Public Sector Reform and Performance Management in Emerging Economies

Outcomes-Based Approaches in Practice

Zahirul Hoque, Zahirul Hoque

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000383140
• Edition: 1
• Topic: Business
• Subtopic: Contabilità
• Index: Business

In the recent decade, governments worldwide are increasingly focusing on being community-centric and outcomes-based. Consequently, they are starting to move towards outcomes-based approaches to public financial management systems. An outcomes-based approach allows government service agencies and specific program areas to organize and communicate priorities to achieve what matters and makes a difference rather than just going through the motions. Empirical evidence on how government agencies in emerging economies go about this contemporary approach and issues affecting these practices is limited.

This edited collection of chapters is aimed at covering public sector reform and performance management in emerging economies with special reference to outcomes-based approaches in practice in government services. Practices from developed economies contained in the first book on the topic have been published by Routledge in February 2021. The insights offered on the topic are written by renowned scholars who have identified important issues pertinent to those interested in public sector governance, accounting, accountability, and performance management effectiveness in emerging economies.

The book will be highly accessible to researchers, academics, and students in the fields of accounting, public administration, development studies, and other non-accounting audiences alike.

Part I

Africa

■ Kenya

■ Egypt

1 Pursuing Results^*

Results-Based Management in the Kenyan Public Sector

Robert Ochoki Nyamori

^* In Hoque, Z., ed. 2021. Public Sector Reform and Performance Management in Emerging Economies: Outcomes-Based Approaches in Practice. New York: Routledge (Chapter 1).

Introduction

The language of outputs, outcomes, and results has become common lexicon in the Kenyan public sector (e.g., Republic of Kenya 2013a, 2013b, 2018a, 2018b) following public sector reforms since the early 2000s that sought to shift the focus of public sector work away from inputs and processes and onto results (Republic of Kenya 2003, 2005b). Results-Based Management Systems (RBMS) are part of New Public Management (NPM), a neoliberal approach that seeks to govern the public sector on the basis of private sector principles (Hood 1995). RBMS require that expectations should be defined ex ante and expressed as measurable targets; public officials should be resourced and accorded autonomy to achieve these targets; these officials should be held accountable for achieving these expectations; and management control should focus on results (Swiss 2005; Moynihan 2006). The expressed purpose of RBMS is to improve performance by re-orienting the public sector toward results and making the public sector more accountable (Cavalluzzo and Ittner 2004; Swiss 2005). This chapter narrates the Kenyan story of RBMS. The chapter reports an in-depth study into the structure of the Kenyan government’s RBMS. The study is based on thematic analysis of policy documents and various internal documents obtained from Kenyan government departments and the World Wide Web. The chapter will serve as a useful introduction to RBMS in Kenya.

The Kenyan context is interesting for a number of reasons. First, the NPM implemented, how it is implemented, and its effects differ from country to country and even intra-country (e.g., Olson, Humphrey, and Guthrie 2001; Kristensen, Groszyk, and Buhler 2002). Second, RBM reforms introduced in Kenya since the early 2000s have received international acclaim.¹ Finally, studies have so far focused on only one aspect of RBMS, for example, performance contracting (e.g., Obon’go 2009; Onyango and Mbatha 2019) or performance-based budgeting (PBB) (e.g., Lakin and Magero 2015).

The chapter is organized into five sections as follows. The second section outlines a brief history of RBMS in the Kenyan public sector. The third section describes performance planning reform following introduction of RBMS in Kenya. The fourth section describes attempts to link national outcomes with the budgetary process culminating in the development of performance-based budgeting. The fifth section describes the system of monitoring and evaluation including the reporting requirements of the RBMS. The sixth section discusses and concludes the chapter.

