CHAPTER THREE

OVERVIEW OF MAJOR AREAS OF PUBLIC ADMINISTRATION AND PUBLIC LAW

INTRODUCTION
Public administration covers many areas. It is an interdisciplinary field of study; uses knowledge of
economics, financial management, sociology, public policy, human resource management, statistics,
and public finance just to mention some. In this chapter, you shall learn about the public policy,
public personnel administration and public financial administration.
Human Resource Management (HRM) is a relatively new approach to managing people in any
organization. People are considered the key resource in this approach. It is concerned with the
people dimension in management of an organization. Since an organization is a body of people, their
acquisition, development of skills, motivation for higher levels of attainments, as well as ensuring
maintenance of their level of commitment are all significant activities. These activities fall in the
domain of HRM.
Human Resource Management is a process, which consists of four main activities, namely,
acquisition, development, motivation, as well as maintenance of human resources. Scott, Clothier
and Spriegel have defined Human Resource Management as that branch of management which is
responsible on a staff basis for concentrating on those aspects of operations which are primarily
concerned with the relationship of management to employees and employees to employees and with
the development of the individual and the group.
Human Resource Management is responsible for maintaining good human relations in the
organization. It is also concerned with development of individuals and achieving integration of goals
of the organization and those of the individuals.
Northolt considers human resource management as an extension of general management, that of
prompting and stimulating every employee to make his fullest contribution to the purpose of a
business. Human resource management is not something that could be separated from the basic
managerial function. It is a major component of the broader managerial function.
French Wendell defines “Human resource management as the recruitment, selection, development,
utilization, compensation and motivation of human resources by the organization”.
3.1. Public Resources
3.1.1. Public Personnel Administration
The success of any organization depends on the human sources and how they are treated in the
organization. Many of the Japanese companies have proved that the success is achieved through the
employees the organization possesses. Akio Morita the founder of Sony Corporation once said that
‘there is no “magic” in the success of Japanese companies in general and Sony in particular. The
secret of their success is simply the way they treat their employees." Nestle'sCEO, Peter Brabeck
also ofthe view that every single person in the organization should ask himself or herself-“is there
anything I can do to add a little more value to the company?”

According to L. D. White “many elements combine to make good administration, leadership,

organization, finance, morale, methods and procedures; but greater than any of these are manpower.”
It is a fact that well thought out and well- planned policies fail to succeed and the best organizations
based on scientific principles breakdown if the human material is not competent to execute the work.
Really no activity of public administration can be performed today without civil servants. The
employees, officers, servants who fill various positions in an organization are collectively known as
“personnel” in public administration. The problems of personnel administration are the most
important and most complex. Other problems of public administration are easy and simple because
they affect only the employees. But the problem of personnel administration affects the public. The
general public is concerned in the sense that it wants a system of personnel wherein all citizens will
have an equal opportunity to enter the government service and rise to higher grades on the basis of
talent and qualification. The government as an employer is interested in securing efficient personnel
and in getting the maximum work for a minimum expenditure. The employees are interested in
getting a good pay, proper work conditions, security of job and a handsome pension at
retirement.Under the impact of science and technology, the activities of the state have multiplied. At
every step the citizen comes into contact with the personnel who is the sovereign factor in public
administration. In fact the government service is presented as a life career. By this it is meant that
steps shall be taken to make public employment a worthwhile life work, with entrance to the service
is open and attractive to young men and women of capacity and character and with opportunity of
advancement through service and growth to posts of distinction and honor. It is also considered as an
honorable occupation which one normally takes up in youth with the expectation of advancement
and pursues until retirement.
Personnel administration or management is that part of administration concerned with the
management of people at work. In other words the central concern of personnel management is the
efficient utilization of employees of an organization. Some people would argue that personnel
management is simply a collection of people-management techniques, which can be used in all
organizations. However, as Margaret Attwood and Stuart Dimmock (1996) noted, the validity of this
definition or understanding is doubtful since techniques applied in one organization for the effective
utilization of staff may fail elsewhere.

In recent years, the term "human resource management" has been frequently being used in reference
to "personnel management". Most organizations have a specialist personnel department that gives
support to managers and supervisors who have direct responsibility for the management of people.
Thus, the function of a personnel department is to assist with the acquisition, development and
retention of the human resources necessary for the success of the organization.

3.1.2. Meaning and Characteristics of Personnel Management

The terms Personnel Management, Personnel Administration and Human Resources Management
are similar and used interchangeably mean the same. They all mean the activities of group of
persons, each cooperating to achieve common interest (Mbieli, 2006). The term personnel refer to
workers, employees or labor on one hand while management on the other hand means the act of
blending human and material resources to make things happen. In organizational setting, resources
have to be considered before making any meaningful planning, budgeting and recruitment. In many
establishments, the techniques of personnel selection are used not only in the hiring of new
employees but also in connection with promotions, disciplines, discharges, transfers, and others
personnel decisions. Personnel Management centered on employment, education and training,
wages and salaries, industrial relations, health and safety, and also on the welfare of employees.
From the above, we can deduce the personnel management is therefore that specialist department
(Mbieli, 2006) responsible for following functions:

 Recruitment;  Transfer;
  Selection;
 Placement;  Promotion;
 Induction;  Discipline (e.g., demotion, termination, dismissal etc)
 Compensation;  Provision of safety against hazards and
 Motivation;  Serves as a link between employees and management.
 Training;

Towel, Schoen and Hilgant, (2009), believe that personnel management function focuses upon
planning, organizing, staffing, directing and coordinating the activities of human resources, the
personnel in a working organization. From the above definition, we can deduce that personnel
management consists of those management functions and activities related to the acquisition,
development, and maintenance of human resources in a working organization. You will discover in
the course of your program that many concepts and terms used in management sciences have
slightly varying definitions depending upon who is defining them.

Personnel management, which is our concern here, takes place in differing organizations or
establishments. Our focus here is concerned with personnel management in the public sector such as
the environment of government organizations and institutions. The processes of Personnel
Management in the public organizations may virtually be the same with that of the private
sector, but with little modification and concession. Private organizations which are the direct
opposite of public organizations are organizations not owned by the government Personnel
Management is the management process that is concerned with maintenance of human relations, the
physical wellbeing of employees, and man power planning of personnel. Personnel Management can
also be defined as the process of obtaining and maintaining a satisfactory and a satisfied work force.

The following are the Characteristics of Personnel Management:

i) Ability to select the right person for the right job
ii) Motivate them to happily contribute for the success of the organization
iii) Guarantee efficient employees and effective organization and;
iv) Proper care to the serving and retired employees as both are duty bound to contribute for
progress of the organization. Mbieli, (2006:257)
3.1.3. Nature of Human Resource Management
The emergence of human resource management can be attributed to the writings of the human
religionists who attached great significance to the human factor. Lawrence Apply remarked,
“Management is personnel administration”. This view is partially true as management is concerned
with the efficient and effective use of both human as well as non-human resources. Thus human
resource management is only a part of the management process. At the same time, it must be
recognized that human resource management is inherent in the process of management. This
function is performed by all the managers. A manager to get the best of his people must undertake
the basic responsibility of selecting people who will work under him and to help develop, motivate
and guide them. However, he can take the help of the specialized services of the personnel
department in discharging this responsibility.
The nature of the human resource management has been highlighted in its following features:
1. Inherent Part of Management: Human resource management is inherent in the process of
management. This function is performed by all the managers throughout the organization rather that
by the personnel department only. If a manager is to get the best of his people, he must undertake the
basic responsibility of selecting people who will work under him.
2. Pervasive Function: Human Resource Management is a pervasive function of management. It is
performed by all managers at various levels in the organization. It is not a responsibility that a
manager can leave completely to someone else. However, he may secure advice and help in
managing people from experts who have special competence in personnel management and
industrial relations.
3. Basic to all Functional Areas: Human Resource Management permeates all the functional area
of management such as production management, financial management, and marketing
management. That is every manager from top to bottom, working in any department has to perform
the personnel functions.
4. People Centered: Human Resource Management is people centered and is relevant in all types of
organizations. It is concerned with all categories of personnel from top to the bottom of the
organization. The broad classification of personnel in an industrial enterprise may be as follows: (i)
Blue-collar workers (i.e. those working on machines and engaged in loading, unloading etc.) and
white-collar workers (i.e. clerical employees), (ii) Managerial and non-managerial personnel, (iii)
Professionals (such as Chartered Accountant, Company Secretary, Lawyer, etc.) and non-
professional personnel.
5. Personnel Activities or Functions: Human Resource Management involves several functions
concerned with the management of people at work. It includes manpower planning, employment,
placement, training, appraisal and compensation of employees. For the performance of these
activities efficiently, a separate department known as Personnel Department is created in most of the
organizations.
6. Continuous Process: Human Resource Management is not a ‗one shot ‘function. It must be
performed continuously if the organizational objectives are to be achieved smoothly.
7. Based on Human Relations: Human Resource Management is concerned with the motivation of
human resources in the organization. The human beings can‘t be dealt with like physical factors of
production. Every person has different needs, perceptions and expectations. The managers should
give due attention to these factors. They require human relations skills to deal with the people at
work. Human relations skills are also required in training performance appraisal, transfer and
promotion of subordinates.
3.1.4. Objectives of Human Resource Management

