Public Institutions In Ethiopia Commerce Essay

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Within last two decades, in Ethiopia to enhance the capacity of public institutions and to create an ideal environment for investment and economic growth, the public sector has gone through a series of reform processes. Among all reform processes Civil Service Reform is a key agenda on the reformist side.

This paper attempts to assess the outcomes of the reform made so far based on qualitative research data (a review of survey) which conducted in two public institutions of the Ministry of Trade and Industry (MOTI) and Agency for the Administration of Rented Houses in Addis Ababa, as an illustration to study the implementation of PSDR from the main framework of Civil Service Reform Program in Ethiopia.

On the context of recent public service reforms in Ethiopia in which a reform like PSDR is to further implemented, it's organizational and policy conditions are the key determinants for its successful execution. From the known deep-rooted problems of the Ethiopian Civil Service System, the introduction of the public service delivery reform within CSRP is imperative and the pressing need to improve these public services can't wait for the right conditions.

However, the need to meet the preconditions proposed by New Public Management (NPM) for better performance seems to hold valid. For instance, the relatively better conditions - such as capable staff and transparent and short service procedures due to business process reengineering (BPR) - seem to be contributing to the recorded success of the ministries. However, very high levels of user satisfaction and spectacular improvements in performance were also recorded as a result of the introduction of business process reengineering. Although the change process in both organizations tended to be sluggish, these improvements appear to be outstanding within the context of Ethiopia's system of public administration.

However, one challenge will be for the government to maintain the momentum of reform and to cascade BPR and other elements of the reform to other divisions, departments, and work units in the government. Putting in place incentive schemes and an appropriate monitoring system should protect the reform from backsliding.

Finally it is arguable on the successful implementation of PSDR in Ethiopia seems largely dependent on specific organizational conditions. Also the higher levels (more of senior officials) of political commitment and accountability are not essentially shaping the outcomes of the reform implementation in the organizations. At the same time, when we seen the overall success of the public service reform of the country from public policy at hand and from inefficient organizational perspective, no doubt, the ongoing reform is more passing through on shadowlike road.



In Ethiopia, deficiencies in human resources and institutional capacity as well as deficiencies in working system and process are among the causes constraining sustainable growth and perpetrating poverty. Shortfalls in capacity across sectors of the economy have been witnessed. These have typically been reflected in inefficient public sector and civil service due to, among others, lack of human and institutional capacity, working system and process and misguided conception of the roles and responsibilities of civil service. Addressing these deficiencies has thus been recognized by the incumbent government as a crucial element in bringing about a desired change in the country.

After 1990s, however, the Government of Ethiopia has embarked on comprehensive public sector reforms aims to enhance the capacity of public institutions and to create an ideal environment for investment and economic growth. Especially, for the last two decades the public sector has gone through a series of reform processes including the civil service to creating new government machineries to establish efficient and effective management systems, and to improving the quality of life of their citizens.

However, as also part of this study, the overall political commitment given to reform by politicians is often criticized as inadequate, since many institutions are lacking visionary leadership, organizations are operating under very poor conditions, the staff in many organizations are not consulted and motivated when they should be, clients' interests are not consulted, and the accountability relationship between government and public service providers has not been clarified (Paulo's, 2000: 23).

Whereas, in Ethiopia, the Service Delivery Survey conducted in 2004 revealed that the governments success in the implementation of service delivery, even if the success should be remains different from organization to organization. Moreover, the conventional assumption of NPM-type organizations (public enterprises like corporations and agencies) could perform better than public ones does not seem to hold true in the Ethiopian case. Therefore, this merits research to analyze the factors (beyond the conventional ones) that contribute to the variation in the success of implementing the public service delivery reform.

Therefore, to fulfill the aim of the study, using qualitative data, the study analyses the contents and processes of the implementing SDR within the context of policy framework of civil service reform program. This essay is a contribution to such research, comparing the Ministry of Trade and Industry (MOTAI) (which is doing well) with the Agency for the Administration of Rented Houses (AARH) in Addis (which is doing poorly). This essay seeks to explore how and why the success of implementing public service delivery reform in these public institutions is so variable. It will also assess the relevance of recent reforms in these bodies to national and organizational settings.

The structure of this paper has also classified into three parts. In part one followed above introduction, working hypotheses, background and rationale of the study and the theoretical framework will be tentatively addressed. In part two, the main analysis and findings will be presented. And in part three some policy and strategic issues should be presented for senior managements and practitioners as recommendations and conclusions.

Working Hypotheses/ Questions

1. The Successful implementation of PSDR in Ethiopia largely lies in the specific organizational conditions.

2. The accountability relationship between politicians and reform implementing institutions varies from organization to organization leading to variation in organizational performance.

