BPA Year 3 Public Administration 3A Semester 1 January 2021

Bachelor of Public
Administration
(YEAR 3)
PUBLIC ADMINISTRATION 3A
Module Guide
Copyright © 2021
MANCOSA
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machines, without the written permission of the publisher. Please report all errors and omissions to the following email
address: modulefeedback@mancosa.co.za
Bachelor of Public Administration
(Year 3)
PUBLIC ADMINISTRATION 3A
Preface.................................................................................................................................................................... 1
Unit 1: Administrative Change and Innovation ...................................................................................................... 10
Unit 2: The Evolution of Administrative Law Regimes, The State and The Rule ofLaw in The Context of
Administrative Law and The New Public Management ........................................................................... 36
Unit 3: Decentralization in Contemporary Public Management ............................................................................. 58
Unit 4: Budget and Accounting Reforms ............................................................................................................... 72
Unit 5: Contemporary Issues in Public Management .......................................................................................... 105
Bibliography ........................................................................................................................................................ 120
i
Public Administration 3A
Preface
A. Welcome
Dear Student
It is a great pleasure to welcome you to Public Administration 3A (PA3A7). To make sure that you share our
passion about this area of study, we encourage you to read this overview thoroughly. Refer to it as often as you
need to, since it will certainly make studying this module a lot easier. The intention of this module is to develop
both your confidence and proficiency in this module.
The field of Public Administration is extremely dynamic and challenging. The learning content, activities and self-
study questions contained in this guide will therefore provide you with opportunities to explore the latest
developments in this field and help you to discover the field of Public Administration. as it is practiced today.
This is a distance-learning module. Since you do not have a tutor standing next to you while you study, you need
to apply self-discipline. You will have the opportunity to collaborate with each other via social media tools. Your
study skills will include self-direction and responsibility. However, you will gain a lot from the experience! These
study skills will contribute to your life skills, which will help you to succeed in all areas of life.
We hope you enjoy the module.
MANCOSA does not own or purport to own, unless explicitly stated otherwise, any intellectual property
rights in or to multimedia used or provided in this Module Guide. Such multimedia is copyrighted by the
respective creators thereto and used by MANCOSA for educational purposes only. Should you wish to
use copyrighted material from this guide for purposes of your own that extend beyond fair dealing/use,
you must obtain permission from the copyright owner.
1 MANCOSA – Bachelor of Public Administration Year 3

B. Module Overview
 The module is a 15 credit module at NQF level 7
The objectives of this module in Public Administration are as follows:

 To harness previous studies, in the discipline of public management and administration, with a view of
understanding the dynamics and importance of administrative change, and innovation, in the context of
administrative reform and government innovation, in an ever-changing world of politics and public
administration, and public management.
 To be in a position to explain the issue of state and the rule of law as a starting point, in respect to
administrative systems in developed and developing countries.
 To understand and analyse the structure of decentralized systems of government, in a changing
environment of increasingly more democratic governments; and within an increasingly changing field of
public management, as a central concept in contemporary public management; and situate the content
within the milieu of international management, and with reference to both the developed and developing
countries.
 To project on certain aspects of accounting (budget) reforms, as one important facet of organizational
principles pertaining to systems of public administration and management in selected countries, in both the
developed and developing world, in the quest of democracy and accountability, within public organizations.
 To apply some aspects of research methodology, in respect to quality methods and quality research, and
towards the challenge of improving public sector quality; and understand the distinctive characteristics of
public management, in terms of common assertions and research findings.
Purpose
The purpose of this module is to introduce the student to public sector reform in the context of the world, and to
this end, issues in respect of administrative change and innovation, in both developed and developing countries
are discussed. The module attempts to challenge the student to use his / her intellectual abilities in a critical
manner, and to harness previous studies undertaken in this field of study, with a view of the application of the
theory and practice of public management, as seen in the international, national and regional contexts, and for
purposes of understanding the public sector of South Africa. Issues in respect of the rule of law and its importance
to governance are enunciated. This is undertaken on the basis of setting the tone for the meaningful consolidation
of democracy in both the developed and developing world. In so doing, the issue of decentralization is discussed,
as a central construct to contemporary public management. The budget is viewed as one of the many important
variables, in respect to organizational principles, pertaining to public management in selected countries, for the
purposes of accountability in public administrations of public sector organizations in both, the developed and
developing countries. Finally, research methodology and general research issues are briefly discussed, in order to
promote quality, and to understand the distinct characteristics of public management, in terms of common
assertions and research findings.
MANCOSA – Bachelor of Public Administration Year 3 2

C. Exit Level Outcomes and Associated Assessment Criteria of the Programme
Exit Level Outcomes (ELOs) Associated Assessment Criteria (AACs)
 List and define political concepts and  Identify and discuss political concepts and
terminologies terminologies
 Students need to apply these concepts in

class/group discussions.
 List three arms of Government  Demonstrate understanding of functions of the

State.
 Enumerate and elaborate three spheres of  Assess the role of arms of Government in
Government ensuring checks and balance
 Evaluate the effectiveness of three spheres of

Government.
 Examine different systems of Government  Apply political concepts and terminologies to

explain the role of legislature in a democratic State.
D. Learning Outcomes and Associated Assessment Criteria of the Module
LEARNING OUTCOMES OF THE MODULE ASSOCIATED ASSESSMENT CRITERIA OF THE

MODULE
 Intellectually, politically, and administratively  Dynamics of administrative change and innovation

understand and comprehend the dynamics of is analysed to determine its relation to public
administrative change and of innovation, to the management
changing world of public management,
nationally and internationally;
 Be in a position to apply this innovation and  Innovation and change is applied to promote
change to public sector management and effective and efficient public sector management
administrative processes, within public sector and government
organizations locally, nationally and
internationally, with a view of promoting
effective and efficient public sector
management and government.

 Understand and comprehend the importance of  Change and continuity is critiqued to explore its
change and continuity, in respect of the tradition application in public administration
of public management, and its application to
public administration;
 Be in a position to understand the central role  Rule of law, purpose of governance and issues of
that the state plays in respect of the rule of law, the state is evaluated to understand public
for purposes of orderly governance, and the administration
promotion of the public servant, in respect of his
/ her neutrality within the ambit of public
administration and, to a lesser extent, within
politics; and
 To be in a position to crystallise the issues of

the state, and the rule of law in selected
countries of the developed world, and apply it to
the modernising state and in the context of
former colonies as it applies to developing
countries.
 Understand, explain and analyse the structure  Decentralised systems are analysed to understand
of decentralised systems of public its role in public management
administration of government as a central
concept and emerging construct, in
contemporary public management;
 Be in a position to situate the discussion, in the  International public management is evaluated to

context of international public management and explore its impact on developed and developing
with reference to both developed and countries
developing countries; and
 Be in a position to comprehend and apply some  Theories and initiatives are critiqued to determine
of the theories that affect decentralisation, how it affects decentralisation
 Understand the context in which

decentralisation works; and to comprehend
decentralisation initiatives in public
administration and public management as
outlined within the literature;

 To be in a position to apply the theory learnt to  Theory is applied to both centralisation and
both centralisation and decentralisation, but, decentralisation to understand programmes and
more importantly, to decentralisation processes, initiatives within the public sector
programmes and initiatives, within the public
sector environment and setting.
 Budgets are analysed to understand organisational
 To be in a position to look at certain aspects of
principles
budget and accounting reforms, in the form of
government budgets, as an example of one
administrative system, amongst a range of
other important and relevant public
administration systems in terms of the
organisational principles involved.
 Accounting and budgetary capability is explained in
 To situate the above subject matter in the
respect to the process within the NPM to understand
context of both developing and developed
how theory is applied to practical settings with the
countries, and to project on the issues
public sector
discussed, in order to understand and
comprehend the issues that permeate
accounting / budgetary capability, in respect to
the process of reform within the NPM, and be in
a position to apply theory to practical settings
within the public sector.
 Issues are analysed to explore how it pertains to the
 Understand, comprehend and analyse some of
crisis of budgets
the issues that pertain to the crisis of budgets in
South Africa, and the strides made under
democracy, with particular reference to national
government, and the decentralised third tier of
government, with particular reference to
municipal governance.
 Issues related to the budget are evaluated to
 Comprehend and analyse the issues raised in
understand the importance of corruption and fraud
respect of budget deficits and the dangers of
within public management and administration
borrowing, the problems encountered in respect
of budgets within municipalities in South Africa,
the possibility of reengineering a new
developmental approach to the economy, and

to understand the importance of corruption and

fraud within the context of public management
and administration and its relationship to both
budgets and accounting.
 Understand the importance of research  Research methodology is examined to understand
methodology and its application to public its relation to public administration and public
management and public administration and management
appreciate their distinctive characteristics, in
terms of their assertions and research findings;
 Broadly understand, comprehend and analyse  Implications of certain perspectives are analysed to
some of the implications of certain perspectives understand its relation to practitioners and
as they relate to practitioners and researchers researchers involved in public management and
involved in public management and administration
administration;
 Comprehend and establish the history of  Professional quality is evaluated to understand how
individual worker and professional quality, in it applies to public sector quality for purposes of
terms of state regulation, as it applies to public measurement and evaluation
sector quality in general, for purposes of
measurement and evaluation;
 Understand the approaches to quality in respect  Approaches in quality are explained to understand
of the overlapping approaches with special quality assessment, regulation and accreditation
reference to customer, legal and standard-based
approaches to quality assessment, regulation
and accreditation;
 Understand and apply quality research within the  Quality research is applied to deal with the
public sector in respect of management and challenges of improving public sector quality
public administration, and deal with the
challenges of improving public sector quality;
E. Learning Outcomes of the Units

You will find the Unit Learning Outcomes on the introductory pages of each Unit in the Module Guide. The Unit
Learning Outcomes lists is an overview of the areas you must demonstrate knowledge in and the practical skills
you must be able to achieve at the end of each Unit lesson in the Module Guide.

F. Notional Learning Hours

Learning time
Types of learning activities
%
Lectures/Workshops (face to face, limited or technologically mediated) 15
Tutorials: individual groups of 30 or less 0
Syndicate groups 0
Practical workplace experience (experiential learning/work-based learning etc.) 0
Independent self-study of standard texts and references (study guides, books, journal 40
articles)
Independent self-study of specially prepared materials (case studies, multi-media, etc.) 27
Other: Online 18
TOTAL 100
G. How to Use this Module

This Module Guide was compiled to help you work through your units and textbook for this module, by breaking
your studies into manageable parts. The Module Guide gives you extra theory and explanations where necessary,
and so enables you to get the most from your module.
The purpose of the Module Guide is to allow you the opportunity to integrate the theoretical concepts from the
prescribed textbook and recommended readings. We suggest that you briefly skim read through the entire guide
to get an overview of its contents. At the beginning of each Unit, you will find a list of Learning Outcomes and
Associated Assessment Criteria. This outlines the main points that you should understand when you have
completed the Unit/s. Do not attempt to read and study everything at once. Each study session should be 90
minutes without a break
This module should be studied using the prescribed and recommended textbooks/readings and the relevant
sections of this Module Guide. You must read about the topic that you intend to study in the appropriate section
before you start reading the textbook in detail. Ensure that you make your own notes as you work through both the
textbook and this module. In the event that you do not have the prescribed and recommended textbooks/readings,
you must make use of any other source that deals with the sections in this module. If you want to do further reading,
and want to obtain publications that were used as source documents when we wrote this guide, you should look
at the reference list and the bibliography at the end of the Module Guide. In addition, at the end of each Unit there
may be link to the PowerPoint presentation and other useful reading.

H. Study Material
The study material for this module includes tutorial letters, programme handbook, this Module Guide, a list of
prescribed and recommended textbooks/readings which may be supplemented by additional readings.
I. Prescribed and Recommended Textbook/Readings

There is at least one prescribed and recommended textbooks/readings allocated for the module.
The prescribed and recommended readings/textbooks presents a tremendous amount of material in a simple,
easy-to-learn format. You should read ahead during your course. Make a point of it to re-read the learning content
in your module textbook. This will increase your retention of important concepts and skills. You may wish to read
more widely than just the Module Guide and the prescribed and recommended textbooks/readings, the
Bibliography and Reference list provides you with additional reading.
The prescribed and recommended textbooks/readings for this module is:

 Ferlie, E. Lynn, L.E. (Jr.). (2005): The Oxford Handbook of Public Management. Oxford University Press:
Great Clarendon Street, Oxford. United Kingdom.
 Chakrabarty, B. Bhattacharya, M. (2005). Administrative Change and Innovation: A Reader: Oxford
University Press. Jai Singh Road, New Delhi. India.
 http://saapam.co.za/joba.html
J. Special Features
In the Module Guide, you will find the following icons together with a description. These are designed to help you
study. It is imperative that you work through them as they also provide guidelines for examination purposes.
Special Feature Icon Explanation
The Learning Outcomes indicate aspects of the particular Unit you have
LEARNING to master.
OUTCOMES
The Associated Assessment Criteria is the evaluation of the students’

ASSOCIATED
understanding which are aligned to the outcomes. The Associated
ASSESSMENT
Assessment Criteria sets the standard for the successful demonstration
CRITERIA
of the understanding of a concept or skill.
A Think Point asks you to stop and think about an issue. Sometimes you
THINK POINT are asked to apply a concept to your own experience or to think of an
example.

You may come across Activities that ask you to carry out specific tasks.
In most cases, there are no right or wrong answers to these activities.
ACTIVITY
The purpose of the activities is to give you an opportunity to apply what
you have learned.
At this point, you should read the references supplied. If you are unable
READINGS to acquire the suggested readings, then you are welcome to consult any
current source that deals with the subject.
PRACTICAL Practical Application or Examples will be discussed to enhance
APPLICATION understanding of this module.
OR EXAMPLES
KNOWLEDGE You may come across Knowledge Check Questions at the end of each
CHECK Unit in the form of Knowledge Check Questions (KCQ’s) that will test
QUESTIONS your knowledge. You should refer to the Module Guide or your
textbook(s) for the answers.
You may come across Revision Questions that test your understanding
REVISION
of what you have learned so far. These may be attempted with the aid
QUESTIONS
of your textbooks, journal articles and Module Guide.
Case Studies are included in different sections in this Module Guide.
CASE STUDY This activity provides students with the opportunity to apply theory to
practice.
You may come across links to Videos Activities as well as instructions
VIDEO ACTIVITY on activities to attend to after watching the video.

Unit
1: Administrative Change
and Innovation

Unit Learning Outcomes
CONTENT LIST LEARNING OUTCOMES OF THIS UNIT
1.1 Introduction  Introduce topic areas for the unit
1.2 Administrative Change in The  Intellectually, politically, and administratively understand and
Changing World comprehend the dynamics of administrative change and of
1.3 Conflict Views innovation, to the changing world of public management,
1.4 Conceptualizing Administrative nationally and internationally;
Change: Theoretical Inputs  Be in a position to apply this innovation and change to public
1.5 Implementation sector management and administrative processes, within public
1.6 Evaluation sector organizations locally, nationally and internationally, with
1.7 Focus On Administrative Reform a view of promoting effective and efficient public sector
1.8 Street – Level Bureaucracy management and government.
1.9 Representative Bureaucracy

1.10 Theories of Administrative Change
– Early Public Administration
1.11 Globalizations and Administrative
Change
1.12 E/Digital Governance
1.13 India Urges South Africa to Join
Pan – African E – Network -33
Countries Have Signed On to
Project Offering Online Assistance
to Continent
1.14 Concluding Remarks
Prescribed and Recommended Textbooks/Readings
 Ferlie, E. Lynn, L.E. (Jr.). (2005): The Oxford Handbook of Public

Management. Oxford University Press: Great Clarendon Street, Oxford.
United Kingdom.
 Chakrabarty, B. Bhattacharya, M. (2005). Administrative Change and
Innovation: A Reader: Oxford University Press. Jai Singh Road, New Delhi.
India.

1.1 Introduction
Administrative change and innovation are indeed complex issues. However, as politics, public administration and
public management are in themselves complex disciplines, in a changing world environment, it is obvious that
public administration was born out of a zeal for reforms and with a bias toward change. Administrative reform is a
core theme of public administration and management. Alternatively, the discussion can centre on particular themes
such as civil service reform, financial and budgetary reform and health service reform.
Public administration is credited with a long history of detailed presentation of descriptive accounts of such overall
or sectoral / thematic reform efforts. Alongside this record of description, there has also been the other more
important endeavour to conceptualize change and reform, categorize it, and build a theory of administrative reform.
This module makes an attempt to capture this theoretical conceptual venture of the discipline. Post-World War II,
the post-colonial Third World emerged as a new phenomenon needing urgent changes in public administrative
structures, processes, and behaviour, to bring about speedy development of the Third World. Development
administration, as a new category of public administration, was ushered in to respond to the special needs and
requirements of development – the objective contents of development, and the nature of the structure of the primary
agency of development – the bureaucracy, became a serious focus.
In the meantime, revolutionary changes came about in the eighties, which marked the collapse of the Union of the
Soviet Socialist Republic (USSR) and the eastern bloc, and along with it, the end of the Cold War. Within the
developed capitalist countries, almost simultaneously, there was the rise of strong anti – bureaucratic, anti – state
criticism directed against what came to be called government overload as a consequence of welfare backlash. The
state, it was alleged, has over the years taken upon itself a large array of activities that have inflated its budgetary
and financial commitments, and led to the overgrowth of bureaucracy. The battle cry was thus to downsize
government and allow more free play to the market and to civil society – giving rise to the new ideology of neo –
liberalism.
Two other strands of thought also gained prominence during this period: environmental management as a global
concern, and decentralization and people – centric, local participative management. The neo – liberal thought
found favour with the Western donor agencies such as the World Bank (The Bank) and the International Monetary
Fund (IMF) that were engaged in the funding of the development projects of the debt – ridden Third World.
The convergence of thought in regard to change reached its apogee in the newly emergent phenomenon of
globalization, facilitated by the free flow of funds, goods, and services as dictated by the new conditionalities laid
down by the World Trade Organization (WTO), and by the new IT revolution that has swept the world. All of this
has impacted on government and public administration, giving rise to the momentous ideological and institutional
turning point in the evolution of public administrative thinking on reform or the more recently coined word innovation.

1.2 Administrative Change in The Changing World

Since the publication of Wilson’s founding essay in 1887, change and reform have remained a constant refrain of
administrative analysis. The initial impulse came from reformers interested in separating politics from
administration, to rid the latter of corruption and to professionalize it. Successive efforts in disciplinary growth were
aimed at organizing decision – making and policy refinement, behavioural reorientation of employees and
managers and public administration, more and more towards the open system, environmental sensitive and client
responsive direction.
In the third world, public administration became development administration, which is a new focus, objectives, and
modalities of functioning. The development – reform nexus has spawned a variety of responses from international
agencies like the World Bank, as well as from developing countries themselves. Good governance, participative
developments, and de – bureaucratization have gained in importance in conceptualizing contemporary public
administration and public management.
Think Point
The impulse of separating politics from public administration, to rid the latter from
corruption and to professionalize it, does not seem to have worked in Africa and,
particularly, South Africa, and in this regard behavioural reorientation of employees,
managers and politicians have failed, given the massive corruption and virtual collapse of
African and South African public service institutions. Can it be argued that Africa and South
Africa are still not ready for orderly public administration, on the basis of the unwillingness
of African governments to separate their ruling political parties from the state, and that
nepotism and patronage reign supreme, in respect of governance on the continent of
Africa? Reflect on this issue and posit a cogent and analytical response.
1.3 Conflicting Views

Stability rather than change was the keynote of Max Weber’s conceptualization of bureaucracy, because according
to him, once established, bureaucracy is one of the hardest social structures to destroy. Victor Thompson argues
that specialization requires some guarantee of stability, and thus the need for caution with regard to change. In
other words, according to Thompson, seeming slowness to act or to change is built as a sort of essential
organizational attribute.
Guy Peters argues, on the basis of empirical studies, that change is very common among governmental
organizations, and refers to reform efforts in many of the European countries during the 1980s, and the early
1990s, with a view to modernize, reform, and decentralize the public services. He further states that governments
continue to attempt to get their organizational structures right, but are doomed to failure. There may be no right
structure, only structures that are more or less satisfactory.

Reorganization is a valuable activity in government because it is able to shape policy outcomes in desired ways.
Reforms, are therefore an obvious response to the new challenges, confronting state institutions managing public
affairs. It is an effort to enhance administrative capability in the changed scenario. Three expressions are used
interchangeably in describing the endeavour: administrative development, administrative modernization, and
administrative reform.
Each has a different approach – administrative development means setting up a new organization and inducting
new kinds of expertise into civil service to respond to new functions and tasks. The establishment of a central
planning agency or sectoral planning units is an example.
Administrative modernization is based on the urge to upgrade the administrative capabilities through the use of
scientific management and modern management techniques. An example would be the creation of organization
and management units in any public organization.
The first two measures are purely selective, and administrative reforms focuses on an existing universe of public
administration, and seek to deal with government-wide problems; by promoting coordination in the management
of public affairs by establishing uniform rules and regulations for public personnel, making management practices
more effective and strengthening the budgetary process. While inputs for reform may be indigenous, international
example and pressure also often act as decisive influences. Administrative reforms are very difficult to implement
as they represent real or perceived shifts in prevailing authority relationships. Change and reform, therefore, are
also rooted simultaneously in culture specifics.
1.4 Conceptualizing Administrative Change: Theoretical Inputs

Administrative reform relates to the idea of change in administration, brought about by deliberate efforts, but
Machiavelli warned that, “There is nothing more difficult to arrange, more doubtful of success and more dangerous
to carry out than initiating changes in state’s constitution. The innovator makes enemies of all those who prosper
under the old order and only lukewarm support, is forthcoming from those who would prosper under the new”.
Administrative reform is, therefore, a risk, a gamble.
It can take generations for administrative behaviour and values to change appreciably (We have seen this in the
case of public servants from the apartheid regime, and civil servants in the former homeland territories of South
Africa). Administrative reform is a long – term process that requires talent, zeal, and commitment, scarce resources
and, above all, time whereas governments are usually short – term and look for quick solutions.
Caiden argues that administrative reform is based on three premises:
1) That government will play an increasingly important part in the life of society;
2) The government needs effective machinery to operationalize its policies;

3) And that effective machinery can be designed on rational principles. What is suggested is that administrative
reform is about:
 Deliberate planned change affecting the society in purview;
 It is synonymous with innovation;
 Improvement in public service efficiency and effectiveness are the intended outcomes of the reforms;
 And the reforms are justified by the need to cope with uncertainties and rapid changes in the organizational
environment;
 It is not merely a technical exercise; it is a process involving the political interactions of stakeholders which
actually determine the course of events;
 A thorough reconstruction of the machinery of government – a complete or partial overhauling of the
prevalent administrative structure;
 It aims at systematic transformation and not piecemeal change, to reduce corruption, incompetence and
red tape;
 The different sectors and programmes are rationalized and reorganized for more effective performance;
 The machinery of government is simplified and streamlined to eliminate unnecessary duplication, reduce
inconvenience, and minimize pluralism;
 It is a device to remedy the malfunctioning of the natural administrative process; and
 Attempts at reform are thus directed toward three elements, either separately or jointly:
1) Structural Reform: The basic concern is with division of work, delegation, and decentralization, creation of
autonomous agencies, and setting up of coordinating mechanisms to harmonize the actions of
interdependent units. This is very common in public administration.
2) Procedural Reform: This may involve changes in financial rules, alterations of work procedures and general
attempts to avoid red tape. Management techniques to different administrative situations belong to this
category of reform.
3) Behavioural Reform: It is a relatively new dimension in administrative reform and the focus is on public
bureaucracy that has been criticized for its impersonal character, and dehumanizing consequences, and is
aimed at improvement of inter - personal, and inter - group relationships within the bureaucracy to serve
the public better. It is a question of attitudinal change. It is a clear break from, and with the Weberian notion
of hierarchical organization that draws, inter alia, upon unity of command and division of labour.
Think Point
In your view, is the notion of reform aimed at improving the status quo and
marks a departure from the prevalent set up? Explain.

Administrative change through deliberate reforms is a process that has distinct phases, from the identification of
the problem to the implementation of the reform proposals, to sort out what is perceived to be administrative ills.
One way of describing the process is to follow Herbert Simon’s model of decision-making, with three interrelated
stages of search, design and choice. This is discussed as follows:
1) The Search Stage: It refers to the appreciation of the need for administrative change;
2) Design Phase: The relevant merit of different alternatives is assessed more specifically with their probable
benefits and costs.
3) On the basis of this analysis, a particular step is chosen since it appears most appropriate at a particular
juncture of the evolution of administration.
4) Caiden puts forward a process model with four distinct phases: Awareness of need for administrative change;
formulation of goals and objectives, strategy and tactics; implementation of reform; and evaluation of reform.
5) Administrative reform becomes necessary when the administration is: unable to cope with the rising demand
coming from clients; unable to anticipate future demands likely to be made from it; and lacking in effective
methods to cope with its ongoing and projective activities.
Usually awareness of change is blocked by a number of factors. Tolerance of maladministration may be high in a
particular society. Top management may be in favour of the status quo. There may be resource constraints, and
the organization may not be prepared to invest extra funds for reform. Formal organizations tend to socialize
individuals into conformist roles. The initiator of reform has to face criticism and even punishment. A reformer is
some kind of rebel who must have the courage and confidence to stand up to the pressures of conformism, social
ostracization, and organizational intimidation.
Think Point
Do you think that the above variables fit the public administrative picture of
democratic South Africa currently? Posit an answer. On the other hand,
administrative knowledge and skill, a sense of politics and a moral commitment
to reform are essential prerequisites. Why do you think that these essential and
necessary prerequisites are absent in public administration at all three spheres
of government in South Africa, currently? Using theory and your experiences
and observations within the public sector, attempt to provide an answer.
Reform proposals find easy acceptance in situations of uncertainty, disorganization and dislocation. Ideological
commitment to change also facilitates administrative reform. There must be status quo – upsetting socio –
economic and political circumstances like regime changes, economic crisis, poverty, and rising crime rate which
would impel changes in administration to cope with these unusual situations. This is the current reality within the
public sector of South Africa, because of infighting within the ranks of politicians, nepotism, patronage, corruption,
the disregard of the law by large sections of the population.

Exacerbated by an inept and self – serving bureaucracy, poorly trained, with no pride and a lack of administrative
capabilities, coupled with the lack of political will, and a host of other salient features, and factors that further
exacerbate the situation; that defies the constitution and the rule of law; thus paying lip service to the enshrined
principles of the Bill of Rights, and tenets of democracy. Given this situation, one has to look deep into its causes
and formulate concrete suggestions for remedial action. Goals and objectives of reform are to be clearly stated
and strategy and tactics to push through reform in the face of opposition and suspicion worked out. Formulations
of reform proposal include diagnosis of the root causes of maladministration, drafting of feasible proposals,
convincing people of their soundness, confronting opposition, and keeping some provision of an escape route in
case of failure.
The plan should be flexible enough to permit necessary adjustments in the light of experience, and the role of
leadership is vital. To meet the new situation, some fundamental changes are necessary in both political and
bureaucratic institutions that appear to have lost momentum in the changed circumstances. This suggests that
there can hardly be a universal package of administrative reform. Just as administrative cultures differ from one
country to another and even one region within a country to another, so organization cultures differ among and even
within organizations.
Administrative reform is a constant process and the aim is to adapt the administrative system, as far as possible,
to the changing requirement of the society in question. Reforms need strong political backing, mass support, and
competent inside facilitation. Hence, implementation and evaluation of reforms are important in the entire exercise.
1.5 Implementation
While analysing implementation, Caiden refers to four methods of implementation as follows:
1) Reforms imposed through political revolution;
2) Reforms introduced to remedy organizational rigidity;
3) Reforms through the legal system;
4) Reforms through changes in attitudes.
Administrative change is influenced by political forces. When one political regime is replaced by another, the
change is bound to affect the structure and working of public administration. This happens even in times of peaceful
political changes in the course of normal democratic governance. A revolutionary change, like colonialism, giving
place to constitutional democracy or a sudden coup signifies radical transformation of the power of the elite through
shifts in the power base. Sweeping administrative reforms are likely to follow such radical political changes.

