), as well as principles of conduct for public service (article 37, caput). The 1988 Constitution definitely constitutes a ground-breaking piece of legislation for Brazilian civil service. Enacted three years after the end of the military regime (1964- 1985), it granted all employees in the public sector an ample right of unionization and strike 9 . These rights are often exercised by public servants, whose unionization rate is of about 55% (OECD, 2010:97). As mentioned, the 1988 Constitution also anchored the right for job security to all civil servants at all levels of government with more than five years of service, including those who had been hired without going through competitive public examinations, and it established mandatory competitive examinations for all new hiring in the public sector. According to article 41 of the Constitution, job security can be obtained by all civil servants in Brazil after three years of probation, after which dismissal can only occur due to disciplinary issues or, since a constitutional amendment dated of 1998, due to poor performance verified in periodic performance assessments, those being subject to appeal and the right to a full and fair hearing. Guiding the provisions regarding civil service in the Constitution are the principles of merit and morality. The strict competitive examinations that grant entry into public service eliminate political patronage that tainted the image of Brazilian civil service in the past, and job security is seen as guaranteeing impartiality, political neutrality, and continuity in civil service. According to the OECD (2010), academic merit assurance is robust and there are ample oversight and recourse mechanisms. Legal and constitutional provisions relating to employment in the public service, such as implicit tenure, reinforce the independence, political neutrality and continuity of the public service (OECD, 2010:232). As emphasized by the OECD, constitutionally guaranteed job security provides Brazilian civil service with independence, political neutrality and continuity (OECD, 2010:232). By establishing public service job security for all civil servants, legislators aimed to create the conditions for a stable, independent and meritocratic career-based civil service. Professional, statutory and permanent civil servants were to be the rule, and exceptions were provided by the Brazilian federal Constitution. The first one of these refers to discretionary appointments. The Brazilian Constitution established in article 37 that these discretionary, commissioned appointments were to be filled in positions of higher level management and assistance, foreseeing even a quota of such positions to be filled only by career civil servants. This provision, however, lacks proper regulation until today, since no law has been enacted in order to establish specific conditions for those appointments,
9 Provided that minimum service rules in the sectors of security, health and transport are guaranteed. 68
resulting that individuals outside of civil service ordinarily fill positions that do not exactly fit to the description from article 37. At the federal level, there are about 46,000 discretionary positions, about 18% of which can be filled by applicants from outside of civil service (dos Santos, 2009:17-18). These positions are divided into DAS positions and commissioned functions, the latter being exclusively filled by civil servants. The DAS system, an acronym for Direo e Acompanhamento Superiores or High Level Management and Assistance, is comprised of about 20,000 management and senior positions as well as assisting positions that can be filled by civil servants but also by individuals from outside of civil service (dos Santos, 2009:17). According to Praa et al. (2011), DAS positions were first implemented during the military dictatorship in 1970 and kept alive in the 1988 Constitution (). DAS appointees are responsible, along with the minister, for the most important decisions taken in each ministry (Praa et al., 2011:145). But DAS appointments lack transparency, since no competition takes place and individuals do not have to demonstrate competence requirements in order to obtain positions. Nevertheless, some flexibility is provided to the system. Furthermore, at least to some extent, DAS appointments are an instrument of political bargain. Praa et al. (2011) write that the proportional, open-list system that characterizes Brazilian politics results in an extremely fragmented congressional representation in Brazil, in which no single party holds more than twenty per cent of the seats in the lower chamber. Consequently, the Head of the Executive needs to constantly negotiate support from the political parties, using bureaucratic appointments as a bargaining strategy (Praa et al., 2011: 145). Besides political purposes, discretionary appointments play an important role in controlling bureaucracy. Dos Santos (2009) writes, for instance, that political appointments are useful instruments for officials who wish to leave their mark during their term of office, and who need to exert minimum vertical controls over career civil servants in order to achieve this. In this matter, we recall Hood and Lodges (2006) nature of political bargain classification, which is very interesting to the extent that political appointees holding discretionary positions conduct agency-type bargains, as they are seen as servants of political masters, while career civil servants conduct trustee-type bargains, since they are more independent. The situation is further complicated when career civil servants exercise political appointments when their trusteeship character can be compromised by partisan loyalty. In quantitative terms, dos Santos (2009) argues that the number of discretionary appointments in Brazilian public administration is perhaps excessive. The already mentioned 20,000 DAS positions are three times the equivalent of the spoils posts in the United States, and virtually eighty times the number of discretionary posts in the United Kingdom. The author claims that patronage and nepotism are closely connected with this incredibly high number of discretionary positions (Aylln and Guerrero, 2005; cited by dos Santos, 2009), and suggests there should be a clear definition of the cases in which these positions could be freely filled in order to avoid political appointment as a rule. Moreover, he believes that in order to prevent patronage, positions of higher hierarchical level should be exclusively filled by permanent civil servants. Whenever political attachment and loyalty 69