3. How has the political context of SDS reform affected its implementation?

4. How do organizational conditions explain the variation between the organizations in the implementation of the reform?

Background and Rationale of CSR in Ethiopia

Historically, in Ethiopia, until recently given high attention to improving public service delivery, the civil service has had a tradition and experience of serving various governments for over hundred years ago with a very backward service delivery system.

The recent democratic government of Ethiopia after coming to power, initiated a first phase of reform program to overhaul and enhance the civil service system of the country through a retrenchment and redeployment programmes to fulfill their desired policies and strategies (1991_1996). Follow this initiation, in 1996, the government by establishing the task force aiming to assess and identify some existing problems that facing the civil service system. Among those assessed and identified problems: lack of clear national service delivery policy; lack of accountability; attitudinal problems; excessively hierarchical organisations; insufficient recognition of citizens' rights; more concern on inputs and routine activities, less on achieving tangible outputs; lack of consultation with clients; and lack of complaint handling mechanism; and giving priority to the convenience of providers_ not users are the majors one. All this identified problems shows that the orientation, attitude and work practices of the bureaucratic machinery were ill-suited to the needs of the new policy environment of the country. (GoE, 2001: 5-24)

By recognition of the constraints, the government takes wide and broad public sector reform initiatives in the form of comprehensive Civil Service Reform Programme (CSRP) in the second reform phase (1996-2002). On this indicative of Ethiopia's "first generation" capacity building efforts, the CSRP sought to build a fair, transparent, efficient, effective, and ethical civil service primarily by creating enabling legislation, training staff, and developing operating systems in five major areas of sub-programs including Public Service Delivery Reform (PSDR). (GoE, 2001)

The government commenced the third reform phase began with the launch of the Public Sector Capacity Building Support Program (PSCAP) in 2003 in the form of the five-year plan of program. These initiations include the launch of a "special program" of Performance and Service Delivery Improvement Policy. PSIP along with other reform programme areas, have promoted Business Process Reengineering as a key management initiative, particularly in those ministries that interface directly with the private sector services like MoTI and others. (GoE, 2004; MoCB, 2003)

As Watson critics on the implementing of reform, the perception is that the CSRP in general is losing momentum, and following an appraisal of PSCAP, the following challenges remained including inefficiencies derived from poor financial management, poor incentives and a lack of strategic or performance orientation across all levels of government (Watson 2005). Also as Mengistu and Vogel (2006) conclusion, institutional capacity, particularly in relation to human resource development, remains a major obstacle to reform civil service in Ethiopia.

The comparison in this paper relies on a statistical data from clients' responses to assess the quality of services in relation to a number of different indicators. (see Table 1).

Looking at the price for service and quality (but not coverage, as needs in general and particularly for housing are never met in Ethiopia), MOTI is performing well (See table 1). Considering the overall level of improvement in service quality of the two organizations based on the variables give in table 1, on average, only 23.5% of the clients' respondents of the Ministry of Trade and

Industry (MOTI) responded by saying that they are not satisfied in relation to each of the variables. At the same time, 46.9% of the clients' responses regarding the Agency for the Administration of Rented Houses (AARH) expressed dissatisfaction with regard to the same parameters. This shows a big disparity (around double) in the perceived service quality of the two organizations, in connection to these variables. (taken from the SDS, 2004)

Table 1: Clients' assessment of the quality of services and staff attitudes by

Organization (% of respondents)


% respondents not satisfied

or agreed

Ministry of

Trade & Industry


Agency for the


of Rented

Houses (AARH)

A. The length of time staff took to serve clients



B. Courteousness and helpfulness of staff



C. Efficiency and hard work of staff



D. Sensitivity of staff to clients' feelings



E. Honesty and integrity of staff



F. Knowledge levels of staff about their work



G. Promptness of staff in serving clients



H. Availability of staff in the office to serve clients



I. Adherence to official opening times



J. Appropriate channels for communication & information dissemination to the clients (Consultative meetings with customers



K. Fees levied matched the quality and value of the services provided



L. There are no perceptions & experiences of corruption in return for services -bribes, nepotism or favoritism



M. Service delivery had improved during the previous 24 months



Source: Service delivery survey (2004)

Theoretical Framework for the study of analyses

For this study, Public service may refer to any act or performance that public institutions provide to fulfill social needs. This entails a dynamic interaction between service providers and recipients that operate in a changing environment that may shape the outcome of the implementation of Service Delivery Reforms. Therefore, in this regard this essay will use some of theories like the new public management, public choice theory, public accountability, principal-agent theory and their logical links to analyze the success of the implementation of the service delivery reform sub-programme in the organizations.