Activity
Read and research what was the impact of political regime change on the structure and
working of public administration in South Africa, post 1994. (Look at the laws, political
parties, bureaucratic change, power relations, affirmative action, BEE policies,
university entrance requirements, procurement, cabinet appointments, integration,
freedom of association and a host of other issues related to public administration,
including the constitution and the Bill of Rights).
Look at Ghana, the first independent country in Africa and determine the changes brought about in respect of
public administration, post British colonial rule (1956). Situate your answer in respect of the concept of Pan –
Africanism, as enunciated by its first President Kwame Nkrumah, and its impact on other African countries.
Look at coup de tat’s on the continent of Africa and list some of the countries that underwent coups, and show the
radical changes that were introduced in terms of the power of the elite, through shifts in the power base and its
impact upon public administration. (Select one country).
In normal times, it is the bureaucracy that feels the need for minor administrative changes. Administrative reforms,
through changes in the legal system, are a very common phenomenon. New laws can usher in very significant
changes in administration. Reform through attitudinal changes involves manipulation of the human side of the
enterprise. Lasting reforms cannot depend on the superiority of power or coercion. Attitudes must change or be
changed. These are not easy to bring about. It opens ways for organizational renewal.
When reforms involve creation of new posts and procurement of new material and equipment, as is the case within
the Zuma administration, with the creation of four new Ministries, budgetary adjustments have to be made
accordingly. Experience shows that reform proposals very often remain in files for want of attention and
supervision.
1.6 Evaluation
Reforms need to be monitored and evaluated. The necessary adjustments must be made organizationally and, at
each stage, the expected results should be predetermined and actual results should be compared with the
expected ones. Evaluation is concerned with the final outcome of implementation. Admittedly, there are many
problems involved in the evaluation of administrative reforms. There are many role players and this complicates
the issue. Nevertheless, evaluation should be an integral part of reform and, to deal with a host of problems, more
rigorous methods of evaluation need to be evolved.

1.7 Focus On Administrative Reform

Discussion on administrative reform is generally confined to changes in bureaucracy In some theoretical
constructs, administration is a technical task separate from politics, and as a tool or means for translating political
objectives into practical reality. Purity of administration received great intellectual support from Weber’s concept of
rational bureaucracy, and contributed to the growth of public administration, as a fairly autonomous institution
bound by rigorous rules and uncontaminated by irrational forces. These can be identified as follows:
 Limited instrumental role in rule making;
 Free and open interaction with a plurality of voluntary associations;
 Maintenance of separate identity and position while dealing with organized voluntary associations;
 Acceptance of electoral sovereignty and recognition of the legitimate role of the elected leaders to specify
what is or is not in the public interest;
 Honesty and integrity of public administrators in the performance of their functions;
Acceptance of and loyalty to the administrative and political system of which administrators constitute an integral
part are as follows:
 These characteristics are contrary to the Weberian norms of anonymity, impartiality, and neutrality, in that the
administrator advises the politician and is not exposed to the din and fury of politics; and
 Neutrality is like a kind of political sterilization, and the civil servant must remain neutral.
From the above, we get a picture of bureaucracy been portrayed as a universal and permanent institution
uncontaminated by the frailties and frivolities of politics. This image is far from true. Despite the proclaimed non –
political characteristics of bureaucracy, the role of the civil servant in preparing legislation is far more important
than is generally assumed. Other forms of bureaucracy are as follows:
 Representative Bureaucracies: within political democracies, these are responsible to and, in greater or lesser
degree, responsive to the political forces which command the support of the electorate and dominate the
political organs of government at a given time; and
 Party – State Bureaucracies: These are the by – products of totalitarian regimes and other one party dominated
political systems, where the state bureaucracy is a distinct structure, is penetrated, controlled and dominated
by party bureaucracy.
Think Point
Can you think of such governments? Do you think South Africa currently
exemplifies, in part, a party state – bureaucracy, because the majority party in
government seems to be running the country instead of the government itself, and
thus there is no separation of the state from the party? What is your viewpoint,
explain..

 Military – Dominated Bureaucracies: The strategic power position is occupied by the armed forces, and they
install their representatives in key civilian posts and direct the state bureaucracy (Think of Chile under Pinochet;
Pakistan under General Musharraff; Ethiopia in the past under Mengestu Haille Mariam). Can you think of
military dictatorships today? Name a few countries.
 Ruler-Dominated Bureaucracies: These exist in political systems where bureaucracies are the highly personal
instruments of an autocratic ruler or dictator, who exercises absolute power and imposes his will (Think of
Robert Mugabe of Zimbabwe, General Gadaffi of Libya, Former dictator Saddam Hussein of Iraq and so on).
 Ruling Bureaucracies: These can be found in certain phases of colonial rule where the bureaucracy itself is in
effect the ruling element in the political system. (Imperial India is perhaps the most classic example under this
category).
The classification of bureaucracies serves an important purpose as it defines the role in different political systems
as it relates to the use of authority and a neutral bureaucracy as a fairly detached instrument of governance is not
a universal phenomenon and can be found only within a particular political framework that accepts the legitimate
supremacy of elected leaders in the administrative and political system. Recruitment from a narrow social base, it
has been alleged, is likely to lead to the perpetuation of a class in the higher echelons of the bureaucracy that
carries the danger of entrenchment of a restricted and conservative social outlook in the bureaucracy.
1.8 Street – Level Bureaucracy

It is the employee, where the organization meets the members of the public, that makes or breaks the image of
the organization, and the front level employees have been called the street – level bureaucracy. With a changing
world, this has brought about new nuances in the conceptualization of administrative change. It is common
knowledge that primary and basic work of the organization is done by the lower – level bureaucracy and they are
generally a neglected lot. They work in poor environments and their work is not appreciated. Often, their work
environments lack the basic amenities for human survival. For example, the police’s public image in South Africa
is one of lowly paid officers, riddled with corruption and inaction.
The lower level or street bureaucracy has drawn the attention of research, in respect of their characteristics. The
features are:
1) They are front-line staff, stationed at the bottom of the organization;
2) They interact directly with the citizens and often advise the client or deliver service to the client;
3) Despite their lower status, they exercise considerable discretion in respect to contacting citizens and
delivering services to them. For instance, it is well known that the policeman may or may not intervene in a
local problem – situation for partisan reasons;
4) The street – level bureaucrats are not easily amenable to higher – level supervision, although on paper the
hierarchy provides for supervision, but their work, it appears, does not lend itself to supervision and is,
therefore, missing;

5) This type of bureaucracy has a major influence on policy in relation to service as delivered to citizens and
the constant engagement with the day – to – day functioning involving people at the grassroots and, therefore,
to them, policy is not a grand scheme or abstract principles; and
6) As the lowest level of bureaucracy exercises discretion, the general trend is to respond towards the calls of
the rich and the influential and neglecting the needs of the downtrodden.
1.9 Representative Bureaucracy

In the discourse on administrative reform, the concept of representative bureaucracy has a central place. One
construct is the interpretation that it is a bureaucracy consisting of all the social, religious, and racial component
groups in a society recruited on the basis of ability. Some are apt to state that it is nothing but neutral democracy,
and it is not a very clearly defined construct. Two important assumptions behind the concept of representative
democracy are that:
1. All groups have more or less equal political power and rights in accordance with proportion; and
2. The civil servants carry their class attitudes and prejudices into their official positions.
As regards the first assumption, political power is nowhere equally shared by all groups in a society, nor is political
power structured along the line of microscopic social groups. The second assumption can equally be contested
because attitudes and prejudices of the civil servant are formed mot merely by his/her location in the original social
space. These are shaped by dominant influences as experiences on the job, education, and socialization as a
member of the bureaucracy.
The cause of the welfare of a Batswana welfare or Zulu welfare can best be looked after by only a Batswana or
Zulu civil servant, for instance, is by no means self – evident. In a plural society with many ethnic, linguistic, and
religious groups, the concept of representative bureaucracy is likely to provoke ominous repercussions. In the
composition of the civil service, to emphasize social class identity is to invite parochialism and narrow group
interests. The civil service is then a divided house. Furthermore, representative bureaucracy is, in a way, a
contradiction in terms.
Bureaucratic identity is based on professional homogeneity. Introduction of social heterogeneity is likely to disrupt
bureaucracy. Neutral bureaucracy, like the concept of bureaucracy itself, seems a highly idolized notion. In actual
management of public affairs, the civil servants, especially those in the higher echelons of administration, are
professionally involved in political decision – making. Reality in administration, therefore, refutes neutrality.
Moreover, bureaucracy is actively involved in the political process in pursuit of class interests.
For developing countries like South Africa, where speedy socio – economic development has to be steadily
pushed through, the nature and character of bureaucracy assume special significance. The first problem is how to
declass a bureaucracy that culturally belonged to the colonial era and served imperial interests. (A variant of this

is the difficulties experienced with apartheid civil servants and public servants of the former self – governing states
of South Africa, including the TBVC states).
As the South African experience demonstrates, the colonial (apartheid) administrative structure was allowed to
continue even after independence in 1994, and it was thought that the changed political leadership and institutional
framework, coupled with proper training and motivation, would bring about the desired cultural changes in the
bureaucracy of South Africa. This was not to be and a host of problems with them still exist.
Another allied issue has been to separate development from law and order maintenance, and differentiate between
development bureaucracy and traditional bureaucracy. The changing role of bureaucracy in development
administration is characterized by such phrases as development bureaucracy and non – Weberian model of
bureaucracy. Neutral bureaucracy is generally contrasted with a rather unclear concept of committed bureaucracy.
It has come to be looked at as an attempt to create a politicized bureaucracy where commitment was interpreted
in terms of acceptance of ideology and attachment to one political party.
Since the developing countries are engaged in rapid socio – economic transformation under the leadership of the
government of the day, public administration has necessarily a very special role to play in national socio – economic
development. The civil servant thus becomes a partner of the politician, in the pursuit of development programmes.
Bureaucracy thus has a sufficient degree of political awareness and an ability to operate with the system without
wearing a party label or party cap.
Think Point
Do you think that a civil servant in South Africa today can execute his/her functions without
wearing a party label or part cap, given the fact that the party and state are technically the
same, and that the ruling party is not wanting to separate this reality? Explain. What are the
consequences to South African democracy? Discuss.
If the concept of committed bureaucracy stands for the social sensitivity of the civil servant, it is much better to
have a committed civil servant than an insensitive and neutral one. Politicized bureaucracy seems apparently an
immaculate conception. A bureaucracy that is politicized is a different theoretical construct and the political
framework in which it appears is also different.
This is a by – product of a totalitarian one – party dominated political system where a monolithic party plays the
transcendent role. In such a system the party penetrates, controls, and dominates the bureaucracy so much so
that the two are almost indistinguishable. Between technical excellence and political beliefs, the choice is clearly
in favour of the latter.

Think Point
Think of Zimbabwe’s ZANU party under President Mugabe, in terms of a politicized

bureaucracy. By the same token, do you think that South Africa, is increasingly
becoming a one party state, in the sense that we find increasingly that the party (ANC)
penetrating, controlling and dominating the bureaucracy by means of politicizing the
bureaucracy, in terms of increasing patronage, styming opposition and pushing through
unpopular legislation to suit its own political agenda. Think deeply and answer either
positively or negatively with cogent analysis.
In the critical literature of administrative change, these four concepts – street – level, representative, neutral, and
committed bureaucracy, figure prominently. Whatever the nomenclature, the instrumental characteristics of
bureaucracy is contingent on the political system that acts decisively on its functioning. Even if the bureaucracy is
purely professional, it has specific socio – economic roots which it can hardly bypass. On the other hand, these
are useful indicators of complex relationships between the administrators and politicians; their respective roles
may, however, be better appreciated by referring to what actually takes place in the decision – making process.
1.10 Theories of Administrative Change – Early Public Administration

As mentioned earlier, stability rather than change has been regarded as the hallmark of bureaucratic organizations.
Public administration, in its early years of evolution, rested on certain core beliefs drawing heavily on Weberian
formulation of an ideal form of organization. There was, therefore, uncritical acceptance of the virtues of hierarchy
and of centralization of power over administration in the chief executive. What was crucial was the belief that
administration remained outside the sphere of politics and efficiency seemed to be the central value of
administration.
There was also the belief that there existed certain universal principles applicable to all administrations regardless
of socio – economic circumstances, in which they were located. That administration is purpose- driven and
teleocratic, negotiating constantly with the changing agenda of the state – seeking to provide a model capable of
containing corruption. It was argued that the science of administration is susceptible to empirical scientific discovery
and verification. The notion of a purposive state with a proactive administration is reinforced by the
conceptualization of scientific management. Scientific management, therefore, ensures:
 Science, not rule of thumb;
 Harmony not discord;
 Cooperation, not individualism;
 Maximum output, in place of restricted output;
 Development of each man to his greatest efficiency and prosperity; and
 A device of promoting prosperity and thus alleviating poverty and suffering.

Strong government was necessary through the Presidential control to make democracy work in national
government for purposes of carrying out the will of the people, and the nation. Many were not persuaded by the
authoritarian and bureaucratic style of control suggested by the classical school; the purposive administration
should be more participatory and democratic, while setting common goals. It was suggested in terms of challenging
the universal design of both, the scientific management and the classical school, a view suggesting a location –
specific administration capable of controlling the situation only through a unity of views.
Elton Mayo, of the human relations school, drew attention to the socio – psychological dimensions of human action
as an important determinant of administrative behaviour. Industrial and technological change had destroyed the
basic human values of solidarity with others under similar circumstances and also undermined the individual
capacity for collaboration in work. This is what, argued Mayo, lay at the root of misunderstanding between
employers and workers in every civilized country. What was required was neither a system of hierarchical control
nor centralized planning but an enlightened leadership, educated and trained sciences of human and social
behaviour.
In his words, the elite of the several civilized powers is, at present, insufficiently posted in the biological and social
facts involved in social organization and control (and) we are greatly in need of an administrative elite who can
assess and handle the concrete difficulties of human collaboration.
Think Point
Is this the situation with the South African administrative elite, given their thirst
for corruption, patronage and scant reference to service delivery and the plight
of the poor that has constantly erupted in civil unrest, in South Africa?
For administrative theorization, these ideas seem to have expanded the horizon of administrative theory that is
completely redefined, rejecting the authoritarian hierarchical organization of public bureaucracy. In other words, it
should be about the rationality of decisions, and for the accomplishment of goals.
Efficiency is an important ingredient of this construct and conceptualization because it consists of those
propositions as to how men would behave, if they wished their activity to result in the greatest attainment of
administrative objectives with scarce means. Rationality is not an absolute virtue but contingent on the available
alternatives under the circumstances; and second, the function of public administration is to maximize the
attainment of governmental objectives by efficient employment of limited resources.
There is no hope for static administration. However, it was argued in 1968 that public administrators must seek to
change those policies and structures that systematically inhibit social equity and that public administrators should

work for changes which try to redress the deprivation of minorities and enhance the political power and economic
well – being of these minorities. Public administration, in this construct, should ideally strive for some sort of a
redistributive state, directed at promoting greater substantive equality in income and wealth among its citizens.
Unless the process of reforms becomes incessant, the administrative system is likely to lose viability and thus
administrative reform is a continuous process with clear political overtone, since public administration of a state
usually reflects the priority of various socio – economic and political forces that matter in decision – making.
Administrative reforms are a perfect entry point to trace the evolution of public administration as a process, located
in specific socio – economic circumstances. In this sense, the dilemma of three – dimensional organizations in
public administration appears paramount because:
 The leadership / management dimension with clear expectations from employees;
 The employees / workers dimension with their own expectations often in conflict with the first dimension; and
 The citizens or clients of the organization to be served, which is often in conflict with the first two dimensions.
Administration in every country evolves historically, and takes shape and changes in response to the specific
nature of social transformation in a country. It is due to the demands of social needs. It is a question of distributive
justice with complex relationships and numerous decision points on which new forms of politics are brought to
bear. Since the 1980s, we have seen more and more market orientation as distinguished from state or government
orientation.
Another development is third – party administration, farming out work to other organizations and private agencies.
This will in future involve new models of control, financing, and monitoring of third – party administration by the
government. Globalization is another factor (discussed later in this chapter). Another factor is the rising tide for
transparency in administrative transactions. Ethics takes a new dimension because the intelligence of the
population is increasing. Corruption, in recent years, has taken a heavy toll on efficiency and national morality. It
has to develop more technical competence, promote constitutional order, take decisions in growing uncertainty,
and cope with citizens, expectations, it has to serve the interests of its people and not be engaged in narrow
politics. Given the new thrust of public administration, the reform agenda has acquired new dimensions that have
radically altered not only the style but also the content of governance.
1.11 Globalization and Administrative Change

Issues arising from globalization have dramatically changed the nature and scope of public administration, and
governments have to now respond to the challenges of the new world economic order, on the basis that, it can no
longer be confined to the analysis of the structure of public administration. In the context of globalization, national
economies are becoming more and more open and subject to supra – national economic influences. As economies
lose their discrete, self-contained character and become enmeshed in global networks and processes, they
become less amenable to national control and management.

The ideology of globalization is dictated to by voluntarism and the market, as underpinnings of the new economic
order. Public administration today is reflecting, in a large part, the changing nature of government practice
especially in the developed world. The practices of traditional public administration have come under increasing
attack from neo – liberal economists, interest group theorists and national scholars who have provided the
intellectual inputs to politicians determined to reduce the size and scope of the public sector. The issue of state,
market, and citizenship is becoming increasingly more important in respect to relationships and thus changes in
ideological climate are likely to have a decisive impact on public administration and this has a massive influence
upon family and other formations.
Waves of reforms have swept through the public sector over the past several decades under societal pressures
and demands, both national and international. The market model
of governance has been holding centre stage since the 1980s. Various other models have also come into being.
For example, the participatory model concentrates on the lower echelons of workers. The idea of flexible
government goes against the conventional model of permanent employment. Part-time work and temporary
employment, and so on, have now become real possibilities and are being used increasingly, depending on the
nature of the market.
Rooted in the movement of reinventing government, the idea of deregulatory government rests on the assumption
that, if some of the constraints on action, in the case of bureaucratic formalities, were eliminated, government could
perform its present function more efficiently, and it might be able to undertake new and creative activities to improve
the collective welfare of society.
The public interest would be better served by an interventionist public sector. Collective action is considered in this
model as a solution and not part of the problem for contemporary societies, as alleged by public choice theorists.
In other words, public administration must go beyond the big questions of Public Management, on the basis that
the debate directs our attention to a more flexible and open – ended vision of governance. The role of public
management is diminished, if society’s role is merely considered in terms of managing public agencies.
What is relevant in the context of the Third World is that public administration has been crippled in the name of
structural adjustment, invoking more and more the market model of governance in utter disregard of the crucial
developmental role of the state in developing countries. The interests of public administration are no longer people-
oriented; these are instead capital-related. And there lie the perils of externally induced administrative reform
through which most Third World countries are passing today.
In terms of administrative theory – building, the current emphasis on public management through the market model
of governance needs to be viewed in its historical context because two contrasting visions have guided the pursuit

of administration analysis: the managerial vision and the democratic vision. In liberal democracies, both public
democracy (and managerialism) and democratic polity have gained in importance almost simultaneously due to
the specific historical circumstances that has emerged.
The central pursuits of public administration, like achieving a democratic polity, collective action and so on are of
no concern to public management advocates; the legal order is substituted by concern with organizational survival.
It undermines the democratic polity by not promoting citizen rights and promoting collective life, which is vital for
public administration in a democracy. It strengthens bureaucracy in the Third World public administration and is a
major problem.
Structural adjustment programmes and policies tend to downsize government and allows the market freer play.
One of the core issues of governance – reform is accountability of those involved in public affairs. Lack of
accountability defeats the primary goal, for which governance is seen as an appropriate model in public
administration, in most countries.
Think Point
Given the importance of accountability to public administration, in most developing
countries, this deficiency results in misguided resource allocation and arbitrariness, and
corruption in government that have deterred private sector investment and slowed growth
and poverty reduction efforts in numerous settings in South Africa.
Do you agree with this statement? If yes posit a cogent answer and show how and what
effect it has on development in the country.
In respect of accountability, two paradigms have emerged, in respect of public administration. One is public
management and the other good governance. Reinventing government, although an innovative expression, falls
in line with the main current thought advocating quality as against size of governance and entrepreneurial spirit.
Historically, the liberal – democratic set up evolved basic mechanisms of accountability such as ministerial control,
parliamentary debate, legislative committees, media security, and the ombudsman system. (All of this is mere
rhetoric currently in South Africa – consider the controversy with SCOPA, the SABC, ESKOM, Travel gate, the
arms deal, Legislative Committees dominated by the ruling party, poor parliamentary debate without accountability,
the opposition being shouted down, the attack upon the independent media, the judiciary forced to pander to the
government, abuse by ministers and MECs and so on).
In reinventing government, one of the issues is the inefficiency of governments and also given the above examples
that, it has been mooted that the market plays a greater role, in which its objectives are shifted to economic growth

and productivity (neo – liberal approach) and its normative standards are shifted and directed toward efficiency,
competition, profit and value for money.
The standards being set are for those of business management. This constitutes a radical departure from the
traditional norms and objectives of governance enhancing human progress, maintaining law and order, removing
poverty and unemployment, providing public welfare, ensuring impartiality and equal treatment, safeguarding
citizens’ rights, and guaranteeing justice and fairness.
In contemporary public administration, the new diction is, therefore, the market of competition, of enterprise,
customers and of entrepreneurial management. All of this pose formidable political, managerial and methodological
challenges to accountability in terms of three specific dimensions:
 The standards of accountability – accountability of what;
 The agents of accountability – accountability to whom; and
 The means of accountability – how accountability is ensured.
The growing primacy of business-like criteria, adopted in contemporary public governance, has the tendency to
displace its accountability in terms of established democratic standards. Second agents of accountability in respect
of an array of services provided by government, has seen the people-centred tradition of accountability evolved
with the emergence of broader civil society, an organized working class, and an increase in the entitlements or
rights of common citizens.
Citizens have been redefined as clients, and is a commercial view of citizenship, reducing social rights associated
with collective to narrow commercial prerogatives of individual customers governed by an exchange relationship.
Low income groups cannot use these services due to their financial incapacity and cannot afford user chargers,
diminishing citizens’ rights in terms of the state and excludes common citizens from the equation of accountability.
This is class – biased accountability.
The power of Ministers or political executives exert influence on the public service, leading to the politicization of
the civil servant in violation of the principle of neutrality. The recent trend to do away with permanent tenure of civil
servants and introduce contract – based appointments makes public servants more vulnerable to political
executives exercising control of job contracts and careers and thus makes civil servants extremely loyal to
Ministers, ignoring their accountability to the general public. Performance has, therefore, shifted on to outcome
rather than input, and this is a phenomenon of both the developed and developing countries.
This can lead to rendering accountability ineffective, because outcome-based performance is difficult to place
under legislative scrutiny, due to the qualitative and controversial nature of public sector outcomes, such as
environmental security, poverty alleviation, and community development. Various inputs in terms of accountability
such as internal control and supervision over the various inputs and processes in the public sector cannot be
measured.

Think Point
Should the powers of Ministers and MECs, in South Africa, be drastically

curtailed, such that they do not influence civil servants, and thus the neutrality
of public servants be safeguarded? Will this allow for better governance and
service delivery? How can South Africa achieve this within its public sector?
This is the fundamental view of accountability of the World Bank and the primary concern is to do away with
dysfunctional and ineffective public institutions. This ignores the empowerment of people. This is crucial for the
Third World that has inherited a colonial administrative model, endorsing the administrative hegemony of powerful
socio – economic elite, that is as keen as the administrative class to privatize government. Decentralization has
been formally and constitutionally assured and philosophically celebrated. The grass – roots institutions are yet to
grow as autonomous institutions in a hostile surrounding of centralizing administration and inequitable resource
distribution.
Given the complexity in the evolution of institutions in the Third World context, administrative reform is more than
a technical exercise. It is essentially a political intervention, taking into account the complex socio – economic
relationships in which these policies are enmeshed. Whether the reform is externally imposed or internally induced,
there is neither a short cut nor an escape route, but to critically assess the importance of these relationships, in
making public administration reform citizen – centric in the genuine sense of the term.
1.12 E - / Digital Governance

In the context of globalization, the recent conceptualization of e – governance or digital governance is of
significance in administrative reforms. Drawing from information and communication technology (ICT), the aim of
e – governance is to open up government processes and enable the greater public access to information. Both
digital and e – governance is of recent origin and there is no universally acceptable definition. Digital / e –
government refers to the use of emerging ICT like internet, Web-Pages, and mobile phones to deliver information
and services to citizens. It can include publication of information about government services on websites and
citizens can download the application forms for these services. It can also deliver services, such as filing in of tax
returns, renewal of a license, and processing on line payments.
Think Point
Barring the South African Revenue Services (SARS), and in spite of modern e
– governance equipment and computers, why have other government
departments not provided the services via e – governance? What do you think
are the drawbacks or problems? .

The purpose of digital government is to create super counters in the government departments and eliminate the
endless maze that citizens have to negotiate in going from door to door, floor to floor, to obtain service. Appropriate
use of various ICT techniques will usher in a new era in public administration by seeking to make governmental
functioning and processes transparent and accessible. E – governance, through a technological innovation, has
changed the basic character of governance, its operational methodology, functional style, ideological orientation,
even the spirit, heart, and soul.
In the developed countries, e – governance is a well-established mode, in which governmental services are made
available to citizens through internet portals. In India, which is a developing country, digital governance has been
legalized by legislation, and uses electronic commerce as an alternative to paper based methods of communication
and storage of information, to facilitate electronic filing of documents with government agencies. It also uses micro
filing, stored media, magnetic, optical, computer memory, computer generated micro fiche or similar devise. It is
an attack on bureaucratic red tape that causes unnecessary delay and corruption.
Furthermore, it also creates a space for regular involvement of citizens who, as customers of public services, have
direct access to governmental activities through the ICT. Citizens are able to view on-line governmental acts, they
can also provide significant inputs to the government through emails and electronic devices. Technology is thus
an important tool integrating citizens’ input and transparency into the model. The ICT – based e – governance has
ushered in a new era in government innovations with capacities to:
 Reduce the cost of government;
 Increase citizens’ input in government; and
 Improve public decision – making and increase transparency of government transactions.
In view of these well-defined functional characteristics, e – governance is also a very meaningful step in combating
corruption. Not only does it curb opportunities for arbitrary action, e – government also empowers citizens by
making their intervention in transaction of governmental business regular through the ICT. Drawing on ICT, e –
governance articulates public administration in a refreshing new way. However, its application is considerably
limited in the public sector simply because e - governance threatens mass retrenchment of workers involved in
government. In many countries, the public sector cannot opt for e – governance to replace people for two reasons,
first, access to the internet is still limited even in developed countries.
While transactions through ICT cost less than conventional devices, the government has to maintain both the old
and new systems to sustain its public character; otherwise a large portion of the people’ will remain outside
governmental transactions. Second, downsizing and reducing public sector employment in many countries results
in economic hardship for those losing jobs, which for obvious reasons, have severe political repercussions. Thus,
for the leadership, this is not a desirable option unless there is no option available. In other words, given the obvious
adverse consequences of e – governance both in the developed and developing countries, its applicability is both
uncertain and limited at present.