According to Scott, Clothier and Spriegal, “The objectives of Human Resource Management, in an
organization, is to obtain maximum individual development, desirable working relationships
between employers and employees and employers and employees, and to affect the moulding of
human resources as contrasted with physical resources”.
The basic objective of human resource management is to contribute to the realization of the
organizational goals. However, the specific objectives of human resource management are as
follows:
 To ensure effective utilization of human resources, all other organizational resources will be
efficiently utilized by the human resources.
 To establish and maintain an adequate organizational structure of relationship among all the
members of an organization by dividing of organization tasks into functions, positions and
jobs, and by defining clearly the responsibility, accountability, authority for each job and its
relation with other jobs in the organization.
 To generate maximum development of human resources within the organisation by offering
opportunities for advancement to employees through training and education.
 To ensure respect for human beings by providing various services and welfare facilities to the
personnel.
  To ensure reconciliation of individual/group goals with those of the organization in such a
manner that the personnel feel a sense of commitment and loyalty towards it.
 To identify and satisfy the needs of individuals by offering various monetary and non-
monetary rewards
.
3.1.5. Technical Areas of Public Personnel Administration:
A. Job analysis
Job Analysis is a procedure, by which pertinent information is obtained about a job, i.e., it is a
detailed and systematic study of information relating to the operation and responsibilities of a
specific job. An authority has defined job analysis as “the process of determining, by observation
and study, and reporting pertinent information relating to the nature of a specific job... “It is the
determination of the tasks which comprise the job and of the skills, knowledge, abilities and
responsibilities required of the worker for a successful performance and which differentiate one job
from all others”.
Information provided by Job Analysis
Job analysis provides the following information:
1. Job Identification: Its title, including its code number;
2. Significant Characteristics of a Job: It location, physical Setting, supervision, union
jurisdiction, hazards and discomforts;
3. What the Typical Worker Does : Specific operation and tasks that make up an assignment, their
relative timing and importance, their simplicity, routine or complexity, the responsibility or safety of
others for property, funds, confidence and trust;
4. Which Materials and Equipment a Worker Uses: Metals, plastics, grains, yarns, milling
machines, punch presses and micrometers;
5. How a Job is performed: Nature of operation - lifting, handling, cleaning, washing, feeding,
removing, drilling, driving, setting-up and many others;
6. Required Personal Attributes: Experience, training, apprenticeship, physical strength, co-
ordination or dexterity, physical demands, mental capabilities, aptitudes, social skills;
7. Job Relationship: Experience required opportunities for advancement, patterns of promotions,
essential co-operation, direction, or leadership from and for a job.
Methods of Job Analysis
Four methods or approaches are utilized in analyzing jobs.
These are:
 1. Personal Observation: The materials and equipment used, the working conditions and
probable hazards, and an understanding of what the work involves are the facts which should
be known by an analyst.
2. Sending out of Questionnaires: This method is usually employed by engineering
consultants. Properly drafted questionnaires are sent out to job-holders for completion and
are returned to supervisors. However, the information received is often unorganized and
incoherent. The idea in issuing questionnaire is to elicit the necessary information from job-
holders so that any error may first be discussed with the employee and, after due corrections,
may be submitted to the job analyst.
3. Maintenance of Long Records: The employee maintains a daily record of duties he
performs, marking the time at which each task is started and finished. But this system is
incomplete, for it does not give us any desirable data on supervisor relationship, the
equipment used, and working conditions. Moreover, it is time consuming.
4. Personal Interviews may be held by the analyst with the employees, and answers to relevant
questions may be recorded. But the method is time-consuming and costly.
A comprehensive job analysis program is an essential ingredient of sound personnel management. It
is fundamental to manpower management programs because the results of job analysis are widely
used throughout the programs. The information provided by job analysis is useful, in almost every
phase of employee relations. Essential for Organization and Manpower Planning, Recruitment and
Selection, Wage and Salary Administration, Job Re-engineering
B. Job Description

Job Description is nothing but a short one or two page written summary of job analysis findings. The
output from analysis of a job is used to develop a job description and its job specifications. Job
Description is summarized job analysis information in a readable format and provides the basis for
defensible job-related actions. They also identify individual jobs for employees by providing
documentation from management. In most cases, the job description and job specifications are
combined into one document that contains several different sections. A job description identifies
the tasks, duties, and responsibilities of a job. It describes what is done, why it is done, where it is
done, and briefly, how it is done. Then, performance standards can flow directly from a job
description and indicate what the job accomplishes and how performance is measured in key areas of
the job description. The reason for including the performance standards is clear. If employees know
what is expected and how performance is to be measured, they have a much better chance of
performing satisfactorily.
Job description is a written record of the duties, responsibilities and requirements of a particular job.
It is concerned with the job itself and not with the work. It is a statement describing the job in such
terms as its title, location, duties, working conditions and hazards. In other words, it tells us what is
to be done and how it is to be done and why. It is a standard of function, in that it defines the
appropriate and authorized contents of a job.
Job description helps top executives, especially when they jointly discuss one another‘s
responsibilities. Overlapping or confusion can then be pointed out questions can be raised about the
major thrust of each position, and problems of structure can be identified. A job description becomes
a vehicle for organizational change and ‘improvement.

A job description contains the following:

1. Job identification, which includes the job title, alternative title, department, division, and plant
and code number of the job. The job title identifies and designates the job properly. The department
division, etc. indicate the name of the department where it is situated-whether it is the maintenance
department, mechanical shop etc. The location gives the name of the place.
2. Job Summary serves two important purposes. First it provides a short definition which is
useful as additional identification information when a job title is not adequate. Second, it serves as a
summary to orient the reader toward an understanding of detailed information which follows. It
gives the reader a quick capsule explanation‖ of the content of a job usually in one or two sentences.
3. Job duties give us a comprehensive listing or the duties together with some indication of the
frequency of occurrence or percentage of time devoted to each major duty. It is regarded as the heart
of a job.
4. Relation to other jobs: This helps us to locate the job in the organization by indicating the job
immediately below or above it in the job hierarchy. It also gives us an idea of the vertical
relationships of work flow and procedures.
5. Supervision: Under it is given the number of persons to be supervised along with their job titles,
and the extent of supervision involved – general, intermediate or close supervision.
A job description enables us to frame suitable questions to be asked during an interview. It is
particularly helpful when the application from is, used as a tool for eliminating the unfit personnel.
 C. Recruitment and Selection
Recruitment is a process of finding and employing individuals to carry out the tasks that need to be
done within an organization. Selection is the last part of the recruitment process when the
organization decided who to employ from the candidates available. Recruitment is also referred as a
process of generating a pool of qualified applicants for organizational jobs. The staffing process
matches people with jobs through recruitment and selection. We observe that in spite there are plenty
of jobs available, and also people are available with knowledge, skill and abilities, still the
organization find problems in getting the right people. The major reason is the business environment
keeps changing and if the job description is not updated, the recruitment process will not be
effective. If the recruitment process is not effective, the HR department can only compromise. The
other reason which is not directly related toJob analysis and description, could be knowledge of the
requirements to the people seeking jobs, media adopted to advertise about the job requirements, how
the information is communicated etc. also influences the recruitment and selection process.