Analysis of the Implementation of PSDR in Both Organizations

2.1. Organizational Setting

As Polidano describes it, beyond the context of policy implementation reform success and failure stories suggest that the outcome of the implementation of reforms to improve service delivery depends largely on the internal contingency factors (Polidano, 1999:5).

Management reforms frequently entail changes to the systems by which public servants themselves are recruited, trained, appraised, promoted, motivated and disciplined (Pollitt and Bouckaert, 2000: 8). In this context, assessing the organizational setting would much help in identifying factors that influence the success of reform execution. Among the many organisational factors, this essay will focus on selective key factors that probably touch on most other organisational elements, too.

2.1.1 Management Practices

Always at the center of organizational success we have seen there is a leadership capacity of organizations. Here NPM concepts suggest that autonomous decision making of organisational leaders matter in implementing public service reform. Accordingly, proponents of NPM have suggested introducing business-like autonomous government institutions with less political intervention. However, from the fact of two organizations considered here, the agency is supposed to have autonomous leadership and the Ministry is not praised by proponents of NPM. The lack of dynamic leadership style in both organisations was evident from their skepticism about assessing changing customer needs through participatory approaches (GoE, 2004).

The top management of government organisations is expected to create a customer-oriented organisational structure which puts customers at the top, front line people at the next important stage (to serve and satisfy customers); the middle managers under them (to support the front line people); and top management at the base (to provide effective leadership); customer along the sides of the employees at all level of an organisation must personally be involved in determining, meeting and serving customers (Pollitt and Bouckaert, 2000).

However, the recent survey data of organizations show, staff from both organisations had agreed on the existence of good work relation and attendance of meeting about public sector reform. The staff from the agency tends to agree with many of the evaluating variables despite their responses are not consistent for reasons at best known to them. Also some of workers at least agreed that the management motivates staff, but majority of them did not agree with issues like rewarding of hard work by management; on the selection of staff for training; on information dissemination; delegation of decision making power; and on promotion and recruitment. That means it is not clear how the management had motivated them. This finding indicates that the management practices in the organizations are still how far from reality.

Staff Capacity and Commitment

Organisational performance in the implementation of the service delivery reform is also affected by the experience, skill and educational level of the human resource of the organisations.

In theory, as staff experience increases, individual performance is expected to improve. In practice, however, this may not hold true always. This variation can be explained on at least three levels. Thus:

One, there seems lack of job rotation to motivate staff by allowing them to face new challenges and learn new skills. This reveals that the type of management proposed by NPM, which motivates staff by employing such techniques, is absent in the agency.

Second, such employees with long years of work experience are also most likely have been influenced by the unresponsive orientation, attitude and work practices of the old bureaucratic machinery of the country. That is why NPM advocates for new blood in organizations.

Third, as SDS noting, the age of the employees of the agency where 51% of them were aged 36-45 years and 31% of them aged 46 years and above (SDS, 2004), this high proportion of older employees may foster resistive behavior against the radical changes envisaged to be achieved by the reform, as some features of a reform (like early retirement and retrenchment may) seem to be applied primarily to them. The assumption of career-based public service with semi-automatic promotion on the basis of time served has recently weakened (Paulos, 2000:5).

The official data of educational status of the employees of the Ministry shows, 14% had received only primary schooling while 17% had a secondary school education (MOTI, 2004). This figure indicates that the Ministry possesses a pool of potential candidates with which to transform it self. On the contrast, the educational status of the Agency, however, is generally observed low. Recent Agency HRM profile data indicates that a serious shortage of educated personnel within the Agency even in the Ethiopian scenario. The relatively high level education of the staff of the Ministry obviously would help the organization to properly carry out its mandate, as partly proved by its service improvement (MOTI, 2004). The opposite could apply to the Agency (GoE, 2005). Besides, the commitment and attitude of the staff of the Agency towards customer-focused service is proven by far lower than that of the ministry's. Low level of education, coupled with lack of appropriate training and with majority of very long-term staff could obviously negatively affect the effective implementation of the reform programme aimed to improve public service delivery of the agency (GoE, 2005). Therefore, it is evident that the recommendations of the proponents of NPM for fresh blood and for competent staff to improve performance assumptions have been missed.

2.2. Political Context and Accountability in Implementing SDR in Ethiopia

Political Context: Recent time increasingly, there is recognition that public service reform cannot be treated merely as a technocratic exercise, but as part of political process that demands political support (Corkery et al 1998: 13). Ideally, reform should have also a broad measure of support from the public, interest groups and the media; the politician has a role to play in selling reform to different interest groups (Corkery et al. 1998: 14).