Think Point
Irrespective of the above limitations, it is not necessary that the application of e

– governance be delayed in South Africa, because the public sector has to
become literate, in respect of ICT. It is not a consequence of retrenchment, but
rather the lack of political will to do so. In spite of millions of rands being spent
on ICT training, why is its use not encouraged to improve service delivery and
in order to take a quantum leap into the future? Provide a reasoned response
to this vexing question.
1.13 India Urges South Africa to Join Pan – African E – Network -33 Countries Have Signed On to
Project Offering Online Assistance to Continent
Peter Fabricius, the Foreign Editor of the Star Newspaper, Business Report of Tuesday, September 1, 2009 reports
on the above subject and reports on the visit to South Africa by India’s Minister of Commerce and Industry, Anand
Sharma. The Indian government is saddened that South Africa has not joined its $117 million (R909m) Pan African
e – Network through which India offers online technical assistance to Africa. The minister said, in Johannesburg
last month that 33 countries had already signed on the network. The first phase covering 11 countries – Benin,
Burkino Faso, Gabon, Gambia, Ghana, Ethiopia, Mauritius, Nigeria, Rwanda, Senegal, and Seychelles – links
leading universities and hospitals of Africa with their counterparts in India, he said at the Gordon Institute of
Business Science.
The second and third phase will be covered in the coming months, Sharma added. “I must mention with a tinge of
sadness that South Africa has so far not joined this network and, I have raised this issue, with President Jacob
Zuma and Deputy President Kgalema Motlanthe, that we cannot have a Pan – African co –operation which does
not include South Africa.
When Indian President Abdul Kalam first proposed to link all 53 nations of the African Union with the fibre – optic
and satellite – powered Pan – African e – Network, in Midrand in 2004, South African government sources
expressed suspicion that the network would enable India to snoop on African countries and governments. This
could still be the reason that Pretoria is holding back from what seems to be an obvious benefit. The proposal
includes not only tele – medicine and education but also internet, video conferencing (including among heads of
state and senior officials), e – governance, e – commerce, infotainment, resource mapping, meteorological services
and others.
The Indian government believes that by providing adequate educational facilities and affordable healthcare to
citizens are two prominent concerns of many developing countries. “Technological improvements in terms of
communication infrastructure for delivering quality education and healthcare uniformly, across the length and

breadth of the country, are a key factor in the progress of any country.” Sharma expressed his regrets about South
Africa, not participating in the network while describing the benefits of greater co – operation between India and
Africa, especially South Africa.
“India today offers a range of low – cost products and services. We make the world’s cheapest car, the cheapest
artificial limb and offer one of the lowest cost medical cares. We welcome our brothers from Africa to come to us
to access affordable high quality healthcare services. For those who cannot come we are even offering
consultations online through the Pan – African e - Network which is a shining example of our co –operation.”
Sharma also offered Africa the fruits of India’s experiences in its green revolution, which made the country self –
sufficient in food grains, and in skills training to make Africans globally employable and get them out of the poverty
net which had captured an additional 50 million people since the global recession began. “It is equally important
that Africa encourages the development of home grown corporate leaders who have the ability to take risks and to
invest overseas,” as Indian corporations were increasingly doing, he said. (Think of India’s computer giant Sahara’s
presence, in South Africa). He said he would like to see Indian companies such as Tata, Mahindra and Kirloskar
build on their sales to Africa by establishing many manufacturing facilities.
Further, he called for greater collaboration between Indian and African countries in building infrastructure across
Africa. He stated that it was an Indian company that had broken the stranglehold of the Merck patent for
antiretroviral drugs, which had substantially brought their cost down and would like to see Indian pharmaceutical
companies invest across Africa.
He also offered to share with Africa India’s vast experience in information and communication technology as well
as in outsourcing information technology and financial services and said that India would like to establish high
quality software development centres in Africa. The African continent must not miss the digital revolution which is
transforming this globalised world, he added. He also mentioned the increased Indian aid to Africa, which had
grown out of the first India Africa Forum summit last year, including the Duty Free Tariff Preferential Scheme which
would cover 94 percent of India’s tariff lines and will provide a preferential market access on tariff lines for 92,5
percent of the global exports of all least developed countries. He noted that India comprised a market of 1 billion
people and a middle class of over 300 million.
India also announced at the summit that it would double concessional lines of credit to $5, 4 billion over the next
five years, prioritizing infrastructure. India’s $500 million budget for aid to Africa provided grants for critical areas
such as human resources, development and capacity building. India has also doubled the number of scholarships.
“Our trade with Africa, which was less than $1 billion in the early 1990s, rose to a level of $35 billion last year and
I would like to see trebling trade with Africa over the next five years to reach the $100 billion mark.”
India had launched a Focus Africa Initiative in 2002 and it is my intention to deepen this initiative and to
institutionalize our economic partnership. “I must end with a quote of Mahatma Gandhi’s: “The commerce between

India and Africa will be of ideas and services, not of manufactured goods against raw materials after the fashion
of Western exploiters.”
Think Point
In respect of what India can offer to Africa, in all aspects of trade, including e –
Networking, and the fact that it is an emerging trade giant and a Third World country,
do you think that South Africa’s decision of not joining the other countries in Africa, is
short sighted? What impact will this have on public administration?
India was the first country, in the world to move a resolution against apartheid in the
United Nations and cemented its friendship on the historic basis of human rights. Is
South Africa justified to view India’s intentions with suspicion, when you consider it is
a matter of trade and affordable prices? What will be the spin offs, if South Africa joins
the Pan – African e – Network? Apply your mind to these issues.
1.14 Concluding Remarks

Administrative change is inevitable because:
 Public administration regularly negotiates with the changing priorities of the society of which it is a part;
 It seeks to incorporate not only the new administrative techniques but also the ideas that grow out of
socio – economic and political churning;
 Public administrative reform is, therefore, an institutionalizing instrument in bringing about changes and
modernization in society;
 It is the search for an appropriate administration to keep pace with changing reality and is inspired by
ideologies, philosophies and policy approaches on which interventions in society are based; and
 Governance is a legitimizing device of governmental action that is justified by the rationale from which a
government draws its sustenance.
Finally, public administrative reforms in the developing world must be based on the theoretical perspective of new
public management through civil service reforms, as necessitated by the ideological move towards de –
bureaucratization. South Africa and indeed both the developed and developing world, must put into place an action
plan for effective and responsive government that will incorporate, nurture, bring about international co – operation,
in wanting to create a new public administrative order, in respect of dealing with the problematics of poverty and
development, in the quest of radically reforming world bureaucracy, which has allegedly been characterized as
change resistant. Innovation must, therefore, be a part of public administration, in a quest for greater
understanding, and the promotion of the new public administration, and of public management, in an ever-

changing, complex and dynamic world, in which poverty, disease, crime and pestilence reign supreme. This can
only be addressed by the commitment and co – operation of both the developed and developing countries.
Practical Application or Examples
Note: This is an important and comprehensive chapter, and, therefore, a

comprehensive number of discussion questions have been framed. It is in your own
interest to work through all of these discussion questions.
1. Outline very briefly the Weberian, Thompson, and Peters views in respect to
reform and bureaucracies.
2. Distinguish clearly, and by means of examples, the terms administrative

development, administrative modernization, and administrative reform.
3. Explain Caiden’s view of administrative reform and also outline structural,

procedural, and behavioural reform.
4. Administrative change through deliberate reforms is described by Herbert Simon’s

model of decision – making in terms of three stages of search, design and choice.
Discuss this statement briefly and compare it with Caiden’s view of the process
model.
5. Clearly show the importance of implementation and evaluation to the reform

process of public administration and to public management.
6. Classify bureaucracies and give appropriate examples of each type of

bureaucracy.
7. Discuss the focus of administrative reform and innovation.
8. A neutral bureaucracy is a fairly detached instrument of governance and is not a

universal phenomenon, and can be found only within a particular political
framework that accepts the legitimate supremacy of elected leaders in the
administrative and political system. Discuss this statement.
9. Explain street – level bureaucracy.
10. Discuss representative bureaucracy.
11. Briefly outline the theories of administrative change.
12. Discuss globalization and administrative change.

13. Outline and discuss the importance of e – governance to modern public

administration and show how it can eliminate some of the problems that plague
public administration in both developed and developing countries.
14. Discuss the possible contributions that India can make to public sector reform in
South Africa in respect of e – governance and trade, and show the disadvantages
that will accrue to South African public administration, by it not wanting to join the
Pan – African e – Government Network Initiative mooted by India.
15. Discuss comprehensively, in the form of an essay of at least six to eight pages,
the issues that permeate administrative change and innovation, as they relate to
public administration in both developed and developing countries. (You must be in
a position to conceptualize and critically examine the issues, as they pertain to the
changing world of public administration).

Unit
2: The Evolution of Administrative Law
Regimes, The State and The Rule of
Law in The Context of Administrative
Law and The New Public Management

2.2 Absolutism and Early Administrative  Understand and comprehend the importance of change and
Science continuity, in respect of the tradition of public management,
and its application to public administration;
2.3 Administrative Law and The New  Be in a position to understand the central role that the state
Public Management plays in respect of the rule of law, for purposes of orderly
2.4 The Starting Point: State and Rule governance, and the promotion of the public servant, in
of Law respect of his / her neutrality within the ambit of public
2.5 Franco – German Administrative administration and, to a lesser extent, within politics;
Systems and Their Characteristics  To be in a position to crystallize the issues of the state, and
2.6 French Centralism Versus German the rule of law in selected countries of the developed world,
Federalism and apply it to the modernizing state and in the context of
2.7 Hierarchy former colonies as it applies to developing countries
2.8 Civil Service
2.9 Comparison of French and German
Classical Administration
2.10 Development Trajectories
2.11 France – A Modernizing State
2.12 Persisting Incrementalism in
Germany
2.13 Influence Abroad
2.14 Western Continental Europe
2.15 The European Union
2.16 Former Colonies
2.17 Two South African Issues in
Respect of the Rule of Law


United Kingdom.
India.
Recommended Textbook:

2.1 Introduction
In chapter one, we discussed the concepts of change and innovation relevant to the modern public service, and,
in so doing, the theories of change were discussed, and the different types of bureaucracies were established, in
respect of public administration discourse. In this chapter, we attempt to discuss the evolution of administrative law
regimes. More importantly, we situate the subject matter in the context of the modern state, and above all within
the framework of the rule of law. In so doing, we very briefly summarize early administrative science, in order to
understand the modern state from the aspects of public administration. It is obvious, therefore, that public
administration and public management, irrespective of continuous change and innovation, in a changing and
complex world, must be pursued within the framework, and the importance of the rule of law. If this tenet is not
fulfilled, then innovation, change and public administration will be meaningless, in terms of its primary objective of
advancing the general welfare, through the processes of orderly governance and development.
2.2 Absolutism and Early Administrative Science

The modern bureaucratic state is a social invention of Western Europe, China’s early civil service notwithstanding.
In discharging the ordinary public services, the emergence of modern public administration and management,
awaited two historic developments: the rise of absolutism in Europe, following the peace of Westphalia in 1648
and the revolutionary ideal of national sovereignty institutionalized in France after the French Revolution of 1789.
The reign of Louis XIV characterized absolutism in paradigmatic form.
The break with the past was in the growth of large bureaus of officials and a new system of financial administration:
the institution of the intendant, a permanent administrator answerable to the king, and ministers, especially in
matters of finance; and the intendants also required staff. Against this background of the scientific spirit created by
Bacon, Galileo, and Descartes, scholars such as Vaubon and Jonchere began addressing the needs of absolutist
institutions. It was in 1640, that the grandson of William the Great created an absolutist state that broke from the
medieval tradition, by instituting public management by competent civil servants.
In other words, this was the beginning of public administration. We will not go into the history of the evolution of
absolutism and what followed, save to say that all of this had a major impact upon the management of
governments, and this phenomenon was increasingly consolidated in imperial bureaucracy, and finally evolved
into the system we know today.
2.3 Administrative Law and The New Public Management

The Westminster reforms of the 1980s, which have evolved into the “new public management” (NPM) require at
least an expansion of the reach of administrative law to the state. It has been argued that the values of
administrative law and NPM are in “prima facie tension.” The conflict comes between the administrative law
concerns, with hierarchical order, with due process, with rules and standards, with systemic coherence, and with
manners and sustainability of institutional practice, and NPM’s assumption that the state is too large and too costly;

and that centralized or rule – oriented solutions are part of the problem. This view, some contend, becomes
problematic as public administration moves farther from the confines of administrative agencies.
It is the role of law within government to articulate legal advice and other legal services, so that the ultimate choices
are left to the responsible bureaucratic or political decision-makers. But in Canada and Australia, the user – pay
system has been developed for government law practice, whereby an agency requiring legal assistance would
simply hire lawyers within government, implying tighter client control.
Think Point
Given the large number of cases that the South African government loses on a
daily basis because of the inefficiency of state – law advisors, should South
Africa adopt the user – pay system of Canada and Australia? Will it work and
will there be resistance? Is the user – pay system a move in the right direction
in respect of change and innovation for the Third World?.
Given such systems, the question arises, where are the assurances of consistency or independence of judgment?
Who will look out for the central agency or whole government perspective? User – pay systems programmes trim
government fat, but they may be doing so at significant cost to intergovernmental equilibria. Entrepreneurialism
has to be a professional discipline, accompanied by effective communication with clients about the value of
independent judgment, and the rule of law.
Some authors on the subject take the extreme view that NPM contradicts the core purpose of administrative law.
The misdirection begins with the notion of what administrative agencies do, and the talk about doing better for less
fundamentally, misunderstands the purpose of administrative activity, because most agencies develop general
norms and adjudicate cases. They are in the governance business, not the service provision business. The second
error comes with the understanding of the purpose of administrative law. The long-term commitment of
administrative law has been to assure that administrative discretion is structured, checked, and balanced.
Administrative law tends to presuppose clear lines of authority, hierarchical control, and responsibility focused on
the top-level management of agencies.
The basic idea is that while arguably reinforcing the accountability, reasonableness, and procedural fairness of
administrative policy making; these regulatory reforms are designed to stall and derail many rulemaking efforts.
Through procedural controls, governments are bent on adding red tape, at least as fast as the executive purports
to eliminate it. The combination of new procedural requirements created by a legislation seeking bureaucratic
control, and a pared down administration, that is less likely to make rules with the requisite procedural rigidities,
will lead to an untenable situation. This is not, however, as acute in Westminster systems, where political control
is more direct.

More mundane, but equally problematic, is the problem of the legal identity because agencies (governments) enter
into contracts, in terms of performance agreements and that these contracts cannot take the form of private law
contracts, because the parties have no separate legal entity. Legal identity precedes and cannot be derived from
a contractual relationship. Nor do these agencies or governments possess corporate personality deriving from
public law; otherwise they would be able to make contracts. It is remarkable that public authorities are assumed to
have an inherent power, and freedom to enter into contracts. The contractual nature of NPM reforms places
administrative law in something of a disequilibrium, though it is nothing that pragmatic and functional jurisprudence
cannot handle. The courts, quite simply, will catch up with these reforms should they indeed have a lasting
presence in government.
We have seen that administrative law exists at multiple interfaces in - between the political branches of governance,
and among the hierarchical levels of the bureaucracy and between the bureaucracy and the client. We have seen
that variation in political regimes has important consequences for the type of administrative law regime that can be
implemented. The reason that politics is so influential is that administrative law regimes exist to police the
delegation of powers from the authorities to the bureaucracy. This is upheld by the third party, the courts. We must
state that recent trends in public administration that can be characterized as manifestations of the New Public
Management can be problematic for the general operation. This is to be expected in the process of continuous
change and innovation, as it pertains to public administration that is in a state of continuous change, and thus we
will have to revisit all of this in the years that lie ahead, for updating the component of administrative law.
Our discussion, thus far, has allowed us to set the pace for the important topic of the rule of law, in that we needed
a glimpse into some aspects of administrative law as it pertains to public administration and the management
thereof. In so doing, we will now look at the state and the rule of law, as the starting point.
2.4 The Starting Point: State and Rule of Law

Continental European political thought is strongly founded on the idea of the “State.” This perspective, which is
rooted in Roman law tradition, views the state as a separate legal entity (moral being), which is granted certain
competencies by constitution and which acts through organs, such as parliament, government, agencies and so
on. Anglo – Saxon political thinking, embedded in Common Law tradition, has never really adopted the term “State”
as a concept for the expression of the methods and structure of government, and the political organization of
society. It is oriented towards institutions, ranging, for instance in the British case, from parliament or the Crown,
and to other institutions such as local councils.
In the continental European tradition, which originates from the eighteenth – century Absolutist state, the state is
still seen as a realm that is conceptually, legally and institutionally distinct from society and the private sector.
Anglo – Saxon civil society tradition has taken a more pragmatic view of government by seeing it as instrumental,
if not ancillary, to the needs of society and economy.

A typical feature of both the French and the German systems lies in the tradition of rule of law, and strict limitation
of administrative and state action to a legal basis. A focus on abstract legal norms and codified law is the primary
medium for controlling administrative action. Both countries are considered to have a legal and administrative
culture. German and other continental countries drew heavily from the French experiences, and thus it should not
be overlooked that present day legal orientation and administrative practice stem from different sources, and the
different routes and traits of this tradition.
In France, law was traditionally considered as an incorporation of public interest, and refers to the ideas of
sovereignty of the people and the nation state (l’etat – nation). In Germany, the idea of the rule of law (Rechtsstaat)
has prevailed according to codification seen as protection of citizens against bureaucracy - formerly against
monarchic authorities and, today, against unjustified constraints of human rights.
According to the principle of the rule of law, every state action has to be tied to a legal basis. In both countries, this
has led to the formation of large bodies of administrative – as opposed to private law, to regulate the citizen / state
and inner – state relations and everything done is a legal act. This underlines the notion that the state, and not
individuals, acts in its name. This has been followed by administrative courts at different levels and for different
purposes, differentiated into two spheres or legal systems. This is one of the most important reasons why private
sector style management techniques were virtually ignored by administrations both in France and Germany for
decades.
In Germany, the concept of the judicial state, legal state, or state of rule of law has a strong impact on the
administrative system. Application of law and compliance with rule has traditionally been seen as the functional
core of public administration. The production of legally correct administrative acts has often been given priority
over more managerial aspects like efficiency and effectiveness. It should be stressed that a rule – oriented
administrative culture may be interpreted as impeding radical reforms of an administrative system, especially on
the federal level, where it is strongly anchored (South Africa, is a unitary state with certain federal characteristics).
The traditional, authoritarian notion of the state, as standing above society, no longer fully captures today’s reality,
but its effects are still shown in today’s administration and explain some of the peculiarities of continental European
public administration, and thus promoting a more cooperative, activating role of the state.
2.5 Franco – German Administrative Systems and Their Characteristics

Notions of legalism account for a large degree of the different characteristics of continental European administrative
systems, and make their mark on every aspect of administration and public management, and thus represent a
common and combining feature of continental European administrative systems. We look at some of these
nuances, in respect of some of the salient differences between the French and German systems.

2.6 French Centralism Versus German Federalism

The most basic difference between France and Germany lies in their basic structural principle. In France, most of
the political and administrative control is concentrated, at the centre of its capital Paris (centralism), whilst in
Germany it is the complicated sharing of responsibilities and rights among the different levels of state (federalism).
France’s state structure traces its roots to Napoleon’s recentralization after the French revolution, in 1789, and
shaped institutional development into the 1980s, as an aftermath of post – revolutionary decentralization initiatives.
Germany’s federal system has its traces in the long absence of a nation state and the multitude of quasi – sovereign
states and principalities. France has long been known for its centralized polity, and its administrative system has
been considered to be an archetype of the centralized nation state, serving as an example for the construction of
hierarchical administration, centralized under government and organized according to a uniform state concept.
The situation is, however, more complex than what we observe at the surface. Since the decentralization reforms
of 1982, the tendency appeared to have been reversed. The territorial reforms, of the 1980s, strengthened local
government, as an institution. Elected political leaders, particularly mayors of larger cities, now have more policy
autonomy than they did prior to the reforms.
Think Point
Are there any similarities with South Africa, in respect of decentralization and
the powers of mayors of large metropolitan cities?.
The institutional setting in Germany strongly reflects the country’s federal character and is characterized as a
decentralized system. The division of the German Republic into the Federal Republic and its constituent states, as
well as the important role given to local self – government, has to be seen in the light of the historical importance;
and prerogatives of state bureaucracies at the time of Bismarck; and has been labelled as administrative –
executive federalism, and safeguards territorial bureaucracies, and is a peculiar system of federalism in Germany.
In other words, the federal level has very little or limited executive administrative capacity. The functions are grades
and devolved to various levels with two tiers of local government. The local level of administration plays an
important role in the provision of services to citizens, and is one of the main interfaces between public
administration and citizens. Local autonomy of municipalities accounts for an enormous variety of approaches in
terms of various aspects. Autonomy in Germany includes a limited power to determine tax levels for local business.
The local level has proven to be a creative innovator and promoter of reforms in Germany. The reform movement,
internationally referred to as New Public Management (NPM), began on the local level and has developed from
there to the upper federal levels.

Think Point
Does South Africa characterize or mimic the federal system of Germany? What then is
the difference, if South Africa is a unitary state? The local level of government has not
proven to be a creative innovator and promoter of reforms in South Africa, given its
virtual collapse. Should provinces be scrapped and should South Africa, revert to strong
democratic centralism, rather than considering and consolidating, variants of
federalism? Apply your mind to these issues.
2.7 Hierarchy
The structure of both countries is hierarchical. They stand for effective control by top officials and politicians and
effective execution of orders throughout the whole organization. Strong control mechanisms by supervisory, and
control agencies and the right of appeal to higher agencies is enforced. Hierarchical organization reflects federalist
and centralist structures of the political system. This, in essence, is the principle of hierarchy, in the Weberian
model.
Centralism stresses the personal responsibility of ministers for all actions of their administration. Administrative
institutions were transferred from France to Germany during the emergence of modern administrative law and,
therefore, show some resemblance. The staff of government ministries, in Germany, is considerably lower than
France.
However, there has been a recent trend toward autonomy and “de-hierarchisation.” These have not come about
by the process of reform initiatives, but in the last few decades, hierarchy has lost its primary role in German
administration. Policy formulation and implementation no longer occur in a top – down hierarchical manner, but
rather with complex negotiating systems, in the shadow of hierarchy.
References to cultural aspects could prove to be helpful for understanding and analysing the actual implications of
the current trends. France and Germany are similar, when it comes to individualism, but show significant
differences in the dimensions of power distance, masculinity, and avoidance of uncertainty. For power distance,
France scores in the upper tier, while Germany is in the lower tier. In France, there is greater acceptance of control
and obedience and for clear instruction, written rules and more ritual behaviour and the greater masculinity index
in Germany points to a greater importance of careers and higher task-oriented motivation.
2.8 Civil Service

Public bureaucracy in Germany and France builds on a professional and highly specialized work force and has
been born from a classical historical basis of the profession, in line with other Western European countries. The
status of civil servants is legally codified, often by constitutional law. It differs from ordinary relationships through
special privileges, rights and duties. Bureaucrats in Germany and France consider themselves as public officials

rather than public servants. It is established on the basis, of corps, and a senior civil servant automatically belongs
to a corps, which is organized in a variety of ways and members show a high degree of mobility.
The grands corps (great corps) embraces all senior civil servants’ positions. There are some 1800 different corps
spread across four occupational categories. The corps system has particular implications for the management of
the civil service, in that individual careers do not depend on one’s hierarchical superior in the ministry but on the
organizational requirements of the corps. Within the corps, it is customary for careers to be managed impersonally,
on the basis of seniority rather than performance.
Think Point
Is seniority the best way to deal with promotion and careers of civil servants,
rather than performance? Substantiate your answer.
Admission to one of the grand’s corps is preceded by education in one of the national administration associations,
and entry is controlled by strict examinations, and the great majority of the administration elite have been trained
in one of them. Former students consider themselves as generalists rather than specialists. The training is law-
oriented and now also covers contemporary management techniques, information systems and performance
evaluation. It is not the question of renewing political control over public administration than to rationalize day – to
– day administrative action.
Unlike the classic Anglo – American image of an impartial public administration, in France, the influence of the
grand’s corps and senior civil servants extends well beyond the sphere of public administration. The senior civil
service has also “colonized” the political sphere, the public economic sector and even the private sector. French
civil servants see themselves as political persons, and the French have always recognized that the dichotomy
between politics and administration is artificial, and that administrators have actually made policies all along. This
creates difficulties in an already complex relationship, and leads to the interlocking of public administration with the
political system at all levels of government.
In respect to Germany, one of the most characteristic elements of German public services is the enormous scope
of the “Beamten,” comprising not only persons having state authority but also every judge, teacher, university
professor, postman or train driver. Most civil servants, reflecting on the structural differences in Germany are
associated with local governments, and civil service is codified by federal framework law, and therefore, no major
difference exists between levels of government. Recruitment is delegated to the lower levels, and to institutions,
and only about 30 percent of public sector employees are employed with special status as civil servants; the rest
qualify as either public employees or public workers.

Public administration in Germany is not very well respected and appreciated either by citizens or politicians, or
even by itself. Employment, as a public agent, is generally sought for reasons of job security and security in old
age than for interesting tasks or ambitions regarding position or income. Civil servants, and accordingly
predominantly jurists, have taken a crucial role in the process of public sector reform. The main reform initiatives
were launched by local government while vast aspects of civil service are codified on the federal level.
Think Point
What can the South African civil service learn from the German experience, in respect of the
public service, and in terms of public administration? Should the South African civil service
introduce the concept of grands corps, and should prospective civil servants be subjected to
strict examinations, before being allowed entry into the civil service? Give a reasoned response..
2.9 Comparison of French and German Classical Administration

The French and German public administration systems, in line with their continental European siblings, are
classified as Weberian models of administration. This is explained as follows:
 They share common characteristics like the legalistic culture, civil service, structure and the dominant role
played by civil servants, with respect to administrative matters, policy formulation and policy implementation;
 They still remain highly traditional and within the framework of their own philosophers;
 The above has led to confidence and rooted in the self – belief in high performance;
 The law is given high priority, rather than the objectives of efficiency and effectiveness and managerial
attention is now being given greater emphasis;
 Reform discourse in Germany is shaped by legal and constitutional reasoning;
 The French and German public administration differ in respect of centralization in the former, and
decentralization in the latter;
 Besides being essentially Weberian in character, the additional concepts are that the German model is
dominated by legalism, rigidity and administrative planning and the French is characterized by the rigidity of
the structures and the flexibility of the bureaucracy; and
 The difference can be derived from varying ideological bases of the rule of law and state conception in the
two countries.
2.10 Development Trajectories

In this section, we attempt to clarify some aspects of the rule of law that affect administrative structures and
procedures, and their modernization in France and Germany. The French territorial decentralization reforms which
are important for subsequent reforms, due to their significant impact on the structure of French administration, is
included. Reforms addressed in this section share a managerial orientation and may be regarded as national efforts
of NPM.

2.11 France: A Modernizing State

In the last twenty years, a number of reform programmes have been launched by successive governments to
modernize the structures and methods of public administration in France. Central government is the key player in
the realm of reform initiatives. Modernization of public administration is identified with the programme of public
service renewal launched in 1989, which has been consolidated by subsequent governments that have redefined,
and extended local government, assigning local management to the communes, social services to the departments
and economic responsibility to the regions. This was undertaken on the basis of a fundamental redirection and
reorientation of policy. The reforms have strengthened local government as an institution. It included four
objectives:
1) Strengthening of human resource management, staff training and appraisal programmes and internal
communication;
2) Devolution of executive management from the central ministries to their territorial field services on the local
level and closer to the user;
3) Introduction of policy and performance evaluation into government; and
4) Enhancement of responsiveness to the users by improvement of quality, prioritizing accessibility, user
information and simplification of procedures.
To devolve executive management, responsibility centres were set up, fixing targets and resources. Performance
evaluation became entrenched throughout the civil service. The end of socialist reforms, in 1992, was marked by
a law on de-concentration and a charter of de-concentration was passed, according to which every administrative
decision had to be taken at the level closest to users. The other measure was the adoption of the Charter of Public
Service and these charters are to be seen from the perspective of the reassertion of values of equality and
concerned with the principles of legality and due process. The ministries were confined to policy setting, resource
allocation, monitoring, and evaluation functions. There were five policy goals as follows:
1) Redefine the tasks of the State and the field of action of public services;
2) Take into account the needs and expectations of citizens;
3) The central state should take on a regulatory function and limited to policy setting, resource allocation,
monitoring and evaluation;
4) Delegate all operational tasks, all non – regulatory responsibilities performed by central administration; and
5) Renovate public management according to modern management principles.
Decentralization now came to the fore. How do these reforms relate to others in the Anglo – Saxon world? The
political and administrative impacts have been described as substantial. In addition, more flexible and business
like forms of internal management and service delivery can be discerned. Managerial delegation with regard to
appointment, promotion and pay is limited. The shift towards modern public management and towards international
reform debate was enhanced.

