Democratization and Public Sector Reform
The World Summit for Social Development was held amid
wide-ranging changes in the way most societies are governed. In much of the world,
authoritarian regimes have lost power in competitive elections, as attempts are made to
establish better forms of political representation and accountable government. These
changes influenced Summit decisions about institutional arrangements for the eradication
of poverty, the promotion of employment and social integration. Social development was not
limited to the provision of more money for social programmes or better formulation of
social policies. It was also necessary to improve the institutions that support social
programmes, conflict resolution and efficient use of resources.
Participants at Copenhagen considered democratization a
pillar of this "enabling environment" for promoting the Declaration and
Programme of Action. It offered prospects for better citizen participation in the
formulation of public policies—especially those important for the well-being of
deprived social groups. Democratization would also allow citizen groups and government
authorities to channel social claims to public institutions without the use of violence.
Finally, it would further the development of law-governed, civic-based societies that
would respect basic human rights.
This faith in democracy as a framework for solving the
world's social problems raises the following questions. What progress have countries and
multilateral institutions made in promoting democratization? What setbacks have been
experienced in various regions or countries and why? Has democratization led to better
social policies and enhanced participation in the way institutions are governed? What do
governments, international organizations and citizens need to do to improve the quality of
their governance institutions?
A chapter of the UNRISD report for Copenhagen Plus Five, Taking
Global Responsibility for Social Development: Policy Reform and Institutional Change in
the 1990s, will seek to answer such questions. It will draw together ongoing UNRISD
work on governance, policy making and public sector reform, as well as commissioned papers
from experts in the fields of democratization and human rights. Four key issues will be
addressed: technocratic policy making and democratization; interest groups, social pacts
and democratization; public management reforms; and plural forms of governance and
ethnically segmented societies.
Technocratic policy making and democratization
Concerns for democratic governance seem to be in conflict
with global market forces, which increasingly restrict economic policy making to selected
experts in the executive branch of government. Key economic institutions—central
banks, finance ministries and tax authorities—are being empowered at the expense of
expenditure-driven ministries, especially those dealing with social affairs and general
administration. Decision makers in national economic institutions are being made more
accountable to global financial markets and lending organizations than to parliaments and
people. The promotion of open market economies, international competitiveness and stable
finance takes precedence over policies concerned with consensus building, conflict
management and social equity.
Openness in policy making, though often touted, is not
always practised. Indeed, in some contexts, policy makers associate democratization with
populist demands that might subvert their technocratic visions and macro-economic plans.
Furthermore, in many new democracies that are pursuing economic reforms, social policies
tend to be residual and reactive rather than comprehensive and proactive. Efforts to limit
participation in policy making, as well as the content of social policy, may produce
outcomes in which politics are formally democratic, but governance in the policy field may
be authoritarian. This may make it difficult to consolidate democracy in developing and
transition societies. It may also lead to bizarre situations in which democratization
itself is associated with social exclusion, limited public choices and the exit of
dissatisfied social groups from mainstream institutions. This may have negative
consequences for development and stability.
How have countries and multilateral institutions coped
with conflicting pressures for economic stability and openness, legislative oversight of
public policies, and civic participation in policy making? In addition, how has the making
of social policy fared in new democracies? Given existing global market constraints, which
countries are doing well and which are not, and why?
Interest groups, social pacts and democratization
Organized interest groups—for example, labour unions;
professional, artisan and trader associations; and peasant organizations—clearly have
a stake in democratization. The participation of interest groups in policy making has long
been recognized as a central feature of democratic accountability, the regulation of
social conflicts and successful implementation of public policies. In established
democracies, rights of organization and collective action enjoyed by labour unions have
been added to rights of participation in the governance of the macro economy itself.
Indeed, the survival of democracy and the market have been linked to the capacity of
countries to reconcile the interests of workers, employers and the state through
"corporatist" or participatory arrangements.
However, the same global forces that are challenging the
powers of parliaments in economic policy making are also undermining the role of organized
interests in this sphere. Trade union rights and the governance roles of labour in
macro-economic policy are being questioned on the basis of the need to promote labour
market flexibility, higher productivity, price stability and industrial order. Such
concerns have affected labour unions in both industrialized and developing countries. They
have implications for the construction of social pacts that will support industrial peace
and political stability.
Still, democratization in developing and transition
societies is associated with labour legislation that seeks to advance the political rights
of labour unions. There are also attempts in many emerging democracies to establish or
reconfigure social pacts or tripartite institutions for macro-economic policy dialogue and
industrial peace. How have these social pacts fared to date? How open and accountable are
they to the groups that participate in them? How have they addressed the tensions between
concerns for economic stability and the demands of unions for social protection and
livelihood improvement?
Public management reform
Successful democratization and social development require
effective states that can establish and defend basic rules of contestation, and protect
disadvantaged groups and communities. However, the 1990s have witnessed a decline in state
capacity in many developing and transition societies. Expenditure needs have outpaced
revenues and tax capacities. Economic crises and stabilization policies have affected
public sector employment and wages. And in less-developed countries heavily dependent on
foreign aid, donor incentives for project implementation have affected the internal
coherence and workload of bureaucracies.
As a result, the major lending organizations and many
governments have attempted to introduce market policies into public sectors. These have
focused on decentralized forms of management. Relations between departments are governed
by contracts as opposed to hierarchy. Important departments that deal with financial and
economic matters are delinked from the general civil service. Employee performance
indicators and fixed-term employment contracts are introduced, and salary structures are
realigned to provide incentives to fewer employees (mostly at the managerial level).
Purchasing and provisioning functions of ministries are separated to allow for contracting
out of services and efficient response to consumers.
These reforms seek to create a standardized,
market-friendly, lean, consumer-oriented and managerial state. What are their implications
for the livelihoods of state employees, the distribution of responsibilities and power
within bureaucracies, the effectiveness of service delivery, social equity and democratic
accountability?
Plural forms of governance and ethnically segmented
societies
Especially in ethnically segmented countries, it is essential
to craft institutions that respect democratic rules of electoral competition, while also
generating broad support among contending groups and parties. Such institutions should
facilitate meaningful dialogue, compromise and consensus on key issues of public life. The
failure of democratization to produce appropriate institutions and rules for governing
ethnically segmented societies has led many countries in the 1990s to major crises of
insecurity, civil strife and war.
Efforts to reform the public sectors of crisis-ridden
states have thus also focused on governance issues. These reforms deal with issues of
decentralization; changes in electoral rules to favour proportional rather than
majoritarian outcomes in legislative and executive branches of government; power-sharing
arrangements; and mainstreaming of human rights in national institutions.
How successful have these initiatives been? What is
holding back progress in the implementation of reforms? Recent evidence suggests that
parliamentary government and non-majoritarian electoral rules offer better prospects than
presidential government for consolidating democracy and implementing public policies.
Coalition governments in parliamentary democracies increase the number of actors whose
choices must be co-ordinated to reach agreements. It is assumed that the process of
co-ordination will itself increase the effectiveness of policy making. What are the
implications of these findings for countries that have opted for the presidential road to
democracy?
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