Addressing Operational Inefficiency in Punjab Government

Provincial Information & Analysis Unit,

I&C Wing, S&GAD

1

Problem Statement Service Delivery Gap

1947 1995 2009

Service Delivery

Expectations

Actual Service

Delivery

Source: WDI, World Bank and Structured Interviews with Ministers, Secretaries and Field Officers2

Service Delivery Gap

Resource Gap

Federal Govt.

Operational Efficiency Gap

CapacityWillingness to

Work

Institutional Design

Policy Framework

Institutional Framework

Causes of Service Delivery Deficit

Source: Basic Theory of Informational Economics, Personnel Economics: Past Lessons and Future Directions, Edward P Lazear

3

Which one is the Binding Constraint?

Res

ou

rce

Sho

rtag

e

HR

Cap

acit

y

Will

ingn

ess

to

W

ork

Inst

itu

tio

nal

Des

ign

Service-delivery deficit

Binding constraint?

If constraint is non-binding, improving it won’t decrease deficit

Max

imu

m s

ervi

ce-d

eliv

ery

cap

acit

y in

cu

rren

t en

viro

nm

en

t

4

So is Capacity a Binding Constraint?

• Government sector teachers are paid 5 times

more than private sector teachers

Source: Leaps Project5

• Government sector teachers are more educated

and better trained than private sector teachers

Source: Leaps Project6

• Yet children in private schools are 1.5-2.5

years ahead of children in government schools

Source: Leaps Project7

• If we look at students that switch schooling

regime (private to public or vice versa)

• The same child performs worse when in a

government school than when in a private schoolSource: Leaps Project

8

Service Delivery Gap

Resource Gap

Federal Govt.

Operational Efficiency Gap

CapacityWillingness to

Work

Institutional Design

Policy Framework

Institutional Framework

Causes of Service Delivery Deficit

Source: Basic Theory of Informational Economics, Personnel Economics: Past Lessons and Future Directions, Edward P Lazear

9

Probability of being caught(increases with information)

𝑃 F = 𝑝𝜏 ∙ 𝑝𝛼

Probability of being punished(decreases due to collusion)

Utility Function of a Public Sector Manager

𝑈 M = 𝑤𝑎𝑔𝑒 − 𝑒𝑓𝑓𝑜𝑟𝑡 + 𝑎𝑙𝑡𝑟𝑢𝑖𝑠𝑚 + 𝑝𝑒𝑟𝑠𝑜𝑛𝑎𝑙 𝑔𝑎𝑖𝑛

𝑤𝑎𝑔𝑒 = 𝑤𝑠 + 𝑤𝑝

salary perks &

privileges

𝑒𝑓𝑓𝑜𝑟𝑡 = 𝑒 𝑞𝑝

‘units’ of public goods delivered

𝑝𝑒𝑟𝑠𝑜𝑛𝑎𝑙 𝑔𝑎𝑖𝑛 = 𝐸(𝜋)

𝑄

𝑞𝑝

sum of units of public goods converted into private goods

Q = total units in control

expected return on

each unit

𝑃 S = 1 − 𝑃(F)

Probability of success

Probability of failure

Expected Return of Allocative Distortion

Reward of succeeding

𝐸 𝜋 = 𝛽 ∙ 𝑃 S − δ ∙ P F

Cost of failure

(via allocative distortion)

10

Service Delivery Gap

Resource Gap

Federal Govt.

Operational Efficiency Gap

CapacityWillingness to

Work

Institutional Design

Policy Framework

Institutional Framework

Service Delivery Gap

Resource Gap

Federal Govt.

Operational Efficiency Gap

CapacityWillingness to

Work

CollusionInformation

Failure

Institutional Design

Policy Framework

Institutional Framework

Causes of Service-delivery Deficit

11

𝑈 M = 𝑤𝑠 + 𝑤𝑝 − 𝑒 𝑞𝑝 + 𝜇

+ 𝛽 ∙ (1 − 𝑝𝜏𝑝𝛼) − δ ∙ 𝑝𝜏𝑝𝛼

𝑄

𝑞𝑝

Utility Function of a Public Sector Manager

Allocative Distortion

Can be increased with improved monitoring

12

Where We See Allocative Distortion

• Irrigation & Power

– Unequal distribution of water

• Education

– Teacher absence

• Health

– Non-provision of medicines

– Medical staff absence

17

How to Differentiate Employee Performance in Presence of Other Gaps

Average performance

Theoretical limits of service delivery outcomes

Performance spectrum of employees working in similar environment

Compare top-performing and lowest-performing employees with reference to averageperformance

18

WHERE will allocative

distortion show up?

1. Amount of unaccounted water2. Dry tails

3. Reporting discrepancies4. Missing gauges

WHO is doing it?