2.12 Persisting Incrementalism in Germany

Public management reforms in Germany began in the late 1980s and the term most often used for this reform is
incrementalism. These efforts have not overcome traditional, structural and institutional settings, and the traditional
primacy of legalism and rule bound bureaucracy have remained largely unchanged while fostering more
managerial flexibility and methods in the existing administrative system. This stability should not be mistaken as
implying a lack of reform efforts, because, in the last decade, substantial redirection with the ideas of NPM, have
taken place.
In contrast to France and in line with the federal, decentralized structures, public administration modernization in
Germany is a bottom – up process. On the federal level it was lean government, and initiatives in respect of the
limited privatization of federal rail and postal systems; it reinforced empowerment, performance management, cost
accounting and so on was introduced into federal administration. By 2004, all states had taken measures towards
NPM, such as concepts as on – line budgeting, cost accounting and management control systems. Since the
1990s, three reform waves have been observed:
1) Local government had to be restructured as a result of reunification and East Germany (the Democratic
Republic) followed Federal models and concepts;
2) Democracy was consolidated by local constitutional reforms and the concept of directly elected mayors came
into being; and
3) Public management reforms were labelled the variant of the NPM style.
Post the 1990s, municipalities have engaged in management – like reforms and concentrating on accountability
and concentrated on issues that were previously separate by integrating responsibilities for resources and policy
issues. In the second phase, the concentration was upon quality management, human resources management
and competition were included in the range of modernization strategies. How do these developments relate to the
Anglo – Saxon experiences?
 There is very little empirical data and evaluations of the real impact and effects of reforms.
 92 percent of municipalities were engaged in reform by the year 2000.
 The scope and substance of reforms have varied widely.
 The general legalistic culture of Germany has not been jeopardized by the reforms, and bureaucracy has
swallowed up the new public management together with its instruments and, at times, has resulted in more
regulation and bureaucracy.
2.13 Influence Abroad

Since France and Germany are considered as reference examples of classical public administrations, it is
appropriate to explore the influence of French and German administrative systems and reform trajectories beyond
the national boundaries of the two countries and to see how characteristics of these countries apply to other
national administrative systems. Some of these influences are discussed hereunder.

2.14 Western Continental Europe

Continental European countries show a great deal of variety and diversity with respect to their political and
administrative systems. Within diversity, all continental European governments and administrations correspond in
two relevant aspects.
 They are commonly attributed with the Weberian model of administration and are characterized by legalism
and a trained professional public service. Even in countries with no explicit Roman law tradition like the
Scandinavian countries, the idea of the rule of law is deeply rooted.
 Its influence is based on the Napoleonic factor, because the countries conquered by Napoleon imposed the
French model of administration. The notable example is Spain, with characteristics of centralism and
hierarchy, administrative law, equality before the law and entrance into the civil service based on merit
examinations. Today, it has a quasi – federal administration.
 Descendants of the French system is seen in the Netherlands, or Belgium, and Spain, and executive powers
and responsibility of ministers for their administration is considered typically French, Napoleonic feature of
administrative systems, and its influence has evolved as far as the Nordic states like Denmark and Norway.
 Competitive examinations are practised and followed by many countries, except the Netherlands and
Germany.
 Most notable is the adoption of Napoleonic legal codes in various countries and has served as the framework
of legal systems, for example, in Germany and Switzerland.
 Specialized schools for higher civil service and elite formation have been established and siblings are now
found in Germany, Spain and Italy.
 German influence is scant in the literature and reference is generally made to civil servants and the
dominance of lawyers in the civil service. This is probably due to the absence of the Napoleonic factor.
 The civil service in Norway and Switzerland resembles the German model. Today, however, Sweden’s civil
service resembles an open system like Great Britain and the Netherlands, than with the closed systems of
Germany and France.
2.15 The European Union

The European Union (EU) is of interest for two phases of continental European administrative systems. First,
national administrative systems had an influence on the shape of the European administrative system. Second,
the latter has, in turn, influenced national public administration systems, and has led to some changes in them.
Our concentration will be on the first phase ad we will limit the second aspect to the effect on administrations in
central and eastern European countries. This is as follows:
 France is often cited as having a substantial influence on the EU and its administrative structures and a
number of important elements point to a dilution of elements generally attributed to the French system;
 Its tradition is to defend the general interest, not only based upon its legal basis, but also in terms of its
provision of political forces;

 The notion of benevolent technocrats, in a shared belief to construct Europe on the basis of a law – based
system and the construct of Financial Regulation and stems from French traditions of identifying
administration with a durable state;
 The structure of the Commission (EU), with cabinets and organization in general directories, strongly
resembles the French regime and is also found in the civil service system with regards to its entrance and
career criteria based on competition, the career logic, the ranks and the non – automatic attribution of a
position;
 It is more continental European in character, like an administrative working state than with the ideas of civic
culture traditions;
 Its civil structures, codes and procedures have been influenced by France and by member states and the
French influence is waning due to the enlargement of the union, reforms, and cultural diffusion within its
administration;
 Recently, the influence has been seen on central and eastern European administrative traditions, due to
aspirations of wanting to join the EU. These are to be considered as reference models for these countries;
 These influences derive from the French, the EU itself, rather than the Anglo – Saxon world;
 Intentions focus on the Weberian model of bureaucracy than on more managerial alternatives as proclaimed
under the NPM credo, and the orientation and knowledge of existing European models is predominant;
 Institutions and structures often represent a blend of continental European example, by the Polish civil
service;
 Another example of influence emerges from the various advisory programmes such as the OECD Sigma
programme. Financed by the EU, Sigma supports the administration of candidate countries in their
preparations for successful entry into the Union by assessing reform progress in terms of good European
practice and assisting in building institutions to meet European standards; and
 Training is afforded in Western Europe in order to foster good relations and to catalyse West and East
influence on CEE countries.
2.16 Former Colonies

In the context of continental European influence on administrative systems abroad, it is important to consider the
footprints in former colonial countries by their colonial European power, with regard to French and German impact
in former colonies.
 It can be said that French influence has been more persistent than Germany.
 This is because of the duration of colonial power and its aspirations for assimilation.
 Due to the limited duration and succession of German colonial power, its influence was largely displaced by
succeeding powers.
 Thus, for example, Tanzania, which was formerly a German colony, under British protectorate, after the
Second World War, adopted a common – law based legal system after independence, and a country that

was formerly a colony will resemble the parent administratively, even though independence was forcibly won
and political apron strings have been cut.
 French colonial policy was influenced by Republican principles, as the republic was a single, indivisible one,
the colonies were an intrinsic part of it, and should be assimilated to it in every aspect, including administrative
structures.
 In countries such as Algeria, Tunisia, Morocco, the French structure can be discerned and the national legal
system generally reflects former colonial influence, meaning that most of the former French colonies have a
Roman law – based, legal system.
Activity
Research the countries of Africa and determine the colonial power that
colonized them and categorize them into Anglophone or Francophone colonial
countries. A mixture of the both were applicable or in a separate category.
Think Point
South Africa is an Anglophone colony. Is this true? Discuss.
Note: You are expected to look at the public administrative system of South Africa and determine the influence of
its colonial masters. In addition, you are to go through your previous studies in public administration 1 and 2 and
refresh yourself with regards the rule of law, in terms of the executive, legislative and judicial processes, as it
relates to South Africa. It is also imperative that you go through chapters – 1, 2, 3, 4, 5, 8 and 10 of the Constitution
of the Republic of South Africa, Act 108 of 1996. This will assist you greatly to understand the subject matter,
discussed in this chapter of the module.
2.17 Two South African Issues in Respect of the Rule of Law

ISSUE ONE
“FIGHT AGAINST ‘BIGGEST THREAT TO RULE OF LAW”
On September 6, 2009, Karyn Maughan wrote an article on the above topic, in the Star Newspaper (Johannesburg,
South Africa). A host of other South African newspapers have also run similar analysis, including the international
press / media. The matter has been reported widely, on local and international television also, and has generated
much debate. The issue is raised in this module, for purposes to broaden your horizons and to promote critical
thinking, on the basis that this chapter is based on the rule of law. It will allow you to determine the impact of the
issue upon the judicial system of South African democracy, and also its impact upon public administration in the
country.

The article is presented below:

Supreme Court of Appeal judge Robert Nugent, no longer wants to apply for a position at the Constitutional Court
– because he is “not prepared to submit his candidacy to the deliberations of people he cannot trust.” So revealed
former Constitutional Court Justice Johan Kriegler yesterday, when he announced that four other Constitutional
Court hopefuls, had also considered dropping out of the race, for posts at South Africa’s highest court – because
of their concerns over the Judicial Service Commission’s (JSC), handling of the Cape Judge President John Hlope
fiasco.
Justice Kriegler, Archbishop Emeritus Desmond Tutu (Nobel Peace Laureate), and academic Dr Mamphela
Ramphele are all backing a legal attempt to challenge the JSCs majority decision, not to pursue and resolve the
dispute between the Constitutional Court and Judge Hlope, a choice which they regard as the “biggest threat to
the rule of law in South Africa.” “Both (Tutu and Ramphele) have told me “you are working for the safety of our
children,” justice Kriegler said. He stressed that Freedom under Law’s decision to go to court over the JSCs Hlope
decision – in which the Commission elected to drop a complaint and counter complaint related to the judge’s
alleged efforts to lobby two Constitutional Court justices for pro – Jacob Zuma rulings – was about judge Hlope.”
Instead, he said, it was about the JSCs failure to fulfil its mandate to appropriately deal with judges accused of
unbecoming conduct. Because the Constitutional Court was “understandably” not going to challenge the JSCs
“irrational” decision, he said, Freedom Under Law had decided that it would do so. Describing the JSCs majority
decision, not to continue with the complaint, against judge Hlope as “factually indefensible, and legally
unsupportable.” Justice Kriegler said it was “gravely harmful … in that serious allegations of misconduct and the
credibility of senior members of the judiciary are left unresolved.”
The country will never know why Constitutional Court justice Bess Nkabinde would have fabricated the statement
that judge Hlope told her he had a mandate and that he had contacts in the cabinet and at the National Intelligence
Agency. “Nor will the country ever know what factual basis judge Hlope had for making the scurrilous allegations
of fraud and political deceit against the Chief Justice (Pius Langa) and his colleagues in the Constitutional Court,
allegations which judge Hlope refused to withdraw.
“It is most understandable that these women and men should have to continue in office without an unequivocal
retraction by judge Hlope, and a clear rejection by the JSC of these grave slurs on their integrity,” he said. JSC
spokesman Marumo Moerane yesterday refused to comment on judge Nugent’s withdrawal of his application for
a position at the Constitutional Court. Judge Nugent had been nominated by justice Kriegler. Judge Nugent was
one of the Appeal Court judges who ruled against judge Hlope in his legal battle with the Constitutional Court,
slamming arguments by judge Hlope’s legal team that the Constitutional Court should have conducted an
investigation before laying a complaint against judge Hlope. His withdrawal follows that an appeal court judge
Belinda van Heerden, who bowed out of the Constitutional Court race because of her reported concerns over draft

legislation such as the Superior Courts Bill and a possible constitutional amendment Justice Minister Jeff Radebe
wants to push through after years of consultation with the judiciary. It is feared these measures, if they become
law, will impact on the judiciary’s independence and integrity.
Think Point
Do you think that the rule of law is being compromised, in this case by the JSC
and the Constitutional Court itself? Posit an answer. What are the implications
in respect to the law and the judiciary in South Africa? Is there overt interference
by government in terms of not respecting the independence of the courts? Does
all of this go against the grain of the Constitution? What are the dangers to the
country? What implications are there for the judiciary and South African public
administration?.
ISSUE TWO
CAUGHT IN A NEW BORDER WAR
THE ARICAN NATIONAL CONGRESSE”S PLANS TO CENTRALIZE GOVERNMENT MAY NOT ONLY BE A
THREAT TO THE DEMOCRATIC ALLIANCE, BUT ALSO THE CONSTITUTION
The above article written by Patrick Lawrence, appeared in the Star Newspaper on September 1, 2009. This debate
and discussion is raging for a few months now, in the South African media and among all political parties in South
Africa. Is it a question of the ruling party, wanting to subvert power and the rule of law, put an end to real opposition
in the country, and to centralize power? Patrick Lawrence comments on these issues. He is an independent political
analyst and contributing editor to The Star.
President Jacob Zuma’s administration and the Democratic Alliance are on a collision course over the
administration’s plans to reappraise the system of provincial government in post – apartheid South Africa and,
perhaps, even abolish it altogether. There are historical echoes in the present debate over the future of provincial
or second tier governance that invoke memories of the often – heated arguments during the settlement negotiations
in the early 1990s on whether the new political dispensation should provide for a unitary or federal system of
government. The present constitution represents a compromise between the unitary and federal systems, as it
provides for central and provincial government.
The balance of power is, however, tilted strongly in favour of the central government, in the sense that the provinces
do not have the exclusive power over the really important sphere of governance within their geographical areas of

jurisdiction. Education, health, housing and policing – to mention an only a few – are matters in which the central
and provincial governments have concurrent powers, an arrangement that means that the wishes of the central
government will prevail in the event of ideological or methodological difference between these two tiers of
government.
Matters reserved for exclusive provincial control are of minor importance compared with those where control is
shared. They include jurisdiction over abattoirs, libraries, museums and so on. Before looking more closely to the
looming dispute between the ANC and the DA, a broad observation about constitutions and constitutional
democracies in general is in order. Constitutions, however wise and prudent their original drafters may have been,
need to be amended from time to time to bring them into line with changing conditions.
Amendments are not intrinsically threatening to the constitutional orders, provided they are not inimical to the
ethos of democracy and are improved by the judicial authorities mandated to guard the constitutions from power –
hungry politicians. As Professor Thomas von Danwitz, of the European court of justice, observed during a recent
seminar in Johannesburg organized by the Konrad Adenauer Foundation, the German constitution has been
amended 55 times without compromising the constitutional democracy founded at the end of World War II.
It is nevertheless advisable to scrutinize every proposed amendment to the existing constitution in South Africa,
least it contain provisions that seek to extend the power of the government of the day, rather than to strengthen
constitutional democracy and good and effective government. The 17th constitutional amendment bill that
confirmed fears in the DA that the Zuma administration plans to radically reconfigure provincial governance in
South Africa, if not eradicate it completely in order to reinforce the ANC’s political domination over the whole
country. These fears have been heightened by Sicelo Shiceko, the Minister of Co – operative government. He has
questioned the need for provincial government, pronouncing pontifically. The implication of this statement is that
all tiers of government must sing in unison with the ANC.
As Doron Isaacs, a scholar of prodigious energy, observes in an article posted on a website managed by political
analyst James Myburgh, the constitutional amendment bill will increase the potential of the central government to
control municipal or local government and thereby deprive provincial governments of their prerogative – under
section 55 and 125 of the constitution – to establish and monitor the performance of municipalities and in the case
of “failing municipalities,” to assume executive responsibility for them.
Another fear is that the ANC controlled government may use its power to redraw the boundaries of some provinces
to alter the composition of their electorates substantially and do so to its advantage. Thus to cite a hypothetical
case, by amalgamating the Eastern and Western Cape into a single larger province, the ANC will at a stroke of the
pen almost certainly deprive the DA of its hard – fought mandate to govern in the province and install an ANC
government in the new enlarged province.

It would amount to gerrymandering on a massive scale, a manipulative technique used by the National Party
(erstwhile party that governed apartheid South Africa) to entrench its control over the many constituencies during
its rule of over South Africa for most of the second half of the last century. The ANC’s rationale for the constitutional
amendment bill is that it is designed to improve service delivery in general and of electricity in particular. DA leader
Helen Zille is unimpressed, however.
If the ANC government is really intent on improving service delivery, it should abandon its policy of deploying
“incompetent cadres” to every lever of power and promote competent and qualified officials, she argues. She
believes, furthermore, the proposed bill is motivated by the desire to deny the DA the opportunity to prove that it is
capable of providing better governance. Another factor may weigh heavily against the ANC in opposition party
circles: memories of how, during last minute settlement negotiations in April 1994, the ANC reneged on agreement
with the Inkatha Freedom Party (IFP) that questions of provincial powers should be referred to mediation by a high
– powered international team.
As Anthea Jeffery, another indefatigable scholar records in the newly published book, People’s War, Cyril
Ramaphosa, the then ANC Secretary General, added two addendums to the treaty drafted by Thabo Mbeki (former
President of both the ANC and of South Africa) and Frank Mdlalose (IFP), meaning that whatever agreement
emerged from international mediation on provincial powers would not be put to the electorate in the pending
election. The net result was a dispute over the terms of the agreement and the consequent withdrawal of the
international mediators.
A last parting thought comes to mind. During the settlement negotiations in the early 1990s, the ANC was initially
so resistant to the idea of the provinces that it preferred the term regions and the constitutional amendment bill
may thus be a signal that it is reverting to its preference for regions – or what is now describes as “administrative
entities” – over provinces.
Activity
Research the above scenario, in greater detail. What will be the implications on
public administration in South Africa? Do you think, if this becomes a reality,
that the rule of law will be compromised? Discuss..
The Mail and Guardian, September 11 to 17, 2009 interviews Judge Kriegler on why he is pursuing the Judicial
Services Council in the John Hlope case. Read the article or see the full interview on www.mg.co.za
/krieglerinterview. This will give you the state of play. You may also read other articles and follow the case as it
unfolds.

An opposing view to Kriegler is given in the City Press of the 13 September, 2009 written by N. Ramathlodi. Attempt
to read the article or other opposing views in respect of the Judge Hlope case. This will give you a balanced view,
in applying your mind to the rule of law, in South Africa.
Recently, soldiers of the South African Army stormed the Union Buildings, the seat of power of the South African
government, in an act of defiance and lawlessness, against the state, the Constitution of the Republic and the rule
of law.
The Minister of Defence Lindiwe Sisulu and President Jacob Zuma, want some 1600 soldiers dismissed amidst
opposition from various quarters. Has law and order broken down in South Africa? Does such action threaten our
democracy? Should the soldiers be dismissed? Should anarchy be allowed to reign and take precedence over the
rule of law in the country? Discuss. Research the issue from the daily newspapers and give a cogent and reasoned
response.

DISCUSSION QUESTIONS
1. It is argued that administrative law is in the governance business and not in the
service provision business, and therefore, the NPM contradicts the core purpose of
administrative law, by stating that, in using the user – pay system, it is the question
of doing better for less. Discuss this statement.
2. Very briefly explain absolutism and early administrative science.
3. Outline and explain administrative law in the context of New Public Management.
4. Explain the evolution of the state and the rule of law in continental Europe.
5. Elaborate and draw the distinction between French centralism and German
Federalism.
6. Clearly explain the differences between the civil service in French and German
bureaucracies.
7. The French and German public administrative systems, like their continental
European siblings, are classified as Weberian models of public administration.
Clarify and explain this statement.
8. What are the main issues of discussion in respect of France as a modernizing state?
9. What is meant by persistent incrementalism in Germany? Explain.
10. Comprehensively discuss the influence of the French and German public
administrative systems, in respect of their influence abroad (Discuss all aspects).
11. Discuss the possibility of the erosion of the rule of law, in South Africa, by actions of
government and the judiciary (use examples to substantiate your answer).
12. The ANC’s plans to centralize the government may not only be a threat to the
constitution, but a very serious threat to the tenets of democracy, the rule of law, and
a move to marginalize all opposition parties in South Africa, and emerge as a one
party state. Discuss this statement critically and analyse the statement cogently.
(You may argue for or against or posit an answer discussing the advantages and
disadvantages of both scenarios).

Unit
3: Decentralization in Contemporary
Public Management

3.2 Decentralization  Understand, explain and analyse the structure of

3.3 Decentralization: Definitions and decentralized systems of public administration of government
Meanings as a central concept and emerging construct, in contemporary
3.4 The Arguments for and Against public management;
3.5 Contexts  Be in a position to situate the discussion, in the context of

3.6 Performance Anxiety – Context in international public management and with reference to both
Respect of South Africa developed and developing countries;
3.7 Decentralization: Theories and
 Be in a position to comprehend and apply some of the
Evidence
theories that affect decentralization, and to understand the
3.8 Contingency Theories
context in which decentralization works; and to comprehend
3.9 Other Organisation Theories
decentralization initiatives in public administration and public
3.10 Decentralization in Public
management as outlined within the literature; and be in a
Administration and Public
position to apply the theory learnt to both centralization and
Management Literatures
decentralization, but, more importantly, to decentralization
processes, programmes and initiatives, within the public
sector environment and setting.
3.11 Summary  Summarise topic areas covered in unit

United Kingdom.

India.

3.1 Introduction
We have in the first chapter looked at change and innovation, and in the second chapter looked at the importance
of the rule of law. In so doing, we attempted to show their importance to contemporary public management, and to
public administration. This was undertaken, because of the ever-changing world of public administration, and we
attempted to situate the discussion, in respect of the discourse that now permeates - New Public Management. In
order to enhance our understanding even further we will, in this chapter, look at decentralization as a central
construct within the framework of the NPM.
For the last quarter century or so, decentralization has been virtually unassailable and almost everyone has been
in favour of it, from the centralized French to the already decentralized Germans; from the majoritarian British to
the consensual Danes and Dutch, in fact, almost all governments of the modern world. Decentralization plays a
central role in the dominant public management ideology of our time, the New Public Management (NPM). This
chapter will look at the issue briefly on the basis of its long history; explore the concept and identify the various
meanings, explore why the idea has gained such popularity; and look at some aspects of centralization; and
attempt to review the practice of decentralization and its importance to contemporary public management.
3.2 Decentralization
Arguments concerning decentralization and centralization are as old as the study of public administration – or
considerably older. In British history, we see the demand of decentralization, and figures such as Adam Smith and
John Stuart Mill can be said to be proponents of decentralization, while Jeremy Bentham, Napoleon, and Lenin
are frequently cast as advocates of centralization, and some political leaders such as Mao Zedong seem to have
swung violently between opposite poles, according to circumstance. At the dawn of the modern study of public
administration, Prussian cameralists were advocating the formalization and standardization of administrative tasks
– a highly centralizing approach.
Centralization is that system of government under which the smallest number of minds, and those knowing the
least, and having the fewest opportunities of knowing it …. And having the smallest interest in the well working,
have the management of it, or the control over it. In the United States, there is a long, unfinished debate concerning
the respective rights and roles of the federal government, the state governments, and local authorities. Likewise,
both France and Germany have sustained extended debates about the balance between centralized and
decentralized authorities. Our task is not to go into the history, but to concentrate on an analysis of its contemporary
meaning and relevance, in terms of reform of public administration and the possibilities of innovation.
3.3 Decentralization: Definitions and Meanings

It is impossible to standardize the meaning of the word decentralization, by giving it meanings that would be
universal. We cannot remove this diversity but we can seek clarification and identify the major applications within
public management. We will consider the spreading of authority, in this context and identify five major distinctions:

1) Political decentralization and / or administrative decentralization: It is the authority to be spread out from the
central political level to other elected politicians – when the British government, for example, transfers certain
powers to the newly created Scottish and Welsh assemblies. (Think of the South African provinces) It occurs
when there is fundamental constitutional change. Our concentration will be on administrative decentralization
rather than political decentralization, although both can, at the same time, be used politically and
administratively, they are different from one another, not least in their implications for public accountability,
and the overall coherence of national policy – making.
2) Territorial decentralization: In many works, decentralization is treated as primarily as a territorial

phenomenon, on the basis that authority is parcelled out by larger territorial units to smaller ones. A large
number of reforms under the label of decentralization do not use territory as a basis for the transfer of
authority. It is, therefore, undertaken on the nature of the basis of division and, in this regard, many instances
are primarily functional rather than territorial. The categories for possible bases of organization into
specialization by purpose (function), process, persons or things to be served or place (territory). Each of these
could thus form the basis for acts of decentralization. Political decentralization to elected local authorities is
construed as democratic and participatory, whereas functional decentralization to a national agency is
regarded as neutral or antipathetic to democracy and so on.
3) Competitive decentralization or non – competitive decentralization: If authority is to be parcelled out – How

should this be done? On the basis of an allocation (X is responsible for activity A and Y for activity B) or on
the basis of a competition (performance activities). Competitive markets are decentralized for purposes of
coordinating decision-making and many over the years have favoured the use of market mechanisms in the
performance of public tasks.
4) Internal decentralization and /or external decentralization: Authority can be parcelled out within an existing
organization, or transferred to other organizations. By palming or delegation of work to committees by use of
discretion, then it is internal decentralization, whilst a government creates a new National Assembly for
another country / region, it is termed external decentralization. The term devolution is sometimes given to
external decentralization. This can be distinguished by use of the terms, delegation and devolution.
5) Vertical decentralization or horizontal decentralization: It is often assumed that decentralization is vertical,

but alongside we must consider horizontal decentralization and refers to the extent to which non – managers
control decision processes. It is most important to networks, network management and partnerships. This is
an elusive concept.

3.4 The Arguments for and Against

Why is decentralization so popular?
1) Its ability to link up with many other arguments and can be used for several agendas at the same time and
brings both administrative and political benefits.
2) Most of the 99 major administrative doctrines that have emerged in public administration can be related to
decentralization, for example, the doctrine of small scale organizations over the large organization is one of
the key features of the NPM. The doctrines of narrow spans of control and so on they can speed up decision-
making in a decentralized order of things. Efficiency can be increased.
3) Independent public bureaucracy is considered superior to certain functions within business, inspection of other
parts of the bureaucracy or the investigation of corruption, for example, the independence of audits and
regulatory bodies.
4) It can encourage local innovation.
5) It can bring managers closer to service users and increasing responsiveness and also increase motivation of
staff.
6) It can be political as well as administrative.
7) Decentralization pulls authorities and activities closer to citizens; makes politicians more accountable and
visible
8) It can promote trust and will train and engage more citizens in political activity, thus enhancing the very fabric
of democracy.
What is “non – decentralization: (Centralization)
If decentralization is such a good thing – what is its opposite? The obvious answer is centralization, but what is
that? It must be the centralization of authority, political or administrative. Concentration of authority is threatening
and dangerous and potentially dictatorial, that no right – minded person will wish it and whole constitutions have
been built around the desire to avoid the possibility of centralized power and yet it has been popular. We have
seen how in Great Britain super ministries were formed – centralizing power and the creation of a central capability
(This idea is now mooted in South Africa and we will discuss this aspect later).
1) It has been associated with (executive) centralization in periods of interventionist political reform.
2) That a single organization will make both strategy formulation and coordination of implementation less difficult
- the economy of scale arguments – a larger organization can more easily support expert central units for
planning, policy analysis, and programme evaluation.
3) It is argued that centralization can improve at the political level the equity and /or equality with which citizens
are treated by eradicating the local variability that can come with a decentralized function.
4) Devolution of political power in the US was what helped sustain racialist practices, until the centralising federal
legislation of the 1960s helped to enshrine the civil and political rights of the black and other ethnic minority
citizens.

