Structural adjustment or liberalisation measures are economic reforms that reduce the State's direct role in providing social welfare and other services, and curb officialdom's influence over the economy in general. New structures for indirectly commissioning and regulating privatised services are introduced in stead. But can governments master these indirect roles? How does the State cope with a long-term management load? A University of Birmingham research study under the Role of Government in Adjusting Economies programme, examines key sectors undergoing change in India, Sri Lanka, Ghana and Zimbabwe. All these States are trying out new working partnerships involving the private sector, community organisations and executive public agencies. The report focuses on changes the administrators need to make, and outlines a framework of research to develop yardsticks for assessing their capacity to tackle these roles.

Reducing the direct role of government may require a variety of organisational readjustments in different sectors and contexts. The degree of government involvement appropriate in each case will also vary. In view of this complexity, research into the degree and type of changes required should:

• examine the case for continuing government intervention in a range of sectors
• identify and compare alternative forms of relationship between government and public or private agencies
• assess alternative deals between government and operators who produce and deliver services
• identify factors which could affect a government's capacity to undertake altered roles.

If various organisational arrangements are to be considered for delivering services, how can capacity to handle these different options be analysed and assessed? The report recognises the difficulty of assessing institutions in the round. It suggests instead a 'middle position' whereby ability of organisations to perform particular tasks is assessed within specific contexts. This approach takes into account both the performance of the task, and the institutional conditions under which it is performed. It appears that the new indirect roles can prove more difficult to perform than the previous direct provision of services. The most far-reaching reforms have been attempted in countries with the most severe economic crises. This transformation is often insisted on by international donor agencies. But the process may result in the most radical changes being applied by governments with the least capacity to make them succeed.

In general, withdrawal of direct state intervention has been greatest in the economic sectors, for example in agricultural marketing and industrial development. In social services, as in water supply and health, withdrawal has been more gradual, producing a range of agency arrangements. In both social and economic sectors the most successful agencies in providing support and regulatory functions are those with most autonomy from civil service and political controls. According to the study report, the most frequent reasons for poor performance of reform processes are:

• Reforms are introduced under adverse circumstances, in the wrong manner, or both.
• Reforms may not be appropriate to a country's particular frailties in state or market provision.
• The new tasks required by reformers are often harder to perform than the old in any case.

Source(s):
A Research Framework for Analysing Capacity to Undertake the 'New Roles' of Government. The Role of Government in Adjusting Economies Paper #23, University of Birmingham, R Batley (1997)

Funded by: Department for International Development (DFID), UK (1994 - 1997)

id21 Research Highlight: 1998-June-02

Further Information:
Richard Batley
International Development Department (IDD)
School of Public Policy
University of Birmingham
Edgbaston
Birmingham
B15 2TT
UK

Tel: +44 (0)121 414 4985
Fax: +44 (0)121 414 7164
Contact the contributor: r.a.batley@bham.ac.uk

International Development Department (IDD), UK