1. Superintendent Engineer (SE)2. Divisional Canal Officer (XEN)

3. Sub-divisional Canal Officer (SDO)

WHAT are

departments doing?

HOW are they doing it?

1. Making Changes in Water Distribution2. Ensuring Channel Safety Against Damage

3. Regulation of Irrigation Channels4. Monitoring of Outlet Performance

Ensuring Equitable Water Distribution

How to Define the Best Indicators?Example Irrigation

19

Developing an Evaluation System

Work Breakdown into

Activities

Process Mapping

Responsibility Assignment

Key Performance

Indicators (KPIs)

System Development

Secretary’s Dashboard

20

Making Government Work

http://mgw.punjab.gov.pk

21

Current Progress

• WBS nodes: 7,312• Process maps: 3,427• Process steps: 34,448• Managers identified: 2,520• KPIs developed for 6 departments

– Health– Higher Education – Schools Education– Irrigation & Power– Board of Revenue– Home (Punjab Prisons)

• Data collection started for– Higher Education– Irrigation & Power

22

Way Forward?

Role of Key Performance Indicators in Wider Punjab Good Governance

Initiative

23

Appendices

• KPI progress

• Other interventions

– Citizen Feedback Model

– Litigation Monitoring System

– CM Directives

24

Citizen Feedback Model

• Aim: Decrease Petty corruption

• Model: Gather feedback through phone calls from the citizens who received a service from the government office

• To be implemented in 7 districts for 5 services.– Registration of Property

– Provision of Free Medicine in Emergency

– Surgical Procedures

– Issuance of MLC

– Pension cases25

Proposed Interventions

• Service provider is made bound to provide Cell# of the citizen availing the service

• Manager/ Senior Office of the Provincial government calls the citizens in a systematic fashion to know about their experiences.

• Over time the telephonic feedback will generate patterns of service provider’s behavior.

• Such patterns once analyzed will throw up worst service delivery nodes.

• It is believed that once the worst service delivery nodes are identified, the service managers can be sorted out through administrative actions like transfers and/ or targeted investigations.

• The intervention explained so far captures non-collusive corruption only. Therefore, supplementary intervention was introduced.

26

Role of PIAU

Step1: Development of Paper Based Data Capture at Service Delivery Node

Step2: Development of Online Data Entry System Step3: Development of Feed back Capturing Forms

• DCO: Forms will be generated to enter the feedback• Call Center: A representative random sample of transactions are

selected for gathering feedback.

Step 4: Development of Online Data Entry system of the Collected Feedback

Step 5: Development of System to detect Collusive CorruptionStep6: Analysis of Patterns (to be put up to concerned

departments, CS and CM)

27

Intervention Cycle for ServicesDevelopment of Data Entry Forms at Service Delivery Node

System for Online Data Entry System

Developmentof Feed back Call Forms

System for Online Data Entry of the Collected feedback

Development of System to Detect CollusiveCorruption & In-efficiency

Revenue

Registration of Property

Completed Completed Completed Completed Completed

Health Services

Provision of Free Medicine in Emergency

Completed Completed Completed Completed

Minor Surgical Procedures

Completed Completed Completed Completed

Issuance of MLC Completed Completed Completed Completed

School Education

Pension & Leave Cases

In Progress In Progress

28

Online Data Entry

29

Feedback Entry

30

MEAs Online Data entry

31

Litigation Monitoring System

• Current System– Court summons are forwarded to relevant departments.

– Summons sometimes incorrectly sent to wrong department

• Need Gap– The Law department is unable to effectively monitor litigation activity because of

delayed intimation/responses from relevant departments

– Delayed response to court summons (due to lack of coordination) results in adverse judgments and expiration of appeal windows

• Solution – Litigation Monitoring System - track status of cases to help streamline the

monitoring process for the Law and concerned departments

– Value Addition• Availability of quick snapshots will help Secretaries identify gaps, timely escalation of

overdue cases will improve response time and assigning of responsibility will become easier in case of lapses

• Status– Development work for the initial release of the software is underway

32

Entering Cases

For priority cases

Has case been sanctioned by Law department?

May be different from concerned department

Post-admittance, evidence, arguments, etc.

Once the case is entered, it will appear on the Solicitor/AG’s dashboard and a law counsel will be assigned to the case

33

Updating Cases

Select existing case from database

Y/N (In case date was postponed without hearing)

Did gazetted officer represent the department?