5) For many French citizens, decentralization is synonymous with social regression, unequal provision, even a
return to the pre – Republican order. Upstanding Republicans equate territorial uniformity with ideas of
progress, equal opportunity and citizenship.
6) It looks like a perpetual struggle between centralization and decentralization, between attainable, but mutually
incompatible goals.
7) Decentralization, it is said is the usual prescription for troubled centralized systems.
8) The two trajectories may appear at the same time in a country, in that centralization is taking place in one part,
whilst, in another, decentralization is occurring with a single reform.
3.5 Contexts
Decentralization, as we have seen, can mean different things in different countries or in two different government
departments or services. The historical legacy must be taken into account. The decentralizing components within
the BPM carry a very different resonance in the highly centralized UK than in the highly decentralized Germany.
These path dependencies go beyond than simply the difference between unitary and federal states. In the federal
USA, a pro-business, anti-public sector ideology has meant that decentralization has been recently transferred into
a massive contracting – out of public services, whereas, in federal Germany, a very different ideology has seen
decentralization strengthen the portfolio of activities carried out by multi – purpose local authorities.
Clearly, if authority is highly concentrated, as it is in states such as France, New Zealand and the UK, then
decentralization has further to go, and may come as a greater shock to the system, than in already extensively
decentralized states such as Denmark, Germany or Switzerland. We have to, therefore, locate studies of specific
acts of decentralization within the particular institutional patterns and trajectories of the countries concerned.
Institutional differences can also lead to paradoxes, for example, it is arguably easier for highly centralized regimes
to achieve radical decentralization than for already highly decentralized regimes. In decentralized regimes, such
as those of Germany and the USA authority is already parcelled out into many different institutional locations and
many of these are protected from sudden change by entrenched constitutional law. In France, President Francoise
Mitter and was able, in the 1980s, to create new regional bodies, and to transfer powers to local authorities, in a
way that would have been difficult or impossible for any American President.
3.6 Performance Anxiety – Context in Respect of South Africa

Having situated the issue of context above, we refer to the article concerning the above that appeared in the City
Press, dated September 6, 2009 written by Mofet Mofokeng. The article focuses on an array of issues as concerns
the South African public administration system, and indicates, in its captions, that the main reason for monitoring
and evaluation is to ensure that government performs better. It states further that we are not looking at hunting
people down or trying to persecute people; overhaul is intended to improve efficiency. These captions give meaning
to certain contexts as concerns South Africa. Hereunder, an attempt is made to summarize the article.

The government of South Africa might change the manner in which directors general (DGs) and heads of
department are appointed. The move, if it is eventually approved, comes as President Zuma seeks to overhaul the
entire public service, in a bid to make it more effective and ensure that top government officials are accountable
for the work they do. In a 22-page document “Improving Government Performance: Our Approach,” the Presidency
has stated that a performance management system works only if there is a mechanism to hold people responsible,
accountable.
But the current “misalignment” in which DGs account to the President – not ministers to whom they report – and
the Heads of Department in the provinces to the Premier not the Members of the Executive Councils (MECs) –
requires reform (refer to our discussion on this aspect as concerns both the French and German public
administration systems). The Public Finance Management Act makes the DG or head of department the accounting
officer, while the Public Service Act, and the political process hold the minister or MEC accountable. This is further
compromised by the process through which DGs or HODs are appointed, making them accountable to the
President. We need to align the system so that the president who appoints the minister holds him or her
accountable, while the minister holds the DG accountable. At a provincial level, the sae should hold true for
premiers. MECs and HODs, reads the document.
The move will go some way towards ending tension in departments that comes about as a result of a DG being
imposed on a minister even if the minister does not want him or her. It will also end the bitter squabble between
ministers and DGs when it comes to who has the authority to suspend or fire a DG or head of department.
Think Point
Is there anything really new in this context, when you consider that in reality in the current
system the DGs or HODs are appointed by the minister or MECs, and the appointment is
only ratified by the President or Premier? Will this new move not create for greater
patronage and inefficiency by appointing friends and relatives, and further exacerbated by
inefficient MECs in the provinces, in the main? Will the ANC’s deployment strategies still
hold sway? Provide answers..
The “Green Paper: National Strategic Planning,” will be tabled at a plenary session in the National Assembly on
Tuesday. Speaking at Friday’s news conference, Minister in the Presidency Collins Chabane said the creation of
the National Planning Commission, headed by Minister Trevor Manuel within the Presidency and the ministry for
performance monitoring and evaluation was intended neither to centralize power nor to “police” ministers.
The document calls for the creation of a ministerial committee on planning and it is this structure that many say will
be the super cabinet. This has raised concerns within the ruling party and its alliance partners of who will ultimately
become the arbiter of policy. The Planning Commission Minister Trevor Manuel said the creation of the ministerial

committee on planning was not intended to introduce a “two tier” cabinet system. South Africa’s planning
commission would be a hybrid of those in India and Botswana.
Think Point
Will or can a super cabinet work? Have planning commissions worked in the Third World or
for that matter anywhere in the world? Research this aspect. Is it not the entrenchment of
power on a centralized basis by the majority ruling party in the government of South Africa?
Will this not cost large sums of money to create the two new ministries in the Presidency,
which South Africa can ill afford? How will it recruit specialized staff, in a country that does
not have talented development strategists? Attempt to answer these questions.
3.7 Decentralization: Theories and Evidence

Despite the use of wide arguments on decentralization, very little empirical research has been conducted, in this
regard. There has not been cumulative research on decentralization, barring mainstream theory, within the field of
academic public administration. Many studies refer to centralization or decentralization in general terms but do not
advance an operationally precise definition.
3.8 Contingency Theory

Donaldson (2001) provides an authoritative synthesis which traces the important role which decentralization has
played in the development of contingency theory. It attempts to operationalize “decentralization” and use it in a
quantified comparison of organizational structures – in both private and public sectors. This is as follows:
1) In terms of the current state of play, it suggests that growth in the size of the organization tends to lead to an
increase in the number of hierarchical levels, and that this, in turn, reduces the effectiveness of centralized
decision – making. (Think of the South African Planning Commission and the Ministry of Monitoring and
Evaluation, discussed above).
2) Organizational leaders are then obliged either to suffer a loss of performance – a decreasing fit between
structure and organizational and environmental contingencies or to decentralize.
3) The decentralization may be lagged or delayed until organizational leaders recognize falling performance and
correctly analyse its cause, or these same leaders may sometimes act in anticipation of problems, by
decentralizing before the vertical information channels become too long and clogged up.
4) The efforts of contingency theorists do not satisfy many epistemologically, but they insist in building clear
models of relationships between variables and then testing strength of those relationships across a population
of organizations. In most contingency schemes, decentralization seems to function as an intermediate
variable, in the sense that it is caused by something else, for example, increasing organizational size,
according to bureaucratic theory, or increasing task uncertainty, according to organic / mechanistic theories,
but then has effects of its own, principally better fit and, therefore, improved performance.

3.9 Other Organization Theories

Over the past 30 years, Mintzberg has been influential in respect to decentralization. He insists that it should be
regarded as but one among several organizational “design parameters” He articulates as follows:
1) The relationships among the design parameters are clearly reciprocal, not sequential.
2) Functional efficiency is the main engine of decentralization.
3) Mintzberg arrives at a centralized type of organizational structure plus four different types of decentralization
– these represent different combinations of vertical and horizontal decentralization (Read page 384 of the
prescribed textbook).
4) The implication is that up – skilling and professionalization leads to decentralized structures, because such
staff can neither work effectively nor sustain their motivation if constantly and tightly circumscribed by rules
and instructions from those at the top of the organization.
5) Mintzberg’s five organizational types have proved widely influential, both in business studies and in public
administration. However, the types are suspect because most organizations occupy intermediate and mixed
positions rather than one of the pure positions set out by Mintzberg.
6) He produces different types of typology – a continuum of control over the decision process and a continuum
of coordinating mechanisms and both are very useful for the analysis of decentralization (See figures 16.2
and 16.3 of the prescribed textbook on page 385).
7) This allows a determination of which steps in the decision process are centralized and which are decentralized
and the overall effects of the final actions / outputs.
8) Strong echoes of the above can be seen in NPM doctrine – targets should be centralized, but authority over
choice of means should be decentralized.
9) NPM doctrine is in favour of lessening centralized controls over direct supervision and standardization of work
processes, but is strong on setting of output targets.
10) Coordination can be achieved in decentralized structures by means of common standards which are
supposed to be a voluntary process.
11) Other theorists of modernization theory are Charles Perrow’s – Complex organizations and W.R. Scott’s –
Organizations: Rational, Natural and Open Systems. (We do not discuss these because they do not discuss
centralization or decentralization).
3.10 Decentralization in Public Administration and Public Management Literatures

Transferring contingency theory logic to the contemporary public sector, we glean that the changing contingencies
mean that increased decentralization is necessary, if government performance is to be maintained or improved.
This could be achieved in the following ways:
1) Can deal with high tech projects or in attempts to solve ill-defined issues such as, social problems, inner city
decay, drug abuse and so on.
2) Increase functional specialization and formalization in government, leading to decentralization as a typical
feature of a more complex bureaucratic system.

3) Many consider decentralization as an inherently centralizing form of organization.

4) Some theories are broad generalizations about the effects of decentralization, under a standard set of
circumstances, in that the authors believe that decentralized networks are becoming more important, that it
is desirable and a pro – democratic trend.
5) Some researchers, through their studies, indicate that networks would work more effectively when integration
is centralized through a powerful core agency and when mechanisms of fiscal control were direct and not
fragmented or indirect.
6) Traditional mainstream public administration. In this regard we highlight some of the findings from the
literature, with reference to extensive administrative practised by NPM – minded British governments between
1980 and 2003.
7) In many cases of the British experience, it was noticed that decentralization occurred, although often less
than had originally been envisaged by policy makers and was also accompanied by significant centralization,
by a shift from local government control to central government control and efficiency measures found an
increasing productivity and greater transparency to various performance measures due to central government
pressure.
8) Decentralization measures were not strong in respect of equity and the research findings would not permit
comparisons of efficiency or effectiveness before and after decentralization.
9) In respect to the above, research tested three propositions to determine if more competition will lead to better
performance; making more information publicly available will improve performance; and whether larger
organizations show declining marginal efficiency and reduced responsiveness to customers.
10) These propositions are closely related to the centralization / decentralization issue because competition
means breaking up public sector monopolies and so does the shift to smaller ones.
11) It has been shown that in health and housing there is some evidence of raised efficiency whilst in education
the picture is obscure.
12) In housing and education there is evidence of greater responsiveness to service users and in health the
evidence is insufficient and in all three sectors there was loss in equity. These findings are heavily qualified.
13) The absence of comparable data prior to reform makes before and after comparisons virtually impossible and
this is due to the fact that indicator definitions and sets change rapidly.
14) Similar conclusions about technical efficiency were found and there were problems with externalities, as
agencies focused tightly on their own targets and neglected wider effects within the system of government
as a whole.
15) The British studies show strong presumption of some efficiency gains and a shift towards greater customer
responsiveness. The data is hard to interpret and time series before decentralization is absent.
16) In Norway, the main strategy has been to avoid privatization by concentrating on structural devolution within
the public sector, with the parallel process of vertical specialization and horizontal depreciation because of
structural devolution or atomization, at the same time that amalgamation and merging processes are being
terminated into existing units to an increasing degree.

17) The Norwegians saw this to be a complex interplay between international trends, particular national
structures, historical – institutional contexts and specific institutional traditions.
18) In the USA, it was identified that devolution was one of the two main dimensions of recent transformations
and more and more of the work of the federal government is carried out through partnerships – with states,
local governments, voluntary associations, and for profit private companies. This causes problems for the
traditional system of vertical accountability.
(A) Informatics: This is a new field of public management and deals with the impact of changing Information
and Communication Technologies (ICTs), and has significant implications for centralization and
decentralization issues. From the literature, we see that diametrically opposite interpretations of the
significance of ICTs are in play. Some are tools for decentralization, democracy and participation – for a
new style of “soft” governance. Others see them as increasing the profitability of a “Big Brother” state.
Much depends on how systems are designed, what categories and decision rules do they incorporate,
and who can access the data? Street level bureaucracy has lost much ground to operating software.
Public servants can no longer take to the streets quickly because they are connected by computer,
because there are electronic forms that can now be filled. Knowledge management systems and digital
decision trees have reduced the scope of administrative discretion. Modern ICTs enable a kind of
decentralized centralization. The conclusion is that system designers need to be held to account and
citizens and their elected representatives should be given the opportunity to examine and criticize these
systems before they pass the point of return.
(B) New Institutional Theorists: A very different school of thought and is much less convinced than Mintzberg
or the contingency theorists that efficiency and fit drive organization restructuring, and see the world with
the logic of appropriateness and organizational reform is part of a cycle of fashion, to imitate the success
of other organizations and to comply with pressures for conformity applied from above. Reform is,
therefore, seen as a matter of preserving or enhancing legitimacy rather than improving efficiency or
responsiveness. Reform is socially constructed by opinion leaders and dominant groups and the real
effectiveness of the change may never be known. There are too many competing demands and priorities
and reforms are subject to exacting norms of accountability, and much of their output is talk and text rather
than action.
Think Point
Given the very serious problems in respect of politics and public administration, leading to
virtual collapse at local and provincial levels of government, in South Africa, is it a question
of too much talk, and text, without exacting accountability by public administrators and
politicians? Discuss this aspect politically and administratively..

(C) Federalist Studies: They have a long history of honour, especially in the USA, but also countries such as
Belgium, Germany, and Australia. It is impossible to do them justice and a selective glance will yield some
insights that are useful for our understanding. Federalist studies show the intimate and complex relationship
between political and administrative decentralization. They may move together or not and show alternation
between periods of activist, interventionist central government and contrasting periods of decentralization.
(D) These alternations occur within a given constitutional framework (path dependency) so that, for example,
the US federal government has larger leverage over the American States (Think of South Africa) than does
the Swiss central government over the Cantons, with the German federal government probably somewhere
in between. Occasionally, federal systems exhibit the paradox whereby the existence of decentralized
autonomy permits a sub - national jurisdiction to develop a unique solution to its policy problems, only to
see the model borrowed by central government and generalized across other jurisdictions.
(E) One may ask why has there been resistance to decentralization or to put it another way, who was trying to
preserve central control? The answer to this is that formidable political impediments to decentralization,
including such well entrenched institutions as congressional committees, federal agencies and
bureaucracies, and the myriad of pressure groups that coalesced around them, it is remarkable that even
incremental steps towards decentralization were taken.
(D) In a number of these studies, there is an increasing suggestion that certain types of programmes may be
better suited to decentralized solutions than others. It is argued and suggested that programmes with
developmental objectives are particularly suited to localized planning and delivery whereas redistributive
programmes are more appropriately handled centrally and it is only the federal government (central
government) that has national constituencies and independence from economic competition with
neighbouring jurisdictions necessary to facilitate significant redistribution.
Think Point
Given the above discussion on decentralization, why is there opposition or resistance, by
the present South African Government, to classical decentralization in terms of federal
options as a political and administration solution, and why is the ruling majority party, in
favour of central control? .
3.11 Summary
 The first conclusion must be that we are dealing with one of the most protean concepts in the field.
 Decentralization, in its many guises is an inseparable partner of centralization and occupies a pivotal place
in more recent public management discourses.

 There is now considerable accumulated evidence, gathered by a variety of methodologies and seen through
a range of theoretical perspectives, to indicate that decentralization can lead to increased efficiency and to
greater responsiveness to users.
 Elements of both agency and structure play a part.
 Managerial and political skill with which a particular decentralization measure is conceived and implemented
affects the outcomes.
 Structural factors like the size of the organization, and the technical complexity of its main task will influence
both the need for decentralization and the type of decentralization, which is most likely to prove effective.
 Different types of programmes may be more or less amenable to decentralization.
 It is a question of legitimacy, with measurable efficiency or customer responsiveness.
 Decentralization is shaped by the analysis of both dependent and independent variables, which seek to pose
different questions that are shaped by a different epistemology.
 Research indicates that decentralization often involves trade – offs and, in human resources, frequently leads
to some loss of equity.
 When it takes the form of partnerships and networking, there may also be some loss in transparency and the
lines of accountability become complex and blurred.
 It is hard to determine who is responsible for what and it makes radical decentralization harder to accomplish.
 The right balance between centralization and decentralization is usually only a temporary one.

1. Write a brief introductory note, introducing the history of decentralization.
2. Discuss the five major distinctions of decentralization in terms of

spreading authority.
3. Explain the arguments for and against decentralization.
4. Outline briefly the contexts that must be taken into consideration when
initiating programmes of decentralization.
5. Explain briefly, but critically, the context of performance in relationship of

the Planning Commission of South Africa, and the role of the Ministry of
Monitoring and Evaluation. Discuss a view of acceptance or rejection of
these modalities.
6. Outline the main features of the contingency theory of decentralization.
7. Discuss the views of Mintzberg’s theories in relationship to the issue of

decentralization by using design parameters.
8. Analytically discuss decentralization in public administration and public

management, in terms of the data produced by research in the literature
pertaining to the subject.
9. Write notes on the following topics: Informatics; New Institutional

Theorists; and Federalist Studies.
10. Outline the main conclusions reached in respect of decentralization.

Unit
4: Budget
and Accounting Reforms

4.2 Elements of Budget Reforms  To be in a position to look at certain aspects of budget and
4.3 Output and Outcome Budgeting accounting reforms, in the form of government budgets, as an
4.4 Accounting Reforms example of one administrative system, amongst a host of other
4.5 Fiscal Decentralization important and relevant public administration systems in terms
4.6 Budget Balancing: Prioritization, of the organizational principles involved.
Cutbacks, And Tax Reforms
 To situate the above subject matter in the context of both
4.7 Budget and Accounting Reforms in
developing and developed countries, and to project on the
Selected Developed and Developing
issues discussed, in order to understand and comprehend the
Countries
issues that permeate accounting / budgetary capability, in
respect to the process of reform within the NPM, and be in a
position to apply theory to practical settings within the public
sector.
 To understand, comprehend and analyse some of the issues

that pertain to the crisis of budgets in South Africa, and the
strides made under democracy, with particular reference to the
national government, and the decentralized third tier of
government, with particular reference to municipal governance.
 To comprehend and analyse the issues raised in four

newspaper articles in respect of budget deficits and the dangers
of borrowing, the problems encountered in respect of budgets
within municipalities in South Africa, the possibility of
reengineering a new developmental approach to the economy,
and to understand the importance of corruption and fraud within
the context of public management and administration and its
relationship to both budgets and accounting.


United Kingdom.
India.

4.1 Introduction
Public administration is made up of many systems such as human resources management and development, the
procurement system, appraisal systems, the training system, the operations management system, the information,
communication and technology system, district management systems, regional management systems, the
education system, the health system and a host of other operational systems, that make up the composite public
administration and public management system.
Our task is to look at the budget and accounting system, in terms of reform within the public sector, and within the
ambit of public administration and management. We have chosen this system because of its importance to the
delivery of public administration services within governments, and its importance to any form or sphere of
governance, and to society as a whole, in terms of the delivery of services. This is so because budgets determine
the policies of governments, and it also determines its ability to deliver services. We have discussed the issues of
change and innovation, the rule of law and the issues of reform in respect of decentralization, in the first three
chapters of the module. It is now our task to logically fit in the budget and accounting system (reforms), in order to
capture the logical themes that we have embarked upon thus far in this module, and to encapsulate and underscore
the importance of the budget and accounting system.
Public budgeting reform around the world has ranged from minor to dramatic over the past decade. The more
dramatic changes include moving from simple line - item budgeting under a centralized government bureaucracy
to adopting programme and performance budgeting, performance contracts, entrepreneurial management,
contracting and leasing with the private sector, output and outcome measurement, accounting changes, and fiscal
decentralization.
These reforms impact the rules and processes of budget formulation, authorization, implementation and reporting
as well as public expenditure management, more broadly, including the way public services are delivered.
Widespread use of the term New Public Management (NPM) to describe many of these initiatives has created a
veneer of sameness, but actual reforms have addressed local problems, and reflect local politics, history and
culture, as well as previous reform efforts and pressures from international organizations.
It must be appreciated that the amount and quality of information available in different countries vary enormously.
Failed reforms have often been ignored by researchers in many developing and developed countries. Making
comparisons is also a very difficult task. The presentation on this subject could lead to selectivity and thus make
the results less than neat. Barring these problems, we will attempt to analyse the issues as best as we can.

4.2 Elements of Budget Reforms

The last decade has been marked by a number of budget and accounting reforms, each with different aims. We
will concentrate in this chapter upon output or outcomes budgeting, accrual accounting and budgeting, fiscal
decentralization, and expenditure prioritization, and cutback schemes to help balance budgets. These reforms
have been associated with NPM, but they need not be. Elements of output budgeting clearly build on early
performance budgeting reforms, for example, countries can adopt performance budgeting without any of the
managerialism ideology or public choice philosophy that accompanies NPM.
4.3 Output and Outcome Budgeting

The dramatic reform efforts are aimed at an intention to shift budgetary control from detailed line – items to
measurable goals for output and outcomes and the shift is normally accompanied by performance contracts which
set out the results (outcome) or the amount of quality of services (the output) to be provided for a given
appropriation. Programme administrators are held accountable for delivering those contracted deliverables or
results, and future appropriation is determined on the basis of performance.
It is obvious that the goals of government programmes have to be articulated clearly, performance measures have
to be developed and monitored, and this information needs to influence budget decision – making. This set of
reforms is intended to give programme managers the flexibility to use public resources in a way that ensures
policies are delivered efficiently and effectively. The intention is to shift the role of legislators, ministers and central
agencies from micro – management (input controls) to policy goals and implications.
Performance contracts increase transparency and accountability of government. It helps to weed out inefficient
and ineffective programmes that waste money. The budgetary role of legislators is likely to be affected by these
reforms and thus gain no power in return. If they lack the staff to conduct analysis they are disempowered. Another
difficulty is to hold administrators accountable for results, over which they have minimal control. The accuracy and
transparency of reporting may become critical.
4.4 Accounting Reforms

1) It is argued that accrual accounting and budgeting reforms increase transparency of public asset usage, and
thus improves both government accountability and the efficiency of resource allocation (Introduced in South
Africa).
2) It impacts on several levels, including the extension of departmental and government – wide accounting to
include balance sheets and statements of assets and liabilities, development of a fully costed public asset
registry; and the full costing of government programmes.
3) This information is used by actual budget reforms in respect of public spending to change decision – making
and the basis of budgetary control.
4) While accrual accounting for the public sector has been widely adopted, accrual budgeting has been adopted
by a small number of countries.

5) In some countries, these reforms replace cash – based accounting and budgeting, in others, accrual
information is seen to complement or extend the existing cash – based system.
6) Advocates of this reform argue that full accrual accounting improves the efficiency of resource allocation and
usage by clarifying how much the government is really spending on programmes.
7) Without this information, it is difficult to know whether a programme is too expensive or whether an agency
is spending too little on purchasing capital assets (Major problem in South Africa).
8) Measuring changes over time in the value of government assets and liabilities might identify places where
government agencies or programmes have unfunded capital requirements or are drawing down their capital
reserves, and, hence, either need more funds or are headed for major financial problems.
9) Others argue that better accounting for capital assets also allows programme managers to estimate a return
on public investments – the notion that, if the value of capital assets is made clearer, estimates of programme
costs will be more accurate, and the ability to prioritize and reduce investments that engender lower rates of
return will be enhanced.
10) Some governments have adopted, or are considering this reform as part of a broader set of public sector
reforms.
11) Owing to competition, benchmarks must be set and, to this end, facilitate competitive tendering, then public
sector and private sector costing models must be comparable.
12) Accrual budgeting in Australia and New Zealand was designed to support the system of performance
measurement and outcomes-based budgeting by clarifying the cost of achieving desired outputs and
outcomes over time.
4.5 Fiscal Decentralization

Fiscal decentralization means granting taxing powers to local or regional governments, giving them united grants
to run their own services, or a combination of both. It is the logical concomitant to political decentralization, bringing
government closer to the people. When political institutions have been decentralized, some form of fiscal
decentralization is required to allow local government and their citizens to choose projects, develop priorities, and
important goals.
Local governments are expected in this model to know better than national governments what the needs of the
local population are, and, hence, fiscal decentralization is supposed to create a more efficient distribution of
revenue. These two reasons, implementing democracy and improving economic development expenditure, are the
ones most commonly used to support fiscal decentralization.
A third argument sometimes offered is that governments should raise revenue in the same proportion as they
spend money. If the national government spends 50 percent of the money, it should raise 50 percent of the
revenue. The same is true of local governments. Creating such a match would eliminate intergovernmental
payments, and presumably would help curtail spending, because the demand for services would be offset by the

reluctance, or impossibility, of raising more taxes at the level of government. In particular, the World Bank has
been concerned that incontrollable local government spending can unbalance national budgets.
Fiscal decentralization efforts bring with them fears that inexperienced local officials will misspend money,
especially when there are few rules or traditions to prevent corruption or brokerage spending. A second difficulty
in implementation is that local governments may have few resources to tax, especially if the population is poor, so
that continued subvention from the national government is necessary. Formula allocations may be devised, with
the intent of equalizing spending across the country, among poorer and richer districts, regions or provinces, but
negotiated funding may eat at the edges of these formulae and lessen their impact.
Getting the balance correct between national and local levels and preventing excessive gaming of the system or
inappropriate responses to build – in incentives is difficult. National governments may find themselves strapped for
funds compared to the functions they have to perform. Moreover, local governments may be difficult to control
directly, creating avenues for the build-up of debt.
Activity
Research the role of the South African Fiscal and Financial Commission, and show the
formulae utilized for fiscal decentralization to provincial and local governments..
Think Point
Is corruption a reality in South Africa, in respect of misspending and corruption by local

government officials? Explain. Without the process of fiscal decentralization, many
local and provincial governments in South Africa will not be in a position to sustain their
existence nor will they be able to provide services. Do you agree or disagree with this
statement? Discuss. What are the mechanisms used by local authorities, in South
Africa, to raise revenue? Research and explain. If large amounts of money are
devolved to provinces and via them to the third tier of government in terms of fiscal
decentralization, is there a need for provincial government in South Africa? Should
centralization become the order of the day? Discuss these two aspects thoroughly, but
critically..
4.6 Budget Balancing: Prioritization, Cutbacks, And Tax Reforms

Countries aiming to balance the pressure of imbalances within their budgets in terms of policy agendas attempt,
some combination of prioritization, spending caps, cutbacks, and tax reforms. Efforts may include getting control
of increases in pension costs or health benefits, improved productivity programmes, reducing the size of

government employment, or controlling capital expenditures. Some countries are working with balanced budget
laws while others are following the European Union model (under the Growth and Stability Pact that allows for
countercyclical spending. Medium-term spending limits and caps have been introduced in some countries to
manage the level of deficits and debt.
Prioritization may use a formal expenditure examination, along the lines of a zero – based budget, with emphasis
on cost-benefit comparisons, especially for capital projects or it may involve more explicit policy making on the part
of the elected officials. Tax reforms may reduce taxation on business or the rich in an effort to stimulate the
economy, increase taxation to help balance the budget, or shift from one source of revenue to another, in an effort
to adapt to a changing economy. Different countries have adopted different sets of changes, and, within countries,
there has sometimes been a shift from one pattern to another, such as from increased taxation to balance the
budget to reducing taxes on the wealthy or the opposite.
Activity
Research the economic policy GEAR introduced by the Thabo Mbeki
government in South Africa and show its main thrust, and show why this policy
was introduced..
Think Point
Under the Thabo Mbeki government and under the watchful eye of Minister of
Finance Trevor Manuel, the economic fundamentals were in place, in spite of
criticism from the labour movement, and medium-term expenditure patterns
were introduced together with the necessary fiscal controls, including reduction
of taxes for the wealthy and the growing middle class of people, in order to
manage South Africa’s deficits and debt. It seemed to have worked. Do you
think that this was a move in the right direction, and was the criticism on the
part of the so – called left, supported by the Congress of South African Trade
Unions (COSATU) justified? You can argue for or against, but critically..
4.7 Budget and Accounting Reforms in Selected Developed and Developing Countries
The idea is to present some core NPM countries and European countries that have not followed the NPM pattern
very closely and countries in transition to democracy and to market economies. The resultant outcome shows
continual learning, adaptation, and change, regardless of whether the country is an exemplar of NPM such as New
Zealand or the UK, or one of the many countries in transition to a freer market economy.

