Introduction To Public Admistration

Course Introduction
This course is a basic introduction to public administration for undergraduate students. The
course on Public Administration has following objectives:
1. Understand the concept of public administration/ management/organization
2. Understand the evolution of the concept of public administration and its importance
3. Understand the role of government
4. Understand the role and core functions of public manager
5. Understand the structure of government /organizations
6. Create understanding about the skills required by the public manager in imparting duties
7. Understand the changing role of government and role of public managers.
Importance of Course
The course on public administration/management is important as every citizen must

understand the functioning of government. Besides, whether one works in private or public
organization or one is doing one’s own business or whatever the profession, this course is
useful as it helps understand organizations and their functioning. It also helps us
understand the environment in which weare working.
Topics
Chapter 1: Introduction
Chapter 2: Power and Politics…
Chapter3: Structure of State
Chapter 4Public and Private Administration
Chapter 5: Centralization And Decentralization
Chapter 6: Good Governance
Chapter 7: Public Finance
Chapter 8:Selection and Training and Public Organizations
Chapter9: Audit
References Nigro and NigroModern Public Administration6th Edition
Jay m. Shafritz E. W. Russell introducing public Administration 9 th

Edition
Baker, R.J.S., 1972, Administrative Theory and Public Administration,

Hutchinson University Library, London
Lecturer: Mohamed Abdi Mumin Page 1

Chapter 1
At the end of lecture the students should be able to understanding:
• The meaning of PA
• The practice of public administration (PA)
• Public administration as a subject of study
• Definition of Public administration
Meaning, Nature and Importance of Public Administration
Meaning
Administration Public administration consists of the activities undertaken by a government

to look after its people, or to manage its affairs. Before discussing the various
interpretations of the concept of public administration, it is pertinent to understand the
meaning of the terms ‘public’ and ‘administration’ separately. The word ‘administration’ has
been derived from Latin words ‘ad’ = to and ‘ministiare’ = serve and ‘Public’ =people or
citizens
Definition of Public Administration
Now we will look at various definitions of public administration to better comprehend the
concept:
Prof. Woodrow Wilson: “Public Administration is a detailed and systematic application of

law.”
Felix A. Nigro :“Administration is the organization and use of men and materials to
accomplish a purpose”.

Simon :“By Public Administration is meant the activities of the executive branches of the
national, state, & local governments Waldo: “Public Administration is the art and science of
management as applied to the affairs of the state.”
L. D. White “Public Administration consists of all those operations having for their purpose
the fulfillment of public policy as declared by authority
ADMINISTRATION, ORGANISATION AND MANAGEMENT
Before we discuss about the, nature, scope and importance of public administration we will
try to know what is administration, organization and management. As these terms are often
used interchangeably and synonymously, it is pertinent to know the differences and
distinctions between these three terms.
Administration is the force, which lays down the object for which an organization and its
management are to strive and the broad policies under which they are to operate.
An Organization is a combination of the necessary human beings, materials, tools,

equipment and working space, appurtenances brought together in systematic and effective
co-relation to accomplish some desired object.
Management is that which leads guides and directs an organization for the accomplishment
of pre-determined object.
To put the above in simple terms, administration sets the goal, management strives to
attain it and organization is the machine of the management for the attainment of the ends
determined by the administration.

NATURE OF PUBLIC ADMINISTRATION
There are two views regarding the Nature of Public Administration, that is, Integral and
Managerial.
According to the integral view, ‘administration’ is the sum total of all the activities – manual,
clerical, managerial, etc., which are undertaken to realise the objectives of the organisation.
Henri Fayol and L.D. White are the supporters of this view.
According to the managerial view of administration, the managerial activities of people who
are involved in planning, organizing, commanding, coordinating and controlling constitute
Public Administration. Luther Gullick, Herbert Simon, Smithburg and Thompson are the
supporters of this view.
ROLE AND IMPORTANCE OF PUBLIC ADMINISTRATION
In the modern state and in developing countries functions and role of Public Administration is
very important. The role and importance of Public Administration are as follows.
1. It is the basis of government.
2. It is the instrument of change in the society.
3. It plays vital role in the life of the people.
4. It is an instrument for executing laws, policies, and programmes of the state
5. It is a stabilizing force in the society as it provides continuity.
6. It is instrument of national integration in the developing countries which are facing class
wars.
Importance of Public Administration as Specialised Subject of Study

One of the important reasons is the practical concern that the government today has to
work towards the public interest. The first and foremost objective of public administration is
to efficiently deliver public services.
Public administration has a special status in the developing countries. Many of these
countries, after independence from the colonial rule have stressed upon speedy socio –
economic development.
Public administration, as witnessed holds a place of significance in the lives of people. It

touches them at every step. For most of their needs, therefore, its teaching should become
a part of the curriculum of educational institutions. People must get to know about the
structure of government, the activities it undertakes and the manner in which these are
actually performed.
Chapter 2
POWER AND POLITICS
At the end of the lecture the students will be able to understand the following:-
1. Concept of power and politics
2. Types of power and conflict
3. The importance of power in organization
Power has been described as the last dirty word. It is easier for most of us to talk about money
than it is to talk about power. People who have it deny it, people who want it try not to appear
to be seeking it, and those who are good at getting it are secretive about how they got it. OB
researchers have learned a lot in recent years about how people gain and use power in
organizations.

A major theme throughout this chapter is that power is a natural process in any group or
organization. As such, you need to know how it’s acquired and exercised if you’re going to fully
understand organizational behavior. While you may have heard the phrase that “power
corrupts, and absolute power corrupts absolutely,” power is not always bad. As one author has
noted, most medicines can kill if taken in the wrong amount and thousands die each year in
automobile accidents, but we don’t abandon chemicals or cars because of the dangers
associated with them. Rather, we consider danger an incentive to get training and information
that’ll help us to use these forces productively. The same applies to power. It’s a reality of
organizational life and it’s not going to go away. Moreover, by learning how power works in
organizations, you’ll be better able to use your knowledge to help you be a more effective
manager.
A Definition of Power
Power as personal characteristics by which one person can influence or dominate another
person
In organizations, power is the ability of one person or department, to influence other people
or departments, in order to bring about the desired results. Without power, organizations will
not be able to achieve their goals, because managers exert influence to force people to do
things that they want. Another element in organization is politics.
Politics is about controlling resources (material, human, financial, information etc.). It is also
about distribution of resources. Who gets what, how, when and where (Harold Las well 1936).
Power is synonymously defined with authority. Authority comes with the job that one is
holding, and power and authority are perceived as one, although power subsumes authority.

“Power and Politics School” views authority as only one of the available sources of
organizational power
It may be mentioned that power is aimed at in all directions in the organizations, i.e. the top
managements power would be felt from top to bottom sideway as well. It can be understood as
the presence of an individual being felt.
Bases of Power
Where does power come from? What is it that gives an individual or a group influence over
others? The answer to these questions is a five-category classification scheme identified by
French and Raven. They proposed that there were five bases or sources of power:
 Legitimate Power
 Reward/Punish Power
 Expert Power
 Referent Power
 Coercive Power
 Legitimate Power
It is the authority given by the organization to the formal management position a manager
holds.