is not vital to the implementation of the elected governments specific programs, he writes, higher level management and assisting positions should be provided by professional civil servants (dos Santos, 2009:15). The World Bank follows a similar line, suggesting that recruitment procedures for these positions be institutionalised with more objective measurements of qualification and more transparency (OECD, 2010). The second exception refers to temporary positions, in which no public competition is held and entry is done through a simplified process. These positions are to be filled in case of exceptional public interest alone and on a temporary basis, although in practice this is not always the case. Besides interns and substitute teachers, many posts are currently occupied by outsourced staff and staff that execute permanent functions in spite of being temporary or precarious workers, giving leeway to nepotism and patronage. Discretionary and temporary employees are not entitled to job security and can be dismissed at any time. In practice, though, as discretionary positions are open-term, it is not unusual that non-civil servants (especially in lower positions) retain their jobs for the rest of their lives. Fixed-term contracts (temporary workers) are the exception to this, and figures for Brazil and OECD countries of these types of contracts can be seen in Figure 12 below.
Figure 12 Short-term employees in the central government of selected OECD member countries and Brazil
Source: OECD (2008), the State of Public Service, OECD Publishing, Paris, p.24.
As far as trends for Brazilian public service, scholars in the field notice a tendency of strengthening of the traditional, tenured bureaucracy system. As Praa et al. (2011) write, in 70
2005, a decree established that 75% of the lower-level DAS positions and 50% of the higher level DAS positions had to be occupied exclusively by civil service career bureaucrats. Official data shows that, in October 2008, more than 71% of all DAS discretionary positions were filled by civil servants (Moraes, 2010). Cardoso Jr. and Nogueira (2011) tell us that from 1995 until 2010, the percentage of civil servants in all three levels of Brazilian public administration rose from 78.5 per cent to 90 per cent. Finally, it is interesting to see that the main pressures on civil service are no longer for downsizing and controlling costs related to staff compensations. According to Bueno de Azevedo & Loureiro (2003), what currently concerns reformers is to provide more efficiency in service delivery and accountability in Brazilian public sector. In the following section, we shall investigate reforms undergone so far in Brazilian public sector, in order to assess whether it is following a particular path as has been the case for OECD countries.
4.4. Reforms in Brazilian public service As documented by the OECD (2010), Brazil has been through several phases of public administration reform since the 1980s. These phases had very different emphasis, though, under the successive governments: () first the re-establishment of traditional values such as merit, continuity and probity; then a focus on cutting staff numbers at the beginning of the 1990s; followed by a restructuring of the public administration and the introduction of performance incentives (OECD, 2010:24). Unfortunately, these reforms were quite disconnected and many of them remained incomplete. Under many years of political centralisation, especially during the military regime (1964- 1985), reforms in Brazil tended to be top-down, and public service at the central level was (and still is) reputed to be the model of professional civil service, holding the best salaries as well. It was also during the military regime that Brazilian indirect administration (government-owned enterprises, foundations, autarchies and mixed economy societies) was enlarged, giving leeway to the establishment of labour law regulated public employees. Later on, as we have seen, labour law would end up regulating most civil servants employment conditions until the advent of the 1988 Constitution. After re-democratization, the 1988 Constitution established provisions that aimed to decrease patronage and nepotism in the public sector, determining competitive entry exams as mandatory for all new hiring in public service, but granting job security to all employees with over five years employment in public administration. In the 1990s, subsequent governments were forced to reduce public expenditures as the economic outlook was of stagnation, high unemployment and overall unenthusiastic macroeconomic indicators. Both Presidents Collor (1990-1992) and Fernando Henrique Cardoso (1995-2001) cut back the size of public service at the federal level, by not promoting competitive entry exams as large contingents of public servants retired. Early discussions regarding the flexibilisation of public service in Brazil arose in the mid- 1990s, when President Fernando Henrique Cardosos government initiated discussions 71