The Ethiopian reform design process as a platform for action does not really recognise the importance of consulting different actors in the policy arena. There is no institutionalized mechanism for discussing or debating development policy proposals between government and the various implementing institutions, business and civic organizations (Berhanu, 1999: 30). The various middle-level officials of the ministries and other actors and stakeholders have not been actively and adequately involved in the drawing-up of the reform projects or in the modalities of their implementation (Paulos, 2000:19). As opposed to this, to having an influential role in the actual policy design, the Ethiopian civil service has been identified as merely executer of policies designed by the government (GoE, 2002: 78). This is contrary to the importance of participatory policy design as a tool to reach consensus, where participation in reform enforces systemic changes in power relations, and lessons eventual resistance to change (Therkildsen, 2001: 33).

Public exclusion from political and bureaucratic decision making may indicate lack of public appreciation of the role of government and the importance of fairness, consistency and adherence to democratic principles (Kaul, 1998: 3). In Ethiopia however, the government does not seem to dare to clearly delegate adequate authority to managers in public institutions, until recent slight initiations promoted.

Political commitment beyond rhetoric should also be supported by practical actions to facilitate the working conditions of the implementing organizations. Looking at the practices of pay, there has been a public debate before and after 2004/1997 election, because the government has officially banned annual salary increments in the civil service, claiming for better service. This seems strictly against the NPM's recommendation for better pay and employee motivation as a pre-requisite for better performance.

Accountability: The task of analyzing the situation of accountability may necessitate comparing the content of the existing policy on service delivery reform and the actual situation at the ground. First in the policy content: how is accountability manifested in the policy? Normatively speaking, the policy document is well written comprehension many issues. Its objectives are very broad: like efficiency, effectiveness, etc; it has devised broad policy instruments such as formulating organizational mission statements, improving access for users, establishing complaints handling mechanisms, consulting with service users, etc; it has devised implementation strategies like establishing a central executive, creating awareness, capacity building, employee participation, and rewarding exemplary performance. Moreover, it has approved a 'directive for handling service users' complaints in the civil service' (GoE, 2001: 58-69). Of course, policies are often good in paper. As many of observers say in Ethiopia the problem lies in the implementation phase.

Because of the self-interested behavior of both politicians and civil servants and the inherent problems of the principal-agent relationship, the state of accountability between the politicians and civil service organizations inevitably affect the implementation of the reform. However, coordination and active control are needed to solve these problems (Das, 1998; WB, 2004; Corkery, et al. 1998; Pollitt and Bouckaert, 2000).

Customer empowerment is important for achieving clarified accountability, at first it depends on the context of the reform itself. But in reality, the policy directive on 'customer complaint handling' is of little use and merely rhetoric in Ethiopia.

So if the overall situation of accountability in Ethiopia looks like poor, how does the accountability relationship appear in the organisations under the study?

The recent assessment shows, the MoTI had undertaken a business process re-engineering to assess the existing work processes in order to clarify, cut waste, and make the work process transparent. Previously, clients used to move up and down at least three floors and were in and out of several offices that housed the RLD. Today, all applications are processed in one stop shopping on the ground floor. The layout of the room has been designed to maximise visibility of staff to clients in order to ensure transparency and to reduce possible corruption. (GoE, 2005)

Of course, the experience of the Ministry of Trade and Industry (MOTI) are instructive examples of how institutions can be transformed to be more responsive, efficient and effective. These public institutions were also taken as good examples in the IMF Country Report No. 06/27 for Ethiopia (2006). According to these report, the Ministry of Trade and Industry (MOTI): It used to take 14 working steps (processes) and two and a half days to secure a trade license for an individual business person where as now (after the Ministry conducted BPR), it now only takes a business person 6 work steps and 34 minutes to get a trade license. This same service used to take a company 26 working steps and 35 days. After the conduct of the BPR, it only takes the same work steps and time as an individual business (6 work steps and 34 minutes, respectively).

This is a spectacular reduction in work process and time in the Licensing and Registration services. This is an indication of the extent to which this particular department of MOTI had been operating inefficiently in the past. This inefficiency had also contributed to an unfavorable legal-business environment in Ethiopia and pinpoints hurdles the business community had been confronting for years. BPR has apparently brought untold satisfaction on the part of the clients. To get rid of the lengthy processes involved, clients used to bribe clerks and some unit heads to get things done. This process may have successfully closed the door for malpractices and corruption ingrained in the system over many years.