For example: Power of CEO,BOSS,Policeperson. These personnel have power because they hold
certain position.
 Reward
The power which stems from the ability to bestow rewards which include benefits like food
allowance, overtime cash allowance and other fringe benefits
Example: Adults can reward or punish children; managers give cash awards to their sub-
ordinates for good performance.
 Expert Power
It is the power possessed by an individual based on experience, or some skills and ability.
Example: computer expert, specialist doctor
 Referent Power
Organizations are always finding ways of using the effective and suitable way of utilizing the
experience and knowledge of reputable managers as far as employee referrals are concerned.
Power based on Charisma or style of behavior
Coercive Power: Capability to punish non compliance of followers.Punishments have negative

side effects and should be used with caution. Furthermore, punishments can be:
 Suspension to demotion
 Termination
 Unpleasant job assignments
 Withholding of praise and goodwill

Does a person have one or more of the five bases of power? Affirmative responses to the
following questions can answer this question:

 The person can make things difficult for people, and you want to avoid getting him or
her angry. [Coercive power]
 The person is able to give special benefits or rewards to people, and you find it
advantageous to trade favors with him or her. [reward power]
 The person has the right, considering his or her position and your job responsibilities, to
expect you to comply with legitimate requests. [legitimate power]
 The person has the experience and knowledge to earn your respect, and you defer to his
or her judgment in some matters. [expert power]
 You like the person and enjoy doing things for him or her. [referent power]
Power Tactics
This section is a logical extension of our previous discussions. We’ve reviewed where power
comes from. Now, we move to the topic of power tactics to learn how employees translate
their power bases into specific actions. Recent research indicates that there are standardized
ways by which powerholders attempt to get what they want
The findings identified seven tactical dimensions or strategies:
 Reason: Use of facts and data to make a logical or rational presentation of ideas
 Friendliness: Use of flattery, creation of goodwill, acting humble, and being friendly prior
to making a request
 Coalition: Getting the support of other people in the organization to back up the request
 Bargaining: Use of negotiation through the exchange of benefits or favorsAssertiveness:
Use of a direct and forceful approach such as demanding compliance with requests,
repeating reminders, ordering individuals to do what is asked, and pointing out that
rules require compliance
 Higher authority: Gaining the support of higher levels in the organization to back up
requests

 Sanctions: Use of organizationally derived rewards and punishments such as preventing
or promising a salary increase, threatening to give an unsatisfactory performance
evaluation, or withholding a promotion
Additionally, the researchers uncovered four contingency variables that affect the selection of a
power tactic: the manager’s relative power, the manager’s objectives for wanting to influence,
the manager’s expectation of the target person’s willingness to comply, and the organization’s
culture.
Conflict
Conflict is a natural outcome of the close interaction of people. It is defined as difference,

disagreement and dissension. When there is disagreement and dissension people will have a
view point and suggestion that is different. In order to have their views prevail people will try to
find means by which give and take will occur.
Therefore, individuals and groups will use power and political activity to handle their
differences and manage conflict.
Conflict- as Positive and Negative
Conflict can have positive or negative affect on the organization. The positive affect is when
manager agree to some new view points of the disagreeing group/individual.
Conflict can be a positive force because it challenges the status quo, encourages new ideas and
approaches, and leads to change.
However, too much conflict can be harmful to any organization. Because too much conflict can
lead to dead lock and things may not move. Some degree of conflict always occurs in all human
relationships.

Reactions of Managers
Most managers have a negative view toward politics and believe that politics will more often
hurt than help an organization in achieving its goals. Politics is also seen as a negative element.
But some kind of politics is always there in organization and if that is understood managers can
use it in a positive way.

Chapter 3
THE STRUCTURE OF THE STATE
At the end of the lecture the students will be able to understand:
 The structure of government

 The functions of the legislative, the executive and the judiciary
Article 37: The Sovereignty and Powers of the State,
Allah who created the Somaliland nation in this land has endowed it with sovereign status and
powers. The people of the Republic of Somaliland have vested their sovereign powers, as set
out in this Constitution, in a state founded on, and which shall act in accordance with, the
Constitution.
The structure of the state shall consist of three branches which are: the legislative, the
executive and the judiciary. The separation of the powers of these branches shall be as set out
in the Constitution. Each branch shall exercise independently the exclusive powers accorded to
it under the Constitution.
1. The Legislative Branch
Article 38: The Parliament and Joint Sittings
The legislative powers of the Republic of Somaliland are vested exclusively in the Parliament
which shall consist of two Houses - the House of Representatives and the House of the Elders.
The power to legislate cannot be transferred to anyone outside the Parliament
The most important objectives and duties of the Parliament are as follows:
a) The protection of the peace and security of the Republic and Republic’s sovereign rule over
its land, sea and air.

b) The adoption by the Republic of Somaliland of all the laws necessary in a Muslim state.
c) The implementation of the laws of the Republic and the genuine achievement of justice
which is the foundation of the Republic’s general stability and the confidence that the members
of the Somaliland public have in each other and their reliance on each other.
The two Houses of the Parliament shall sit jointly when considering matters such as the
following:
a) The receipt of the Report of the President on the opening of the two Houses;
b) The debates on the Republic of Somaliland joining international or cross regional

organizations, or the ratification of international or regional treaties;
c) The Resolution on and declaration of a state of war when the Republic of Somaliland is
faced with war;
d) The debates on natural disasters;
e) The debates relating to emergency laws;
f) The confirmation of the appointment of the Chairman of the Supreme Court; (and)
g) Any other matters considered by the two Houses as meriting joint sittings
The House of Representatives
Article 39: General Provisions of the House
The House of Representatives consists of members who represent the public, and forms the
first part of the country’s legislative, passing laws and approving and overseeing the general
political situation and the direction of the country.

Article 40: Membership and Election of the House
The House of Representatives shall consist of 82 members who shall be directly elected by
secret ballot in a free general election.
Article 41: Eligibility for Candidacy
Any person who is standing for election to the House of Representatives must fulfill the
following conditions:
1. He must be a Muslim and must behave in accordance with the Islamic religion.
2. He must be a citizen who is not younger than 35 (thirty five) years.
3. He must be physically and mentally able to fulfill his duties.
4. He must be educated to, at least, secondary school level or equivalent.
5. He must not have been subject of a final sentence for a criminal offence by a court within
the preceding five years.
6. He must be a responsible person with appropriate character and behaviour.
7. No employee of the state shall be eligible for candidacy unless he has tendered his
resignation from office prior to a period determined by law. Such resignation shall be accepted.
Article 42: Period of Office and Election Term
1. The period of office of the House of Representatives is 5 (five) years beginning from the
date when the Supreme Court declares the electoral results.

2. The President shall announce the election of the new House a month before the expiry of
the period of office of the outgoing House.
3. If the election of the House of Representatives cannot be conducted because of dire

circumstances, the outgoing House shall continue in office until the end of these circumstances
and a new House is elected. Dire circumstances are: a wide war, internal instability, serious
natural disasters, such as earthquakes, epidemic diseases, (and) serious famines; and shall be
determined and resolved by the House of Elders on the proposal of the Council of Government.
Article 53: The Powers and Duties of the House of Representatives
1. All appointments of Ministers, Deputy Ministers or Heads of the organs of the state shall be
subject to confirmation by the House of Representatives [95] in accordance with the
Constitution.
2. The House of Representatives shall also have power to debate, comment on, refer back with
reasons or approve the programme of the Government.
3. The House of Representatives shall ratify governmental (international) agreements

(treaties) such as political, economic and security agreements or those agreements which
impose new financial burdens which have not been covered in the Budget, or which will involve
the promulgation or amendment of legislation.
4. The House of Representatives shall submit to the Council of Government (the

Cabinet) advice and recommendations about the direction of the general political situation.
5. The Council of Government (the Cabinet) shall seek the approval of both Houses (the House
of Representatives and the House of Elders) for the imposition of a state of emergency[97] in
either the whole of the country or parts of it.
6. The House of Representatives shall have the power to summon the Government or its
organs or agencies in order to question them about the fulfillment of their responsibilities.

7. The Committees of the House of Representatives shall have the power to question
Ministers, Heads of the state organs or agencies or other senior national officers, whose duties
are relevant to them, about the performance of their duties
The House of Elders
Article 57: General Provisions of the House
The House of Elders[102] of the Republic of Somaliland is the second part of the legislative, and
shall review the legislation passed by the House of Representatives before it is forwarded to the
President; and shall have special responsibility for passing laws relating to religion, traditions
(culture) and security.
Article 59: Eligibility for Candidacy
Without prejudice to the requisite age and level of knowledge as set out below, any person
who is standing for election to the House of Elders must fulfill the same conditions which are
needed for eligibility for election to the House of Representatives:
1. He must not be aged less than 45 (forty five years).
2. He must be a person who has a good knowledge of the religion or an elder who is versed in
the traditions.

