The decade from 1985 can be seen as one of a creeping crisis in public sector management. The term ‘creeping crisis’ refers to situations ‘where a succession of events transforms itself into an acute crisis’ (Rosenthal et al. 1989, 27). The crisis was not brought about by a lack of policy or interest. There were plenty of policy recommendations and ample policy-making. There was also considerable interest and funding from donors. But policy design and implementation were often poor while consistent political support from top decision-makers was not forthcoming. Concern with accountability faded. The result was a decline in bureaucratic performance, and the public service management that the World Bank had described as ‘basically sound’ in 1983 became basically unsound by 1995.
Despite its declared general satisfaction with public sector management in Papua New Guinea, the World Bank’s 1983 report actually pointed to a number of major problems which required urgent remedial treatment. The public service was too big, over-centralized, hamstrung by excessive proceduralism, lacking incentives for staff, biased against training provincial public servants, and presided over by a Public Services Commission (PSC) which ‘could and did ignore the Government of the day’ (Cochrane 1986, 58). The response of the Papua New Guinea government was to request assistance from the World Bank to revise the constitution to pave the way for a reduction in PSC powers and then restructure the public service. The request was positively received by the World Bank and in 1984 the Programme Management Unit (PMU) was set up to accomplish these ambitious objectives.
The major casualty of these reforms was the PSC. Since independence it had determined personnel matters and had an autonomy which could lead it to oppose or obstruct government policy. Politicians believed that the PSC was simply too powerful while administrators were frustrated by PSC-induced delays to their projects. Its conversion to an advisory body at the margins of government was not mourned in official circles. The cabinet now became responsible for the broad direction of human resource management (HRM) policy and for appointing heads of departments and agencies. A new ‘streamlined’ Department of Personnel Management (DPM) was allocated some of the PSC’s former general functions and was answerable to cabinet. Many personnel responsibilities were scheduled to be delegated to departmental heads. Efficiency was to be the hallmark of the new HRM system.
Results did not support the theory. The demise of the PSC heralded the increased politicization of the public service. Personal connections started to become more significant determinants of who occupied seats on boards of public authorities or filled the higher departmental positions. The new DPM turned out to be ‘a renamed and slightly restructured Department of the PSC with the same staff, the same equipment and the same premises’ (Turner 1991, 102). There was no visible improvement in efficiency and no formal monitoring or evaluation. It was somewhat optimistic to expect the Department of the PSC, renowned for red-tape and slowness, to reinvent itself overnight. A succession of projects promised significant improvements in DPM efficiency but there is little evidence of their operations or achievements.
Restructuring was also in the PMU’s terms of reference. Detailed diagnoses of organizational pathologies were conducted and remedies suggested for each of the cases. It is doubtful whether the PMU’s efforts resulted in improved organizational outcomes. Weak monitoring and evaluation processes meant that, with the demise of the PMU, nobody was examining the implementation of the departmental reform programs.
Another PMU initiative was the Resource Management System (RMS). The RMS had been decreed by cabinet in 1984 but it took the PMU some time to decide what it actually was. The thrust of RMS was to create a new comprehensive planning system which would encompass all the activities of departments and agencies. There would be no divide between recurrent and project budgets. Evaluation would be according to outcomes and outputs and not simply expenditure control. It was to be authentically Papua New Guinean with a strong participative bottom-up approach. The system-wide re-engineering of public sector management would produce accelerated development. This was not to be: there was much objective-writing, timetable-setting and mission-debating, but the RMS did not eventuate as the guiding force of the public sector. There were few supporters outside of the PMU. Many departments did not understand the RMS and saw it as theory devoid of practical relevance. The cabinet appeared to lose interest, absorbed as ever by crisis management and maintaining numbers in parliament. This made it even easier for large central agencies to resist RMS advances. There were also financial constraints greatly exacerbated by a secessionist movement on Bougainville which destroyed the country’s largest mine and export earner.
Training was the final component of PMU’s broad-ranging activities. The PMU had identified a range of training requirements through its work in organisational analysis. A Central Planning Assistance Team (CPAT) was set up ‘to generate training needs and requirements at the provincial level’ (PMU n.d., 1). A Transitional Training Unit (TTU) was also formed to conduct management. Like most PMU activities, the TTU initiative started with great enthusiasm but had either disappeared or become entirely marginalized before its declared use-by date. The World Bank now stepped in to assist with the ever-popular non-threatening reform strategy of training. The Bank agreed to fund the government’s 1989 National Training Policy. The project was costed at $US23 million and comprised yet another capacity-building effort in DPM, institutional strengthening of the Department of Labour and Employment, support for the new National Training Council, and overseas fellowships. But once again, implementation was not as anticipated in the project plans, and achievements fell well short of targets.
In 1990, budgetary pressures and continuing concerns over the size of the public service led to another downsizing exercise. In common with its predecessors it failed to achieve its objectives (AusAID 1992). While retrenchments were double the 1,250 target, the public service remained the same size because of new hiring. Also, the scheme’s generous benefits proved attractive to more competent public servants. In 1992, the government established a Rationalisation Task Force with a familiar brief: ‘to examine ways in which the national departments could be restructured and their management practices improved so that the cost of government could be reduced and its efficiency improved’ (AusAID 1994, 146). Two years later, an AusAID review of Papua New Guinea noted that the task force’s report had been referred to the Policy Coordination and Monitoring Committee for consideration but that the report was not available for public discussion.
Another familiar theme on the public sector reform agenda was the question of what to do with public enterprises. In 1979, there had been a report by an IMF adviser recommending the government to ‘get prices right’ (Millett 1993, 6). No action was taken by the government, and in 1982 a study was commissioned by the private sector think-tank, the Institute of National Affairs (INA). This study advised that many public enterprises had performed poorly and needed attention (Trebilcock 1982). Recommendations to improve efficiency and to privatize were provided but not acted upon. In 1983, a public enterprise reform policy was belatedly unveiled based on the 1979 IMF report. It contained various actions to improve the efficiency of public enterprises and by 1987 their performance had improved in absolute terms and in terms of returns on assets (Whitworth 1989). In 1989, privatization was mooted in the Administrative Reform and Improvement Programme in a proposed project to prepare a program of public enterprise sale and to determine what to do with non-performing assets. The structural adjustment loan of 1990 then resulted in the establishment of a national privatization committee. However, progress on privatization was slow and corporatization was only marginally superior. In 1992, the PNG Holdings Corporation was established to develop and implement policy on privatization but little progress was recorded (AusAID 1994). During the period 1985–1994 there was a great deal of policy talk on corporatization and privatization but action was much less apparent. (Policies on privatization are discussed in more detail in chapter 17.) The similarity with downsizing, restructuring and other areas of public sector reform is striking. In all cases there was little implementation.
Meanwhile there was mounting evidence that service delivery was continuing to decline. Mainly in reference to provincial government, May (1999, 123) referred to ‘copious documented and anecdotal evidence of lax and inefficient administration, nepotism and outright corruption’, noting that he had also witnessed such things in his own fieldwork. As the mid 1990s approached, the World Bank (1995, 12, 16, 19, 22) reported a health system that was ‘deteriorating’, an education system that ‘does not appear to be improving’, ‘a totally inadequate sum’ of government money devoted to agriculture, and ‘considerable scope for increasing the effectiveness of infrastructure expenditure’. Everybody agreed that the public was not being served properly and that the situation was getting worse. The creeping crisis in public sector management appeared to have transformed into an acute crisis.