IDB study analyzes strengths and weaknesses in the public sector’s human capital in Latin America

Washington, September 23, 2014.- Despite recent economic and social advances, Latin American countries now face the crucial task of developing more efficient and effective public management in order to tackle their citizens’ needs, a new Inter-American Development Bank (IDB) report shows.

Achieving that goal depends, among other things, on the quality of public servants. For this reason, the report looks into the strengths and weaknesses of human resources management in 16 Latin American and Caribbean nations, updating a similar report carried out in 2004.

The report allows countries to view their progress. It also includes tools to gauge civil service development, recommendations on the type of reforms that should be produced in the future in different contexts, and lessons from international experience on how to implement them.

“Civil service professionalization helps build more effective, more efficient, and more open government institutions,” IDB’s Institutions for Development Department Manager Ana María Rodríguez-Ortiz said.

“We are seeing big progress,” Rodríguez-Ortiz added. “It’s becoming more and more common for governments to select talent based on merit and manage public sector human resources. Several countries have embarked on major reforms, but there’s still a long way to go to meet their citizens’ growing expectations”.

Countries invest on average 5.8 percent of GDP in central government civil services, or 41 percent of their tax revenues and more than one-fourth of total public sector spending. This is why, among other reasons, having a professionalized civil service is key to boost the State’s capabilities and achieve better quality in public spending, the study shows.

Taking 2004 as the baseline, the report analyzes civil service development levels in 16 Latin American countries between 2011 and 2013 using a methodology that assesses civil service based on 33 critical points.

The 16 nations’ average aggregate score went from 30 to 38 between 2004 and 2013.

Yet, this incremental progress on a general scale masks major disparities. Although improvements were observed in most countries, the biggest advances took place in those nations that started from a lower baseline. Within this category, the Dominican Republic, El Salvador, Nicaragua, Panama, Paraguay, and Peru have made headway by generating regulatory and technical instruments they lacked before (such as legislation and information systems, among others), strengthening their human resources regulatory bodies at a central level and, to a lesser degree, extending merit-based evaluations to access public sector jobs.

Also starting from a relatively lower than average baseline, another group of nations including Bolivia, Guatemala and Honduras has shown stagnation over the past decade. This is also the case for Ecuador, although it should be noted that its evaluation was made in 2011, before the launching of a major civil service reform that is still under way.

Thirdly, a group of countries that got higher scores in the 2004 reports little or no progress since. This group includes Brazil, Costa Rica, Colombia, Mexico and Uruguay. These nations now face the challenging task of implementing more complex reforms. Lastly, Chile has made important headway since the initial assessment, which came in at a relatively high level.

The book presents an agenda for the future with 10 key tasks necessary to continue improving civil service. This includes achieving a better balance between the principle of merit and flexibility in human resources management decision-making, professionalization of the management environment, achieving realistic progress on performance management, and improving compensations to attract, retain and motivate human capital, among others.

Success in this possible agenda for public service modernization can be facilitated by including some lessons learned from the dynamics of the reforms of the last decade. This includes the design and implementation of gradual reforms that take into account the possibilities as well as the technical and political constraints of each national context and the generation of political incentives to move the reforms forward.