Article 60: The Membership of the House of Elders
1. The House of Elders shall have 82 (eighty two) members, and shall elect from amongst its
members a Speaker, two deputy Speakers and such committees, as it deems necessary. The
House shall have a Standing Committee[106] of 25 (twenty five) members.
2. The following shall always become honorary members:
a) Five members to be selected by the President on the basis of their special significance to the
nation, whose term of office shall coincide with that of the House.
b) Any person who has served as a Speaker of the House of Elders or the House of
Representatives.
c) Any person who has served as a President or Vice-Presidentof the Republic of Somaliland.
d) Honorary members do not have the right to vote in the House and cannot serve in the
Standing Committee.
Article 61: The Powers and Duties of the House of Elders
1. The passing of legislation relating to religion, traditions (culture) and security.
2. With the exception of financial legislation, the review] of legislation approved by the House
of Representatives. It may refer back, with written reasons of its views, any such legislation to
the House of Representatives only once within 30 (thirty) days beginning from the date when
the relevant legislation was forwarded to the office of the Speaker of the House of Elders.
4. Assistance to the Government in matters relating to religion, security, defence, traditions

(culture), economy and society, whilst consulting the traditional heads of the communities.
5. The summoning of the members of the Government and putting questions to them about
the fulfillment of their duties.

2. THE EXECUTIVE
The Executive Branch (sometimes referred to as “the Government”), shall be headed by the
President and shall consist of:
- The President;
- The Vice-President;
- The Council of Ministers appointed by the President.
Article 82: The Conditions for Eligibility for Election as President or Vice-President
To be elected as President or Vice-President, a person must fulfill the following conditions:
1. He must be a citizen of Somaliland by birth, and, notwithstanding residence as a refugee in

another country, must not hold any other citizenship,
2. He must be a Muslim, and must behave in accordance with Islamic religion.
3. He must not be aged less than 40 years.
4. He must be physically and mentally fit to fulfill his duties.
5. He must possess knowledge of and experience in management (public and otherwise).
6. He must not have been convicted by a court for an offence against the Somaliland nation.
7. His spouse must be Muslim.
8. He must be fully apprised of the realities of the country, having been resident in the
country for a period of at least two years before the date when the election is scheduled to
take place.
9. He must register his private property.

Article 90: The Powers of the President
The President is the Head of the nation and the state, and is the symbol of the unity of the
citizens of the Republic of Somaliland. He is responsible for the care of the nation’s resources,
the protection of the peace, the advancement of the society and the proper conduct of the
administration of the state. In order to fulfill these responsibilities, the President shall have the
following powers:
1. The leadership of the general policy of the Government.
2. The appointment and removal from office of the members of the Council of Ministers
3. Having consulted the appropriate Ministers and in accordance with the Constitution and
other relevant special laws, the appointment and removal from office of the senior officers of
the state. Such senior officers of the state are:
a) the auditor-general[161];
B) the chairman of the central bank;
C) the chairman and the committee members of the civil service agency;
D) the chief accountant;
E) the director generals of the ministries and the state organs and agencies;
F) the commanders of the armed forces and their deputies;
G) ambassadors;
H) the attorney general; and
I) any other senior officers (heads) whose appointment or dismissal has been assigned to the
president in accordance with any law passed by legislative bodies.

4. The leadership of the national armed forces as he is the commander-in-chief.
5. Without prejudice to the principles of just retaliation (qisas[162]) and the limits[163] under
islamic sharia, the exercise of pardon and amnesty[164], and the grant of political asylum after
consultation with the appropriate bodies.
6. The signing of international agreements[165] (and treaties).
7. The participation in international conferences as representative of the republic of

somaliland.
8. Holding audience for foreign diplomats and receiving their credentials.
9. The appointment of ambassadors representing the republic of somaliland in foreign

countries, international and regional organisations.
10. The granting of awards and honours, such as medals.
11. Leadership in conditions of war, and at the same time, the proclamation of state of
emergency[166].
12. The execution (implementation) of laws[167], which does not fall within the jurisdiction of
the judicial branch.
13. Any other powers set out in the constitution or any other laws.
14. The president shall fulfil his duties in accordance with the constitution and other laws of the
land.

Article 91: Powers of the Vice-President
The Vice-President of the nation shall have the power:
1. To act as President in the absence or illness of the President.
2. To undertake such duties as delegated to him by the President.
3. To act] as President in the event of the office of President becoming vacant because of the
following reasons:
A) The resignation of the President;
B) the conviction of the President for a crime which resulted in his loss of office;
C) inability of the President to undertake the duties to which he was elected because of ill
health; and
D) death.
Article 94: The Council of Ministers
1. The Council of Ministers shall assist the President in the fulfilment of his duties and shall
resolve collectively the general policies, planning and programmes of the state.
2. Ministers and Deputy Ministers shall be appointed or dismissed by the President. Their
appointments shall be presented[173] to the House of Representatives whose quorum shall be
half of their total membership plus one, and the House shall confirm or reject the appointment,
on a show of hands, by a simple majority vote.
3. The Minister or Deputy Minister so appointed shall be sworn into office, within thirty (30)
days of the appointment being confirmed by the House of Representatives, by the Chairman of
the Supreme Court, in the presence of the President or, in the latter’s absence from the country
or illness, the Vice-President.

4. Ministers and Deputy Ministers shall not hold any occupation other than that accorded to
them by the nation.
5. No person who can not fulfil the conditions necessary for eligibility for election to the House
of Representatives[174] shall be appointed as a Minister or a Deputy Minister.[175]
6. A Minister may be responsible for one or more Ministries.
7. The President shall preside over the ordinary and extra-ordinary meetings of the Council of
Ministers.
8. No Minister or Deputy Minister may be detained unless caught in flagranto delicto in

respect of an offence punishable by imprisonment for three years or more, or the President has
removed his privileges after having been satisfied by proposals put to him by the Attorney
General.
3. The Judicial Branch
Article 97:
1. The state[180] shall have a judicial branch whose function is to adjudicate on proceedings
between the Government and the public and between the various members of the public.
2. The Judicial Branch shall fulfil it duties in accordance with the Constitution, and shall be
independent of the other branches of the state.

1. The Judiciary shall have the power to:
a) Interpret, in accordance with the Constitution, the laws passed by the Constitutional bodies
and emergency laws;
B) Adjudicate on disputes between the governmental bodies and the public and between the
members of the public;
C) Adjudicate on all disputes which relate to compliance with the provisions of the Constitution
2. A judge shall not engage in any other occupation whilst in office
3. The proper status of judges shall be determined by the law
Article 99: The Structure of the Judiciary
1. The Judiciary consists of the courts and the Procuracy
2. The judges and the members of the Procuracy are independent when exercising their
judicial functions and shall be guided only by the law.
Article 100: The Courts
The courts of the Republic of Somaliland shall consist of:
1. the Supreme Court;
2. the Appeal Courts of the Regions;
3. the Regional Courts;
4. the District Courts; and
5. the Courts of the National Armed Forces.

Article 101: The Supreme Court
The Supreme Court is the highest organ of the Judiciary and is also at the same time the
Constitutional Court[184]. In addition to the Chairman, the number of judges in the court shall
not be less than four[185]. A special law shall govern the court[186].
Article 102: The Lower Courts
The appointment and the conduct of the work of the lower courts (the Appeal Courts of the
regions, the Regional and the District Courts) shall be determined by a special law[187].
Article 103: The Procuracy
The Procuracy of the state shall consist of the Attorney General and his deputies[188].
Article 104: The Courts and Procuracy of the Armed Forces
1. The courts of the Armed Forces shall have special jurisdiction in hearing criminal charges
[189] brought against the members of the armed forces in peace or war.
2. The courts and procuracy of the Armed Forces shall be determined by a special law.
Chapter 4
PUBLIC AND PRIVATE ADMINISTRATION
At the end of the lecture the students will be able to:
1. Understand the dissimilarities between public and private sector
2. Understand the similarities between the two sectors.
The major concern of administration is to properly organize men and material for achieving
desired ends. As a co-operative group activity, administration is truly universal and operates in
all types of public and private organizations. In other words, administration occurs in both

public and private institutional settings. Its nature depends upon the nature of the setting and
goals with which it is concerned. On the basis of the nature of the institutional setting, public
administration can be roughly distinguished from private administration. Public administration
is governmental administration concerned with achieving state purposes, determined by the
state. Private administration, on the other hand is, concerned with administration of private
business organisation and is distinct from public administration. Let us elaborate this
Distinction between public and private administration

John Gaus, Ludivig Von Mises, Paul H. Appleby, Sir Josia Stamp, Herbert A. Simon, Peter
Drucker, etc., in their writings, have made distinction between public and private
administration.
According to Simon, the distinction between public and private administration relates mainly to
three points:
• Public administration is bureaucratic whereas private administration is business like;
• Public administration is political where as private administration is non-political; and
• Public administration is characterised by red-tape where as private administration is free from
it.
Felix A. Nigro has pointed out that government is also different from private organisation, as no
private company can equal to it in size and diversity of activities.
According to Sir Josiah Stamp, the four principles, which differentiate public from private
administration, are:
• Principle of Uniformity: Common and uniform laws and regulations mostly regulate public
Administration.
• Principle of External Financial Control: the representatives of the people through a legislative
body control Government revenues and heads of expenditure.
• Principle of Ministerial Responsibility: Public administration is accountable to its political
masters and through them to the people.