Therefore, it is true in case of MoTI service has been improved because of the BPR, also this is a big stride forward achieved by the Ministry, while the Agency has been doing its business as usual. The short work process together with the introduction of the one stop shopping and probably the proximity of the department heads to the close supervision of the minister's officials are possible explanations of the presence of the default accountability which has contributed to better performance of the Ministry. However, this is different from genuine political commitment in action and deliberate efforts for clarified accountability, which are essentially absent in Ethiopia.



Based on emerged finding, the following points are worth mentioning as possible ways of improving the implementation of the service delivery reform in Ethiopia ahead:

The policy design should consider the implementation context, which in the end is affected by the actors involved. So practical an institutionalized forum for policy debate is essential;

The broad and long-term relationship of accountability connecting policy makers to organizational providers should be replaced by clear contractual agreement based on results to ensure deliberate accountability;

Policy makers should strictly follow up, control, and enforce measures to ensure sound implementation of the reform;

Managers of service providers should give strategic leadership, to motivate their staff and to create favorable working environments, clear incentive mechanisms should be put in place is essential; so that hard work and innovation are rewarded; recruitment, training, evaluation and promotion policies are transparent; adequate decision making authority is delegated to front line employees; working facilities are accessible; staff needs are consulted and client need is assessed continuously;

Contracting out selected activities and supervising investors (which is currently handled by the Ministry) can be considered; and

Finally, further and detailed study needs to be conducted in order to analyze and investigate the real image of the implementation of the service delivery reform in Ethiopia.


In conclusion, it is important to caution that if the technocratic vision of an efficient, effective, transparently functioning Civil Service is to be fulfilled, then the tendency to tolerate shoddy performance on the part of senior public service managers, simply on account of their loyalty to the government of the day, must be eschewed. Without this real political commitment to the ideal of innovative, results oriented and client centered Civil Service, the Ethiopian Civil Service Reform Program might fail to deliver on its most important objectives is no question.

Moreover, it is similarly true in Ethiopia that the importance of the political context in which reform is implemented is found to be essential. However, practically good political intentions and policy amendments are not enough for effective service delivery reform implementation. Instead, the need for forum for policy debates, capable administration and staff, improved pay, merit based recruitment, real managerial autonomy, clear performance standards, result oriented and active control, clear reward mechanisms, clarified accountability, etc yet to be met demands genuine political commitment in action (Bjorkman, 1994:135).

The lack of genuine political commitment of the government was manifested by its failure to ensure clarified accountability to overcome the inherent problems of the principal-agent relationships in the implementing organizations. This problem has been compounded by the self interested behavior of the civil servants of the organizations, which was fostered by perceptions of corruption, nepotism, favoritism and poor service in both organizations (but as the finding with a lower rate in the Ministry).

Among the important conditions suggested by NPM like changing and moving individuals in the organization (Ingraham and Rosenbloom, 1992: 35) and staffing with skilled and capable workers, are relatively fulfilled in the Ministry but not in the Agency. Also the accountability relationship between the frontline workers and administrators seems improved in the Ministry because of the BPR and the subsequent one-stop shopping setup, which in turn has improved transparency, close supervision, and customer empowerment. These are some of the possible factors explaining the better performance of the Ministry.

The use of different forms of service delivery such as corporation, agency, contracting out, and privatisation are part of a NPM paradigm aimed at fostering a performance-oriented culture and a less centralised public sector (Kaul, 1998: 6). However, from the analysis it emerges that the mere introduction of NPM-like organisations may not actually contribute to the success of the reform implementation and improvement of public service delivery unless the underlining requirements of NPM are met. The success of implementing service delivery reform according to this study is mainly explained by the organisational contingency factors, not by being in the Agency or Ministry.

Overall, given the deep-rooted problems in the Ethiopian Civil Service System, the introduction of the public service delivery reform is imperative and indispensable. The fulfillment of preconditions proposed by NPM for better performance seems to produce at least partly the desired result. The relatively better conditions such as capable staff and transparent and short service procedures due to BPR seem contribute to the success of the Ministry.

Therefore, the hypothesis that successful implementation of public service delivery reform in Ethiopia largely lies in the specific organisational conditions seems true. Also political commitment and accountability (even if accountability in the ministry due to the BPR may seem to help) are not essentially shaping the outcome of the reform implementation in the organisations. This is very far from the target of written policy at hand. The analysis thus revealed the need for more efforts to ensure the necessary conditions in both the context and implementing organizations, and for clarified accountability. As my suggestion so far, the ongoing reform process in Ethiopia needs still the close attention and follow-up of policy makers and implementers at all level is very essential.