regarding the alteration of the constitutional provision that established public service job security. The reforms under FHCs government seemed to be quite influenced by New Public Management theories, with a strong rhetoric emphasizing the need to provide public service with more efficiency and effectiveness and by introducing incentives and planning structures along managerialist lines (OECD, 2010). In 1995, a Guiding Plan to the Reform of the State Apparatus (Plano Diretor da Reforma do Aparelho do Estado) was enacted, specifying the objectives and guidelines for redefining Brazils public administration. This plan emphasized the need for more efficiency as well as empowerment of ministries in formulating policies and controlling administration, providing managers with more room for manoeuvre (OECD, 2010:47). As mentioned, one of the proposals consisted of obliterating security of tenure altogether. In practice, however, the implementation of this and other proposals would require constitutional amendments, which generally did not occur. The legacy of this reform period is only translated into the constitutional amendment n.19 of 1999, which included efficiency as one of the constitutional principles regarding public administration, and included the possibility of dismissal due to insufficient performance. Nevertheless, performance management is not a major part of careers in civil service and remains very limited. From 2003 until 2010, the Lula administration prioritised macroeconomic stabilisation, the promotion of social inclusion, recovery of growth, investment in infrastructure projects, and the fight against corruption (OECD, 2010:48). Public management reforms focused on performance were not seen as a priority in this period, and the government sought to fill a capacity gap in the public sector after years of insufficient staff. Several entry exams were conducted and careers had their salaries adjusted. Generally, civil service in Brazil still holds traditional values very strongly, as these are truly ingrained in public service culture. Statutory civil service is the rule in public employment, competitive exams being established as the predominant form of entry. On the other hand, there is, perhaps, an excessive quantity of discretionary positions that are often filled by civil servants themselves, but that allow some bargain in Brazils highly fragmented political system and consequently some partisan behaviour and patronage. Reforms of the 1990s introduced new values such as performance and efficiency, but were unable to implement considerable changes in the meritocratic and tenured civil service system, which enjoys a fairly good image as the opposite of the patronage and nepotism that dominated public service in the recent past. The one criticism made by a OECD (2010) report relates to the lack of strategic vision of reforms so far, and their discontinuity throughout the years: the priority for Brazil, they write, should thus be to define an HRM strategy based on a solid long-term vision of how core values should evolve (OECD, 2010: 42). To these researchers, there is plenty of room for reforms seeking better cost-effectiveness, as outcome indicators for government- financed programs in Brazil are relatively poor in comparison to the OECD.
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4.5. Lessons from the OECDs civil service reforms for Brazil In the traditional versus post-bureaucracy continuum elaborated by Demmke and Moilanen (2012:41), Brazil would most likely rank among countries such as Germany, Belgium, Luxembourg and France. Brazil has a strong statutory civil service, with well ingrained core traditional values such as merit and job security, the latter certainly being part of civil servants psychological contracts. In fact, a recent decision by the Brazilian Supreme Court conveys this message very well. In 2011, the Court deemed in its Extraordinary Appeal (RE) 598099 that candidates that had been approved in entry exams, within the number of positions established in the entry competitions rules, were entitled with the right to be appointed to these positions. That is, even before being hired by the public administration, selected candidates had a right to their position, and could not simply be dismissed should the administration change its mind regarding the admissions. Unlike countries such as Germany and France, civil servants figures did not tend to drop in the past decade, but the contrary has occurred. In fact, from 2002 until 2010 absolute figures for civil service have risen over 18%. This of course, is representative of a true capacity gap that recent governments were able to fill thanks to an improved macroeconomic scenario of economic growth and development. Since the 1990s, public service had seen its figures drop dramatically due to a fiscal crisis that persisted for several years. Another difference between the trends seen in Brazil and in OECD countries in general is the fact that contractual forms of employment are not seeing any increase in the country, but on the contrary, the career-based system has been consistently enforced over the years, with the exception of a brief period of NPM-rhetoric that tried to impose changes during the FHC government (1995-2002), but that in practice brought no major changes to the tenured system. Unlike OECD countries, career-based tenured employment is not retroceding to core functions of government, but is the rule for employment in the public sector, including in health and education sectors, which in turn have been de-privileged in several OECD countries. As far as exceptions to statutory, tenured civil service, are concerned, there are basically three. The first