• Principle of marginal Return: The main objective of a business venture is profit, however
small it may be. However, most of the objectives of public administration can neither be
measured in money terms nor checked by accountancy methods.
According to Paul H. Appleby public administration is different from private administration. He

remark, “In broad terms the governmental function and attitude have at least three
complementary aspects that go to differentiate government from all other institutions and
activities: breadth of scope, impact and consideration; public accountability; political
character. No non-governmental institution has the breadth of government.
Appleby notes that the political character of Public Administration differentiates it from private
administration. Public Administration is subject to political direction and control. This is the
primary distinction between the two. He further argues, “Administration is politics since it must
be responsive to the public interest. It is necessary to emphasise the fact that popular political
processes, which are the essence of democracy, can only work through governmental
organisation, and that all governmental organisations are not merely administrative entities,
they are and must be political organisms.”

Appleby reflects further on the distinction between public and private administration in the
context of public accountability “Government administration differs from all other
administrative work to a degree not even faintly realised outside, by virtue of its public nature,
the way in which it is subject to public scrutiny and outcry. This interest often runs to details of
administrative action that in private business would never be of concern other then inside the
organisation.
According to Appleby private administration cannot claim the breadth of scope, impact and
consideration of the public administration. He observes, “The organised government impinges
upon and is affected by practically everything that exists or moves in our society. It involves
policies and actions of immense complexity. Its fullest possible understanding requires the
wisdom of many specialists as well as the key participants in public and private life.
The more important distinguishing features of Public administration may be described under
the following sub-heads:
Political Direction: Public administration is political, while private administration is non-
political, public administration takes place in a political context.
Absence of profit motive: The absence of profit motive from the Public administration is
another feature, which distinguishes it from the private administration. The primary purpose of
governmental organisation is to provide services to the people and promote social good.
Prestige: Public administrators who serve in the Government enjoy high status and prestige in
comparison to their counterparts in private enterprises especially developing countries.
Public Gaze: All the actions of public administration are exposed to wide public gaze because
the public closely watches it. This does not happen in private administration.
Service and Cost: Most governments spend more money than their income or revenues. That is
the reason for finding generally a deficit budget that is, expenditure exceeding income.
Conversely, private administration income often exceeds expenditure without which they
cannot survive.
Legal framework: Public administration operates within a legal framework. It is rule oriented.
The responsibilities of public administrators are fixed by a set of constitutional practices, laws

and regulations. Government officials are obliged to act within their legal powers and not
outside the law.
Consistency of treatment: A government official is required by law to maintain a high degree of
consistency in his dealings with the public. He has to observe the principle of equality of
treatment in serving the people. It is a legal obligation to not to discriminate against any
person.
Public accountability: Public accountability is the hallmark of Public administration in a
democracy. Public administration is responsible to the public, though not directly but indirectly
through political executive, legislature, judiciary, etc.
Large-scale administration: Public administration is large-scale administration. It is said that
almost anything under the sun is directly or indirectly under the domain of public
administration. It is by all means larger than any big private concern in terms of size.,
complexity and diversity of activities.
Monopolistic and Essential Services: In the field of public administration, there is generally a
monopoly of the government and it does not generally allow private parties to compete with it.
For example, no person or bodies of persons are allowed to establish or perform functions
related to public services like national security, foreign relations, law and order, mint and
currency, as these are the exclusive fields of the government and thoroughly important for the
community and polity to prosper.
Officials remain Anonymous: In public administration, even the most senior officials remain
anonymous and their identity is not disclosed. This is so because whatever they do, they do in
the name of the government and not in their own name.
Financial meticulousness: Public administration has to be very careful in financial matters
because it is working as custodian of people’s money.
Lower level of Efficiency: Efficiency is said to be the cornerstone of any organisation. However,
due to varied responsibilities, lack of effective control, less accountability, involvement of a
large number of levels and job security of employees, efficiency has not been there in public
organisations to the effect desired. When compared to private administration, one finds that
the degree of efficiency in public organisations is at a lower level. With profit as the major

motive coupled with excessive control and flexibility in personnel administration the level of
efficiency in private organisations is much higher.
Similarities between Public and Private Administration

Scholars like Henry Fayol, Mary P. Folletand L. Urwickdo not make a distinction between public
and private administration. The classical writers held the view that public and private
administrations are the undifferentiated members of the genus administration. Henri Foyal, for
example, says that there is only one administrative science, which can be applied equally well
to public and private sectors. In his address in the Second International Congress of
Administrative Science, Fayolremarked, “The meaning which I have given to the word
administration and which has been generally adopted, broadens considerably the field of
administrative sciences. It embraces not only the public service but also enterprises of every
size and description, of every form and every purpose. All undertakings require planning,
organisation, command, co-ordination and control and in order to function properly, all must
observe the same general principles. We are no longer confronted with several administrative
sciences but with one which can be applied equally well to public and to private affairs”.
The following similarities between the two types of administration may be noted:
1. Both public and business administration rely on common skills, techniques and procedures.
2. In modern times the principle of profit motive is not peculiar to private administration,
because it is now accepted as a laudable objective for public sector enterprises also.
3. In personnel management, the private organisations have been influenced greatly by the
practices of public organisations.
4. The private concerns are also subjected to many legal constraints. Government is exercising
much control over business firms through regulatory legislation such as taxation,
monetary and licensing policies, etc. Consequently, they are not as free as they once
used to be.
5. There is a similar type of hierarchy and management systems, both in public and private
sectors. Both have same kind of organization structure, superior – subordinate
relationships, etc.

6. Both Public and private administration carries on continuous efforts to improve their internal
working and also for efficient delivery of services to people or customers.
7. Public and private administration serves the people, whether being called clients or
customers. Both have to maintain close contact with people to inform about their
services and also to get feedback about services and product. In both the cases, public
relations help them to inform and improve their services to the people.
The preceding discussion shows that the distinction between public and private administration
is not absolute. In fact, they are becoming more and more alike in many respects. However, it
does not mean that there are no significant differences between these two types of
administration. Waldo observes that Public administration is distinct because it reflects the
peculiar characteristics of government activity and the public setting in which it functions.
Given the wide acceptance of the ideas of liberalisation, privatisation and globalisation, both
public and private administrations have to compete in the same area to provide services to
people. Here both are dealing with customers, who pay for their services, in such a situation it
narrows down the differences between the public and private administration. New Public
Management, which has come into prominence, recently, puts emphasis on managerial
techniques, which are to be adopted by public administration for the efficient delivery of public
services. But in providing public services in the field of social and welfare areas there exists a
difference between public and private administration With this brief characterization, it could
be stated that both public and private administration are placed in different environments. But
this difference is more apparent than real. According to Waldo, The generalization which
distinguish public administration from private administration by special care for equality of
treatment, legal authorization of, and responsibility of action, public justification of decisions,
financial probity and meticulousness, etc. are of very limited applicability,” In fact public and
private administrations are the “two species of the same genus, but they have special values
and techniques of their own which give to each its distinctive character.

