The Prospects of NPM Among Philippine LGUs

(April 23-30, 2007)
By Wilfredo B. Prilles Jr.

Wilfredo B. Prilles Jr.

A. Introduction¹

When I applied for the “New Public Management” (NPM) seminar during the online phase from February to March 2007, I purposely stated the need to reconcile certain realities in developing countries with the elements and principles of NPM.

One of these realities is the inconsistency between the practice of Philippine local governments (LGUs) to hire more staff or at the very least maintain their current workforce levels -- which leads towards bigger, stronger state roles in the scheme of things -- and NPM’s emphasis on the “lean state” ideal.

The engaging discussions with other participants from different cultures and contexts helped clarify these inconsistencies. It also infused me with a good deal of practical optimism as to NPM’s applicability to Philippine local authorities.

Fascinating Discoveries

One of the fascinating discoveries I made in the course of the seminar in fact had a lot to do with local governments. In a previous article for Vox Bikol, a Naga-based newsweekly, I mentioned Civil Service Commission Chair Karina Constantino-David saying that Philippine LGUs, notwithstanding of their own peculiar problems, are one of the good news about civil service in the country.

In the NPM seminar, our Peruvian and German facilitators mentioned practically the same thing: reforms along the lines of NPM -- which seek to apply private sector mindsets, processes and tools in the public sector -- have better chances of taking off at the local level. Maybe this shift was impelled by hard realities.

NPM principles are quite appealing, and advocate the following: a lean state, separate decision making with politics deciding the strategy and the civil service taking care of the operations, lean management, a new service attitude, new models of control, decentralization, quality management, and product approach. However, NPM’s large-scale implementation faces great resistance at the national and federal levels.

For instance, there are reversals in a number of countries that originally pioneered NPM. In the United Kingdom the “joined-up governance” espoused by the New Labour Party under Tony Blair has effectively reversed efforts to “roll back the state” that Margaret Thatcher introduced in the late ‘80s. So much so that a 2005 study spanning seven “leading-edge” NPM countries jointly conducted by researchers from the London School of Economics and Political Science and Oxford University pronounced it dead, arguing that the stage is now set for what they call “digital-era governance.”

But success stories from the federal state level downwards have come to the fore. In Brazil, for instance, governors in four of the 26 states were either elected or re-elected with a strong mandate on the basis of public sector reforms and modernization. This goes against the grain of populist policies being espoused by the current Brazilian government, as well as the rise of left-wing regimes in Latin America.

In the Philippines, Naga of course is a “leading-edge” city implementing NPM, without us even knowing about it. When Mayor Jesse Robredo first became mayor in 1988, he introduced private sector tools and techniques at City Hall owing to his previous work with San Miguel Corporation. These included management by objectives and the Performance Pledge under the Productivity Improvement Program.

The Pledge, found in all city hall departments and offices, later became the basis for the development of the Citizens’ Charter. This documents some 140 or so services provided by the city government. Now on its second edition, the charter describes the step-by-step procedure in availing each service, the expected response time as well as the city hall staff responsible for each step. It is available both in printed and digital format through the city’s Website. A streamlined Bikol version is currently being developed to comprise the charter’s 3rd edition. ²

All these innovative efforts happened rather instinctively. It was part of a process to continuously improve the quality of service delivery, now consciously centered on meeting the needs of its customers. We only came to learn that they in fact are examples of NPM in practice when the Friedrich Naumann Foundation in the Philippines invited Mayor Robredo to speak in a seminar it arranged for Philippine LGU officials last year at the AIM.

Conclusion

What do these developments mean? 1. NPM tools and techniques are applicable in the Philippine setting, especially in the context of our 15-year decentralization experience. 2: We still have a long way to go, especially in reversing the current situation where “leading edge” localities are more of the exception rather than the rule.

B. Reflections on Privatization and Populism

Reader and fellow Filipino blogger Cris Jugo asked in my Weblog: "In what way would NPM go against 'populist policies?’ Couldn't you implement populist policies using NPM?"

By way of reflection, I will address the issue of NPM’s compatibility with populism which came up again and again throughout the week-long seminar, precisely because our Latin American participants -- who are not exactly fans of Hugo Chavez and the other left-wing leaders in the region -- assumed NPM is automatically incompatible with populist policies.

That was actually the bone of contention in an exchange I had over lunch with Luis Leonardo Abelin, a Brazilian participant who came from Porto Alegre, the city that pioneered the "participative budgeting" best practice and hosted several editions of the World Social Forum.