one concerns employees contracted under labour law in government owned companies and mixed economy societies, such as the Brazilian Post and publicly owned banks, for instance, who were recruited through competitive entry exams nonetheless. Although a Supreme Court decision in 2008 determined that no future hiring in the public sector could be regulated by labour law, employees hired under this legal regime prior to the Courts decision are still subjected to it. Dismissal of these employees should thus at least in theory follow the same rules applied in the private sector. However, the position of courts in the matter of acquired job security is still disputed and controversial. The second category of exceptions is that of temporary workers hired to fulfil an urgent need of the administration in case of public interest. These workers must also undergo entry exams, although simplified, and are submitted to specific laws regulating their employment relationship since the already mentioned 2008 Supreme Court decision 73
established that labour law could no longer discipline this employment relationship. Furthermore, efforts have been conducted by public prosecution authorities in order to curb this type of contracting whenever it seems to be dispensable or illegal. The last exception and perhaps the most significant is that of discretionary appointments, which do not require any entry examination or even demonstration of qualifications, providing leeway for political partisanship and patronage. This type of appointment exists in all levels of government, and in federal government alone there are over 40,000 such positions, a very high figure in comparative standards, considering that it is far superior to that observed in the USA and the UK, for instance. The persistence and quantity of such discretionary positions can be attributed, nonetheless, to the highly fragmented political system in Brazil, in which appointments in central government are often part of the bargain instruments of the Executive in order to obtain support from political parties. A mitigating factor is that a huge proportion of these positions are actually filled by career civil servants (partisan or not), guaranteeing professionalism at least to some extent. It could also be argued that discretionary appointments provide a much needed flexibility to a highly rigid career, tenured, system, with the possibility of dismissing individuals in management positions that prove unfit for the task. From all the reform trajectories of the countries analysed in the OECD, Brazil seems to resemble the most the case of France, where some rhetoric has been present but minor changes have actually been implemented. There, as in Brazil, civil servants have a strong esprit de corps, and job security is seen as a positive feature guarding the State from patronage and abuse. Most importantly, perhaps, is the ingrained Rechtsstaat administrative culture that prevails in both nations, meaning that major changes in the civil servant status would require constitutional amendments and extensive legislative review, proving costly in political terms and reformers being able to count on fierce resistance against any type of precarisation of working conditions. The limited scope and measure of reforms could be attributed to some extent to the consensual and decentralized state in Brazil, but certainly other factors connected to cultural and economic backgrounds would also play a role. Empirical research has not been conducted to date in order to verify this. Furthermore, it would seem quite premature to point to a particular path of reforms which Brazil most likely will follow. Reforms so far have not been very consistent and have changed emphasis depending on the government in place, with some reforms reaffirming traditional values while others tried to bring NPM- inspired rupture with very limited success. The efficiency discourse has made a debut in Brazilian agenda in the 1990s, leaving its mark in a constitutional amendment in 1999, but with no major impacts for civil service. Favourable economic conditions have kept this type of discourse far from the political agenda in the past two administrations, but OECD (2010) studies as well as media and public perception seem to find that there is plenty of room for a more cost effective public administration. Removal of tenure, however, is not likely to occur, since the alternative to tenured public employment leading to some inefficiency is not appealing, due to past 74
patronage and corruption in Brazilian civil service. In simple terms, the medicine would be worse than the illness itself. 5. Conclusion NPM-inspired reforms tended to hold a negative view with regards to public service job security, and as a result, tenure has been abolished in several countries. The empirical evidence presented in this work showed that civil service reform outcomes are however very distinct in OECD countries, resulting in a highly heterogeneous scenario. Generally speaking, it is hard to overlook a very strong trend towards normalisation of employment conditions in private and public sectors, with a rise of precarious contractual employment in most OECD countries. Overall, countries featuring a legalistic, Rechtsstaat-type of administrative culture seem to be more prone to retaining traditional civil service characteristics, while Public Interest countries have unceremoniously stripped civil service of job security and often of its distinctive status as a whole. But the difficulty to ascribe several countries into this classification has led to the realisation that it is perhaps too simplistic and that it has a reduced explanatory value. Following Pollitt and Bouckaerts (2011) classification, we have identified specific trends that