Chapter 5
Centralization and decentralization
After reading this chapter, the students will be able to understand:
 What is centralization
 What is decentralization
 Advantage of centralization
 Disadvantage of centralization
 Objectives of decentralization
 Advantage of decentralization
 Disadvantage of decentralization
 Types of decentralization
 Political decentralization
 Administrative decentralization
Introduction
The systematic and consistent reservation of authority at central point within the organization
is called centralization of authority. The various activities of office are brought under the direct
control of the office manager. According to Fayol—"everything which goes to increase the
importance of the subordinate's role is decentralization and everything which goes to reduce it
is centralization." The importance of the subordinate is reduced and the importance of the
superior executive is increased in centralization.
Centralization of office services may be physical or functional centralization. In the former state
of centralization, all office personnel are placed at a central place for work but in the later set

up, personnel are scattered at departmental level but their control is exercised from a central
point. Centralization of authority in pure sense of the term is not found. A mixture of
centralization and decentralization is the practice of today.
The issues of centralization and decentralization involve the principle of delegation of authority.
• When a limited amount of authority is delegated in an organization, it is usually

characterized as centralized.
• When a significant amount of authority is delegated to lower levels in the organization,
the business is characterized as decentralized.
Centralization and decentralization are opposites, and there are different degrees of each. In a
highly centralized organization, employees at lower levels have a limited range of decision-
making authority. The scope of authority to make decisions in decentralized organizations, by
way of contrast, is very broad for lower level employees.
What Is Centralization?
Centralization means the authority is centralized at the top level of management. Decisions
are made by the higher level managers. It is opposite of decentralization. Top managers
make all the decisions. Subordinates simply carry them out.
According to Ricky Griffin,” Centralization is the process of systematically retaining power
and authority in the hands of higher level managers”.
The systematic and consistent reservation of authority at central point within the organization
is called centralization of authority. The various activities of office are brought under the direct
control of the office manager. According to Fayol—"everything which goes to increase the
importance of the subordinate's role is decentralization and everything which goes to reduce it

is centralization." The importance of the subordinate is reduced and the importance of the
superior executive is increased in centralization.
Advantages Of Centralization
• Personal leadership: Centralization encourages and permit personal leadership. The
introduction of personal leadership facilitates quick action, aggressive marketing and
attainment of pin-pointed objective or purpose.
• Specialization management: The higher the specialization of jobs, the greater the need
for centralization. Tall hierarchical organizations with functional departments are best
managed through centralization.
• Reduced cost: The standardized procedure and method helps in considerably reduction
of office cost. Office cost is reduced as it does not emphasizes on more specialists, and
more departmental machines and equipment.
• Better co-ordination: Centralization facilitate better coordination among various
operations. Direct control and supervision are facilitated which results in less likelihood
of conflict of authority and duplication of work.
• Significant decision making: Non-programmed significant decisions require centralized
decision making by top management. Decentralization is not suitable for making such
decisions. Moreover, management philosophy may also favor centralization in such
decision.
• Improved capacity at lower levels: Subordinates may lack capacity or be unwilling and
inexperienced to exercise decentralized authority. Such situations give advantage to
centralization.
• Environmental stability: Centralization is the most suitable model for making decisions
in stable environment.
• Crisis management: When organizations face crisis or risk of failure, centralized decision
making by top management has advantage.
• Cost effective: High cost of decentralization makes centralization advantageous.
Duplication of efforts is minimized.
Disadvantages Of Centralization

• Poor environmental adaptation: Organizational environment tends to be dynamic,
complex and uncertain. Centralization cannot quickly adapt to the changing
environment.
• Poor diversification management: Modern organizations tend to be highly diversified.
They are also geographically dispersed. Centralization is not suitable to manage
diversified and dispersed organizations.
• Poor management development: Centralization blocks the management development
of subordinates. Their skills and talents remain unutilized because of lack of
participation and involvement in decision making.
• Delayed decisions: Centralization creates multiple layers for decision making purposes.
The files move through the hierarchy from subordinates to bosses. This delays decision
making.
• Delay in work: Centralization creates loss of man-hours and delay in performance of
work because of transmission of records from and to the central control room. Quick
decision is not possible which also results delay in office work.
• No special attention: In centralization no special attention is given to special work as all
works are done at one place.
• Unsuitable for programmed decisions: Programmed decisions are routine-type
decisions. They are relatively minor decisions. Such decisions are not suitable for
centralization. They burden top managers.
• What Is Decentralization?
Decentralization is the result of delegation of authority. It is devolution of decision making
authority downward.
According to Koontz and Weihrich,” Decentralization is the tendency to disperse decision-
making authority in an organized structure”.
Decentralization of authority means conscious/systematic effort to bring dispersal
(spreading) of decision making power to the lower levels of the Organization. In
decentralization, only broad powers will be reserved at the top level. Such powers include

power to plan, organize, direct and control and maximum powers will delegated to the
authority at the lower level.
• Objectives Of Decentralization
The following list enumerates frequently cited objectives.
• Increase service delivery effectiveness through adaptation to local conditions

and targeting to local needs.
• Improve efficiency of resource utilization by incorporating local preferences into
determination of service mix and expenditures.
• Increase health worker motivation through local supervision and involvement of
service users in oversight, performance assessment, etc.
• Improve accountability, transparency, and legitimacy by embedding health
service delivery in local administrative systems.
• Increase citizen participation in health service delivery by creating systems and
procedures for involvement in planning, allocation, oversight, and evaluation.
• Increase equity of service delivery by enabling marginalized and poor groups to
access health care providers and to influence decisions on service mix and
expenditures.
• Increase the role of the private sector in health service delivery by separating
financing of health care from service provision.
• Increase cost-consciousness and efficiency of service production through closer
links between resource allocation and utilization.
Advantages of Decentralization
• Quicker and better decisions: it disperses decision making authority close to unit
managers who execute decisions. It reduces problems of communication and red tape.
This leads to quicker and better decision making.

• Diversification: decentralization facilitates diversification of products, activities and
markets. Profit centers can be established with independence in decision making.
• Competitive organizational climate: Decentralization promotes competitive climate for
improving performance among divisions and profit centers.
• Management development: decentralization encourages managers to exercise freedom
and independence in decision making. They learn to make decisions and exercise
judgment. This develops managerial competency.
• Environmental adaptation: Decentralization helps organizations to adapt to fast-
changing environment.
• Relieves burden of top management: Top managers are relieved from making routine
decisions. They can concentrate on important issues of strategic relevance.
• Higher motivation and morale: Decentralization provides power, prestige and status to
subordinates. This increases motivation and morale of subordinates.
• Disadvantages Of Decentralization
• Problem of coordination and control: Decentralization provides freedom and
independence in decision making. This can lead to inconsistencies in policies, programs
and procedures. This can create the problem of poor coordination and control.
• High cost: Decentralization can result in duplication of efforts and waste of resources.
Human resources need to be trained. This results in increased costs. It is also time
consuming.
• Unsuitable for specialized services: Decentralization is not suitable in tackling
emergency situations. Adjustment to fast changing situation may be difficult.
• Handicap in emergency: Decentralization can become a handicap in tackling emergency
situations. Adjustment to fast changing situation may be difficult.
• Lack of managerial capacity: Decentralization requires competent and skilled
subordinates. It may be difficult to find them.
• Conflict: Decentralization puts more pressure on divisional heads to realize profits at
any cost. Often in meeting their new profit plans, bring conflicts among managers.

• Uniform policies not Followed: Under decentralization, it is not possible to follow
uniform policies and standardized procedures. Each manager will work and frame
policies according to his talent.
Types of Decentralization
Types of decentralization include
A. Political decentralization,
B. Administrative decentralization,
 Deconcentration
 Delegation and
 Devolution
C. Fiscal decentralization and
D. Economic or Market decentralization.
 Privatization
 Deregulation
A. Political Decentralization: aims to give citizens or their elected representatives more

power in public decision-making. It is often associated with pluralistic politics and
representative gov’t, but it can also support democratization by giving citizens, or their
representatives, more influence in the formulation and implementation of policies.
Advocates of political decentralization assume that decisions made with greater
participation will be better informed & more relevant to diverse interests in society
than those made only by national political authorities. The concept implies that the
selection of representatives from local electoral jurisdictions allows citizens to know
better their political representatives & allows elected officials to know better the needs
& desires of their constituents.

