Politicians and managers should look to south-east Asia for inspiration, says a new report comparing the performance of public sectors globally
Asked to name a country with one of the world’s most efficient public sectors, which would you pick? New Zealand, perhaps, or Canada?
You’re unlikely to choose Vietnam. But a new report from the Chartered Institute of Management Accountants (CIMA), comparing the performance of public sectors globally, says managers and politicians should look to south-east Asia for inspiration.
Since the end of the war there in 1975, Vietnam – population 90.5 million – has transformed its impoverished, centrally-planned economy to a mixed and fast-expanding one, where GDP has grown in real terms between 5% and 8%.
More recently, Vietnam has instituted a radical simplification of its public sector. In 2007, the government launched Project 30, a plan to cut its administrative procedures by 30%. The country created a single, national database of all its administrative procedures and then assessed them against three criteria: whether they are necessary, whether they are user friendly, and whether they are legal.
Vietnam has not yet succeeded in cutting its public services by almost a third – it has reached what the Organisation for Economic Co-operation and Development (OECD) calls a “crucial stage” in attempting to implement its radical cuts, with the first results only just beginning to materialise. But in the UK its bold approach will be music to the ears of the government’s efficiency and reform group, which has been wielding the axe over public services since the coalition government came to power.
CIMA and the OECD, which reviewed Vietnam’s project earlier this year, believe that other countries could learn from the Vietnamese approach. One of the key factors of its success was having a strong co-ordinating unit at the centre of government, with backing from senior politicians. Nguyen Xuan Phuc, the minister who led the reforms, is now deputy prime minister, so there is backing for reform at the very top of the government. Dedicated taskforces to carry out the plans in each department have also been important.
The report’s main conclusion is that public sectors around the world need a better, more professional way to make decisions. “Effective performance management is crucial to achieve sustainable and stable public finances, and to gain public confidence that tax revenues are being used effectively,” says Louise Ross, head of corporate management at CIMA. But using the Socialist Republic of Vietnam, and Singapore, also singled out for praise in the CIMA report, as exemplars for public services will raise some eyebrows. It is no coincidence that the authoritarian regimes are being studied by China, as part of its reform programme.
Noel Tagoe, head of research and development at CIMA, argues that the way forward is not just efficiency for its own sake but better and more open statistics about public spending in western-style democracies. He cites another example in the report: in 2009, there was a big discrepancy between the Greek government’s estimate of the country’s public sector deficit and official EU figures. A lack of trust in the figures led credit agencies to downgrade the country’s debt rating, pushing Greece into further economic failure.
“Figures aren’t going to determine political outcomes,” he says. “Politicians will still have to argue about their own philosophy and the practical appeal of any policies.” But he clearly believes that shining a light on what works best means politicians may just be forced out of making short-term decisions and towards more fundamental measures that would ensure better public services.