DEVELOPED COUNTRIES
1) NEW ZEALAND
The public service of New Zealand has undergone two distinct phases of budgetary reform. The first set of reforms
began in the 1980s owing to its economic problems. It was aimed at reducing (1987) the size and cost of the public
sector by reshaping the incentive structure underpinning public institutions.
This meant increasing freedom over inputs, separating out the purchasers and providers of public services,
clarifying and strengthening accountability for outputs, and introducing contracting out and privatization. In 1989,
legislation was introduced that required fiscal objectives to be clearly stated and reported against and required that
annual budgets be developed within the context of these pre – stated fiscal policy objectives. The first phase of
reform became iconic of the budgeting and accounting reforms of the NPM.
The second stage of budgeting reform in New Zealand began in the late 1990s. These adaptations were partially
due to the limitations and problems emerging from earlier reforms, but were also the result of changes in the
political and economic environment. The second phase was about what should be done rather than how it should
be done. The focus was on strategic planning at the government – wide, rather than agency, level. The fiscal
management objectives shifted from deficit reduction to the perceived need to impose stricter rules for on-going
fiscal discipline, under conditions of budgetary surpluses and coalition governments. The New Zealand experience
suggests or claims that accrual accounting will radically improve transparency and result in better accountability
mechanisms.
On the other hand, critics have stated that the valuations required by accrual accounting were made out of sight,
were nearly invisible, and were often biased against departments and service provision capability. In 2001, some
authors argued that the accrual estimates intended to improve the comparability of public and private sectors
costing were manipulated in some cases to the advantage of the private sector. There was overestimation of capital
costs and erosion of departmental capital rather than maintenance (Is this a major problem in South Africa?).
Think Point
In the light of the above, and if true, accrual reforms have had an unintentional
effect of making government look more expensive than the private sector and
more expensive than it is. What is your opinion? .
By far, the most fundamental problem to emerge was with devolution and decentralization. This was because of
the gradual reduction in the capacity of government to address questions of cross – government policy
development and coordination in anything but an ad hoc manner. Agencies began to see themselves as

independent entities, considering their own goals and outputs. These agencies became less controllable and less
responsive to the policy concerns of public officials.
A report in 2002 by the OECD indicates that the reforms create more efficient agencies, but are not good at
selecting priorities and allocating to them, and little capacity to evaluate whether programmes are achieving
objectives. Efforts to address these problems emerged in the mid – 1990s. Initially, ministers were required to set
priorities and policies and the contract with agencies to carry them out. This did not resolve the lack of coherence
and strategic capacity within the bureaucracy or at the centre of government. This was reviewed by government
with various review exercises such as value for money and cross agency networks to work on difficult problems.
Changes in both the economic and political environment in New Zealand have undermined some of the earlier
strategies for promoting fiscal discipline. Electoral reform, in 1997, moved NZ to proportional representation and,
in so doing, introduced the reality of coalition governments. Fiscal provisioning was introduced to curb spending
by fixing limits over the parliamentary term of three years. This has proved a difficult instrument to manage
politically. The money was spent in the first two years and thus incapable of limiting spending of a coalition
government, facing six consecutive budget surpluses and an impending election. These difficulties led Treasury to
introduce the “new fiscal management” approach, by making fiscal limits more flexible.
2) AUSTRALIA
The most substantive budget reforms to be introduced in Australia over the past decade are associated with the
introduction of accrual outcome budgeting. The government used accrual accounting to estimate the full cost of
delivering government programmes. The bottom line budgetary balance was recalculated to reflect accrual
accounting principles and to include a consolidated statement of assets and liabilities for the federal government.
Budget documentation and processes were redesigned to ensure that outcomes became the primary basis for
parliamentary control and, theoretically at least, the focus of cabinet decisions of resource allocation. This was due
to overcome the problems experienced in New Zealand and thus to focus on outcomes rather than outputs, so that
efficiency and economy can be examined. While Australia was aware of the problems of accuracy, transparency,
and equity of the accrual costing methodology, little was done to address them and several problems quickly
emerged.
The methodology for moving from cash to accrual costing was based on the status quo programme estimates,
which meant that existing inaccuracies were incorporated into the new regime (This is exactly what happened in
South Africa, coupled with untrained and ineffective staff functionaries). The second problem was the issue of
usability and transparency of the accrual information. Cabinet ministers and parliamentarians were equally
confused by the new information and recommended that cash-based information be reinstated in the interests of
simplicity and comparability over time.

Relatedly, many programme analysts lacked sufficient grounding in accounting theory to understand the new
figures and were replaced in the short-term by financial accountants. This move threatened to undermine both the
credibility and relevance of recommendations made by the budget office to the cabinet in the annual budget
negotiations. This was partially rectified by recruiting skilled staff. The department of Finance and the Treasury,
responsible for fiscal and taxation policy, had different needs. The latter required more cash-based information and
published reports with accrual information.
When accrual information resulted in deficits, cash figures were conveniently used to suggest a surplus position.
While the government is aware of these problems, they remain unresolved, primarily for political reasons. The
outcome system is proving difficult for both parliament and cabinet. It is difficult to apportion funding or responsibility
to more than one agency in respect to outcomes, and has undermined claims of improved accountability and the
usefulness of performance reports, for decision - makers. Both the Auditor General and the relevant parliamentary
committees have suggested that the portfolio budget statements, in which output and outcome information is found,
are “at too great a level of generality to be useful.”
To address this problem, agencies are encouraged to monitor and report against a range of performance
indicators that cover conformance as well as performance.
Some comparative research suggests that weaknesses may be inherent to the output system as currently
designed. A comparison of results in respect of output – based budgeting reforms in New Zealand and Australia
show that neither has achieved the promised results. These studies have shown the following common difficulties:
a lack of rigour in the definition and measurement of outputs; a lack of clarity and measurability in the choice of
outcomes; and an almost total lack of reflexive feedback performance measurement systems to provide vital
feedback as to the impact of purchased outputs on policy-driven outcomes.
Documentation is no different from the traditional documentation used and presented to parliament and challenge
the notion that internal management processes had fundamentally changed as a result of the adoption of new
systems in the guise of OBB budgeting. In Australia, it also led to different calculations and this has led to confusion
in respect of intergovernmental transfers, and ironically, one way of creating more uniformity is to return to cash –
based systems. The issue has only recently become important as cross – jurisdictional performance measures
come into play as a basis for national allocation of resources to the states.
3) UNITED KINGDOM
Since the election of Tony Blair’s labour government, in 1997, the British government has engaged in a flurry of
budgetary and accounting reform. These reforms were intended to fundamentally re – engineer the system of
expenditure management operating in the UK. This was also intended to be used as the basis of cross –
departmental reallocation to “correct” departmental expenditure trend lines. Within a few years, it had been adopted

to form the basis of a three-year expenditure and performance management cycle. A series of adjustments to the
fiscal and budgetary framework underpinned the expenditure management reforms.
Firstly, to limit government debt to reasonable limits and levels and forbade government borrowing for anything
other than capital investment. In 1998 budget introduced a Code of Fiscal Stability which requires Treasury to
articulate statements of fiscal objectives and to report each year on progress toward these objectives. It introduced
an aggregate limit for total managed expenditures (TME), and this limit provided the basis for a three-year
expenditure management cycle. TME was divided into two roughly equal categories: annually managed
expenditure (AME) and departmental expenditure limits (DEL). AME included the more volatile statutory
expenditures including social security and interest repayments and, as the name suggests, continued to be
managed on the annual basis as part of the budget process. In contrast, DEL established aggregate departmental
spending budgets that are allocated on the basis of the spending reviews and fixes for three years.
This system is intended to shift the focus of budget negotiations from the size of annual increments to questions
of policy continuation, effectiveness, and appropriateness. Spending departments are required to sign up for three
– year performance contracts. Initially, this consisted of a Departmental Investment Strategy, and a Performance
Service Agreement. The latter states desired outcomes, establishes specific output targets, and provides specific
managerial and process targets. According to some authors, this seemed like a revolution on the basis that the
shackles were broken and managers would be able to engage in real strategic planning and management, focused
on delivery.
Maintaining a three-year budgetary cycle has proven difficult. By the year 2000, the time span between spending
reviews was shortened to two years. The main drive to this was Treasury’s aim to improve the quality, of
performance indicators, and to analyse, and develop policies that cut across departmental boundaries. The second
driver appears to have been the large proportion of departmental budgets being carried forward in each year. The
monetary policy gurus were concerned that it would create a cash management problem; the government and
media were concerned that government programmes were not being implemented. The latter issue grew in
significance as the general election loomed.
Think Point
Do the above issues remind you of South African government departments in

the national and provincial governments that cannot spend their allocated
budgets, and request carry – over into the new budget year? What are the
public administration and political implications of this scenario, in respect of
accountable government and upon service delivery and the alleviation of
poverty programmes? Explain thoroughly.

The notion of fixed budgets has been further undermined by increasingly regular policy announcements and by
top –ups to departmental budgets, initially at budget time and then throughout the year. Treasury officials argue
that this additional money does not undermine budgetary discipline because the limit set for total managed
expenditures (TME) is not violated. At the level of aggregate expenditures, this is correct. For various reasons,
including better than expected economic performance and overly cautious economic assumptions, spending in the
AME envelope is regularly lower than predicted in the budget documents.
In most cases, the money allocated to departments is a transfer from the AME envelope into the DEL envelope.
This leads to incremental budgeting that operates outside the constraints of either an annual budget round or the
spending reviews. Over the short – term, the Treasury has managed these pressures, but will it able to do so when
economic conditions worsen (It has not been able to do so during the current recession. Also think about the
situation in South Africa). The performance management system has also been adopted since its inception.
The first system saw the inclusion of too many indicators. They varied in quality and were largely inadequate at
measuring performance. They could also not be split adequately between the different departments, in respect to
specific functions. A number of new documents were introduced in respect to spending review and required
departments to set out their plans and strategies for achieving the stated targets and indicators. The frustration is
that output indicators are business measures and provide little feedback on the achievement of government
policies.
Monitoring departmental performance has proved to be both politically and technically complicated. Initially this
was the responsibility of spending teams of the Treasury and that departments will report during the three year
spending period and through spending reviews. But as the targets gained a higher profile they became politically
sensitive. The Prime Minister together with the Cabinet Office became more involved and the Prime Minister
established his own Delivery Unit and focused on six main themes of the government, leaving the Treasury to
focus on the remaining areas. This was an overlap and a turf war erupted between agencies and ministers
responsible for monitoring agency performance. There is little evidence to show that the new system has improved
the capacity of Parliament to monthly public sector performance.
4) SWEDEN
Reform in Sweden has occurred in phases and the huge deficits of the late 1980s were the primary impetus of the
first round of budgetary reform. These are as follows:
 These early reforms included the abolition of all open-ended permanent appropriations and the introduction of
a top – down three – year budget plan in which parliament first approved total spending levels, and the
allocated the total to specific programmes and agencies.
 It resulted in a more integrated budget that brought off – budget programmes into the process of annual budget
deliberations. Accrual accounting, but not budgeting, was adopted in 1993 for agencies that had business like
operations rather than for general government.

 More recently, the government has proposed to shift to accrual budgeting and results – oriented budgeting
was officially adopted for all state organizations from 1998, but the effect was limited to controlling
expenditures than looking at results.
 The focus of reform shifted to performance management as the fiscal crisis subsided in the 1990s.
 The VESTA project or the performance budgeting project sought to increase the use of performance
information in the political decision – making process with the aim of improving effectiveness, efficiency,
quality, and flexibility of central government public services.
 The shift was now on policy objectives, while giving agencies more flexibility to use the resources as they saw
fit. Immediately the Parliament approves the budget, letters of instruction, are drawn up between the policy
Ministries and service delivery agencies.
 Implementation has proved problematic and is similar to the problems experienced elsewhere.
 letters of instruction varied and were vague and too general and the more specific letters were written by
agencies themselves, giving the impression that the ministries had no control over outcomes.
 These letters were negotiated by the agencies rather than set as instruction by the ministries and there was
an approach of contractual obligation rather than a traditional approach, characterized by dialogue, informality,
and flexibility.
 If the letters of instruction were carried out by the ministries in the detailed manner originally envisioned, the
transaction costs would be enormous, and the benefits would probably not be worth the costs.
 Input controls were relaxed but the output and outcome controls were not effective.
5) THE UNITED STATES

Reform in the United States has been marked with different emphases at different times and sometimes has taken
U – turns for example, the period from 1993 to 1998 was determined by budget discipline, in terms of top – down
budgeting with controls over aggregate totals and subtotals, capping discretionary spending and requiring explicit
offsets for revenue decreases and entitlement increases. Budget deficits were all but eliminated by 1998. By 2002
those budget rules lapsed and while top – down budgeting remained, its effectiveness was swamped by tax
reductions without offset requirements. This resulted in rapid restoration of budget deficits that reached historic
highs in 2003.
Throughout the 1990s the US attempted, but largely failed, to introduce an expenditure management system with
fewer input controls in exchange for performance contracts. Unable to reduce input controls, the Clinton
administration shifted to trying to create Performance Based Organizations (PBOs) which reflected the Next Steps
Model in the UK. Businesses that could operate on the basis of their own revenues and like businesses were
nominated for PBO status. This initiative was limited in implementation and by the end of 2000 only three PBOs
had been created: one of the education department, one in the commerce department and one in three Federal
Aviation Administration.

In 2001 the Bush administration nominated the State Department’s Foreign Building Operation’s Office as a
“Results – based Organization. The reluctance of Congress to loosen input controls and stop micro – managing
the PBOs has proved to be a major impediment to implementing even this small reform. Some organizations in
spite of being allowed to use revenue collected were unable to be successful and backlogs still remain.
Unless Congress agrees to the terms of the PBO agreement it is unlikely to achieve any of the promised
efficiencies. In 2000 the Bush administration introduced the Performance Assessment Rating Tool (PART) which
established a set of simple summary performance measures for each department. Under this system, government
departments were assessed as having a red, yellow, or green light performance ranking: most were labelled
failures. A refinement was introduced in that each agency had to answer twenty questions and provide back up
evidence for their answers.
Based on the answers the agencies are ranked as well managed or not or insufficient information. Most of the
agencies are unable to get a green ranking. The new system pays scant if any attention to prior efforts or
improvements, and gives more credit to those whose goals are clear and easily measurable. This issue still has to
be passed by Congress.
Opinions differ widely on how well the new performance budget system is working or whether it is a retreat or
advance from the prior system of programme evaluation. It differs from its predecessor on the basis that it is forced
integration with the budget, and in terms of simplicity. Some have argued that that it has helped to identify and
improve management problems.
Some consider it simplistic and that departments’ performance information is so limited that they are unable to
produce performance reports.
A second concern whether they hold agencies accountable over matters that they have no control over. There
seems to be disagreement about the types of goals set or they are contradictory, the agency will be marked as
performing poorly because its performance cannot be measured. They would receive reduced funding and thus
organizations will be reluctant to report, regardless of its legal mission. Some say that it brings to the fore salient
management issues that call for rectification and less useful in budgeting. Linkages between performance and
budgeting has the potential for distorting information and that factors such as equity, problems being addressed
and were increases in performance are warranted.
The model for increased freedom over inputs in exchange for more accountability for outputs has not made major
inroads in the USA. Flexibility in respect of inputs is limited. The national government has rejected accrual
budgeting and has made the reporting of loans more accrued based, but there is no capital budget. Social security
and healthcare both have severe problems and the government has not been able to deal with these longer term
problems, even when it is running surpluses. The outcome makes it questionable whether there could be many
advantages from a more accrual – based budget.

Activity
Research the obstacles that the Obama administration is politically facing in the US, with
regards healthcare reform, in respect of access to some 42 million citizens that have no
access to healthcare, in the United States of America.
Research the proposed National Health Insurance Scheme (NHI) that the South African
government is proposing to introduce in South Africa, for purposes of extending healthcare
for all citizens. Can the proposed system work amidst the collapsed public healthcare
sector? How will the NHI be financed and what will it cost the taxpayer? Is this a move in
the right direction, for a predominantly Third World country, that operates within a market
driven economy? Attempt to provide critical and reasoned inputs in respect of these issues.
6) JAPAN
Japan is facing and experiencing major financial problems, with huge annual deficits and continuing deflation, a
banking crisis that has lasted for years, and an ageing population that is contributing to a pension and healthcare
crisis. In an effort to stimulate the economy, the government has engaged in repeated rounds of tax reductions
and major capital spending, but there has not been striking economic success. This has contributed to deficits; the
focus on cyclical economic problems has done little to address the structural problems within the economy and in
2001 the government agreed that this strategy was not working and argued for spending reductions. The
government promulgated a plan to address this problem. We outline the efforts as follows:
 These plans have been vague and progress registered has been slow and there is a decided political party
opposition.
 The plans for cutbacks have three major components: addressing social security, pension and healthcare
crisis that are pending; revising the process and dollar amounts of public infrastructure investment; and
engaging in complete revision of the central / local government financial relationship focusing on fiscal
decentralization.
 The healthcare issue was addressed by increasing premiums and by making co – payments, but other issues
like making drugs available over the counter are pending.
 Some progress has been reported in reductions in infrastructure spending.
 Some of these gains came by dismantling government corporations and by privatizing them. 62 corporations
were privatized.

Think Point
A first world economy and country like Japan has dismantled and privatized loss making
government corporations in a period of crisis, but a Third world economy like South Africa,
is resisting this move, in spite of the fact that the Minister of Public Enterprises (Barbra
Hogan) has called for a very serious discussion on dismantling loss making, government
corporations in South Africa, and was criticized by the ruling political party for such a call.
Should such corporations in South Africa be dismantled and privatized? (Think about South
African Airways, Eskom and others). What will be the public administration, but more
importantly the political implications, with regards such a move? What is your opinion?
 Charging the way public infrastructure programmes are funded, reducing cost to government.
 Previously government lent money to agencies for capital projects using pension reserves and postal savings
and created no incentives for reducing the size or expense of projects. The new programme charges more for
longer term borrowing and now mimics the market and the pension and postal systems are allowed to invest
in the markets and possibly get higher returns.
 The argument by government that local governments spend too much of tax money and run deficits and
borrow too much. The plan calls for scaling down local government spending and its functions to the minimum,
reducing the federal subsidy, and allowing the local governments to raise more taxes
Think Point
Is the above intervention possible in South Africa? Should the
centralization option of the South African government be broken with such
a strategy? Would there be more accountability within local government
in South Africa by such a move? Examine these issues. What will be the
public administration and political implications?
 The public will ask for less, if they have to pay for certain services. This reform is still in progress, with specifics
of reductions in national subsidies yet to be agreed upon.
 To create scale economies by cutting back expenditures and provide better services for the more remote
areas at lower costs.
 Deregulation and letting market incentives work are figured in these reforms, but there has been relatively less
attention to output and outcome budgeting, with relaxed input controls.
 Universities are now drawing up performance measures and thus a corporate culture is being harnessed. This
has been done with the postal services also, granting more discretion to top management of universities over
faculty and staffing. Universities have to now have measurable goals and draw up mid-range plans. The
faculty, are no longer government employees. It is more management than market oriented.

 Note that what is not part of this set of reforms are accrual accounting and budgeting and the accompanying
contracting for service delivery.
DEVELOPING COUNTRIES
1) CHINA
Many of the budget and accounting reforms adopted in China are intended to provide a transition from government
ownership and a planned economy to a more market orientation. They reflect concern for spending control and
budgetary balance, in part because of China’s new membership in the World Trade Organization (WTO). The steps
taken are also to comply with donor requirements, such as the Asian Development Bank, which is pressing for
improvements in auditing, and to help attract foreign capital. China still has a long way to go.
The first reform efforts focused on reconstructing the taxation relationship between the national government and
the provincial and local governments – referred to as fiscal decentralization. These reforms were primarily intended
to rationalize both the level of taxation and the formulas for distributing funds to the provincial and local levels. In
this regard much of the revenue was utilized by the provinces, that the national government was unable to fund
the necessary projects and services without running into deficits.
The recent changes were introduced with the dual objectives of balancing the national government budget, and
making spending on economic development more efficient and effective. A second effort has been focused on
accountability and what is called departmental budgeting. Previously only aggregate levels of spending were
presented to Parliament by the national and provincial governments and the four agencies to allocate funding to
the departments. Departmental budgeting also consolidates the different revenue sources each department
receives including extra budgetary funds. Major projects are to be described, in what is the core of a capital budget.
Departmental budgets are more, timely and with greater authority.
Third reform thrust in the 1990s saw a move to either corporatize, or privatize some of the state owned enterprises,
many of which have not operated efficiently. Compared to Eastern European countries, privatization in China has
been slow. State owned enterprises receive much of their capital from selling shares on a market with outside
ownership, rather than inside ownership. It is not yet sure in spite of the inflow of capital that reform has improved
performance. The government is encouraging zero – based budgeting reforms at local level. There is little
information as to how well this is working. Initial reports indicate that getting past the expected base budgets to
some kind of target based on need has been difficult. It is one of the largest economies of the world, with sustained
growth, a large investor into other countries and has a population of some 1, 4 billion people. It is a major player
in the world economy and a leader in many ways.
2) INDIA
Taxation forms an important area under the Finance Commission. The basic idea revolved around a cooperative
system of revenue distribution in the first two chapters of Part XII of the Constitution. Broadly speaking these can

be separated into four categories, the allocation of taxing power; and the distribution of tax receipts; the power of
the Union, particularly to make grants in aid, the articles regulating borrowing; and the provisions providing for a
Finance Commission. Taxes that have an interstate base are under the legislative jurisdiction of the Union, while
those that have a local base fall under the legislative jurisdiction of the states. Union retains part of the proceeds
like corporate taxes, custom duties, taxes levied on companies, surcharges, state tax and a variety of other taxes.
Second, there are taxes levied by the Union government, but the proceeds are shared with the states - primarily
income tax and excise duties, except agricultural income tax and certain excise duties reserved for the states.
Certain other taxes which are levied by the Union but proceeds are wholly assigned to the states, such as estate
duties, terminal taxes on goods and passengers and so on. Fourth there are taxes levied by the Union but collected
by the states – such as stamp duties and excise on medicines. State governments have jurisdiction over taxes on
land, agricultural income and other related taxes and on alcohol and narcotics.
The Financial Commission is a constitutional authority and is constituted every five years. Revenue is broadly
shared and allowing the poorer states to receive more. The founding fathers felt that if federation means anything
it means there should be transfer of wealth from the richer to the poorer provinces. Cooperative federalism really
came into play because the richer provinces were willing to allow distribution of taxes to the poorer provinces. The
arbiter, in this case is the Union government.
The beginning of the 1990s was characterized by financial stresses, compounded by the fact that the foreign
exchange situation was also becoming very critical. In 1991, the government of India ushered in an era of economic
reforms, largely due to compulsions of facing the deteriorating foreign exchange position in the context of mounting
debt service obligations. The economic reform process was characterized by conscious policies of liberalization,
privatization, and globalization. The current Prime Minister Manmohon Singh was then the Finance Minister, an
economist of international repute, who was formerly governor of the Reserve Bank of India, lent credibility and
legitimacy to the new direction of the economic reform process.
The lessons from other developing countries in Latin America and Africa, which had to compulsively take the
economic reform route due to World Bank and IMF conditionalities provided the perspective to the policies
introduced during the reformist phase in India. Market forces logic was now allowed to dictate terms and thus
allowed a smooth flow of foreign direct investment, into India, and moving towards increasing share in international
trade.
The import substitution agreement and the growth with self – reliance argument had greater adverse effects by
insulating the Indian economy from the level playing field in the international markets and had to be replaced by
pro – active export promotion arguments. This shift essentially was an outcome of the review of governance and
public administration functions in India. The new mantra of the shift in the role of government from an entrepreneur,

investor, and owner of individual enterprises to that of a regular and umpire found its ardent followers among the
senior policy makers.
It was felt that the government must concentrate on the development of infrastructure, stability in fiscal and
monetary policies, and in the safeguarding of law and order, while simultaneously ensuring the growth of human
resources by greater emphasis on social sectors like health care, education and social welfare. Poverty alleviation,
income generation and employment generation had to be addressed as the objectives of conscious policy
interventions of the government. India today, like China, is a major role player on the international and global arena,
in respect of economics, trade, public administration and a host of other issues, with a more than stable economic
growth and a population in the region of 1, 2 billion people.
3) VIETNAM
The champions of financial reform in Vietnam, is the Ministry of Finance and other coordinating agencies and they
rely heavily on international expertise given the history from which Vietnam is trying to emerge, in terms of framing
reform initiatives. It is attempting to emerge as a new modern state. The existence of a consolidated revenue fund
is one such and still cannot be taken as given. We discuss some of these reform efforts:
 Local agencies and departments of all kinds not only collect their own fees, charges and levies and spend
the process outside the state budget, but in some cases they operate their own bank accounts with minimum
oversight.
 Controls and accounting systems to record transactions and monitor expenditures within the budget are
rudimentary.
 In one aspect the system performs well; the Ministry keeps strict control of financial allocations to ministries
and provinces, enabling the government to balance its books as well as helping to achieve macro –economic
stability.
 The traditional socialist state accounting system in Vietnam was geared to recording financial transactions
for statistical revenue purposes not for reasons of public accountability and the extraction of taxes from
surpluses generated by state – owned economic units was the main fiscal purpose of the system.
 During the 1990s, a number of reforms were set in train to transform the system of public finances and a new
law on State Budget was adopted in 1996; in 1997, internationally accepted classification system of standards
were adopted for reporting of expenditures; and a uniform budget manual was distributed for the 1998 budget.
 A Public Expenditure Review and a Public Investment Programme were initiated with the help of international
agencies and for the first time the government published a state budget in 1999.
 The law on State Budget sets out the responsibilities of state agencies ion preparing, executing, accounting
for, and inspecting the state budget. It sets out reporting conditions and an oversight role for the National
Assembly. Defines the expenditures and revenue powers of the levels of government, provides for a
regularized system of revenue sharing and transfers and spells out auditing and accounting systems.

 Audit systems are weak with little internal audit capacity and audit is not an independent entity or body and
reports directly to the Prime Minister, with no guarantee of public disclosure.
 The tax system is one of the weakest points in Vietnam’s evolving system of public administration. However,
a number of taxes have been introduced including VAT and business tax.
 Tax payments are not measurable transactions of income flows and much of the economy is beyond the
reach of the state in the informal sector; accounting standards and rules regulating the financial transactions
and other economic entities are neither non – existent or not enforced and ad hoc exemptions and
concessions reflect the multitude of political deals that accompany the commercial activities in Vietnam.
 Tax regimens will be vital in order to set up the system, for purposes of predictability, to sustain operations
and pay the wage bill and thus the absence of a uniform taxation system is the chief reason for the
fundamental weakness of control mechanisms within the state apparatus.
 The size and scope of the budget sector breeds resistance to central control, encourages turf wars, and
sustains local patron – client relations in personnel patterns, in turn obstructing implementation of civil service
reforms.
 Favouritism and arbitrariness in the treatment of citizens and market actors are also encouraged by the need
to extract off – budget funds. This is a political struggle within the state for the control of its own resources
and it is fundamental in shaping the nature and trajectory of administrative reform.
Think Point
The last point made above draws parallels in respect of South Africa, in respect
of many dimensions of corruption, patronage and above all the selective
application of Broad Economic Empowerment deals. Discuss this issue, in
respect of the rule of law and the implications to the economy of South Africa.
4) SOUTH AFRICA
The transition from apartheid in South Africa involves building a democratic regime while also trying to recover
from generations of economic and political repression. The budget reforms are intended to support the creation of
democratic government that the people control by building a more transparent government and by decentralizing
revenues to follow political decentralization. The latter is complicated by the fact that the poorest areas have the
most need for public services and projects, and the least ability to raise their own revenue. At the same time, the
country must generate sufficient funds to facilitate economic development and ameliorate poverty.
The result has been on the emphasis on privatization, in essence selling off assets to gain money for development,
and compliance with international banking regimes to enable the country to continue borrowing on an international
market. This view suggests that the primary reform objectives should be budget balance, moderation in the amount
of borrowing, reduction in the amount of corruption, and predictability of the budget.