could be attributed to a set of institutional characteristics which shaped reform trajectories in OECD. To these authors, countries have not exclusively followed the NPM path of reforms, and cannot thus be typified as reform frontrunners and laggards. In reality, some countries fit an entirely different reform model, denominated by the authors Neo-Weberian State (NWS), which can be divided into managerial and participatory countries. In examining their classification, we went a step further in identifying different trends in reforms, specifically those concerning public service. Contradicting Pollitt and Bouckaerts (2011) allegation that all NWS countries maintain a high status for the top career civil servants, our findings indicate that managerial and participatory moderniser NWS countries present very distinctive outcomes. In participatory countries such as Sweden, Finland and the Netherlands there has been considerable normalisation of employment conditions, with job security virtually extinguished. On the other hand, countries ascribed to the managerial modernisers group, such as Belgium, France and Germany have practically maintained traditional civil service structures. Switzerland and Italy, although classified in this same group, have presented such drastic de-privilegisation that they would be more suitably placed in the NPM reform path in this matter. After a thorough analysis of several OECD countries, our feeling is that national tradition and structures do seem to play a major role in inhibiting or favouring reforms related to job security. When shifting our analysis to Brazil, we have found that this is also the case. In South Americas largest emerging economy, civil service has undergone considerable changes over the past decades, and contracting out of the merit system has been traditionally linked to political patronage and corruption. 75
To overcome this, the 1988 Brazilian Constitution established mandatory competitive entry exams and job security as a rule both seen as the key to a professional and stable public sector workforce. Despite a considerable number of spoils posts that owe their existence to an extremely fragmented political system, the trend in Brazil does not seem to be towards abolishing job security or the public service status, but quite on the contrary, it seems to be in the direction of improving civil servants conditions and increasing its figures. Recent NPM-inspired reforms have proved unsuccessful in their attempt to remove job security, since the required constitutional amendments could never be achieved. Overall, the OECD experience fails to convince countries such as Germany and France that normalisation would be the path to a more efficient public service, and, likewise, there is absolutely no compelling reason for Brazil to follow this path, with institutional factors proving to be quite hostile to reforms in this sense, in both cases. Of course, a set of limitations have to be considered along with these conclusions. Above all, the ambitious scope of the present work is a two-edged sword. On the one side, it provides an ample overview of public service job security and its trends in OECD and Brazil, while on the other, the attempt to condense this enormous range of information may have resulted in important omissions and oversimplifications. Another considerable limitation is the fact that classifying countries into typologies proves to be a difficult task in a context of extreme institutional diversity, to a point that one may inquire whether comparing institutions still actually makes any sense. We seem to believe so, but criticisms in this direction have risen over the past years. Finally, the present work has laid the foundation for vast possibilities of future research. For instance, to our knowledge, no quantitative research comparing reform outcomes in public service has been conducted so far, but only timid attempts, such as those of Demmke and Moilanen (2012), who produced a traditional bureaucracy versus post- bureaucracy continuum, which could certainly be further developed. Comparative OECD country analysis lacks this sort of quantitative empirical research when civil service reform is concerned. Moreover, the identification of patterns of civil service reform, with a set of comparable institutions could be improved in order to provide a clearer typology of countries, enhancing the explanatory power of such a classification. Specifically regarding Brazil, we have identified numerous possibilities of research, especially those regarding public service performance, motivation and the differences between career workforce and political appointees. The information provided by future studies in this area could present evidence confirming or otherwise refuting the findings of the present work, in which a few gaps most certainly exist.
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Je dclare par la prsente que jai ralis ce travail de manire autonome et que je nai utilis aucun autre moyen que ceux indiqus dans le texte. Tous les passages inspirs ou cits dautres auteur-e-s sont dment mentionns comme tels. Je suis conscient-e que de fausses dclarations peuvent conduire lIDHEAP me retirer le diplme MPA. Ce travail reflte mes opinions et nengage que moi-mme, non pas les membres du jury qui mont accompagn-e dans cette recherche. En tant quauteur-e, jai la possibilit de disposer de mon texte selon mon gr. La diffusion du texte avec le logo de lIDHEAP ne peut se faire quavec laccord spcifique du jury. Par ailleurs, jaccepte que mon mmoire soit consult par les tudiant-e-s de lIDHEAP, de mme que par des personnes extrieures, qui seraient intress-e-s par le sujet que jai dvelopp, sous rserve dune dclaration spcifique de confidentialit. Lausanne, le 14 mai 2013.