Recruitment is often treated as an experienced based activity with members of the recruiting
organization knowing more about the practice and process of recruitment rather than treating it as a
body of knowledge. For such people who do not consider recruitment as a body of knowledge, the
recruitment may be just a replacement or an entirely new job and vacancy, or the organization is
short of people, necessity to have a person to do a task etc. But for a successful recruitment process,
the recruiter in the HR Department first should understand the recruitment process, must be skilled
and must adopt a systematic approach.

Recruitment means search of the prospective employee to suit the job requirements as represented by
job specification–a technique of job analysis. It is the first stage in selection which makes the
vacancies known to a large number of people and the opportunities that the organization offers. In
response to this knowledge, potential applicants would write to the organization. The process of
attracting people to apply in called recruitment.
Dale S. Beach has defined “Recruitment as the development and maintenance of adequate manpower
resources. It involves the creation of a pool of available labor upon whom the organization can
depend when it needs additional employees.”
According to Edwin B. Flippo Recruitment is the process of searching for prospective employees
and stimulating them to apply for jobs in the organization.
There are two sources of recruitment; generally classified as internal source and external source.
A. Internal Sources: This refers to the recruitment from within the company. The various internal
sources are promotion, transfer, past employees and internal advertisements.
B. External Sources: External sources refer to the practice of getting suitable persons from outside.
The various external sources are advertisement, employment exchange, past employees, private
placement agencies and consultants, walks-ins, campus recruitment, trade unions, etc.
The following external sources of recruitment are commonly used by the big enterprises:
1. Direct Recruitment: An important source of recruitment is direct recruitment by placing a notice
on the notice board of the enterprise specifying the details of the jobs available. It is also known as
recruitment at factory gate. The practice of· direct recruitment is generally followed for filling
casual vacancies requiring unskilled workers. Such workers are known as casual or badly workers
and they are paid remuneration on daily-wage basis. This method of recruitment is very cheap as it
does not involve any cost of advertising vacancies.
2. Media Advertisement: Advertisement in newspapers or trade and professional journals is
generally used when qualified and experienced personnel are not available from other sources. Most
of the senior positions in industry as well as commerce are filled by this method. The advantage of
advertising is that more information about the organization job descriptions and job specifications
can be given in advertisement to allow self-screening by the prospective candidates. Advertisement
gives the management a wider range of candidates from which to choose. Its disadvantage is that is
may bring in a flood of response, and many times, from quite unsuitable candidates.
3. Management Consultants: Management consultancy firms help the organizations to recruit
technical, professional and managerial personnel they specialize middle level and top level executive
placements. They maintain data bank of persons with different qualifications and skills and even
advertise the jobs on behalf their clients to recruit right type of personnel.
4. Educational Institutions or Campus Recruitment: Jobs in commerce and industry have become
increasing technical and complex to the point where school and college degrees are widely required.
Consequently big organizations maintain a close liaison with the universities, vocational institutes
and management institutes for recruitment to various jobs. Recruitment from educational
institutional is a well -established practice of thousand of business and other organisations.1t is also
known as campus recruitment. Reputed industrial houses which require management trainees send
their officials to campuses of various management institutes for picking up talented candidates doing
MBA.
5. Recommendation: Applicants introduced by friends and relatives may prove to be a good source
of recruitment. In fact, many employers prefer to take such persons because something about their
background is known. When a present-employee or a business friend recommends someone for a
job, a type of preliminary screening is done and the person is placed on a job.
Labor is not preferred by many businesses, organizations. Recruitment through labor contractors has
been banned for the public sector units.
1. Telecasting: The practice of telecasting of vacant posts over T.V. is gaining importance these
days. Special programs like ‘Job Watch‘, ‗Youth Pulse‘, Employment News‘, etc, over the T.V
have become quite popular in recruitment for various types of jobs. The detailed requirements of
the job and the qualities required to do it are publicized along with the profile of the organization
where vacancy exists. The use of T.V. as a source of recruitment is less as compared to other
sources.

D. Job Evaluation
Job Evaluation is a system wherein a particular job of an enterprise is compared with its other jobs.
In the present industrial era, there are different types of jobs which are performed in every business
and industrial enterprise. Comparative study of these jobs is very essential because on the basis of
such study the structure of wages for different types of jobs is prepared. The comparison of jobs may
be made on the basis of different factors such as duties, responsibilities, working conditions, efforts,
etc. In nut shell, it may be said that job evaluation is a process in which a particular job of a business
and industrial enterprise is compared with other jobs of the enterprise. Some scholars name it the
determination of job rate. Kimball and Kimball define job evaluation as “an effort to determine the
relative value of every job in a plant to determine what the fair basic wage for such a job should be”.
According to Wendell French, “job evaluation is a process of determining the relative worth of the
various jobs within the organization, so that differential wages may be paid to jobs of different
worth.” The relative worth of a job means relative value produced. The variables which are assumed
to be related to value produced are such factors as responsibility, skill, effort and working
conditions.

Job evaluation is a process of comparing jobs with other jobs in terms of the demand a job makes on
the worker. It does not set the price of a job; it merely fixes its relative worth. It presents an effort to
determine the relative value of every job in a plant, and to determine what the fair basic wage for
such a job should be. It is not evaluating the, merit of the worker who is doing the work. It rates the
job and not the qualities of the individual worker on the job, which is the task of employee rating.
We may define job evaluation as a process of analyzing and describing positions, grouping them and
determining their relative value of comparing the duties of different position in terms of their
different responsibilities and other requirements.
Objectives of Job Evaluation
The following are the objectives of job evaluation:
 To secure and maintain complete, accurate and impersonal descriptions of each distinct job
or occupation in the entire plant;
 To provide a standard procedure for determining the relative worth of each job in a plant;
 To determine the rate of pay for each job which is fair and equitable with relation to other
jobs in the plant, community or industry;
 To ensure that like wages are paid to all qualified employees for like work;
 To promote a fair and accurate consideration of all employees for advancement and transfer;
 To provide a factual basis for the consideration of wage rates for similar jobs in a
community and industry; and
 To provide ‘information for work organization, employees ‘selection, placement, training
and numerous other similar problems.
3.2. The Concept of A Career Civil Service
Herman Finer, quoted in RumkiBasu (1994:295), defines the civil service as a "professional body of
officials, permanent, paid and skilled". In this connection, a civil servant may be understood as a
"servant of the general public (not being the holder of a political or judicial office), who is employed
in a civil capacity and whose remuneration is wholly paid from the budget provided by the
parliament any legitimatized body of the government". This excludes members of the armed forces
and judicial services. The civil service constitutes the "permanent" executive in the modern state.
With the increasing variety in the functions of the civil service, the new category of employees (both
technical and generalist in character) working under the public sector are being gradually added to
the category of civil servants everywhere. The major requirement of the civil service is that it shall
be "impartially selected, administratively competent, politically neutral, and imbued (instilled) with
the spirit of service to the community".

Willoughby defined career civil service as:

"A system that offers equal opportunities to all citizens to enter the government service, equal pay to
all employees doing work requiring the same degree of intelligence and capacity, equal opportunities
for advancement, equal favorable conditions and equal participation in retirement allowances and
makes equal demands upon the employees".
Career civil service has been understood as a system aimed at recruiting young people having the
talent and ambition, with capacity for learning and growth, training them in order to develop their
potentialities for the service of the state. Despite there have been historical traces for the existence of
some sort of a rudimentary civil service, for example in ancient china and Egypt, concept of civil
service as a career is comparatively a recent origin even in those developed countries. England had
no permanent civil service until the middle of the 19th century and USA until the end of that
century. The "patronage system" and the "spoils system" that prevailed in England and the USA
respectively have delayed the development of a merit-based public career system until those
mentioned periods.