I asked Luis Leonardo, a free market advocate, what he thinks of his hometown's innovation. He vehemently opposed the idea. He argued that some decisions made by the budgeting committees benefited only a few -- like buying an ice-freezing facility for some fishermen within the community. “Why don't they work their butts out so that they will earn enough money to buy the freezer themselves?” Leonardo asked.

“But what's wrong with a decision arrived at by a community?” I argued. “Is that not what democracy and NPM is all about, respecting the decision of the majority and allocating government resource to address what customers need?”

On Privatization

Our debate extended into our group work which grappled with the task of defending privatization of government services against common opposing arguments. One of these had to do with excluding the poor who do not have the money for private services.

While I argued that successful privatization, as in the case of telecommunications and air travel in the Philippines, can actually make these services more accessible to ordinary citizens, it should not be pursued for its own sake. Critical preconditions exist such as the existence of private providers who can actually do better than the state in delivering these services.

A good example would be education. While public and private schools exist in cities and leading urban centers making it possible to offer and implement a voucher system that can promote choice and competition, the same is not true in the rural areas. This market failure provides a justification for the state to come in and provide the service itself through the public school system.

These examples demonstrate a number of things. 1: It is unwise to put our faith wholly on market forces to provide all the goods and services required by society. 2. It is a disservice to NPM to assume that privatization is the only way to achieve a lean state; there are other tools that can pretty much achieve the same objective, such as decentralization. Finally, the devil is in the details; there is no one-size-fits-all formula to pursue NPM, and the choice of the most appropriate tools depends on a given context.

On Populism

Finally, is NPM incompatible with populism?

"Populism" is defined as 1. Politics unfavorable to elite: politics or political ideology based on the perceived interests of ordinary people, as opposed to those of a privileged elite 2. Focus on ordinary people: focus or emphasis on the lives of ordinary people, e.g. in the arts and in politics.

From the way it was described by Luis Leonardo, populism is being automatically equated with the left-leaning regimes of Hugo Chavez in Venezuela, Luiz Inácio Lula da Silva in Brazil and Evo Morales in Bolivia who use state resources in pandering to ordinary people's needs to strengthen their hold on power.

One concrete example he gave was Fome Zero, a new all-purpose poverty program that Lula launched in Brazil which can provide food subsidies to all citizens. It created a negative effect on overall productivity as ordinary workers found it better to drop out of work and qualify under the program -- which effectively guarantees their daily survival -- rather than continue working.

If that indeed were the case, then there is a basis for questioning such approach, particularly on the basis of sustainability. There is no way Brazil, its rich natural resources and economic growth notwithstanding, will be able to support what amounts to a welfare state for the long term.

From our discussion, even advanced economies like Germany are finding it difficult to finance their welfare systems. Dr. Monika Ballin pointed out that their country today is highly indebted precisely because it has been spending more than it earns since the '90s, incurring deficits in the process. The possibility of a systemic collapse, above anything else, in fact made NPM-oriented reforms that center on a "lean state" highly attractive.

But our experience in Naga however negates the assumption that NPM is incompatible with populism. Again, as I previously pointed out, we did not realize that we had actually been practising NPM principles in managing the city for close to two decades now.

When I was given the chance to expound on our experience, I presented the material Mayor Robredo used in his seminar organized by Friedrich Naumann Foundation Philippines last year. The group was surprised that our city had gone through great lengths in actual practice and not just in theory, effectively belying the assertion that NPM is dead.

Is the Robredo administration populist? It will depend on which meaning of populism one uses. It definitely is not if the label carries the first meaning, which essentially demonizes the elite. In this case, such divisive rhetoric is actually an exercise in hypocrisy. The entire leadership, comprised mostly of specialists with a high degree of education, in fact belong to the elite.

But if populism were to take the second meaning, then the administration certainly is by virtue of its creating innovative mechanisms through which ordinary people's social, political and economic needs are addressed more effectively.

If there is one lesson to be learned here, it is the danger of using conventional labels to advance a preset agenda that actually devalues reality and misses out on the rich diversity of experiences on the ground.

 

¹ This is a two-part report based on blog entries I made while attending the NPM seminar in Gummersbach
² My fellow participants expressed strong interest in the Naga experience built around these functioning NPM tools. This came about when a our three-person group comprising of Daniel Welwel of Tanzania and Jelena Milic of Serbia was tasked to find ways of promoting NPM’s customer-oriented mindset in a workshop.