Background to Results-Based Management in the Kenyan Public Sector

The concept of RBMS was first introduced into the Kenyan public sector in the form of performance contracting in the context of state corporations that were considered underperforming and a drain on public funds (Republic of Kenya 1994, 1996). These state corporations included Kenya Railways Corporation, National Cereals and Produce Board, Mumias Sugar Company, and Kenya Airways (Republic of Kenya 2005c; Kobia and Mohammed 2006). These state corporations agreed performance targets (PTs) with the government on the basis of which they would be funded and held accountable. These changes were, however, not sustained (Republic of Kenya 2010b), partly due to lack of support from the management (Kobia and Mohammed 2006).

RBMS were to emerge in 2001 when the government launched the “Strategy for Performance Improvement in the Public Service” with the aim of improving productivity and service delivery (Kobia and Mohamed 2006). A key outcome of this strategy was the introduction of Results-Oriented Management (ROM), which sought to re-orient the public sector from “a passive, inward-looking bureaucracy to one which is pro-active, outward looking and results oriented; one that seeks ‘customer satisfaction’ and ‘value for money.’” ROM required state agencies “to adjust operations to respond to predetermined objectives, outputs and results” (Kobia and Mohammed 2006, 8). As part of the ROM, state agencies were required to prepare strategic plans whose objectives would be drawn from and reflect national priorities as expressed in various planning documents and the Millennium Development Goals (MDGs) (Kobia and Mohammed 2006). ROM does not, however, appear to have been implemented to any noticeable extent.

The election of an opposition-led government in 2002 infused performance improvement aspirations in the public sector with a new sense of urgency with claims that the prevailing system “emphasized inputs and conformity to laws, regulations and procedures rather than on outputs, efficiency and cost-effectiveness” (Republic of Kenya 2005c, 9). The new government initiated the Economic Recovery Strategy for Wealth and Employment Creation (ERS) (Republic of Kenya 2003), which linked Kenya’s poor public sector performance to poor economic performance and poverty (Republic of Kenya 2003). The ERS asserted that the new government would focus on “developing, introducing and institutionalizing performance based management practice in the public service” by transforming the culture of the public sector from one focused on inputs and processes to one based on results (Republic of Kenya 2003, 12).

The ERS recommended “putting all Permanent Secretaries and Chief Executives of parastatals on performance contracts” (Republic of Kenya 2003, 12), thus extending performance contracts beyond the commercial realm of government. Subsequently, in 2004, sixteen state corporations were put under performance contracts as part of a pilot project (Republic of Kenya 2005c). Following the perceived success of the pilot projects, performance contracts were extended to the entire public sector by the end of 2005 (Republic of Kenya 2007). The expressed aim of performance contracting was to reorient people to become results oriented, that is, “privatise(s) the style of public sector management by focusing on results and not processes” (Republic of Kenya 2005c, 5) but also serve as a mechanism through which public servants would be held accountable for achieving set targets (Republic of Kenya 2005c). The government formed the Performance Contracting Steering Committee (PCSC) to facilitate the development and implementation of performance contracts in the public sector. The PCSC sought to re-orient the government’s accountability mechanisms away from inputs and toward results (Republic of Kenya 2005d).

This reorientation received financial support from the World Bank (World Bank 2004), wherein the government introduced Results-Based Management (RBM) in 2004 as part of broader public financial management reforms:

Introduction of Results Based Management (RBM) will shape organizations and work activities for the achievement of pre-determined outputs/results and re-orient the goals and objectives of the workforce towards cost effectiveness and responsiveness to customer demands and needs. RBM entails moving away from the traditional administration practice of correct application of Government regulations and procedures towards an empowered, results and service oriented public sector.

(Republic of Kenya 2005c, 12)

Employing the mantra of “Results for Kenyans,” the government launched the Public Sector Reform Strategy (PSRS) with the stated aim of institutionalizing RBM. RBM was distinguished from performance contracting by presenting it as a holistic approach that would mobilize government resources to achieve identified performance targets (Republic of Kenya 2005d). The main aim of RBM was to transform the public service into “a performance oriented organization” that would achieve “cost effective, efficient and timely service delivery” (Republic of Kenya 2005e, 5).

The government established the Public Sector Reform ...