Think Point
Privatization efforts have been resisted by the trade unions in South Africa and the time has
come in a recessionary climate for government to borrow on the international market, given
the deficits in tax collection and by the same token the demands for large salary demands by
workers and massive corruption in state institutions. Discuss the above statement, in respect
of the possible negative impact on the economy, public administration reforms, and possible
fiscal deficits, thus stemming development initiatives.
Observers report that South Africa has enjoyed considerable success in budget and financial management
reforms, but they caution that the reforms should be seen as on--going. Reforms include a medium – term
expenditure framework, regular reports with reasonably reliable information for decision makers, and moves to
develop, a capacity for performance and compliance auditing.
Think Point
In spite of methodological audit policy, these policies are paid scant reference to, if one
considers that year after year a majority of departments in all spheres of government are
unable to spend budgeted funds, and above all most departments continually receive either
qualified or disclaimer opinions, in respect of their audit reports. Why do you think that this is
the situation?.
There has been greater transparency in respect to the budget aided by more inclusive and consolidated budget
and auditing coverage. Extra budget activities have standardized accounting and reporting requirements and while
observers report some loopholes, they suggest that compliance is generally good (Not so, in terms of observations
in South Africa, itself).
The Public Finance Management Act of 1999 (PFMA) sets standard budgeting and reporting requirement for all
listed institutions and tasks the accounting authorities of public entities to provide annual reports, financial
statements and auditors’ reports --- also enables the auditor General to audit any of these institutions. Reorganizing
intergovernmental relations at different levels of government has been a major element of the reform, as old
apartheid divisions into black and white were dissolved and a single system created.
Functions were assigned to each level of government in accordance with spill overs, so that functions that affect
regions or the whole country were assigned to those regions or the national state, and functions with narrower
groups of beneficiaries, such as water, were assigned to the local level. The national government collected some
taxes such as VAT and corporate and personal income taxes, and local government collected property taxes. To
compensate for the inability of some very poor areas to collect taxes and provide basic services, the national
government created a series of grants.

Activity
Get hold of a copy of the Public Finance Management Act1999 (PFMA). Study the Act and
show its impact and influence upon government finance and control, in terms of public
management and administration. Also research the different grants that the government
provides to government institutions and to citizens. Show its impact upon social development.
Can South Africa sustain these grants?
Evaluations of this element of the reform have been mixed and suggest that fiscal decentralization may be a double
edged sword. This is an ambitious policy agenda which has resulted in a new intergovernmental system that has
become an example of best practices for many developing and transition economies in terms of both process of
implementation and the outcome. However, others argue that work still has to be done. Intergovernmental flows
are not understood by citizens in spite of improved information.
The OECD country report also expresses a less optimistic view noting that 80 percent of total spending is
channelled through provinces and local governments which have so proved to be inefficient and unaccountable.
As a result, there is significant under5spending and corruption and abuse of public funds. It applauds the efforts in
respect of training and systems and building financial capacity, it states that, it will take time before the absorption
capacity of the local entities improves.
Budgeting reforms are likely to continue in South Africa, for the foreseeable future. There is still considerable
unpredictability in the budget process and this is the focus of work intended to clarify the use of contingency funds
and emergency spending, and also the role of the legislature in amending the budget. Revenue projections have
uniformly been below actuals since 1998, despite the fact that privatization has been somewhat slower than
predicted.
The reforms also get qualified approval from the Public Service Accountability Monitor, as non – profit funded by
the Ford Foundation located at Rhodes University. The accountability monitor ploughs through public documents
such as budgets, auditors’ reports, and plans, to answer a series of questions about the quality of financial
management and the agencies’ achievement of performance goals. While the answers vary from agency to
agency, and they find many strengths and also find systematic weaknesses, from missing needs assessments to
lack of performance contracts, to inability to explain where all the staff are that they have hired. In short, reforms
in South Africa are on-going.
In pursuing our discussion, in respect of budgetary reforms and accounting, including some economic variables,
the module will discuss four issues that appeared in the media recently (newspapers) to highlight some crucial
issues. The issues presented are not the opinion of the Management College of South Africa (MANCOSA). They

are being presented in terms of their relevance to the subject matter discussed in the module and for purposes of
stimulating critical academic debate. The issues are as follows:
1) Revenue could fall short of budget by R80 billion. The Star, Business Report, Wednesday, September 2,
2009. Article by Dawie Roodt.
2) Treasury warns on municipal spending: Revenue fall to hit cash flow. The Star, Business Report, Wednesday,
September 2, 2009. Article by S.E. Payne.
3) A parallel economy will free the people: The South African government is using growth, jobs, taxes, debt and
globalization in a misguided adventure, certain to fail. The Star, Inside Report, Wednesday, September 2,
2009. Letter written to President Jacob Zuma by Joseph Edozien, Chairman of the South African, New
Economics Network.
4) Public service bosses are main fraud culprits: Trend showing they are more corrupt than juniors must be
tackled, report says. The Star, Friday, September 4, 2009. Article by Siyabonga Mkhwanazi.
1) REVENUE COULD FALL SHORT BY R80 BILLION

Government revenue could fall short by R80 billions of budget in the current fiscal year, says Dawie Roodt, the
chief economist at Efficient Group. This is well above the projection by Finance Minister Pravin Gordhan, of an
under collection of R60 billion due to a decline in economic activity. Gordhan said while introducing the 2009 the
Taxation Law Amendment Bills that the government was between R22bn and R23bn below the tax revenue target
for the financial year so far. His spokeswoman Thoraya Pandy said Gordhan was referring to the unaudited figure
for the shortfall that had accrued between the start of the financial year in April and the end of August, 2009. She
said the forecast shortfall for the whole financial year remained R60bn.
Roodt’s calculation was based on the data for April to July, released last week by the Treasury. And, based on the
national Treasury’s three year rolling budget. Roodt predicted that the collection in the following year would fall
short by R100bn. He said the biggest casualty this year would be the VAT take, which would fall between R30bn
to R40bn short, followed by corporate tax, which would be about R20bn below projections, while taxes on
individuals would be about R10bn short.
Poor revenue collections in the first four months of the fiscal year show the extent of the re4cession, according to
Michael Ronald an investment professional at Marriott. Vat returns were down 22 percent and corporate taxes
were 15 percent lower. The burden is being carried by private individuals, whose contributions were 4 percent
higher in spite of the current unemployment which indicates the effects of continued wage increases, said Roodt.
While the four months represent one third of the fiscal year, revenue collections are equal to only 24 percent of
projected revenue. However, Roodt pointed out that seasonal payment patterns had to be taken into account. Last
year for instance, R41bn in company tax came in December alone.
Kevin Lings, the economist at Stanlib, said that last year revenue fell short, R14, 5bn after four consecutive years
of overruns. And Lings said that there had been overruns in nine of the past twelve years. Ronald is concerned

about the combined impact of higher government spending and lower collections. He said after the fiscal year’s
first quarter, the deficit between revenue and spending amounted to R89bn. This compares with R95, 6bn projected
for the entire fiscal year at the time of the budget in February, which is equal to nearly 4 percent of gross domestic
product. Ronald said if the government spending continued at budgeted levels, the actual deficit for the current
year would be higher. \
Economists are expecting that; it will be closer to 6 percent. The implication is that the government will have to
raise more on the capital markets. Ronald warned that the bond market would weaken if the government had to
raise more funds by issuing new bonds. He suggested that the government persuade investors to swap bonds or
reduce its own cash holdings. But these cash holdings, which were R100bn at the time of the budget, have already
been reduced by R16, 6bn, almost twice what the government had planned to use for this year. This brings the
cash levels down to R85bn, less than three months of expenditure.”
The recovery of the South African economy from its first recession in seventeen years would be slow and the fiscal
deficit for 2009 /10 would be larger than budgeted in February, Finance Minister Pravin Gordhan said. While there
are indications that the South African economy might have reached the bottom of this sharp downturn, the road to
recovery will be slow and gradual. Gordhan told Parliament.
In the second quarter, the economy shrank by 3 percent after a decline of 6, 4 percent in the first quarter. Gordhan
also said that the budget deficit would certainly not be at the same level as the Treasury’s forecast of 3, 8 percent
of gross domestic product, given lower revenue and no reduction in spending.
Think Point
Borrowing from the markets to finance deficits may be a temporary cushion, but
opens the door to now borrow from the World Bank and the IMF, in future. Is
this the beginning of South Africa’s economic slide and the possible
dependency, and perhaps external intervention by the World Bank? This is
exacerbated by huge wage demands by the public sector across all spheres of
government, the appetite for wasteful spending on unnecessary exotics and the
creation of four new ministries, at the cost of millions by government, and the
lack of general control. Can South Africa sustain the heavy costs involved,
including many other variables that directly impact on the economy? What will
be the implications on the public sector and upon public administration? Attempt
to answer these issues critically. .

2) TREASURY WARNS ON MUNICIPAL SPENDING

The National Treasury has warned municipalities to carefully balance their spending plans with expected revenue
to avoid a cash flow crisis, as the recession bites into people’s ability to pay for services. A very significant risk is
that municipalities spending plans outstrip realistically collectable revenues – especially given the economic
recession. If municipalities are to avoid a cash flow crisis, they will need to align their spending plans to their
expected revenues, the Treasury cautioned in a statement.
This warning comes with the publication of details of the spending and revenue collection of 283 municipalities for
the year to June that show that metropolitan municipalities had collected only 84, 8 percent of their revenue at the
end of the fourth quarter. Nationally consumer debts to councils total R50, 4 billion. Big municipalities are owed
R29, 4 billion, up 10, 4 percent from the previous year. Johannesburg is owed R9, 1 billion, Ekurhuleni R6, 8 billion,
and eThekwini and Cape Town R4, 5 billion each. Consumer debts owed to secondary cities rose 38, 6 percent.
Nevertheless, the National Treasury said municipal revenues were holding up well, although some faced problems
(Given the facts the statement of the Treasury is unrealistic and avoids the use of the word crisis).
Metros that seem to be hit hard by the recession are Nelson Mandela Bay and Ekurhuleni which are exposed to
the vehicle and engineering manufacturing industries. Nelson Mandela Bay’s chief financial officer, Kevin Jacoby,
said not only had retrenchments and people being put on short time affected revenue collections, but the council’s
revenue enhancement strategies had also been affected as there was limited construction and new development
under way. In the year to June revenue collection rates at Nelson Mandela Bay fell to 91 percent from 98 percent
the year before. Jacoby said if consumers showed proof of retrenchment or being put on short time, they would be
given payment terms. The council also had an assistance plan for poor people.
Among smaller municipalities, those in the Northern Cape and North West have the highest percentage of creditors
outstanding for more than 90 days at 44, 5 percent and 44, 1 percent respectively. They may not be able to pay
creditors due to cash flow problems.
Treasury said that it was not clear if the debts could be fully attributed to the recession or if the problem was due
to poor financial effort at municipalities (This is indeed a very serious problem). It is just not consumers that owe
council money, the national and provincial governments are also errant players (This is going on for years the
national government cannot rectify the situation and is in fragrant violation of the rule of law). Michael Sutcliffe, the
city manager of eThekwini said government departments owed the council up to R700 million. Add to this was
R700 million more for unfunded mandates. A deficit of R1, 4 billion and this will be the tip of the iceberg.

Think Point
The Treasury’s response of blaming the recession and errant consumers is a smoke
screen. It might be one of the minor problems. The real problem is the non –
payment by government departments. The fact that local government institutions, in
the form of municipalities, as cited by various government reports, are in the main
on the brink of collapse, due to infighting, the appointment of incompetent
functionaries, appointments made on patronage and not on merit, extremely poor
administrative services coupled with massive corruption and the lack of political will.
Treasury’s report skirts the real issues and this is certainly a haphazard response
because it touches only the tip of the iceberg. This situation has very serious
implications, and ramifications to the economy of South Africa, upon public
administration reform, service delivery and the possibilities of civil unrest and a
threat to the very survival of local government, and by implication to the survival of
national and provincial governments, in South Africa. Discuss the above issues in a
reasoned response and suggest ways for improvement from a public management
and public administrative perspective..
Finally, The Star of Friday, September 11, 2009 reports on the state of council finances and laments as follows:
Only three of 283 municipalities have their books in order, Auditor General Terence Ntombembe told the Cape
Town Press Club that only Cape Town, eThekwini and Johannesburg had their books in order. This means that
only 1 percent of local governments have a clean bill of health. Of the 119 provincial departments that have been
audited, only seven or 4 percent, have balanced their books. At national level, seven of 34 have a clean bill of
health. This issue has been underscored above, and one can safely state that local government has collapsed and
both provincial and national governments of South Africa are in financial disarray.
3) A PARALLEL ECONOMY WILL FREE THE PEOPLE

By Joseph Edozien – Chairman of the South African New Economics Network
Dear President Zuma

The most truly relevant economic justice question facing us at this juncture, is how we, as a nation, can restore
self – sustainability to the mass of the population in practical and harmonious ways in a socially acceptable time
frame. This is what restorative economic justice is all about. At present, South Africa is going about the task of
economic justice in exactly the wrong way: a non – restorative way. South Africa is using growth, jobs, taxes, debt,
and globalization in a misguided macro – economic adventure certain to fail. South Africa will never grow itself out
of poverty under the current financial regime. It is not possible.

The growth rate required to accelerate economic growth permanently beyond the population growth rate would
require a massive infusion of externally based interest – bearing and profit – seeking capital. This would imperil
the country with an unsustainable sovereign debt burden, eventually stifling any real growth by imposing an
onerous tax levy on future generations to pay back the interest on what would then become continual rollover
loans, keeping the country in bondage, to foreign powers. Worse, the profits of this mode of development would
leave the country in the service of its foreign owners anyway. Conventional economic growth within the structures
of the global financial system is not the answer for South Africa. It cannot be. The internal capital base in
conventional finance is too skewed in the direction of those whose economic interests are more aligned with global
capital than with the social needs of the population mass of South Africa, while the interests of external capital are
even less aligned with those of South Africa’s historically dispossessed masses. Growth as you seek it, is a false
hope. It won’t work.
Second, South Africa will never create enough jobs under the current financial regime. It is not possible. The
present financial system requires that average business profit rates must exceed average interest rates to avoid
recession or depression. This means that businesses are forced to increase the capital content of production in
order to increase the productivity of labour, so that more units of profit can be extracted from proportionally fewer
units of labour to keep ahead of constant background interest rate pressure from their necessary financing needs.
Labour intensive production reduces the profitability and productivity of capital in this financial regime and makes
output prices relatively uncompetitive in globalised markets. The labour unions battle eternally with this
fundamental dynamic is one guise or another. Economic growth in this financial systems necessarily and eternally
a job shedding growth in relative growth rate terms. The economy must grow faster than the growth in jobs just to
keep going. Therefore, the practical economic growth rate required to meet the social demand for jobs is
intrinsically unattainable. Redistribution based on jobs is a blind alley in the financial system if you are to meet your
social goals. Jobs are not the answer for South Africa. They cannot be.
Third, South Africa will never be able to tax enough to redistribute according to social need under the current
financial regime. It is not possible. There are far few tax payers relative to the far too many unemployed who can’t
pay taxes and who desperately need social grants just to survive in the financial system. Moreover, most of those
with the jobs to pay taxes don’t earn enough to pay sufficient taxes. And there are far too few sufficiently rich tax
paying people and enterprises. Even if you were to tax those sufficiently rich people and enterprises at a 100
percent taxation rate, which of course will be self – defeating and which is impossible, there will still not be enough
tax revenue to solve the real social problems of the masses. Worse, high taxation is a powerful
economic disincentive that tends to limit enterprise and growth, while providing an incentive for endemic tax
evasion that would be far too expensive to police and curb effectively. Taxation is not the answer for South Africa.
It cannot be.

Fourth, South Africa will never be able to borrow itself out of the social poverty of the masses under the current
financial regime. And South Africa will never be able to borrow itself into a sustained and sustainable national
social and economic development under the current financial regime. It is not possible. The Ministry of Finance,
under the guidance of then Finance Minister, Trevor Manuel and the tutelage of then President Thabo Mbeki was
indeed brilliant, very wise, and most far – sighted to avoid supplementing insufficient tax revenues with excessive
national debt. The inevitable result was a slowdown in social transformation. But they chose the better of two very
bad options; decelerate social development to avoid crushing debt or go into monumental debt to accelerate social
transformation.
We must think then of their fiscal prudence under criticism, for it saved future generations from a bad deck of fiscal
cards. But their prudent choice is not sustainable in the face of mounting social pressure. South Africa has a chronic
problem of insufficient effective demand because of insufficient purchasing power in the hands of the masses of
its citizens. This systemic problem has been notoriously addressed in the now – failing experiment of consumer
borrowing. Borrowing is the worst way to boost insufficient effective demand because the predicate for sustainable
borrowing is the necessary revenue and cash flow to make the required loan repayments. If the problem causing
the problem is the lack of that necessary revenue and cash flow, the solution clearly defeats itself and only delays
the days of reckoning – and those days are here for most consumers.
Worse South Africa does not have a global reserve currency such as the US has. Therefore, South Africans will
never be able to borrow like Americans within the confines of the current global financial order. Debt is not the
answer for South Africa. It cannot be. Finally, South Africa will never be able to globalize itself to attain the required
social development under the current financial regime. It is not possible. Globalization under the current financial
regime and as reflected in the character and dictates of the various global institutions and trade agreements is
nothing but economic colonization in a new dress with a new name.
Foreign investment perverts the economics of South Africa by skewing profit extraction towards export. Poor and
dispossessed South Africans, work hard and labour faithfully while the profits of their toil flee the country in impolite
haste. In the process, a few South Africans as the local guardians of foreign investment become rich, while their
compatriots become poorer, although they work harder to maintain the profitability of those foreign – owned assets
so that more foreign investment can be attracted to these shores in a futile game of running faster only to get there
more slowly. Worse the real terms of globalized trade are self – defeating for South Africa.
Products of high value – added content are imported in exchange for exports of low value – added content.
Therefore, there is a chronic outflow of economic value from these shores. This is then exacerbated by the pressure
to reduce the exchange value of the rand to boost the export of lower value – added products to purchase higher
value – added products, thus sabotaging the value equilibrium of trade and worsening the very problem the country
is trying to solve. Globalization is not the answer for South Africa.

The current financial system will never deliver restorative economic justice to all South Africans. This is neither its
nature nor its purpose. But we cannot do away with the current financial system, even if we wanted to. It is far too
entrenched, in the bloodstream of the nation and in the mental paradigms of its people and leaders. Moreover, it
is supported and maintained by the most powerful and coordinated transnational oligarchies in the world.
Therefore, we must together create parallel supplementary financial systems for very different purposes and with
very different goals and intents and which work in very different ways.
We must break the monopoly of usury finance based on money issuance through debt creation. South Africa must
commit itself to a core long – term national project to build a parallel supplementary and complimentary economy
outside the financial monopoly for the benefit of its dispossessed masses, in order to bring to them the genuine
promise of real freedom, the economic liberty of self – sustainability. The complimentary new economy must be
built around the edges and in the cracks of the conventional economy, and it must be informal and based on the
true free enterprise of non – taxed small – scale and micro – scale businesses of the masses in places of rand
scarcity.
The aim of this unconventional new economy is not to replace the conventional old economy or even to reduce it.
The aim of the new economy is to supplement and compliment the old economy; and to allow those who now lack
the means, the property and the capital, to survive and thrive in the big – finance and big business debt dominated
capitalist economy. This is the only way to restore self – sustainability to the masses; a complementary parallel
economy fuelled by a new and unconventional non – usury parallel financial system.
The authors do not expand on the very serious problem of millions of foreigners that have been allowed to enter
the country on the basis of asylum and as refugees, by corrupting the system within the Home Affairs Department
or as illegal immigrants, and obtained illegal citizenship and identity documents. In many of their countries there is
no civil strife. Immigrants from India, Pakistan, Sri Lanka, Bangladesh, Somalia, Ethiopia, Sudan, Zimbabwe,
Nigeria, Morocco, Algeria, Tunisia, Egypt, China, the whole of Eastern Europe, other parts of Africa and the
remainder of the world.
They have successfully entered the informal economy, and repatriate millions of or in fact billions of Rands, outside
the country, pay no taxes, live in their informal stores, have no real overheads, enter their children into public
schools and use the health system and so on, at the cost of millions of Rands to the South African tax payer. They
have become a burden upon government resources. If they can enter the informal economy and are successful,
the government has to intervene, or face the brunt of the local population who are being completely marginalized,
in terms of informal activity and business in the country of their birth.
This is not to fuel any xenophobia debate, but to point out the reality of a scenario that is becoming untenable, and
that the government is sitting on a time bomb, awaiting an explosion. The time has come to stop this

type of entry and immigration into South Africa and to empower those that have historically bore the brunt of
apartheid and its gross inhumanity.
Think Point
What is your opinion on the open letter written to President Zuma? Are the
arguments cogent, in the sense that aspects discussed could be used in
respect of reforms towards the New Public Management and public
administration, in South Africa? What of the economic debate put forward? Do
you think that the government should curb asylum seekers, refugee
applications and illegal immigrants? Posit a critical economic answer in respect
of these immigrants who enter the informal sector, repatriate large amount of
money and pay no taxes, and what should be done to officials within the
Department of Home Affairs, who aid and abet criminal behaviour, within the
public administrative system?
4) PUBLIC SERVICE BOSSES ARE MAIN FRAUD CULPRITS

A report by the Public Service Commission has revealed shocking figures showing that senior managers in the
government are more prone to fraud and corruption than junior employees. The commission expressed concern
that although senior managers constitute a small fraction of the total number of employees in the public service or
0, 7 percent, rounded off to 1 percent, the fact that 2, 5 percent of them are involved in financial misconduct must
raise warning bells for the government. This revelation is contained in the commissions 2007 / 2008 report on
financial misconduct in national and provincial departments.
Of the reported cases of financial misconduct, it was found that the state had lost R21 million in the 2007 / 2008
financial year down from R130 million it lost in fraud and corruption in the 2006 / 2007 financial year (Note that this
may not be the actual figures because a number of cases remain unfinished and that corruption is endemic in the
public sector, and the fact that corruption at local government / municipalities have not been factored into the
report). The report states that while most of the reported cases of financial misconduct involved junior employees,
this was because junior – level workers make up a large chunk of the civil service, at 86, 2 percent. During the last
financial year 85, 9 percent of cases of financial misconduct, including fraud, corruption, theft, misappropriation
and abuse of funds, involved junior officials (Junior or not, it is a very serious concern and that 85, 9 percent cases
makes it endemic and a threat to democracy and to public administration).
But the commission expressed concern at the high ratio of errant senior managers, when compared with the overall
numbers of senior managers employed in the public service. Using the same comparison between the total number
of employees at the SMS (senior management service) level and the percentage of the total number of finalized
financial misconduct cases of SMS members (2, 5 percent) for the 2007 / 2008 financial year, the outcome
suggests that employees in the SMS have a greater propensity to commit financial misconduct.

The commission said it was concerned that there had been a significant increase in the number of senior officials
involved in acts of wrongdoing, as these individuals were largely entrusted with the responsibility of guarding
against the scourge of corruption and fraud. This is a worrying trend given that the SMS play a critical role in the
promotion and maintenance of sound financial management and are the stewards of public resources. This trend
cannot be ignored and must be addressed. It also found that more senior managers we found guilty of fraud in the
2007 / 2008 financial year as opposed to the preceding financial year.
There has been an increase in the percentage of SMS members found guilty of financial misconduct from the 2006
/ 2007 (1, 6 percent) to the 2007 / 2008 (2, 4 percent) financial years, the report found. It was also found that of
the 868 cases reported, a total of 6709, or 82 percent of those who faced charges of financial misconduct were
found guilty and that the amounts involved totalled R21, 7 million. Of this, the state was able to recover R8, 8
million, or 40 percent of the total amount. (These figures are reported by departments, and other reports, like the
Auditor General across government has reported that many departments had not provided data. Kickbacks have
not been factored in, including hundreds of officials, in fact thousands that conduct business whilst employed in
the public sector. If all of this and other serious issues were factored into the report, the situation will be drastically
altered and is a frightening scenario).
Think Point
Is corruption endemic in the public sector of South Africa? Consider the Travel gate episode
were parliamentarians were positively implicated, but left off the hook by parliament itself,
coupled with senior civil servants and junior civil servants, involved in fraud and corruption, it
paints a very sorry sight of the public sector. Do you believe that the fabric of the rule of law has
completely broken down, in the South African public sector? Can this situation be rectified or
have we reached a point of no return? Does this put paid to public sector reforms and the
credibility of these reforms in respect of budgeting and accounting? How can a positive image
ever be created of the public sector of South Africa when almost the entire public sector officials
and also politicians are involved in corruption and fraud? How does this scenario pan out in
respect of the image and integrity of the South African public sector, regionally and
internationally? Is South Africa a safe haven for foreign investment? Project on these issues and
provide a critical analysis in respect of public management and public administration.


1. Outline briefly the elements of budget reforms in relationship to output and outcome
budgeting.
2. What are the main objectives of accounting reforms?
3. Fiscal decentralization means granting taxing powers to local or regional (provincial)
governments. Discuss fiscal decentralization with reference to the New Public
Management reforms (NPM).
4. Clearly explain fiscal decentralization and show its importance to provincial and local
government reforms in South Africa.
5. A comparison of output – based budgeting in both New Zealand and Australia, indicates
through research that neither has achieved the promised results, Discuss the problems
encountered by the system of accrual accounting and indicate the implications for public
administration, and the effects upon politicians and public officials.
6. Discuss the labour government’s flurry of accounting and budgeting reforms post 1994,
under Prime Minister Tony Blair’s government, in the United Kingdom, which intended to
fundamentally re – engineer the system of expenditure management, and clearly show its
implications on politicians and on public administration.
7. Write notes on budgeting reforms in respect of the following countries: Sweden; USA; and
Japan.
8. Both China and India are emerging economic giants in terms of the emerging world
economic order, and have achieved much in respect of their budgets, accounting and
economic reforms, yet they are confronted with mammoth problems, in this direction, and
much still has to be done. Discuss their public administrative reforms in relationship to
budgeting and accounting.
9. Vietnam has emerged from both the communist regimented rule and the devastation of the
Vietnam War with the USA. It has made some strides in respect of budget and accounting
reforms but is plagued with human resource problems and corruption. Discuss.
10. Budgetary reforms in South Africa, have been necessitated by the process of transition,
from apartheid to democracy, and is an ongoing process. Discuss the salient achievements
of budget reforms in the country, against all odds.
11. Select one of the four articles discussed in relationship to South Africa, and discuss the
implications to the economics of public administration and relate your discussion to the
implications of budget reforms and public management and public administration generally.
12. Corruption and fraud is endemic within the public sector of South Africa. Discuss.