According to Dr. Finer, the growth of the cardinal principles of modern civilization brought about
the establishment and growth of a professional civil service. Some of those principles were the
principles of specialization and division of labor, the democratic ideas of "career open to talents",
etc. The Civil service is the chief instrument for the implementation of the will of the state as
expressed through public policy. It is indispensable to the functioning of the modern state. With the
change in the philosophy of the state from the laissez faire to that of the social welfare, the modern
state involved itself in multifarious tasks, which are performed by the civil service. The basic task of
the civil servants is to transform politics into action. Besides, the higher echelons of the civil service
assist their political superiors in policy-formulation through expertise advice, assistance, and
information. With the diversification of the nature of the civil service personnel, civil servants of the
technical category engaged in various productive and public sector organizations are rendering
useful social and economic services to the people.

Therefore, the tasks of the civil servants became comprehensive, directly impinging on the lives and
welfare of citizens. Due to the increasing significance of the civil service in modern societies and the
assumption of responsibility by the state for the performance of various socioeconomic functions, it
has become necessary or imperative to recruit persons and thereby build competence for the civil
service.

Professionalization of the civil service became absolutely necessary to attract the best available
talent to government jobs and enable them to make a rewarding career of it. For example a
Commission established in 1933 in the US defined the concept of career civil service and identified
its main characteristics as:
  High prestige and status attached to government service,
 Appropriate recruitment procedures,
 Broad avenues for promotion and transfer of personnel,
 Clear pay scales, and
 Adequate retirement and pension system
In addition/similar to the above outlined ones, the main characteristics of a career civil service that
have got common acceptance are:
 Permanence of tenure and stability of service,
 Equal opportunity of competing for government services,
 Merit to be the sole criteria of recruitment with due recognition to ability and personal
efficiency in a sound promotion system,
 Fairly large extent of territorial jurisdiction of public employees to enlarge their scope of
activity and improve their avenues for promotions, and
 Adequate steps taken to provide in-service training to civil servants to keep them in touch
with the latest trends and developments in administrative theory and practice.
Powell also suggested the incorporation of (a) planned and continuing upward progression system,
and (b) planning of staff needs to be included in the provisions of a career civil service. The system
of career civil service is applicable to all ranks of administration from the highest to the lowest
grades and to all levels of government.

Ideally, a career civil service is a system of service, with recruitment on merit, security of tenure,
and due recognition of service and merit through timely promotions. Every organization has its own
service systems comprising permanent civil service groups, whose size and function depend on the
nature of the organization. Modern civil service constitutes people with both general and technical
qualifications. Personnel administration involves a number of tasks that range from recruitment to
retirement and pensioning. The most identifiable tasks of personnel management (administration) are
discussed in brief as follows.

3.3. Public Policy

Public administration theorists have been concerned with attempts conceptually to distinguish policy
and administration. The distinction, which was probably based on a confusion of politics and
administration, has always been somewhat fictional. There are therefore two principle features of
policy:
Policy is concerned with either change (its dynamic aspect), or with the preservation of the status
quo (its static aspect), and there is no clear distinction between policy and administration and both
contain dynamic elements. The existence of a passive executor administration is no longer a
justifiable assumption.
Policy formulation is necessary prior to every action in every form of organization, be it private or
public. It is thus a prerequisite for all management. The different definitions of public policy reflects
its multi-faceted nature, yet all draw elements of public decisions, choices, positions and statements
of intents.

3.3.1. The Meaning of Public Policy

Public Policy is the chief instrument of a politically organized community. The entire process
involving/concerning public policy needs to be distinguished primarily from two dominant angles.
From the input side, the articulation of needs and interests, and the factors determining the ‘choice’
of activity have to be identified. From the output side, a distributive analysis has to be undertaken, in
that the impact of the policy has to be assessed. This brings out two major dimensions to public
policymaking.

In the first dimension, public policy is seen as an instrument of effective control over the
environment, in that it harbours the potential to create “fundamental social transformation” or that
could significantly influence the environment. The second dimension is that it “derives the
normative values on which it is based from the environment.” Public policy, thus, both acquires and
imparts values from/to the environment. It is the chief means by which the input-throughput and
output of government activity is performed. Public policies are those, which are developed by
governmental bodies and officials. The special characteristics of public policies as differentiated
from other policies emanate from the fact that they are by "authorities" in a political system namely,
"elders, chiefs, executives, legislatures, judges, administrators, councilors, monarchs, and the like".

The question here is that why do we study public policy? There are both academic and political
reasons for studying public policy or engaging in policy analysis. The study of public policy
formulation processes may help to gain greater knowledge and understanding of the complexities of
the interacting social, economic and political processes and their implications for society. Policy
may be viewed either as a dependent or independent variable. If the former is the case, then
attention is placed on the political and environmental factors that help to determine the content of
policy. If public policy is viewed as an independent variable, the focus shifts to the impact of policy
on the political system and the environment. Factual knowledge about the policy-making process
and its outcomes are a prerequisite for prescribing on dealing with social problems normatively. The
study of public policy should be directed towards ensuring that governments adopt appropriate
policies to attain certain desirable social goals. It is not to deny, however, that substantial
disagreements may exist in society over what constitutes "desirable" or the "appropriate" goals of
policy.

In practice, policy formulation overlaps with policy decision in the policy-making process. Policy
formulation aims at getting a preferred policy alternative approved. A policy decision on the other
hand involves action by some official person or body to approve, modify, or reject a preferred policy
alternative. Policy decision when approving a preferred policy alternative takes such forms as the
enactment of legislation or the issuance of an executive order. Therefore, what is typically involved
in the policy decision stage is not selection from among a number of policy alternatives, but action
on the preferred policy alternative. Another point of discussion in the study of public policy is about
the factors determining policy formulation. Policy-making cannot be adequately understood apart
from the environment in which it takes place. Demands for policy actions are generated in the
environment and transmitted to the political system. At the same time, the environment places limits
and constraints upon what can be done by policy makers. Hence, environment is a decisive factor on
public policy formulation.

Environment, in turn, includes geographical characteristics as natural resources, climate and

topography; demographic variables like population size, age and sex ratio distribution and spatial
location; political culture; social structure; and the economic system. Of these environmental
aspects, political culture and socioeconomic variables are considered as the more influential factors
in public policy formulation.
Differences in public policy making of various countries can be partly explained in terms of
variations in their political culture. For example, the time orientation of people-their view of the
relative importance of the past, the present and the future has implications for policy formulation. A
political culture oriented more to the past may recognize age-old traditions, customs and social
moves, while future oriented political culture comprehends to change and innovation.
RumkiBasu (1994:273) further identified three types of political cultures as parochial, subject, and
participant. In a parochial political culture, citizens have little awareness of or orientation towards
either the political system as a whole or the citizen as a political participant. Citizen's participation in
the policy formulation in a parochial political culture is essentially non-existent, and government
will be of little concern to most citizens.

In a subject political culture as that of in many developing countries, citizens are oriented towards
the political system, yet they have little awareness of themselves as a participant. They are aware of
governmental authority and they may have political views, but they are essentially passive. In the
subject political culture, an individual may believe that he/she can do little to influence public
policy, which may lead to his/her passive acceptance of governmental action. In the participant
political culture, like that is evidenced in the United States, citizens have a high level of political
awareness and information and have explicit orientations towards the political system as a whole,
and a notion of meaningful citizen's participation in politics. Such orientation includes understanding
of how individuals and groups can influence decision-making.

In the participant political culture, individuals may organize into groups to influence government
action to rectify their grievances. Government and public policy are viewed as controllable by
citizens. It is also assumed that more demands will be made on government in a participatory
political culture than in the other two types. In general, the study of political culture is important
because values, beliefs, and attitudes could inform, guide, and constrain the actions of both decision
makers and citizens.