Immediately flags to Solicitor/AG office

Option to attach scanned documents

Person representing department

•When next hearing date passes and case is not updated, case is flagged automatically•The case proceedings will be updated by law counsel. The Litigation officer will be able to view and comment on updates

34

CM Directives Monitoring System

• Current System– Computerized Diary number issued for CM Directives but not used to

track implementation progress of Directives

• Need Gap– Increase in volume of directives has rendered it difficult to track

progress on directives– No pre-emptive information on delays, response always reactionary

• Solution– Online CM Directives Monitoring System - tracks the entire activity

that takes place on a particular Directive once it is issued– Value Addition

• Shorten the response time• Improve coordination between departments• Ensure relevant departments receive directive

• Status– Preliminary software version under testing

35

CM Directives

36

CM Directives

37

Infant Mortality Rate Per 1000

0

20

40

60

80

100

120

140

160

180

19

60

19

62

19

64

19

66

19

68

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

38

Health Expenditure Per Capita

0

5

10

15

20

25

30

35

2002 2003 2004 2005 2006

He

alth

Exp

en

dit

ure

pe

r ca

pit

a (i

n U

SD)

Bangladesh India Pakistan

Source: World Development Indicators, World Bank 39

The Problem of Collusion• Collusion is an exogenous variable

– Society– Patronage-based politics

• Organizations are a subset of society – Behavior dictated by society instead of vice-versa– Minimum level of collusion given in society – Change requires external intervention

• Pakistan– High societal dependence on beradri– High nepotism– Social network guarantees insurance against shocks– Khwaja, Mian (2005) study of loans data on 90,000 firms

from 1996-2002 find politically-linked firms borrow 45 percent more and have 50% higher default rates

40

Political-Administrative Interaction

• Government operating at two levels – De facto and De jure– De jure

• National leadership, CM, CS, Administrative Secretaries, Commissioners, DCOs

– De facto• Service managers – SHOs, Patwaris, Headmasters, Bulldozer

operators, etc

• Each tier faces different incentives– Policy for improvement of one tier will not necessarily

affect the other if they have competing incentives

41

Incentives of Politicians

National/ Provincial leadership

Local leaders

Local leaders

Local leaders

Local leaders

De jure

De facto

Patronage-based votes

Party-based votes

42

Incentives of Politicians

• National party leadership desires national/ provincial seat– Needs popular support for success

– Bargains for as many votes as possible

– Two types of votes available• Patronage-based votes via local politicians

• Party-based votes via public popularity

– Negotiates with local politicians for patronage-based votes using party-ticket

• Stronger party-based votes, more bargaining power

• Party-based votes can only be increased by provision of public goods

43

Incentives of Politicians

• Local leader desires role in government– Bargains using patronage-based vote bank that

can be used with any party

– Desires to get seat without making extra effort to gain more votes (by providing public goods)

– Only do as much work as is required to maintain patronage-based vote bank

• Provide public goods only to patrons (i.e. convert them into private goods)

– Land tenure security, coercive force (police), health services, etc

44

Incentives of Politicians

Maintenance of patronage-based vote bank

• Patronage-based distribution of public goods

• Long-term capture of position in government (without permanent alignment to political party)

Maximization of party-based votes (i.e. gain support of popular masses)

• Equitable distribution of public goods

• Long-term sustainability of party appeal

Locally elected representatives

MNAsMPAs

DE FACTO (LOCAL)

POLITICIANS

DE JURE (NATIONAL) POLITICIANS

PM CM

Party leaders

45

Interaction of Politicians with Administration

• Incentives create a market for exchanging political favours for public goods

– Administrator uses political favours to lower probability of being held accountable

– Politician uses public goods as private goods for community leaders of patronage-based voters

46

Trade of Public Goods for Political Protection

Local leader

s

National/ Provincial leadership

Patron of local leader Political protection

Public goods traded as private goods

Service Delivery

tier

Senior public

managers

47

Institutional Design

• 18th Amendment

• Medium Term Development Framework

• Valuation of rural land

• Review of PLGO

• LRMIS

• Punjab Health Sector Reform Programme

• Punjab Education Sector Reform Programme

• Punjab Resource Management Programme

48

Learning and Educational Achievementsin Punjab Schools (LEAPS)

• Rigorous academic study carried out by Tahir Andrabi(Pomona), Jishnu Das (World Bank), Asim Khwaja (Harvard), Tara Vishwanath (World Bank) and Tristan Zajonc (Harvard)

• 112 villages (having at least 1 private school) studied for 4 years (2003 to 2007) in districts– Attock– Faislabad– Rahim Yar Khan

• Sample– 823 schools – 5,000 teachers– 12,000 children tested in Urdu, Math and English– 2,000 households

49

Information Failure in Observing Employee Performance

UNOBSERVABLE PORTION

OBSERVABLE PORTION

OBSERVED PORTION

COMPLETE INFORMATION SET (only known to employee him/herself)

50

Empirical Support of Low Service-delivery as a result of Information Failure

• Health service in Delhi, India– Public-sector doctors are more competent, but exert

less effort

• Civil works (roads) in Indonesia– Missing funds decreased from 27.7% to 19.2% by

increasing to monitoring.