Political decentralization often requires constitutional or statutory reforms, the development
of pluralistic political parties, the strengthening of legislatures, creation of local political units,
and the encouragement of effective public interest groups.
B. Administrative decentralization seeks to redistribute authority, responsibility and

financial resources for providing public services among different levels of government. It
is the transfer of responsibility for the planning, financing and management
of certain public functions from the central government and its agencies to field units of
government agencies, subordinate units or levels of government, semi-autonomous
public authorities or corporations, or area-wide, regional or functional authorities.
The three major forms of administrative decentralization:
A. Deconcentration,
B. Delegation, and
C. Devolution
• Deconcentration. which is often considered to be the weakest form of decentralization

and is used most frequently in unitary states-- redistributes decision making authority
and financial and management responsibilities among different levels of
the central government. It can merely shift responsibilities from central government
officials in the capital city to those working in regions, provinces or districts, or it can
create strong field administration or local administrative capacity under the supervision
of central government ministries.
• Delegation. Delegation is a more extensive form of decentralization. Through

delegation central governments transfer responsibility for decision-making and

administration of public functions to semi-autonomous organizations not wholly
controlled by the central government, but ultimately accountable to it.
•
Governments delegate responsibilities when they create public enterprises or corporations,
housing authorities, transportation authorities, special service districts, semi-autonomous
school districts, regional development corporations, or special project implementation units.
Usually these organizations have a great deal of discretion in decision-making. They may be
exempt from constraints on regular civil service personnel and may be able to charge users
directly for services.
• Devolution. A third type of administrative decentralization is devolution. When

governments devolve functions, they transfer authority for decision-making, finance,
and management to quasi-autonomous units of local government with corporate status.
Devolution usually transfers responsibilities for services to municipalities that elect their
own mayors and councils, raise their own revenues, and have independent authority to
make investment decisions. In a devolved system, local governments have clear and
legally recognized geographical boundaries over which they exercise authority and
within which they perform public functions. It is this type of administrative
decentralization that underlies most political decentralization.
C. Fiscal Decentralization
Financial responsibility is a core component of decentralization. If local gov’ts and private
organizations are to carry out decentralized functions effectively, they must have an adequate
level of revenues –either raised locally or transferred from the central government– as well as
the authority to make decisions about expenditures. Fiscal decentralization can take many
forms, including a) self-financing or cost recovery through user charges, b) co-financing or co-
production arrangements through which the users participate in providing services and
infrastructure through monetary or labor contributions; c) expansion of local revenues through
property or sales taxes, or indirect charges; d) intergov’tal transfers that shift general revenues
from taxes collected by the central gov’t to local gov’ts for general or specific uses; and e)

authorization of municipal borrowing and the mobilization of either national or local gov’t
resources through loan guarantees. In many developing countries local gov’ts or administrative
units possess the legal authority to impose taxes, but the tax base is so weak and the
dependence on central gov’t subsidies so ingrained that no attempt is made to exercise that
authority.
D. Economic or Market Decentralization

• The most complete forms of decentralization from a government's perspective are
privatization and deregulation because they shift responsibility for functions from the
public to the private sector. Privatization and deregulation are usually, but not always,
accompanied by economic liberalization and market development policies. They allow
functions that had been primarily or exclusively the responsibility of government to be
carried out by businesses, community groups, cooperatives, private voluntary
associations, and other non-government organizations.
• Privatization. Privatization can range in scope from leaving the provision of goods and
services entirely to the free operation of the market to "public-private partnerships" in
which government and the private sector cooperate to provide services or
infrastructure.
• Deregulation. Deregulation reduces the legal constraints on private participation in
service provision or allows competition among private suppliers for services that in the
past had been provided by the government or by regulated monopolies.
In recent years privatization and deregulation have become more attractive alternatives to
governments in developing countries. Local governments are also privatizing by contracting out
service provision or administration.
Privatization can include:
• Allowing private enterprises to perform functions that had previously been monopolized
by government;
• Contracting out the provision or mngt of public services or facilities to commercial
enterprises indeed, there is a wide range of possible ways in which function can be
organized & many examples of within public sector and public-private institutional
forms, particularly in infrastructure;
• Financing public sector programs through the capital market (with adequate regulation
or measures to prevent situations where the central government bears the risk for this
borrowing) and allowing private organizations to participate; and
• Transferring responsibility for providing services from the public to the private sector
through the divestiture of state-owned enterprises.
Chapter 6
GOOD Governance
The main objectives:-
To understand the new tools helping the administration

Concentrate on–Good Governance
GOOD GOVERNANCE.
Recently the terms "governance" and "good governance" are being increasingly used in
development literature. Bad governance is being increasingly regarded as one of the root
causes of all evil within our societies.
Major donors and international financial institutions are increasingly basing their aid and loans
on the condition that reforms that ensure "good governance" are undertaken.
• The concept of "governance" is not new. It is as old as human civilization. Simply put
"Governance" means: the process of decision making and the process by which decisions are
implemented (or not implemented). Governance can be used in several contexts such as
corporate governance, international governance, national governance and local
governance
GOVERNANCE. FORMAL/INFORMAL FACTORS
Since governance is the process of decision making and the process by which decisions are
implemented, an analysis of governance focuses on the formal and informal actors involved in
decision-making and implementing the decisions made and the formal and informal structures
that have been set in place to arrive at and implement the decision.
Government is one of the actors in governance. Other actors involved in governance vary
depending on the level of government that is under discussion. In rural areas, for example,
other actors may include influential land lords, associations of peasant farmers, cooperatives,
NGOs, research institutes, religious leaders, finance institutions political parties etc. The
situation in urban areas is much more complex. In addition to the above actors, media,
lobbyists, international donors, multi-national corporations, etc. may play a role in decision
making or in influencing the decision-making process.
Characteristics GOOD GOVERNANCE.

Good governance has 8 major characteristics. It is participatory, consensus oriented,
accountable, transparent, responsive, effective and efficient, equitable and inclusive and

follows the rule of law. It assures that corruption is minimized, the views of minorities are
taken into account and that the voices of the most vulnerable in society are heard in decision-
making. It is
also responsive to the present and future needs of society
Participation by both men and women is a key cornerstone of good governance. Participation
could be either direct or through legitimate intermediate institutions or representatives. It is
important to point out that representative democracy does not necessarily mean that the
concerns of the most vulnerable in society would be taken into consideration in decision
making.
Participation needs to be informed and organized. This means freedom of association and
expression on the one hand and an organized civil society on the other hand.
RULE OF LAW.
Good governance requires fair legal frameworks that are enforced impartially. It also requires
full protection of human rights, particularly those of minorities. Impartial enforcement of laws
requires an independent judiciary and an impartial and
incorruptible police force
Good governance requires fair legal frameworks that are enforced impartially. It also requires
full protection of human rights, particularly those of minorities. Impartial enforcement of laws
requires an independent judiciary and an impartial and
incorruptible police force
TRANSPARENCY.
Transparency means that decisions taken and their enforcement are done in a manner that
follows rules and regulations. It also means that information is freely available and directly
accessible to those who will be affected by such decisions and their enforcement. It also means
that enough information is provided and that it is provided in easily understandable forms and

media.
RESPONSIVENESS.
Responsiveness Good governance requires that institutions and processes try to serve all
stakeholders within a reasonable timeframe..
CONSENUS ORIENTED.
There are several actors and as many view points in a given society. Good governance requires
mediation of the different interests in society to reach a broad consensus in society on what is
in the best interest of the whole community and how this can be achieved. It also requires a
broad and long term perspective on what is needed for sustainable human development and
how to achieve the goals of such development. This can only result from an understanding of
the historical, cultural and social contexts of a given society or community.
EQUITY AND INCLUSIVENESS.
A society’s well being depends on ensuring that all its members feel that they have a stake in it
and do not feel excluded from the mainstream of society. This requires all groups, but
particularly the most vulnerable, have opportunities to improve or maintain their well being.
Effectiveness and efficiency

Good governance means that processes and institutions produce results that meet the needs of
society while making the best use of resources at their disposal. The concept of efficiency in
the context of good governance also covers the sustainable use of natural resources and the
protection of the environment. ..
ACCOUNTABILITY
Accountability is a key requirement of good governance. Not only governmental institutions
but also the private sector and civil society organizations must be accountable to the public and
to their institutional stakeholders. Who is accountable to whom varies depending on whether
decisions or actions taken are internal or external to an organization or institution. In general
an organization or an institution is accountable to those who will be affected by its decisions or
actions. Accountability cannot be enforced without transparency and the rule of law.
CHAPTER 7
PUBLIC FINANCE