Public policy is simply whatever governments choose to do or not do”. Here, we are focusing not
only on government action, but also on government inaction (what the government chooses not to
do), and we may contend that government inaction can just create as great an impact on society as
government action. Governments do many things.
Public policies are those, which are developed by governmental bodies and officials. The special
characteristics of public policies as differentiated from other policies emanate from the fact that they
are made by "authorities" in a political system namely, "elders, chiefs, executives, legislatures,
judges, administrators, councilors, monarchs, and the like".
Definitions of policy, specifically public policy, may vary in their scope and level depending on the
perspectives of different writers. The following are examples of such definitions to the subject
matter, as a concept or as a practice:
 Policymaking occurs in the determination of major objectives, in the selection of methods of
achieving these and in the continuous adaptation of existing policies to the problems that
face a government (N. Johnson)
 Public policy is a purposive course of action followed by an actor or set of actors in dealing
with a problem or matter of concern. It is a purposive course of action followed by an actor
or set of actors in dealing with a problem or matter of concern (James Anderson, 1984)
 Public policy is a very complex, dynamic process whose various components make different
contributions to it. It decides major guidelines for action directed at the future. These
guidelines (policies) formally aim at achieving what is in the public interest by the best
possible means (YehezkelDror, 1973)
 Public policy is a conscious, goal-selecting process undertaken by actors in the decision-
making system and it includes the identification of the means of achieving such goals (O.
Saasa)
The following points will make clear the implications of the concept of public policy:
1. Public policy is goal oriented. It is purposive or result oriented action, rather than random
behavior or chance happenings, to accomplish goals and produce results. Goal-orientedness and
attainment of result is the hallmark (characteristic) of public policy. Public policy is formulated and
implemented in order to achieve objectives for the ultimate benefit of the masses in general.
Example:
 Goal: to increase farm income
 Policy: provides subsidizes and utilizes production controls
 Result: incomes of many farmers have increased
2. Public Policy is the outcome of the government’s collective actions. Public policy refers to the
action or decisional pattern taken by public administrators or government officials in a collective
sense on a particular issue over a period rather than their separate discrete decisions on that matter in
an ad hoc fashion.
Example: Industrial health and safety policy is based not only on Occupational Health and Safety
Act, but also by a pattern of administrative and judicial decisions interpreting, elaborating and
applying (or not applying) the Act to particular situations.
3. Policy is what governments actually decide or choose to do, and what subsequently happens,
rather than what they intend to do or say they are going to do. It can take a variety of forms like law,
ordinance, court decisions, executive orders, etc.
Example: If legislature enacts law for the payment of minimum wages by the employer and then
nothing is done to enforce the law, it is not-regulation of wages.
4. Public policies emerge in response to policy demands on some public issue made by other actors
such as private citizens, group representatives, other public officials upon government officials and
agencies.
Examples:
 A municipal government do something about in order to solve traffic congestion
 National government to prohibit the stealing of pet dogs or cats for sale to medical and scientific
research organizations
5. Public policy may be either positive or negative in form. Positively, it depicts the concern of
government and involves some form of government actions regarding any issue or problem. Public
policy in its positive form is based on law and is authoritative; it has a legal sanction behind it, which
is potentially coercive in nature and is binding on all citizens. Negatively, it may involve a decision
by government officials not to take action on a matter on which governmental opinion, attitude, or
action is asked for.
In practice, policy formulation overlaps with policy decision in the policymaking process. Policy
formulation aims at getting a preferred policy alternative approved. Policy decision on the other
hand involves action by some official person or body to approve, modify, or reject a preferred policy
alternative. Policy decision when approving a preferred policy alternative takes such forms as the
enactment of legislation or the issuance of an executive order. Therefore, what is typically involved
in the policy decision stage is not selection from among a number of policy alternatives, but action
on the preferred policy alternative
3.3.2. Categories (Typologies) Of Public Policies
Policy instruments are different approaches to address perceived policy issues or problems in
society. Some policy instruments are more authoritative than others legislation that can be enforced
through other organs of state like police, inspectors, defense force or courts can be regarded as
strong policy instruments. On the other hand, press statements, ministerial speeches, departmental
memoranda and other policy approaches that rely mainly on persuasion in order to be implemented,
can be regarded as weak policy instruments if they are not considered legitimate or if they cannot be
enforced directly and indirectly and are ignored or deliberately resisted by their target audiences.
In democratic policy environments public policies need not always be directly enforceable if a
popularly elected democratic and responsive exists that enjoys a high level of legitimacy and
authority in the eyes and minds of the citizenry. Such voluntary compliance with public policy is an
indication of a stable and advanced policy system. Not all policies can, however, rely on voluntary
compliance, especially if they curtail or reverse existing rights and benefits, and are perceived by
some to be favoring certain individuals or interests above others. Clear benefits resulting from
compliance with a policy as well as effective enforceability and sanctions and penalties linked to
non-compliance with a policy, are therefore important attributes of good public policies, and
enhance the success potential of such policies (Coning, 2006). In order to come to grips with the
huge task of understanding the nature of policy enactment, political scientists have developed several
typologies to categorize public policy
3.3.2.1. Substantive and Procedural Policies
1. Substantive Policies: involve what government is going to do (e.g. construction of highways,
payment of welfare benefits, prohibition of liquor, acquisition of bombers). Substantive
policies directly distribute advantages and disadvantages, benefits and costs to people.
2. Procedural Policies: pertain to how something is going to be done, who is going to do it (e.g.
which agencies are responsible for illegal drug enforcement).

3.3.2.2. Distributive, Redistributive, Regulatory, and Self-Regulatory Policies

This typology differentiates policies on the basis of the nature of their impact on society and the
relationships among those involved in policy formulations.
1. Distributive Policies: involve the distributive of services or benefits to particular segment of
people such as: individuals, groups, corporations, communities, etc (e.g. Bank loans), or
distribution of benefits to vast number of persons (e.g. Tax concessions, free public school
education). These policies use public funds to assist particular groups, communities and
industries (e.g. flood control, ports improvement, water supply, etc). In very broad terms,
distributive policies create public goods for the general welfare and are a non-zero-sum in
character. In the long run all government policies may considered redistributive, because in
the long run some people pay in taxes more than they receive in services, Or, all may be
 thought regulatory because, in the long run, governmental decisions on the use of resources
can only displace a private decision about the same resource or at least reduce private
alternatives about the resource. These are policies in which the indulged and deprived, the
loser and the recipient, need never come into direct confrontation.
2. Redistributive Policies: involve shifting of the allocation of wealth, income, property, rights
and powers among broad classes of people: haves and have-nots; rich and poor (e.g. land
reforms). These policies attempt to change allocation of wealth or power of some groups at
the expense of others. The same goes for various “welfare state” programs, which are
redistributive only for those who entered retirement or unemployment rolls without having
contributed at all.
3. Regulatory Policies: involve imposition of restrictions or limitations on the behavior of
individuals or groups; they reduce the freedom to act of those who are regulated (e.g. business
regulatory policies related to pollution control or regulation of transportation industries).
These policies specify rules of conduct with sanctions for failure to comply enforcement of an
unfair labor practice on the part of management weaken management in its dealings with
labor. So, while management is firm-by-firm and case-by-case, policies cannot be
disaggregated to the level of the individual or the single firm (as in distribution) because
individual decisions must be made by application of a general rule and therefore become
interrelated within the broader standards of law.
4. Self-Regulatory Policies: are usually sought and support by the regulated group as a means of
protecting or promoting the interests of its members. For example, licensing legislation is
heavily influenced by the practitioners; agricultural policies are influenced by farmers.
3.3.2.3. Material and Symbolic Policies
This classification is done depending upon the type of benefits the policies allocate.
1. A Material Policy: provides tangible resources or substantive power to their beneficiaries,
and they may also impose costs on those who may be adversely affected. Examples of this
policy could be minimum wage act, public housing program and income support payments to
farmers.
2. Symbolic Policies: have little material impact on people and no real tangible advantage or
disadvantages. Rather, they appeal to the values held in common by individuals and society,
values that could include social justice, equality, peace and patriotism (e.g. Peace Pact,
Endangered Species Act, etc). Symbolic policies can be used to either divert public attention
or to satisfy public demand when no substantive benefits are being provided.
3.3.2.4. Policies Involving Collective, Or, Private Goods

1. Collective (Indivisible) Goods: are provided to one and all persons equally and similarly.
This means, if they are given to one individual or group, then they must be provided to all
individuals or groups. For example, national defenses, public safety, traffic control, mosquito
abatement, clean air etc.
2. Private (Divisible) Goods: may be broken into units and charged on an individual user or
beneficiary basis. Various social goods provided by government (e.g. garbage collection,
postal service, medical care, museums, national parks) have some characteristics of private
goods.

