WPS8595 Policy Research Working Paper 8595 Public Disclosure Authorized Management and Bureaucratic Effectiveness Evidence from the Ghanaian Civil Service Public Disclosure Authorized Imran Rasul Daniel Rogger Martin J.Williams Public Disclosure Authorized Public Disclosure Authorized Development Economics Development Research Group September 2018 Policy Research Working Paper 8595 Abstract A burgeoning area of social science research examines practices is partly explained by bureaucrats having to multi- how state capabilities and bureaucratic effectiveness shape task, interactions with their intrinsic motivation, their economic development. This paper studies how the man- engagement in influence activities, and project character- agement practices of civil service bureaucrats correlate to the istics such as the clarity of targets and deliverable outputs. delivery of public projects, using novel data from the Ghana- The paper discusses the interplay between management ian Civil Service. This paper combines hand-coded progress practices and corruption, alternative methods by which to reports on 3,600 projects with a management survey in measure management practices in organizations, and the the government ministries and departments responsible for external validity of the results. The findings suggest that the these projects. The analysis finds that management matters: focus of many civil service reform programs on introducing practices related to autonomy are positively associated with stronger incentives and monitoring may backfire in some project completion, yet practices related to incentives/mon- organizations, and that even countries with low levels of itoring of bureaucrats are negatively associated with project state capability may benefit by providing public servants completion. The negative impact of incentives/monitoring with greater autonomy in some spheres. This paper is a product of the Development Research Group, Development Economics. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/research. The authors may be contacted at [email protected]. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Produced by the Research Support Team management and bureaucratic effectiveness: evidence from the ghanaian civil service⇤ imran rasul daniel rogger martin j.williams† JEL Classification: J33, O20. ⇤We gratefully acknowledge financial support from the International Growth Centre [1-VCS-VGHA-VXXXX- 33301] and the World Bank’s i2i trust fund financed by UKAID. We thank Julien Labonne, Anandi Mani, Arup Nath, Simon Quinn, Ra↵aella Sadun, Itay Saporta-Eksten, Chris Woodru↵ and seminar participants at Oxford, Ohio State, PMRC, and the EEA Meetings for valuable comments. Jane Adjabeng, Mohammed Abubakari, Julius Adu-Ntim, Temilola Akinrinade, Sandra Boatemaa, Eugene Ekyem, Paula Fiorini, Margherita Fornasari, Jacob Hagan-Mensah, Allan Kasapa, Kpadam Opuni, Owura Simprii-Duncan, and Liah Yecalo-Tecle provided excellent research assistance, and we are grateful to Ghana’s Head of Civil Service, Nana Agyekum-Dwamena, members of the project steering committee, and the dozens of Civil Servants who dedicated their time and energy to the project. This study was approved by UCL’s Research Ethics Committee. All errors remain our own. †Rasul: University College London and the Institute for Fiscal Studies [[email protected]]; Rogger: World Bank Research Department [[email protected]]; Williams: Blavatnik School of Government, University of Oxford [[email protected]]. 1 Introduction A burgeoning area of social science research examines how state capabilities shape economic de- velopment [Besley and Persson 2011, Acemoglu and Robinson 2012, Pepinksy et al. 2017]. Much attention has been placed on understanding the e↵ectiveness of government bureaucracies, a key component of state capability. Bureaucratic e↵ectiveness matters for macroeconomic outcomes such as growth and inequality, and for microeconomics given the presumption that successful micro-evaluations of interventions can lead to them being e↵ectively scaled-up by government. Despite the importance of bureaucratic e↵ectiveness, economic analysis of public sector agents has largely focused on the selection, retention, and response to incentives of frontline public sec- tor workers, or ‘street-level’ bureaucrats. In contrast, we contribute to a nascent body of work studying the vital middle-tier of bureaucrats working in central government civil services, who are responsible for policymaking, administrative functions and for supervising frontline workers [Bertrand et al. 2017, Finan et al. 2017]. Specifically, we study whether the management practices that this professional class of civil servant bureaucrats operate under correlate to the e↵ective de- livery of projects their Ministries and Departments are responsible for.1 We do so in the context of alowermiddle-incomecountry,Ghana,atatimewhenmanydevelopingcountriesareengagedin reforming bureaucracies in line with the ‘good governance’ agenda of the World Bank and United Nations [Goldfinch et al. 2012, Hasnain et al. 2012]. Our analysis focuses on the professional grades of technical and administrative bureaucrats within 45 Ministries and Departments. To quantify the delivery of public projects, we exploit the fact that each organization is required to provide quarterly and annual progress reports. These detail targets and achievements for individual projects the organization is charged to deliver. Progress reports cover the entire range of bureaucratic activity, including project types that have been much studied, such as procurement and infrastructure, but also areas of activity that have been far less subject to quantitative study, such as policy development, advocacy, human resource management, budgeting and regulatory design. We use these progress reports to identify 3628 projects underway during 2015, and to hand-code each project’s initiation and full completion. To measure the management practices bureaucrats operate under, we follow the methodologi- cal approach of Bloom and Van Reenen [2007], and Bloom et al. [2012] (henceforth BSVR). We adapt their management surveys to the Ghanaian public sector setting, taking account of insights from the public administration literature [Rose-Ackerman 1986, Wilson 1989]. We elicited de- tails on management practices in an individual survey administered to bureaucrats. The surveys 1There are well-documented reasons why management practices could have di↵erent impacts on middle-tier bureaucrats than for lower-tier frontline public sector workers [Dixit 2002]. The selection, objectives and motivations of middle-tier of bureaucrats might di↵er. The nature of work for middle-tier bureaucrats might also di↵er: they might need to multi-task, and the mapping between e↵ort inputs and observable output is perhaps more uncertain. Finally, there can be specific labor market rigidities applying to middle-tier bureaucrats, leading to di↵erent dynamic selection e↵ects than for frontline workers. 2 enumerated senior bureaucrats in managerial roles, as well as the less senior bureaucrats they manage. In contrast to much of the earlier work on management, we can therefore reconstruct management practices based on alternative sets of respondents in the organization. The measure of management practices used for our baseline analysis averages management scores over the most senior divisional-bureaucrat reports. We later consider alternative constructs, based on all senior bureaucrats in an organization (a top-down view of management), or as elicited from lower-tier bureaucrats being managed (a bottom-up view of management). For each organization we construct two dimensions of management practice: (i) the autonomy provided to bureaucrats; (ii) the provision of incentives and monitoring of bureaucrats. The essence of the BSVR approach is to capture a holistic set of practices along each dimension, rather than coding very formal and specific rules or compensation scheme structures in place. Importantly, this approach aims to capture the actual management practices being used in practice, not an idealized version of what the organization’s practices are supposed to be on paper. The autonomy index captures the extent to which bureaucrats of all levels are empowered to make meaningful contributions into policy formulation and implementation processes, and the flexibility with bureaucrats can use their discretion in responding to project peculiarities and introducing innovations. There are long-standing views in the public administration literature on the importance of autonomy. As Rose-Ackerman [1986] describes, at one extreme lies the view that public agencies ought to delegate