At the end of the lecture the students will be able to :
• - Understand the concept of Public Finance,
• - The various components of Public Finance and
• - The difference between Private and Public Finance
Public finance is related to the financing of government activities i.e. how government raises
money to produce goods and services. It a subject discusses financial operation of the public
treasury. Public finance is a subject and is taught as a semester course. But since than this is
introductory course. We will only touch upon this subject in few lectures.
• Concept & Definition
Public finance deals with the finance of the government. The finances of the government include
the raising and disbursement of government fund’ or public fund.
• Components of Public Finance
The government operates at three levels, i.e., Federal, provincial and Local. The subject of public
finance looks into financial problems and policies of government at these three levels and studies
inter governmental financial relation. The area of public finance also sees that how the 3
government raise and share resources.
• Following are the main components of public finance:
1) Public revenue: sources of government income are:
a. Taxation and its effect on economy
b. Non-tax revenues such as fee, fines, grants, interest receipt etc.
c. Public debt problems: public debt is a source of income
2) Public Expenditure: through public expenditure government participates and contributes to
3) Financial Administration: It involves issues of financial administration including public
budget, its approval, financial implementation, control systems and audit. Without the study of
financial administration the subject of public finance remains incomplete.
Similarities & Dissimilarities between Public and Private Finance

• Private finance means the financial problems of individual economic unit, i.e., a
household, a shop, a firm etc. Private finance does not form part of government. We will
look at the similarities and dissimilarities to develop analytical framework for public
finance.
Similarities between Public and Private Finance
1. Both the State as well as individual aim at the satisfaction of human wants through their
financial operations. The individuals spend their income to satisfy their personal wants whereas
the state spends for the satisfaction of communal or social wants
2. Both the States and Individual at times have to depend on borrowing, when their expenditures
are greater than incomes.
3. Both Public Finance and Private Finance have income and expenditure. The ultimate aim of
both is to balance their income and expenditure.
4. For both kinds of finances, the guiding principle is rationality. Rationality is in the sense that
maximization of personal benefits and social benefits through corresponding expenditure.
5. Both are concerned with the problem of economic choice, that is, they try to satisfy unlimited
ends with scarce resources having alternative uses.
Difference between Public finance and Private Finance

The main difference between Public finance and Private Finance is The public sector is made
up of all government agencies, corporations, and local offices. The private sector is made up of
companies, individuals, and companies.
The primary goal of the public sector is to build social gains while the private sector is to make
money.
• The ultimate winners of the public sector strategy are the people themselves, whereas the
beneficiaries of the private finance strategy are the managers, shareholders, or individuals
themselves.
• Revenue can be obtained without one’s consent in Public Finance but the same doesn’t
work out for Private finance.
• Public finance focus on investments for long terms but Private Finance focus on Short
term investments
Chapter 8

SELECTION AND TRAINING AND PUBLIC ORGANIZATIONS
At the end of lecture the student will be able to:

- Understand the application of HRM concepts and principles in federal government
- Identify the agencies of recruitment, selection, orientation and training in government
- Examine performance evaluation in public organization
- Examine training of public managers
What is the Recruiting and Selection Organization?

Civil Service Commission (CSC) is the recruiting and selection organization in the public sector.
It announces the examination date every year for examination to be held for recruitment of civil
servants. Those who qualify exams are selected for 15 occupations in the Grades. As you may
recall that there are two methods of recruitment in public organization. These are through
examination and other through direct advertisement.
Requirement for Admission to the Civil Service
1. Appointment to the Civil Service shall be open only to citizen who are at least eighteen
years of age, mentally fit for appointment to the office, of good moral conduct and who
possess the following educational qualifications:
a) A university degree or its equivalent for Division "A"
b) A higher secondary school Diploma or its equivalent for Division "B"
c) A lower secondary school Diploma or its equivalent for Division "C"
d) Elementary school Diploma or its equivalent for Division "D"
2. An applicant for admission to the Civil Service must possess the prescribed qualifications on the
Date of application.
Entrance examination and Appointment of Examination Committee

1. Officials shall be appointed on probation at the initial grade of the
respective Division on the basis of open competitive examination and on
the basis of genuine qualifications except as otherwise provided in this
law.
2. Where two or more candidates obtain equal marks in an examination, the
older one will be selected.
3. The terms and conditions of open competition examination shall be
established by the commission, in conformity with the advice of the
council of ministers the examiners will be appointed by the commission.
4. Except as otherwise provided by this law, any appointment not in
compliance with the provisions of paragraph 1 of this article shall be null
and void and shall not give rise to any obligation on the part of
administration.
Direct Appointment

In the event of exceptional circumstances, citizens who have the requirements for admission to
the Civil Service under Article 8 paragraph 1, and who have distinguished themselves for their
outstanding ability, competence and experience, may be appointed by the commission in a grade
not lower than grade "A4", without competitive examination or probation
Oath
A senior official at the Director General level and above shall, on entering the Civil Service, take
the following Oath: "/ DO SWEAR IN THE NAME OF GOD THAT I WILL ABIDE
LOYALLY BY THE LAWS OF THE REPUBLIC, WILL FULFILL ALL THE DUTIES OF
MY OFFICE WITH DILIGENCE AND ZEAL, WILL SCRUPULOUSLY KEEP OFFICIAL
SECRETS AND WILL CONDUCT MYSELF IN A MANNER BEFITTING THE DIGNITY
OF THE OFFICE"
Temporary Assignment to Public Agencies
An official may be temporarily assigned to a public agency having a legal entity, with the prior
agreement of the agency concerned
During such assignment, the official shall receive emoluments not lower than those provided by for
his/her division and grade, and such emoluments shall be paid by the agency concerned.
The service of the official shall during the assignment to public agency, for all purposes be deemed to be
service in the Administration.
Promotion
The suitability of an official for promotion to the higher grade shall be considered
(a) In the order of the seniority;
(b) On the basis of examination;
(c) On the basis of special merit, In accordance with the terms and conditions laid down in the
schedules annexed to this law
Transfer
Transfer is the movement of an official from one post to another post other than by way of
promotion, or demotion .The transfer of an official shall not alter his pay or incremental date.
Discipline
1. No official shall be subject to disciplinary proceedings except in accordance with the

provisions of this chapter.
2. Without prejudice to any civil or criminal proceedings to which he/she may have rendered
himself/herself liable, an official who ceases to fulfill or violates any of the provisions of this law
or regulations made hereunder shall be dealt with:
a) By a ministerial Disciplinary Board, or
b) By a National Disciplinary Board
Penalties and Offences
1. The following penalties may be imposed by a ministerial or National Disciplinary Board
a) Censure in writing
b) Fine not exceeding the amount of seven days pay
c) Stoppage of pay for a period nor exceeding thirty days, which period shall not be counted
towards pension.
d) Suspension from duty with loss of pay for a period not exceeding three months, this period
shall not be counted toward pension
e) Retardation of promotion or increment
f) Reduction of pay not exceeding one third and for a period not exceeding six months.
g)Demotion
h) Dismissal
2. The penalties referred to in sub-paragraph (a) to (e) of the preceding paragraph may be
imposed, depending in the seriousness of the offence for:
a) Gross negligence or unsatisfactory service
b) Willful disobedience
c) Conduct causing interruption or disturbance of the work of the office
d) Absence from duty without justification
e) Tolerating abuses committed by subordinate officials
3. The penalties referred to in sub-paragraph