3.3.2.5. Liberal and Conservative Policies

Liberal Policies seek government intervention to bring about social change whereas
conservative policies oppose such intervention. Distinction between “liberal” and “conservative” is
slippery and difficult to define such distinction was possible in the latter part of 19 th and 20th
centuries but now has passed into the graveyard of consensus. It could be argued that the distinction
between the two policies has become blurred in recent years and that the division is not about
whether government should intervene but in what areas, in what form, and on whose behalf. Their
respective stand vis-à-vis government.
Liberals
i. To bring social change and greater equality
ii. Public policies to correct social injustices
iii. Economic regulatory programs
iv. Supported welfare programs.
Conservatives
i. Such change should occur slowly
ii. Existing social order satisfactory
iii. Opposed economic regulations
iv. Opposed welfare programs.

Some policy analysis studies arrive at conservative conclusions that favor relatively well-off groups
in a society. Other studies arrive at liberal conclusions that favor relatively deprived groups. The
kind of studies that are most likely to generate objections from liberals may be studies relevant to
environmental protection, occupational health/safety, and antidiscrimination, which argue that the
high monetary costs are not justified by the non-monetary benefits. Those studies place a relatively
high value on the cost of pollution equipment, safety devices, and affirmatively seeking minority
employees, a relatively low value on clean air/water, worker health/safety, or equal opportunity.

The studies that are most likely to generate objections from conservatives may be studies designed to
decrease pollution, on-the-job injuries, and discrimination. They may also be studies seeking neutral
goals such as reduced inflation, unemployment, or crime, but they conclude that the way to do it is
through the public sector rather than the private sector. They may reflect different perceptions of
what happens when one relies on public versus private means for dealing with social problems. The
important point is that there is nothing inherently liberal or conservative in systematic policy
analysis. The methods can be used for maximizing liberal or conservative goals. They can and are
used by socialistic or capitalistic governments.
Conservatives tend to like such methods because it sounds businesslike to talk in terms of benefits
minus costs analogous to income minus expenses. Conservatives also like policy analysis because of
its stress on feasibility and the use of market analogies regarding incentives.
Liberals tend to like such methods because they sound like national economic planning, urban-
regional planning, or at least positive governmental thinking. Liberals or reformers also like policy
analysis because analysts get a lot of credit if they succeed in pushing big changes. This analysis
tends to encourage change. Perhaps the more important point is that any ideological orientation is
likely to be more effective and efficient in achieving its goals if it uses systematic public policy
analysis for choosing among alternative public policies (Nagel, 1992).
3.3.3. Actors in Policy Making Process

Policy is what the government says and does about perceived problems. Policy making is how the
government decides what will be done about perceived problems. Policy making is a process of
interaction among governmental and non-governmental actors, i.e. Policy is the outcome of that
interaction. In a real world context, public policy can be understood as the public solutions that are
implemented in an effort to solve public problems. Policy actors, or “players” are those individuals
and groups, both formal and informal, that seek to influence the creation and implementation of
these public solutions.
3.3.3.1. Institutional Actors
A. Legislature/ Congress
This is a central institution in the policy process because of its legislative authority. The vast
majority of legislative decisions are made in committees- with standing committees, special
committees, joint committees, conference committees, and all of their associated subcommittees.
Committees and subcommittees are responsible for the initial review of draft legislation. Committee
chairs have disproportionate influence over policy as a consequence of their power to determine
policy agendas. Similarly, certain committees have more policy influence than others.
The House Rules Committee, for example, is responsible for determining which bills will be heard
and in what order. The Appropriation Committee in both the House and Senate are responsible for
reviewing any legislation that requires funding. The powers that members of such committee hold,
and the powers of committee chairs, make them key players in the policy process
The organization of Congress itself evolved to maximize the re-electability of members. But, if
members are acting to maximize their individual political futures, their ability to govern in the
national interest is severely limited. The need to satisfy constituents’ interests over national interests
has led to dangerously high levels of pork (political handouts) in legislative outcomes. Committee
decisions, compromises between committees and executive agencies, the influence of staffers, and
the comfortable relationship between legislators and deep pocket lobbyists have even greater policy
importance because they all take place outside of the public eye. Although as a consequence of
political reform in the 1970scommittee meeting are open, staff reports are available for public
review, lobbyists are required to register with the government, and all financial contributions are
public record, few people have the time to closely follow the ins and outs of the policy process.
Consequently, members of Congress and those whose business it is to influence them are generally
free to act without concern for public attention.

B. the President and Executive Bureaucracy

Like Congress, the president is mandated by the constitution of the United Stated of America as a
partner in the policy process, but, unlike Congress, the president can only approve or disapprove
legislation; he or she has no power to amend. Thus, the policy priorities of the president cannot be
directly legislated; rather the president must rely on the power to persuade. If public policy is a
process of identifying problems, identifying solutions, and implementing those solutions, the
identification of problems and solutions, is tied to the assumptions held by players in that stream.
While Congress makes laws, the president can only recommend laws. Yet the president, as chief
executive, may do whatever is necessary to enforce legislation, an enforcement that typically
involves discretionary (subjective judgment) policy decisions. The constitution of United States of
America (Article II, section 2 and 3), define the power of the president as follows:
i. To recommend policy proposals
ii. To act as commander-in-chief of the armed services (the power to move and control
troops, but not to declare war)
iii. To grant pardons and reprieves for federal offenses except in cases of impeachment
iv. To make treaties with advice and consent of the senate
v. To appoint federal judges, ambassadors and consuls, and the heads of cabinet level
departments and regulatory agencies with the advice and consent of the senate
vi. To “faithfully” enforce all laws.

While the president is often looked upon to set the national policy agenda, he or she can only do so
as long as he or she holds an ability to persuade. With the expressed powers of the president limited
to specific areas, effective presidents must rely on their power to persuade members of Congress, the
bureaucracy, the media, and the public. By appointing individuals who share his or her political
perspective and agenda, a president is able to extend influence throughout the executive and judicial
bureaucracies. Cabinet officers and heads of regulatory agencies establish policy priorities within
their agencies. The cabinet officers and agency heads have wide autonomy in defining,
implementing, and enforcing policy. Still, specialization is critical for effective government; the
Department of Defense clearly has different needs and concerns than the Department of Agriculture.
There may, as a result, be little alternative to bureaucratic organization.

C. Courts
The influence of judges in interpreting laws has an equally significant impact on policy. Judicial
policy influence is not restricted to Supreme Court decisions. Appellate courts have also had critical
policy influence in several areas, including abortion and civil rights policy. The policy role of the
judiciary is not universally appreciated. The current debate over judicial activism and judicial
restraint (judges to limit the exercise of their own power)is only the most recent in the long discourse
(discussion). Glazer in Cahn (1995) argues that judicial activism infringes on democratic policy
institutions, and that an activist court erodes the respect and thrust people hold for the judiciary. Still,
whether a court is active or passive, there are significant policy implications. While the Brown
decision may be considered “activist,” for example, had the Court chosen to remain passive, civil
rights policy might have remained nonexistent for many more years. Non-action is in itself a policy
decision with substantial policy implications.

