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Practice Advice on Strategy and Structure

Public Sector Management (UNDP)

Summary Advice: The UNDP describes a number of principles and pieces of advice for public sector reform that can help promote effectiveness, efficiency and transparency in governments.

Main PointsAccording to UNDP, good public sector management is needed to ensure competitiveness in the emerging global economy. It requires the implementation of sound policies and practices in economic and financial management to help enhance trade, investment (private sector partnerships) and debt management. It also requires increased effectiveness and performance of the civil service by improving the quality of services to the population and enhancing the capacity of the civil service to carry out core government functions. Thus, reforms in developing countries should be undertaken in three areas: economic and financial management and the civil service.

The UNDP observes that most governments now recognize the need for more flexible, dynamic, and responsive public sector organizations as a means to become or remain competitive in the global economy. Achieving this requires public sector organizations that have improved management systems, strategic human resource development, better economic and policy management, and stronger financial control. A comprehensive approach to public sector economic and financial management is conducive to long-term development and helps promote credibility, investment, liberalisation, and growth. Thus, the objective for the public sector in this new environment is to create the conditions in which markets can perform well. Accomplishing such a task requires improvements in macroeconomic management and civil service reform.

In macroeconomic management, sound economic and financial management policies and practices are thought to significantly contribute to an enabling environment for sustainable human development, increased public accountability, improved debt management, and the formulation of policies to enhance international competitiveness. To this end, public sector reform should include:

  • Trade enhancement: develop regulatory frameworks that support competitive markets by protecting the environment, fostering competition and innovation, and preventing abuses of monopoly power;
  • Debt management: implement a debt management and financial analysis system to record and control domestic and external public debt; support the financial administration of the public sector through integrated modules for treasury, budget, accounting, and public credit; and the centralization of the financial administration and the control and integration of financial systems; 
  • Investment in the private sector: develop policies that encourage the establishment and development of businesses, especially small- and medium-scale enterprises (SME’s). SME’s can help improve employment generation, technological skills, increase integration of local content into manufactured products, increase equitable income distribution, and enhance foreign investment.

In civil service reform, increasing the effectiveness and performance of the civil service requires improving the quality of services to the population and enhancing the capacity of the civil service to carry out core government functions. To this effect, institution-building strategies should be comprehensive, focused on the development of strong leadership capabilities, strategic human resource management and total quality management techniques. The ultimate goal of civil service reform in the current context is improved service delivery. Favoured reform measures include the following:

  • Reducing the size of the civil service;
  • Decentralizing government services to local authorities;
  • Improving public enterprise performance;
  • Encouraging the private sector to take over public sector functions;
  • Increasing remuneration levels and differentials; and
  •  Establishing clear relationships between performance and rewards.

Source: UNDP (1997). Management Development and Governance Division, "UNDP AND GOVERNANCE: Experiences and Lessons Learned" Lessons-Learned Series No. 1 at http://mirror.undp.org/magnet/docs/gov/Lessons1.htm#1.3 (accessed 01 November 2012).

Page Created By:  Ruby Dagher. The content presented on this page is drawn directly from the source(s) cited above, and consists of direct quotations or close paraphrases. This material does not necessarily reflect the official view of the publishing organization.

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