1 (f. g. h.) may be imposed, depending on the seriousness of the offences for:
a) Gross abuse of authority
b) Violating of official duties causing damage to the state, to public or local administration or to
private person.
c) Wrongful use or misappropriation of funds administered by, or entrusted to an official.
d) Demanding or accepting any gratification in return for acts performed or to be performed in

the course of official duty.
e) Acts of gross insubordination
f) Violation of official secrets
g) Abuse of official position for personal gain
4. Where there are aggravating circumstances or in case of repetition of offences, or where

there are extenuating circumstances, the penalties which may be imposed may be greater or
lesser than those provided for the particular offences.
5. Periodic increment and promotions for a period of two years shall not be grant to an official
in respect of whom any of the disciplinary measure referred to in letters (b), (c) and (d) of
paragraph 1 of the preceding article have been taken.
CHAPTER 9
AUDIT
At the end of lecture the students will be able to:
- Understand the concept of audit and audit in government
- Understand the concept of Performance Audit
- Understand Audit as control tool
Audit is a specialized area of financial management and control. Their instruments of control are
governments rules, regulations and procedures which must adhered to when making financial
transactions.
Definitions of Audit
Following are some of the definitions of audit:
 It is an examination and verification of a company’s financial and accounting records and
supporting documents by a professional,
 It is a formal examination of an organization’s accounts or financial situation. An audit
may also include examination of compliance with applicable award terms, laws,
regulations and policies after transactions are made. It is the examination of some or all
of the following items: documents, records, reports, systems of internal control,
accounting procedures, and other evidence, for one or more of the following purposes:
 An examination and verification of a company’s financial and accounting
records and supporting documents by a professional
 A formal examination of an organization’s individual accounts or financial
situation. An audit may also include examination of compliance with
applicable award terms, laws, regulations and policies.
 The examination of some or all of the following items: documents, records,
reports, systems of internal control, accounting procedures, and other
evidence, for one or more of the following purposes:
(a) Determining the propriety, legality, and mathematical accuracy of
proposed or consummated transactions;
(b) Ascertaining whether all transactions have been recorded; and
(c) Determining whether transactions are accurately reflected in the accounts
and in the statements drawn there from in accordance with accepted
accounting principles.
Use of Public Money

Public money is the money from tax and non tax revenue and borrowed money. This money has
to be spent according to the laid down procedures (Drawing and disbursing Handbook). The
fundamental principle of spending public money is to spend public money in a manner as one
would spend one’s own money.
Definition of Performance Audit and Value for Money

While audit is like a “post mortem”, after the event or financial transaction has taken place it
verifies whether rules were adhered to. In performance audit the whole working of the
organization is analyzed.

Performance audits are value for money audit and the use of resources by public sector
organizations in relation to its achievement of goals. Although performance audit can be very
wide-ranging, in broad terms, it can be applied to:
- Those activities involving a considerable level of resources
- Projects that are at risk of failing in their objectives
- Issues which are of concern to Parliament or the Public Accounts Committee, (Public
Accounts Committee is a committee of parliament which reviews the accounts of all government
organization every year).
The term “value for money” refers to the way in which resources (financial, human or physical)
have been allocated and utilized by the entity (organization).
Following definition has been used for performance audit:

“A performance audit “is an objective and systematic examination of a public sector
organization’s programme, activity, function or management systems and procedures to provide
an assessment of whether the entity, in the pursuit of predetermined goals, has achieved
economy, efficiency and effectiveness in the utilization of its resources”. Performance audit,
therefore, involves an independent assessment of whether economy, efficiency and effectiveness
have been achieved by organization. Now let us see each of the word used in definition to have
better understanding of performance audit.
Economy
Economy is concerned with minimizing the cost of resources used (staff, materials and
equipment) for an activity in the pursuit of its objectives and whether they are in accordance with
sound administrative principles and practices and management policies. An economical
organization acquires its input resources, of the appropriate quality and quantity, at the lowest
cost. In summary, economy means minimizing the cost
of resources used for an activity, having regard to quality i.e. spending economically, whilst
maintaining quality.
Example: Where standard items such as school or hospital supplies of a given quality are
purchased at the best possible price.
Example: Cost of a vehicle in comparison with another model of similar quality.
Efficiency
Efficiency is concerned with the relationship between goods and services produced (the outputs)
and the resources used to produce them (the inputs). An efficient entity produces the maximum
output from any given set of inputs. Alternatively, it may require minimum input. This will be
reflected in increased productivity and lower unit costs. In summary, efficiency means ensuring
that maximum output of goods and services has been gained from the resources used in their
production i.e. spending well.
Example: Efficiency has improved when the unit cost of teaching children or providing hospital
treatment has been reduced over time; or where more children have been taught or hospital beds
provided, without additional resources.
Example: Reduction in repairs and maintenance cost of equipment, for example, vehicles,
computers or photocopiers, is a measure of efficiency

Effectiveness
Effectiveness is concerned with achieving predetermined objectives (specific planned
achievements) or goals and with actual impact (the output achieved) compared with the intended
impact (the objectives). Using a range of performance measures and indicators, it is possible to
assess an entity’s effectiveness. In summary, effectiveness means ensuring that the desired
results, objectives, targets or policies have been successfully achieved i.e. spending wisely.
Objectives of Performance Audit

The primary objective of performance audit is to provide parliament with independent
information, assurance and opinion about economy, efficiency and effectiveness in major fields
of revenue, expenditure and the management of resources.
A secondary objective of performance audit is to identify ways of improving value for money
and to encourage and assist audit bodies to take the necessary action to improve systems and
controls. Areas of
Performance Audit is that Performance reviews can be used to cover all types of management
activities, which must be audited for better use of resources.
Concepts
􀂈 Audit: it is the examination of financial records of an organization after transactions have
taken place at the end of financial year. It reviews whether the rules of accounts were applied or
not.
􀂈 Performance audit: it is the examination and analysis of all the activities of the organization
and it is seen that the money used has been able to achieve objectives/goals economically,
efficiently and effectively.

Introduction To Public Admistration

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Introduction To Public Admistration

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Course Introduction

3. Understand the role of government

4. Understand the role and core functions of public manager

5. Understand the structure of government /organizations

7. Understand the changing role of government and role of public managers.

The course on public administration/management is important as every citizen must

References Nigro and NigroModern Public Administration6th Edition

Jay m. Shafritz E. W. Russell introducing public Administration 9 th

Baker, R.J.S., 1972, Administrative Theory and Public Administration,

Lecturer: Mohamed Abdi Mumin Page 1

At the end of lecture the students should be able to understanding:

• The practice of public administration (PA)

• Public administration as a subject of study

• Definition of Public administration

Meaning, Nature and Importance of Public Administration

Administration Public administration consists of the activities undertaken by a government

Definition of Public Administration

Prof. Woodrow Wilson: “Public Administration is a detailed and systematic application of

Lecturer: Mohamed Abdi Mumin Page 2

ADMINISTRATION, ORGANISATION AND MANAGEMENT

An Organization is a combination of the necessary human beings, materials, tools,

Lecturer: Mohamed Abdi Mumin Page 3

ROLE AND IMPORTANCE OF PUBLIC ADMINISTRATION

1. It is the basis of government.

2. It is the instrument of change in the society.

3. It plays vital role in the life of the people.

4. It is an instrument for executing laws, policies, and programmes of the state

5. It is a stabilizing force in the society as it provides continuity.

Importance of Public Administration as Specialised Subject of Study

Lecturer: Mohamed Abdi Mumin Page 4

Public administration, as witnessed holds a place of significance in the lives of people. It

POWER AND POLITICS

1. Concept of power and politics

2. Types of power and conflict

3. The importance of power in organization

Lecturer: Mohamed Abdi Mumin Page 5

Lecturer: Mohamed Abdi Mumin Page 6

Lecturer: Mohamed Abdi Mumin Page 7

Coercive Power: Capability to punish non compliance of followers.Punishments have negative

 Unpleasant job assignments

 Withholding of praise and goodwill

Lecturer: Mohamed Abdi Mumin Page 8

The findings identified seven tactical dimensions or strategies:

Lecturer: Mohamed Abdi Mumin Page 9

Conflict is a natural outcome of the close interaction of people. It is defined as difference,

Conflict- as Positive and Negative

Lecturer: Mohamed Abdi Mumin Page 10

Lecturer: Mohamed Abdi Mumin Page 11

THE STRUCTURE OF THE STATE

At the end of the lecture the students will be able to understand:

 The structure of government

Article 37: The Sovereignty and Powers of the State,

1. The Legislative Branch

Article 38: The Parliament and Joint Sittings

Lecturer: Mohamed Abdi Mumin Page 12

b) The debates on the Republic of Somaliland joining international or cross regional

d) The debates on natural disasters;

e) The debates relating to emergency laws;

f) The confirmation of the appointment of the Chairman of the Supreme Court; (and)

The House of Representatives

Article 39: General Provisions of the House

Lecturer: Mohamed Abdi Mumin Page 13

Article 41: Eligibility for Candidacy