3.3.3.2. Non-Institutional Actors

Public policy is not merely the result of independent policy-making institutions. Policy, then, is a
result of institutional processes influenced by non-institutional actors, such as:
A. Interest Groups
Interest groups are fundamental partners in policy making. Citizens participate in the policy process
through communication with policy makers. Such communication takes place individually (for
example, letters to elected representatives) and collectively interest groups facilitate collective
communications. Dahl in Cahn (1995) argues that in an open society all persons have the right to
press their interests. To the extent others share these interests and collective pressure may allow
greater policy influence. They supply public officials with information on the possible consequences
of policy proposals. In doing so, they contribute to the rationality of policy making. Pressure groups
are many in number and quite diverse in nature, interests, size, organization and style of operation.
They represent organized labor, business, agriculture, migrant workers, etc.
Interest groups may be single issue oriented, for example, Women’s liberation, prohibition; or public
interest such as environmentalists, animal lovers, good government proponents, anti-corruption etc.
The most common resources include bureaucratic knowledge, a network of contacts, citizen backing
(size of constituency), an ability to make political contributions, and an ability to mount a public
relations (media) campaign. Clearly, no group utilizes all of these resources, but the ability of an
organized group to make use of one or more is critical for policy influence.
B. Political Parties
Political parties are distinct from other citizen organizations. Rather than attempting to influence
existing policy makers, parties seek to get their own members elected to policy-making positions.
While interest groups seek influence on specific policy issues, parties seek influence on a wide
spectrum of policy issues. Parties develop issue platforms, draft candidates, campaign on behalf of
candidates, and work to get out the vote. In short, parties work to bring together citizens under a
common banner. Most people may think of parties only during election cycles, but their policy
influence extends beyond campaigns. Parties continue to play a dominant role in policy outcomes.
First and foremost, the party that emerges dominant determines the direction policy will take. The
president is responsible to the party that got him or her elected and therefore must pursue at least
some of the policy objectives articulated at the party convention.
C. Research Organizations/ Think Tanks
Private research organizations/think tanks are staffed with full time policy analysts and researchers
some of whom are ex- government officials. Their studies and reports often provide basic data and
information on policy issues, develop alternatives and proposals for handling problems, and evaluate
the effectiveness and consequences of public policies.
D. Communication Media
The media are influential to policy outcomes because they help define social reality. As Lippmann in
Cahn (1995) observed, perception of reality are based on a tiny sampling of the world around us. No
one can be everywhere; no one can experience everything. Thus, to a greater or lesser extent, all of
us rely on media portrayal of reality. Graber in Cahn (1995) argues that the way people process
information makes them especially vulnerable to media influence. First, people tend to pare down
the scope of information they confront. Second, people tend to think schematically; when confronted
with information, individuals will fit that information into preexisting schema (mental pattern) and,
since news stories tend to lack background and context, schemata allow the individual to give the
information meaning. In such a way, individuals recreate reality in their minds.

The data collected by Iyengar and Kinder, as cited by Cahn (1995), show that television news, to a
great extent, defines which problems the public considers most serious. They refine the agenda-
setting dynamic to include what they call “printing”. Printing refers to the selective coverage of only
certain events, and the selective way in which those events are covered because there is no way to
cover all events, or cover any event completely, selective decisions must be made. The implications
for public policy are serious. If policy is a result of the problem recognition, then the problems that
gain media recognition are much more likely to be addressed.
3.1. Public finance administration
Public finance is not just about money. Its subject matter includes not only all aspects of public
sector finances but also the structure of the public sector and fiscal institutions as well as the broad
objectives and rationale for government activity. We focus here on how governments raise resources
to finance spending, without regard to what spending is financed. Even so, our scope is still
substantial, not least because some analysis of the nature and efficiency of public spending is needed
for a proper understanding of financing sources. Public finance policy results from a complex
interaction between ideas, interests, and institutions. The best public finance system for any country
is one that reflects its economic structure, its capacity to administer its public finances, its public
service needs, and its access to different sources of finance such as taxation, debt, or aid. The public
finance system of any country is both path-dependent and context-specific, reflecting the outcome of
complex social and political interactions between different groups in a specific institutional context
established by history and state administrative capacity. Influence does not flow only in one
direction, however, so how the public finance system operates may influence not only the context
but the nature and the outcomes of such interactions. Though long dominated by economists, the
study of public finance has important political and administrative dimensions that have recently
received increasingly close attention from historians and those concerned with improving policy
outcomes in developing countries.
The governments of advanced countries are committed to stability and full employment. In case of
under developed countries the government aims at accelerated economic development. Government
sector can play a decisive role in shaping and charting the path of any economy. Depending on the
level of development of each country the roles of government sector differ. However, in all cases
the aim is to attain full employment and economic development through the development of
agriculture, industry and service sector. Today the communication sector has also been included in
these vital sectors of the economy.

The Private finance deals with the wants and the satisfaction of households and firms. But the public
finance deals with the collective wants and their satisfaction. The objective of both private and
public finance is similar. Public finance aims at maximizing social welfare or social benefit by
efficient use of public goods.

The study of state is called “Public Finance”. Public finance is the study of income and the
expenditure of the government. Rising of necessary funds for incurring expenditure constitutes the
subject matter of public finance. The methods of public finance have certain effects on economic
life and can, therefore, be used as an instrument for bringing about desired social and economic
changes. Public finance also deals with the problems of adjustments of income and expenditure of
the government .I t is also known as fiscal operations of the treasury. Thus, fiscal operations and
fiscal policies are integral part of public finance.

Public Finance deals with the income and expenditure of the public authorities. Here the term Public
means the Government that is Central, state and local authorities. According to Prof. Dalton, public
finance is one of those subjects, which lie on the borderline between Economics and Politics. It is
concerned with the income and expenditure of public authorities and with the adjustment of one to
another. Hence, it can be defined as the science that deals with the nature and principles of the
income and expenditure of the government.
Ethiopia has adopted the policy of welfare state for bringing about social and economic justice.
Public finance policy of the country is drawn up in tune with the constitutional commitment Welfare
state. Under the welfare state, government performs important functions and takes up certain public
or collective welfare measures which private sector cannot provide.
3.3.4. Fiscal policy

Fiscal policy is also called as budgetary policy. In broad terms, fiscal policy refers to that segment
of national economic policy, which is primarily concerned with the receipts, and expenditures. It
follows that fiscal policy relate to those activities of the state that are concerned with raising
financial resources and spending them. Resources are obtained through taxation and borrowing both
within the country and from abroad. Budget can act as an important tool of economic policy. The
state by its policy of taxation-regulated expenditure can influence the economic activities and
development.
Keynes emphasized the effects of government revenue and expenditure upon the economy as a
whole and argued that they should be used deliberately and consciously to secure economic
stabilization. This underscores the importance of budget in economic development.
Fiscal policy relates to the government’s decision making with respect to the following:
1. Taxation
2. Government spending
3. Government borrowing and
4. Management of government debt.
The policy relates to government decisions, which influence the degree and manner in which funds
are withdrawn from private economy. Basically fiscal policy in these different facets deal with the
flow of funds out of the private spending and saving stream into the hands of government and the
recycle funds from government into the private economy.
It is thus obvious that fiscal policy deals quite directly with matters, which immediately influence
consumption and investment expenditure. Therefore, it influences the income, output and
employment in the economy. Fiscal policy is primarily concerned with the aggregate effects of
public expenditure and taxation on income output and employment. In developed economies the
propensity to consume leads to stability. Excess saving by the community leads to lowering of
demand for goods and services resulting in suboptimal employment level. Fiscal policy should
balance the economy by sustaining the consumption in the economy.

In underdeveloped and developing countries main objectives are rapid economic development and
an equitable distribution of the income. Fiscal policy can be an important instrument for attaining
these objectives. Fiscal policy influences the economy by the amount of public income that is
received and on the other by the amount and direction of public expenditure. The important fiscal
means by which resources can be raised for the public exchequer are taxation, borrowing from
public and credit creation. These means must be used in harmonious combination so as to produce
the best overall effects on the economic life of the people in terms of economic progress and social
welfare.