Unit
5: Contemporary Issues
in Public Management

5.2 Distinctive Characteristics of Public  To understand the importance of research methodology and its
Management: Common Assertions application to public management and public administration and
and Research Findings appreciate their distinctive characteristics, in terms of their
assertions and research findings;
5.3 Some Implications for Practitioners  To be in a position to very briefly understand, comprehend and
and Researchers analyse some of the implications of certain perspectives as they
relate to practitioners and researchers involved in public
management and administration;
5.4 History: The Individual Worker and  To comprehend and establish the history of individual worker
Professional Quality and professional quality, in terms of state regulation, as it
5.5 State Regulation and Public Sector applies to public sector quality in general, for purposes of
Quality measurement and evaluation;
5.6 Definition, Measurement, And
Evaluation
5.7 Approaches to Quality  To understand the approaches to quality in respect of the

overlapping approaches with special reference to customer,
legal and standards – based approaches to quality assessment,
regulation and accreditation;
5.8 Quality Research  To understand and apply quality research within the public
5.9 The Challenges of Improving sector in respect of management and public administration, and
Public Sector Quality deal with the challenges of improving public sector quality;
5.10 Current Issues and Future Trends  To understand the importance of current issues and future
issues with particular reference to e – government.
5.11 Summary  Summarise topic areas covered in unit


United Kingdom.
India.

5.1 Introduction
The module in the first four units, attempted to outline, discuss and introduce students to contemporary issues in
respect of public management reforms, in respect of a host of issues that permeate the initiatives that encompass
NPM reform, in both developing and developed countries. In so doing, the first chapter discussed change and
innovation in respect of the challenges confronting public administration, in terms of reform.
Naturally, leading from this, the issue of the rule of law was placed on the agenda of our discussion, outlining its
importance to reform and public management, and the pursuit of the rule of law in relationship to public
administration discourse and initiatives. In the third chapter, we focused on the importance of decentralization of
government structures, as it pertains to the new momentum of the NPM initiatives, in selected developed and
developing countries. Automatically, leading from this, we clarified the different systems utilized in public
administration, in respect of providing public services, and, in so doing, we chose to discuss the budgeting and
accounting system, because of its importance to service delivery and to public sector reform in terms of the NPM.
This was undertaken to clearly show the progress being made, the challenges confronting administrations, and the
problems that have to be dealt with by both developed and developing countries. The chapter also dealt with a
host of political, economic and service delivery issues, in respect of South Africa, and in terms of budgetary
implications in a period of transition. This final chapter will concentrate on some aspects of research and research
methodology, in respect to its importance to the NPM, but more importantly, as it affects public management
implementation. This is undertaken on the basis of introducing the student to some research parameters, in the
quest for improving the practice and application of reform initiatives in the discourse of public administration, as a
whole.
5.2 Distinctive Characteristics of Public Management: Common Assertions and Research Findings
In this regard and in spite of the challenges in designing conclusive research, the steam of assertions and research
findings continues. These research reviews have compiled the arguments and evidence about the distinction
between public and private management. The discourse includes a mixture of the types of studies undertaken, and
summarizes the main points and theoretical positions, the frequent assertions, and the points for which research
evidence exists, and notes points of consensus or conflict. The more recent research contributions are listed below:
Note: The student is referred to and requested to read pages 81 to 90 of the prescribed textbook to get a better
picture of these research contributions and assertions. These are listed as follows for ease of reference. These
must be read for clarity purposes in conjunction with the appendix on pages 92 to 96 also in the prescribed
textbook. This is not for examination purposes.
 Differences in Operating Environments;
 Distinctive Transactions with the Operating Environment;
 Distinctive Public Management Goals, Roles, Structures and Processes;
 Comparative Performance of Public and Private Management; and the
 Conclusions.

5.3 Some Implications for Practitioners and Researchers

The foregoing discussion is undertaken to very briefly outline the leadership of some key features in the public
sector organizational context, in relationship to diffuse power, as it is associated with the network perspective,
divergent objectives, associated with the value perspective, and complex systems of rules, associated with the
practice perspective. The multifaceted framework focuses the attention of both practitioners and researchers on
the essential features of leadership in public organizations.
For practitioners, the framework suggests a need to look beyond leaders as individuals to examine the processes
associated with acquiring and using power, legitimacy and knowledge. For example, drawing on the network
perspective, a public leader must see himself as embedded in an ongoing process shared with others, not as an
external authority able to impose his/her will. Attention must, therefore, be given to understanding what actors
inside and outside the organization want and can support, and designing and redesigning managerial projects that
can slide through windows of opportunity where interests converge long enough to ensure irreversibility.
Drawing from the value perspectives, leaders need to consider what fundamental societal value systems are in
play, how they are reconciled, and how to modify the organization and themselves as individuals to best represent
values of the organization’s identity. To deal with comparing logics, the leader must also attempt to bridge alternate
identities and value systems that are nevertheless inherent to the organization’s existence and survival. Finally,
the social practice perspective brings the leadership process down to earth by showing how patterns of decision-
making are embedded in position practices and routines.
Some leaders are more skilful than others in using routines, interactions and other tools available to them to move
events in directions they seek to promote. These skills can be acquired both individually and organizationally
through active participation in the routines of strategic decision making. Achieving genuine impact in complex public
sector contexts requires skilful effort over a long time: this is a call for patience, persistence and subtlety. The most
successful leaders will be those who are willing to commit both to their organizations and to desired managerial
and strategic developments over the longer-term.
For researchers, taking into account these three perspectives will direct leadership studies towards a more dynamic
process and contextual vision of leadership that adds richness and depth to the static variable-based conceptions
that have dominated in the past. However, this will require recourse to more qualitative, longitudinal research
methods that follow leaders and leadership teams over time, to reveal cycles of leadership actions and their
consequences. Even so, this is not a methodology that promotes easy prediction.
There are no simple recipes for leadership effectiveness through having appropriate traits, fitting one’s style to the
context, or being charismatic although all these undoubtedly play a role. Moreover, these perspectives do not
plump down on one side or other of the entrepreneurship – stewardship debate, but could be compatible with both

of them depending on whether leaders decide to destabilize old networks, build new ones and act as critics or
creators of new routines or whether they promote stability of existing networks, defend established conventions
that reconcile competing values and develop their leadership skills through the rehearsal and usage of existing
routines.
Whichever path they take, they will need to build on and deal with the three underlying forces that we have
suggested embody leadership in public organizations: power acquired by collectively operating within networks,
legitimacy acquired by incarnating and bridging the values that lie at the heart of organizational identity, and
knowledge that is embedded in and acquired through participation in organizational routines and practices.
5.4 History: The Individual Worker and Professional Quality

The “craft – based” theory of quality is that the “goodness” of the artisan’s product – its fitness for purpose and
artistry – is largely dependent on their skill, which, in turn, comes from many years’ experience and an
apprenticeship with a master. By emphasizing the quality of their services to the public, some workers were able
to convince customers and cast doubts about the proficiency of those who were not members of their exclusive
organization. In more recent history, the profession built on the craft approach to quality. The traditional
professional approach to quality is individual and thorough education and regulation, both largely run by the
professions.
5.5 State Regulation and Public Sector Quality

The involvement of the state and government in service quality also has a long history. The state has acted to
regulate certain work of workers, often on the rationale of protecting the public. Neither the professions nor the
state’s exposed concern for the welfare of the public, however, were the only factors in their actions.
For professions, quality issues coincided with winning and protecting markets. For the state, regulation could
provide income and government leaders could trade favours with the rising professional elites. Attention to quality
has always combined altruistic and self – serving motives, no less so for the recent managerial focus on quality
which provides one way of increasing control or reducing management – employee conflicts in the large
professional and unionized workforce of public services.
Note: You are requested to read pages 540 and 541 of the prescribed textbook in respect of large – scale
manufacturing for purposes of understanding very briefly the history of the private sector in terms of the emergence
of quality within this sector.
Concern about public sector quality and using quality methods in this sector emerged in the late 1980s.
Consumerism, increasing competition, and the use of quality methods in the commercial sector have led to more
choice and higher quality. The contrast between the choice and services people receive from the commercial and

public sector has grown. Politicians have increased audiences in respect of the privatization of certain aspects of
the public sector and by contracting services and the welfare state has also been providing for choice and quality,
regardless of the lack of evidence that the private sector provides better quality.
Quality improvement has been one of a number of ideas which have been introduced into public services over the
last twenty years. This has included standards for management, explicit standards for performance management,
focus on outputs and efficiency, concern for safety, greater use of competition and contracting, increase in
accountability for performance and so on. It is against this background that we will look at quality and research in
the public sector, to understand its crucial role in the advancement of public administration and accompanying
reform.
5.6 Definition, Measurement, And Evaluation

(A) Definition
What do we mean by “quality?” Quality can be defined as fitness of purpose or conformance to quality. In other
words, it is defined as the totality of features and characteristics of a product or service that bear on its ability to
satisfy stated or implied needs. These definitions do not recognize the economics of quality or the legal or
regulatory context, both of which are important in public services.
A definition for public services then could be or is “meeting the wants and needs of those who need the services
most, without waste and within regulations, available resources and the control of the service.” It, therefore,
includes client, professional and management quality. There are a host of different definitions for different public
sector services, for example, in healthcare, it is defined as – accessibility, relevance to need, equity, social
responsibility, efficiency, and effectiveness. In spite of various criticisms as concerned definitions, we ask what
should be the process for defining quality.
The manager or higher levels deciding a definition, with or without customer research, or experts deciding, or a
process involving users or multiple stakeholders in agreeing to a definition, are the issues that research into public
sector services, in the context of reform within public administration, have to address.
(B) Standards and Measurement

A key principle in improving quality is moving from definitions, which may be useful for purposes of general
orientation, to specifying quality for a particular purpose. It is intended for service measurement. Measurement of
quality is a challenge in services. Routine measurement is economically and practically difficult and thus different
measurement systems have been developed.
Although many are useful only for research, rather than everyday purposes, it is not our intention to discuss the
concepts of measurement, in any detail.

(C) Evaluation
Quality evaluation is often termed quality assessment and requires defined standards and ways to measure
performance against the standards. Quality evaluation is comparing the level achieved by a service with either the
standard intended or with levels of similar services, or with the same services at another time. It is increasingly
undertaken by higher levels of government or by organizations that government assigns tasks or services. A
common approach is external quality assurance or audit, where external assessors visit the service and assess
the service against explicit standards. Examples of external systems are EFQM model, 1992; ISO 9000; ISO 2003,
the Swedish educational quality standards assessment system and a system designed specifically for public
services. The question is whether quality evaluation should be voluntary or mandatory. Accreditation is often used
as a requirement to be met before public or private services can receive public funds. There has to be a balance
between assessment for improvement, and assessment for inspection or “policing.”
5.7 Approaches to Quality

Public services have used different approaches to improving quality. One or a combination of the following
overlapping approaches can be utilized:
1) Customer or User Approaches: It is used to improve customer satisfaction by using the measuring of user
perceptions of service, by developing a user focus or listening to the customer: surveys, focus groups,
complaints analysis, customer contact reports, suggestion boxes or forms and mystery shoppers. It means
changing employee’s attitudes towards being more customer-friendly and changing service organization to
provide a more individualized service. These methods have been combined with ideas about user
involvement and community participation which have a longer history in public services.
2) Legal approach: This involves the introduction of laws requiring certain standards, or the granting of explicit
rights or guarantees to service users. Rights may or may not be backed up by legal sanction or procedures
for challenging decisions – usually there is an escape clause, which recognizes what is feasible with available
resources. Some countries have introduced the ombudsman system (South Africa also) for purposes of
raising concerns about services and for seeking redress. Apart from user rights, laws may be introduced to
regulate professionals on quality criteria. The legal approach may also require external assessment or
certification body and for inspection at regular intervals. Inspecting, for example, health service providers for
compliance with quality regulations and many European countries have external health provider assessment
systems.
3) Quality Assessment, Regulation and Accreditation: Accreditation is a certification by an external body that a
provider has met certain quality standards and can be voluntary and compulsory. It has been used mostly for
educational and health services, and for contracted – out supply services. It uses systems for awarding
certificates of competence for practitioners or facilities, for licensing practitioners or facilities to operate, and
for accrediting facilities to show the level of quality they have achieved. There are five methods of self –

assessment, peer review, certification, licensing, and accumulation. The advantages can be to reduce the
harm to service user from incompetent professionals and dangerous services. The disadvantages are that it
can be unpopular with many practitioners and services, takes time and bureaucracy to implement, and that
the resources might be better used for other actions to improve quality.
Activity
Politically review the peer mechanism used by SADC and the African Union for
reviewing the practices of countries in Africa, in terms of peer review
mechanisms, in respect of human rights, corruption, government practice and
other issues. Where does South Africa stand in terms of its review in respect of
governance? .
4) Standards – Based Approach: In this approach, a service will set standards for quality – for inputs, for example
- number of staff or for equipment, processes, for example – waiting times, outcomes, for example – user
satisfaction, error rates, or for all three. Most approaches under the name of “audit” or quality assurance are
this type. Where standards are not met, supervisors have to take corrective action – by training, mentoring
or using other actions or methods. There are three phases to carrying out a standard – based approach:
 Develop standards which will ensure effective and safe care and which are feasible given the resources
available;
 Implement standards: communicate and supervise the standards, and document where standards are not
met;
 Take corrective action where practice falls below standards using problem solving methods. It is an easy
approach which can be implemented through management structures, with advice and support.
Disadvantages are that the management and supervision structure might not be strong enough to
communicate and uphold standards, or there may not be resources for supervision or for effective action if
practice is below standard. It has been observed that showing care to be below standard when nothing can
be done can damage morale.
5) Organization – Wide- and Team-Project Approaches

 It uses approaches where management introduces an organization – wide strategy or assessment system
to improve quality. There are different systems and approaches.
 The ISO 9000 standards for a quality system are used by some public services to create a quality assurance
system which covers all aspects of quality.
 It has been criticized because of the overt use of documentation and having too many technical terms.
 ISO 9000, in recent years, involves Total Quality Management (TQM), including process improvement. The
Baldrige system used in the USA is more attuned to the public service.

 TQM is involved in attitude change for enabling staff to learn and use quality methods in order to reduce
costs and meet the requirements of customers.
 TQM has been applied in a number of hospitals, clinics and health organizations in Europe.
 It involves team based improvement projects and a customer orientation across the organization. The
approach has not been easy to implement.
It has to be borne in mind that the issues of quality have been raised above, in terms of its importance to public
administration and in a quest to find solutions to vexing issues and challenges that confront public management,
in a period of change. To this end, there is no doubt that public administration and management requires continuous
research in this direction for purposes of better quality of services to the public by the public sector. Without quality,
there can only be mediocrity and resistance to government initiatives. There is management resistance towards
empowering employees and this is due to a lack of understanding the influential role that research findings can
play in respect of improving quality. Sustaining improvement has been difficult where there are no incentives or
where quality measurement is poor and has not given feedback of the results of people’s efforts.
5.8 Quality Research

Several themes and subjects have been addressed by research, and there are a number of discussions of the
applicability of private sector quality methods in the public sector and reports of experiences and issues in adapting
them. Some research considers implementation approaches and strategies. Some research has compared public
and private service quality. There are also many reports of experiences in specific services, for example, local
government services, public leisure services, government purchasing agencies and public utilities.
 Most research into quality in the public sector has consisted of studies to examine users, wants and service
experience, descriptive or result studies of quality programmes, or theoretical and conceptual studies.
 Many reports of results are by consultants or those leading quality programmes, and even the research
literature shows a publication bias towards positive results.
 There are methodological problems in evaluating quality initiatives, including issues about which criteria to
use to assess success and results.
 It is difficult to generalize from one country or organization, to another, largely because the context of the
initiative appears to be important for success.
 These methodological problems cast doubt on some of the generalized claims for quality methods, made by
many studies, especially concerning quality programmes.
 A quality programme (QP) is the planned activities carried out by an organization or service system to prove
and improve the quality of the service- include whole organizations and are complex issues that need
attention by research.
 Most studies in the public service have involved service experience, description of results of studies of quality
programmes or theoretical or conceptual studies.

 One study in the UK noted twenty-five separate quality programmes in the UK’s National Health Service
(NHS) and many countries are embarking upon accreditation programmes in the absence of research
evidence or of effectiveness of different systems and about different ways to implement them.
 These programmes consume considerable resources, yet little is known of their effectiveness or relative cost
– effectiveness.
 Hospital quality programmes have been most studied and points to the limitations of the studies, and few
studies describe or compare different types of hospital quality programmes.
 Little is known about the sustainability of the programmes or of any long-term results and few studies describe
hospital quality programmes.
 Even when results are available, many hospital organizations have not implemented the recommendations.
 Some of the studies compare public purchasing and some of local partnerships, for example, the care for
older people.
 There is clearly a need for more evaluations and other types of studies of quality programmes which answer
the questions of decision-makers and also build theory about large-scale interventions to complex public
service organizations.
5.9 The Challenges of Improving Public Sector Quality

The literature shows mixed evidence of results with quality methods although most studies consider a narrow set
of results over the short-term and there is more discussion about how to adapt and apply quality methods to public
services and of the reasons why improving quality in public services is difficult. Quality programmes like TQM have
failed to show either mixed results and public sector programmes are more difficult to evaluate than physical
products. Systems of training are required to respond to client needs and different types of accountability in public
services are often in conflict with service imperatives.
Another reason why a simple transfer of quality methods to public services is not possible is because there is often
not a simple individual customer for these services. The primary recipient of education is the student, but there are
also other important customers, parents, industry and society. In reality, quality is only known after the service has
been delivered and improving quality in education and healthcare has been the greatest challenge for a variety of
reasons, including multiple objectives, multiple beneficiaries and professional traditional ownership of quality and
their individual focus and resistance to management – imposed and organization – or system based quality
methods. Public sector workers lack the incentives to improve quality that are experienced by private sector
employees in competitive markets.
Poor quality does not threaten jobs or the organization’s survival in the same way. This is seen as a fundamental
obstacle. In addition, there must be major programmes to transform the bureaucracies, management, culture and
systems. Healthcare management and administration has traditionally had a weaker management role than in the
manufacturing industry. In recent years, professionals have felt their independence and power threatened, and the
idea that management should take a strong role in leading quality is not welcomed.

TQM has faced particular challenges in healthcare and education, promising much but delivering little. The theory
of TQM are management led, the manager’s role is to empower employees to improve quality and his/her role
changes from command to control to one of supporting and facilitating employees and teams.
Managers have to adopt a new role to introduce the methods; then, as employees take more control of the care
process, the role of managers’ changes again. This has not been understood or, where it has, managers have
found change difficult. The greatest challenges faced by public services are reported to be:
 Fully engaging professionals in the organization and process improvement approach, especially doctors in
health services;
 Developing managers to take on a quality leadership role;
 Developing low – cost and relevant data systems to measure quality and give feedback about the results of
quality changes;
 Finding effective ways to address the larger quality problems which involve cross – professional and cross –
agency working issues.
5.10 Current Issues and Future Trends

Over the last ten years, there has been a clash of two different quality paradigms: between the standards /
inspection based approaches and the newer continuous quality process improvement approaches. Whilst it is
unfair to characterize the former as the “police and punish” method, inspection approaches do tend to be based
on the assumption that highlighting employees’ divergence from standards is itself enough to produce quality
improvement. This approach is not effective if employees do not believe in the standards or, if they fear the
consequences of being shown to be below standard, or if they do not have the skills or power to make changes.
It is based on the idea that employees are prisoners of the systems in which they work, and are condemned to
produce poor quality unless they use proven methods to understand and change the systems. This approach is
thought to work when there is already a climate of trust, and the skills and time to use the methods. It also demands
a change of the traditional bureaucratic control hierarchies in public services. Both may be necessary; public
services must have standards, inspection and regulation of quality, and indeed this may be a necessary
precondition for CQI methods and yet there is a tension of incompatibility between these approaches.
A second and related issue is whether quality performance information should be made public, or only disclosed
to and used internally by the service. In education, this debate has been won by those supporting publication –
schools and higher education, in many western countries, publish comparative reports. Publication is strongly
opposed in public healthcare systems. That quality must be measured is rarely disputed by the experts, although
which are the best measures will always be a contentious issue. If the measures are generally agreed to be
adequate, and also allow comparisons, then publicizing these data would produce faster and more significant
quality improvements than only releasing data internally.

Publicizing information is the trend – in healthcare, the question is now becoming, what right do governments, or
others have to withhold data and prevent patients from protecting themselves? The future of quality in public
services is likely to be shaped by a number of external factors, as well as internal influences arising from the
growing quality movement within these services. More importantly, there has to be a sustained attempt in respect
of future trends and challenges to intensify quality research in directions pertinent to the NPM and public
management and public administration, generally.
It is essential for us to project on the challenges of e – government. This is vitally important for the developing and
developed worlds alike. In the opening chapter of this module, we discussed e – government and, to this end, our
discussion will not be complete if we do not place on the agenda the importance of research in this direction and
in respect of the challenges confronting governments, in terms of its importance to future trends concerning public
management and public administration. In this regard, we emphasize that governments must utilize resources in
respect of the development of e – government initiatives, as we enter the second decade of the 21st century. This
research must be directed as follows:
 The IT revolution is sweeping the globe, the direction we choose will determine our future worldwide, and in
the context of public administration, it has to be used as an enabling technology to achieve the broader goal
of good governance. For this, the following research must be undertaken:
 Enhancing effective and efficient administration; improving the quality of life of citizens; establishing
legitimacy and credibility of institutions; making administration responsive, citizen friendly, and citizen caring;
ensuring accountability, securing freedom of information and expression; reducing cost of governance;
 Making every department result – oriented; improving quality of public services; improving productivity of
employees; eradication of corruption to re – establish credibility of government by ensuring integrity of
individuals;
 Removal of arbitrariness in exercise of authority; and use of IT – based services to de – mystify procedures
and improve the citizen – government interface;
 To shift the reform agenda from macro to micro, from generalization to organization – specific solution and
implement these effects in each process of governance.
 It must be created for servicing the customer, the client, the beneficiary, and the citizen;
 Some of the areas that IT should be applied, in respect of e – government, are: urban services; (Think of the
types of services); compliance and payment of taxes; filing of complaints; managing traffic on the roads,
development projects; social security; managing imports and exports of cargo; payment of bills and bookings
for rail, air and ships; appointment and transfer of personnel, filling in of government documents; marketing
of government and information services; checking unauthorized construction, minutes of meetings, various
applications made to government by citizens and so on (Can you think of other possible uses);
 Improving Citizen – Government Interface: Integration of passport, driving licence, ration card, income tax
identification, voter identification, SMART card, public distribution system; immigration information and

monitoring; management of public health; water and power supply, property taxes and monitoring of primary
education;
 Some Critical Factors for Success: Promoting commitment to quality and the search for excellence; training
in IT for good governance; and
 Features of IT – enabled e – Government:
FROM TO
Paper files – torn covers and so on Computer – based files
Hierarchical authority Networked power
Wielding power through hiding information Empowerment through information
Expenditure orientation Performance orientation
Individualistic Organizational
Compliance /inspection Achievement
Batch processing Online processing
Delayed access Instant access
Delayed response Prompt response
Repeated manual data entry EDI
More time for routine repetitive work Creative work
Fear for unknown IT savvy
Status quo Continuous improvement
Activity
Research other areas in which IT can be utilized to improve e – government
within the public sector. Posit reasons as to why e – government is a slow
process in respect of implementation within the public sector of all three
spheres of government, in South Africa
5.11 Summary
 Quality methods assist a service to do what it is meant to do, in a humane and safe way, without waste
and errors. It introduces significant changes in workers’ understanding by learning and using quality
methods, in order to analyse and change work organizations and in the role of management and the
balance of responsibility and control between management and workers.
 Quality methods assist in the total transformation of public sector practices and it can make resources go
further, and that quality concepts can keep a focus on service users.
 They do not alter power relations between professions and for profession specific quality improvement.
 Standards – based approaches can be readily absorbed into a hierarchical bureaucracy.
 The main problem is to getting professions to work together to improve quality.

 Professional boundaries and autonomy are maintained in spite of the criticism on the part of trade unions,
and of managers of quality methods to uphold professional values, and the reassertion of principles which
have declined in importance in the business of public service.
1. In respect to the common assertions and research findings, outline the

distinctive characteristics of public management.
2. Discuss the implications of the essential factors of leadership in organizations

for practitioners and researchers.
3. Explain the definitions, measurement and evaluation criteria in respect to

quality, as they relate to the public sector.
4. There are various approaches utilized in respect of assessing quality.

Discuss these approaches comprehensively.
5. Outline the challenges confronting the public sector in improving public sector
quality.
Analyse the current issues and emerging trends, including that of research
imperatives, and the conclusions reached, and also the importance of IT in e –
government, in terms of how they all relate to quality paradigms within the public
sector, and in terms of public management and administration.

Bibliography
 Ferlie, E. Lynn, L.E. (Jr.). (2005): The Oxford Handbook of Public Management. Oxford University Press: Great
Clarendon Street, Oxford. United Kingdom.
 Chakrabarty, B. Bhattacharya, M. (2005). Administrative Change and Innovation: A Reader: Oxford University
Press. Jai Singh Road, New Delhi. India.


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Bachelor of Public

Unit 1: Administrative Change and Innovation ...................................................................................................... 10

Unit 3: Decentralization in Contemporary Public Management ............................................................................. 58

Unit 4: Budget and Accounting Reforms ............................................................................................................... 72

Unit 5: Contemporary Issues in Public Management .......................................................................................... 105

Bibliography ........................................................................................................................................................ 120

We hope you enjoy the module.

1 MANCOSA – Bachelor of Public Administration Year 3

The objectives of this module in Public Administration are as follows:

MANCOSA – Bachelor of Public Administration Year 3 2

C. Exit Level Outcomes and Associated Assessment Criteria of the Programme

Exit Level Outcomes (ELOs) Associated Assessment Criteria (AACs)

 Students need to apply these concepts in

 List three arms of Government  Demonstrate understanding of functions of the

 Evaluate the effectiveness of three spheres of

 Examine different systems of Government  Apply political concepts and terminologies to

D. Learning Outcomes and Associated Assessment Criteria of the Module

LEARNING OUTCOMES OF THE MODULE ASSOCIATED ASSESSMENT CRITERIA OF THE

 Intellectually, politically, and administratively  Dynamics of administrative change and innovation

3 MANCOSA – Bachelor of Public Administration Year 3

 To be in a position to crystallise the issues of

 Be in a position to situate the discussion, in the  International public management is evaluated to

 Understand the context in which

MANCOSA – Bachelor of Public Administration Year 3 4

5 MANCOSA – Bachelor of Public Administration Year 3

to understand the importance of corruption and

E. Learning Outcomes of the Units

MANCOSA – Bachelor of Public Administration Year 3 6

F. Notional Learning Hours

Tutorials: individual groups of 30 or less 0

Practical workplace experience (experiential learning/work-based learning etc.) 0

Independent self-study of specially prepared materials (case studies, multi-media, etc.) 27

G. How to Use this Module

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I. Prescribed and Recommended Textbook/Readings

The prescribed and recommended textbooks/readings for this module is:

Special Feature Icon Explanation

The Associated Assessment Criteria is the evaluation of the students’

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PRACTICAL Practical Application or Examples will be discussed to enhance

APPLICATION understanding of this module.

Case Studies are included in different sections in this Module Guide.

You may come across links to Videos Activities as well as instructions

VIDEO ACTIVITY on activities to attend to after watching the video.

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Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT

1.1 Introduction  Introduce topic areas for the unit

1.6 Evaluation sector organizations locally, nationally and internationally, with

1.8 Street – Level Bureaucracy management and government.

1.9 Representative Bureaucracy

1.14 Concluding Remarks

Prescribed and Recommended Textbooks/Readings

 Ferlie, E. Lynn, L.E. (Jr.). (2005): The Oxford Handbook of Public

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1.2 Administrative Change in The Changing World