• Driving licensing in India– 2/3rd people obtaining licenses are not qualified to

drive

51

The Dire Straits of Medical Practice in Delhi, India – Das and Hammer (2005)

• 205 doctors in Delhi assessed by interviewers acting as patients

• Same doctors observed a month later in clinical practice

• Observation– Public sector doctors more competent than private sector

ones, but exert lesser effort than their counterparts

• Policy Insight– To improve medical services for the poor greater emphasis

needs to be laid on changing the incentives of public providers rather than increasing competence via training

52

Monitoring Corruption: Evidence from a Field Experiment in Indonesia

• To study the impact of increasing top down monitoring on corruption.

• Setting:– 608 villages in Indonesia were selected where roads were to be built. Out

of these, some villages were selected randomly and told that their fundsusage will be audited by central authority. The missing funds ( reportedusage- actual usage) were taken as an indicator of corruption. The changein percentage of missing funds before and after the intervention wasstudied.

• Finding:– The missing funds decreased from 27.7% to 19.2% .

• Policy Insight:– The knowledge that a tighter level of monitoring is being exercised by the

superiors reduces corruption. However, this must be complimented withhigher chances of being punished.

53

Corruption in Obtaining Driving Licenses in India (Bertrand, Djankov, Hanna and Mullainathan, 2006)

• Study undertaken in India to observe the process of obtaining driving licenses by following 822 individuals through the application process

• Observations

– 1/3rd of those that obtained a License did not take the driving test; all on average paid 2.5 times more that the requisite fee and 2/3rd were unqualified to drive

– Extra legal payments were unavoidable and not paid directly to corrupt bureaucrats, but to “agents”

– Process fails to implement the social goal it was implemented for

54

Information Services

• KPI should not be looked into in isolation

• It will help Business Process Improvement for all depts.

• Enterprise Service Bus: – Get data from 36 Districts & 38 Departments

– Give services to public/employees

• Resultantly, the existing systems of departments improve, e.g. Health:– DHIS + PHSRP MIS

– Clerks bring Flash Drives from Districts to Lahore

– Amalgam of 5 systems with duplications

56

CIVIL SECRETARIAT

LAHORECM SECRETARIAT

ITD, AIWAN-E-IQBAL

COMPLEXMOST ISLAMABAD

NTC RACE COURSE

LAHORE

Comm. Tower

Comm. TowerComm. Tower

Wireless Link

Wire

less

Lin

k

Satellite dish

Digital Cross Connect

(Dxx) (1 Mbps)

Digital Cross Connect

(Dxx)(1 Mbps)

Digital Cross Connect

(Dxx)(128Kbps)

Digital Cross Connect

(Dxx)(1 Mbps)

BRI ISDN

BRI ISDN

INTER - LAN CONNECTIVITY (THREE SITES)

These Links will be used for internet Access, inter

departmental communication, Email, Messaging

Linkages• GATEWAY Portal: $3 million with Microsoft

– Dashboard for CM is only front-end

– What is the right information for the indicators? Where is it going to come from?

– PITB has requested PIAU for Enterprise Service Bus

• The Urban Unit

– Established wireless networking* with PIAU for their GIS data needs (e.g., Health data for PHSRP)

– CS + Secretaries would have GIS Decision Support System

* All Wireless Network Equipment has been procured & installed but not yet operational since TUU’s Vendor defaulted

RHC Barana

HR-MIS / PIFRA

• HR-MIS for ALL Depts. (ITD & PIFRA)

– PIFRA data currently being obtained in real-time from AG office and ported to ITD system

– Transfer/Enquiry/Promotion orders for employees NOT to be issued until first updated in system

– Pilot: Higher Education & Sialkot CDG

59

... Linkages: Result Based Mgmt. (RBM)• RBM is a public sector management philosophy

and approach that focuses on achievement of goals and objectives for improved result delivery:

• Strategic planning

• Systematic implementation

• Effective resource usage

• Performance monitoring, measurement & reporting

• Evaluation to improve result delivery

– Next tranche of $150 million from PRMP

– Being dove-tailed formally with PIAU

•Thomas, Kosha, Malaysia: “Integrated Results Based Management,” 2008 Community of Practice on Managing for Development Results,Annual Publication•The World Bank/IBRD, “Designing and Building a Results-Based Monitoring and Evaluation System, A Tool for Public Sector Management,” A Workshop for Government Officials and Their Development Partners, 2000

Case Study: Mohatir’s ICU• New Remuneration System 1993

• Public Sector Agencies given freedom on policies/procedures, akin to businesses

• Five Central Agencies for reform:– Implementation Coordination Unit (ICU JPM) within

PM’s Office

– Malaysian Administrative Modernization And Management Planning Unit (MAMPU), Economic Planning Unit(ECU), Public Sector Department (PSD)

• Annual Contract System with Employees– Goals set at beginning of year

– Remuneration dependent upon performance/goals

• Program Based Budgeting