3.3.5. Taxation Policies

A tax is “a compulsory charge imposed by the Government without any expectation of direct return in benefit
".
In other words, a tax is a compulsory payment or contribution by the people to the Government for which
there is no direct return to the taxpayers. Tax imposes a personal obligation on the people to pay the tax if
they are liable to pay it. The general public should be taxed according to their ability to pay, and the people in
the same financial position should be taxed in the same way without any discrimination.
Thus, tax can be defined as, "an involuntary fee or more precisely, "unrequited payment", paid by individuals
or businesses to a government (central or local)". Taxes may be paid in cash or kind (although payments in
kind may not always be allowed or classified as taxes in all systems). The means of taxation, and the uses to
which the funds raised through taxation should be put, are a matter of hot dispute in politics and economics,
so discussions of taxation are frequently tendentious.
A good tax system should not affect the ability and willingness of the people to work, save and
invest. If not, it will affect the development of trade and industry and the economy as a whole. Thus,
a sound tax system should contribute in the economic development of a country. Hence, "taxation
should not be like killing the goose that lays golden eggs".
3.3.5.1. General Characteristics of Tax

A tax has the following characteristics:

1. Tax is a Compulsory Contribution: Tax is a compulsory contribution by the taxpayers to the
Government. The people whom the tax is levied cannot refuse to pay the tax. Once it is levied they
have to pay it. Any refusal in this regard leads to punishments.
2. Benefit is not the Basic Condition: For the payment of tax, there is no direct return or quid pro
quo to the taxpayers. That is, people cannot expect any return in benefit for the amount of tax paid
by them. There is no relation between the amount of tax paid by the people and the services
rendered by the government to the taxpayers.
3. Personal Obligation: Tax imposes a personal obligation on the taxpayers. When a person
becomes liable to pay the tax, it is the duty of him to pay it and in no way he can escape from it.
4. Common Interest: The amount of tax received from the people is used for the general and
common benefit of the people as a whole. Now the Government has to render enormous range of
social activities, which incur heavy expenditure. A part of the expense is sought to be raised through
taxation of various types. Thus, taxes are said to be the sharing of common burden by the people.
5. Legal Collection: Tax is the legal collection. It can be levied only by the Government both
Central and State.
6. Element of Sacrifice: Since the tax is paid without any return in benefit, it can be said that there
is the prevalence of sacrifice in the payment of tax.
7. Regular and Periodical Payment: The payment of tax is regular and periodical in nature. It is
levied for a fixed period usually a year. Thus, almost all the taxes are annual taxes. The payment of
taxes should be regular also.
8. No Discrimination: Tax is levied on all people without any discrimination of caste, creed etc. but
according to their ability to pay.
9. Wide Scope: Tax is levied not only on income but also on property and commodities. To enhance
the revenue and to bring all the people under the tax net, the Government imposes various kinds of
taxes. This enhances the scope of taxes.
3.3.5.2. Objectives of taxation
Taxes are compulsory payments to the Government by the taxpayers. In the beginning, Government
imposed taxes for three basic purposes viz., to cover the cost of administration, maintaining law and
order in the country and for defense.
But, in modern days, there has been a sea change in the Government’s expenditure pattern. Today,
the Government is in the position to restore social justice in the society by way of providing various
social services like education, employment, pension, public health, housing, sanitation and the
development of weaker sections of the society. Besides the above, the Government announces heavy
subsidies for agriculture and industry. Thus, Government requires more amount of revenue than
before. Non-tax revenues are not sufficient to meet the entire expenditures. Hence, Government
imposes taxes of various types.

 Raising Revenue: The basic purpose of taxation is raising revenue. To render various
economic and social activities, Government requires large amount of revenue. To
meet this enormous expenditure, Government imposes various types of taxes in
addition to the non-tax revenue.
 Removal of Inequalities in Income and Wealth: The welfare state aims at the
removal of inequalities in income and wealth. By framing suitable tax policy, this end
can be achieved. It is stressed in the Canon of Equality. In Ethiopia, the progressive
taxation on income is the suitable examples in this regard.
 Ensuring Economic Stability: Taxation affects the general level of consumption and
production. Hence, it can be used as an effective tool for achieving economic
stability. That is, by means of taxation the effects of trade cycle i.e. inflation and
deflation can be controlled. During the period of boom or inflation, the excess
purchasing power in the hands of people leads to rise in the price level. Raising the
existing tax rates or imposing additional taxes can remove such excess purchasing
power. Then the abnormal demand will be reduced and the economic stability can be
achieved. At the same time, by providing grants, tax exemptions and concessions,
production can be encouraged thereby inflation is controlled.
Likewise, during the period of depression or deflation, the role of tax policy in the economy is
important. Reduction in the existing tax rates and removal of certain taxes, consumption can be
induced which in turn results in increasing demand. This encourages business activities, and the
economic growth can be achieved. Thus, through properly devised tax system, the economic stability
can be achieved by controlling the effects of trade cycle.
 Reduction in Regional Imbalances: It is normal that certain parts of the country are
well developed, whereas some other parts or states are in backward conditions. To
remove these regional imbalances, the Government can use tax measures. By way of
 announcing various tax exemptions and concessions to that particular backward
regions or states, the economic activities in those areas can be induced and
accelerated.
 Capital Accumulation: Tax concessions or rebates given for savings or investment
in provident funds, life insurance, unit trusts, housing banks, post offices banks,
investment in shares and debentures of certain companies etc. lead to large amount of
capital accumulation which is essential for the promotion of industrial development.
 Creation of Employment Opportunities: More employment opportunities can be
created by giving tax concessions or exemptions to small entrepreneurs and to the
industries adopting labor-intensive techniques. In this way, unemployment problem
can be solved to certain extent.
 Preventing Harmful Consumption: Taxation can be used to prevent harmful
consumption. By way of imposing heavy excise duties on the commodities like
liquors, cigars etc. the consumption of such articles is reduced to a considerable
extent.
 Beneficial Diversion of Resources: The imposition of heavy duties on non-essential
and luxury goods discourages the producers of such goods. The resources utilized for
the production of these goods may be diverted into the production of other essential
goods for which various tax concessions are given. This is called as beneficial
diversion.
 Encouragement of Exports: Now-a-days export oriented industries are encouraged
by way of providing various exemptions like 100% relief from income tax, free trade
zones etc. It results in the large earnings of foreign exchange.
 Enhancement of Standard of Living: By way of giving various tax concessions to
certain essential goods, the Government enhances the standard of living of people.

Classification of tax

Taxes are sometimes referred to as direct or indirect. The meaning of these terms can vary in
different contexts, which can sometimes lead to confusion. In economics, direct taxes refer to those
taxes that are paid by the person who earns the income. By contrast, the cost of indirect taxes is
borne by someone other than the person responsible for paying them. For example, taxes on goods
are often included in the price of the items, so even though the seller sends the payments to the
government, the buyer is the real payer. Indirect taxes are sometimes described as hidden taxes
because the purchaser of goods or services may not be aware that a proportion of the price is going
to the government.
A direct tax is paid by a person on whom it is levied. In direct taxes, the impact and incidence fall on
the same person. If the impact and incident of a tax fall on the same person, it is called as direct tax.
It is borne by the person on whom it is levied and cannot be passed on to others. For example, when
a person is assessed to income tax or wealth tax, he has to pay it and he cannot shift the tax burden to
anybody else. In Ethiopia, Government levies the direct taxes such as income tax, tax on agricultural
income, professional tax, land revenues, taxes on stamps and registrations etc. From the above
discussion, it can be understood that the direct taxes levied in Ethiopia take the form of taxes on
income and property. Under indirect taxes, the impact and incidence fall on different persons. It is
not borne by the person on whom it is levied and can be passed on to others. For example, when the
excise duty is levied on the manufacturer of cement, he shifts the burden of tax to the consumers by
raising the selling price. Here the impact of excise duty falls on the manufacturer and the incidence
on the ultimate consumers. The person who is required to pay the tax does not bear its burden. Thus,
indirect taxes can be shifted.
3.3.5.3. Public Expenditure

Recently, there has been both quantitative and qualitative change in government’s expenditure. This
category deals with the principles of public expenditure and its effect on the economy etc.
Government of a country has to use its expenditure and revenue programs to produce desirable
effects on national income, production, and employment. The role of public expenditure in the
determination and distribution of national income was emphasized by Keynes.
The term “Public Expenditure” is used to designate the expenditure of government-central, state
and local bodies. It differs from private expenditure in that governments need not pay for themselves
or yield a pecuniary profit. Public expenditure plays the dual role of administration and economic
achievement of a nation. Wise spending is essential for stability of government and proper earnings
are a prerequisite for wise spending. Hence planned expenditure and accurate foresight of earnings
are the important aspects of sound government finance.Public expenditure is done under two broad
heads viz., developmental expenditure and non-developmental expenditure. The former includes
social and community services, economic services, and grants in aid. The latter mainly consists of
interest payments, administrative services, and defense expenses.