Description
Generally speaking, analytic refers to the "having the ability to analyze" or "division into elements or principles."
Research Report on Institutional Capacity: An Analytical Framework
Abstract Many functions of the public sector or government can broadly be grouped into three broad categories; that is, policy-making, service delivery, and oversight and accountability. Most of these functions are performed by various public sector institutions and, in order to successfully perform these tasks, public sector institutions have to have a relatively high level of capacity. In the early introduction of institutional development programs (institutional building and institutional strengthening periods) public institutions and their capacity were approached and analyzed by looking at the individual organization and not at the broader environment or sector
Many functions of the pu blic sector or governm ent can broad ly be grou ped into three broad categories; are policy-m aking, service d e liv e r y , an d o v e r s ig h t an d accountability (World Bank 2000:xii). Most of these fu nctions are perform ed by variou s pu blic sector in s t it u t io n s a n d , in o r d e r t o su ccessfu lly perform these tasks, pu blic sector institu tions have to h a v e a r e l a t i v e ly h i g h l e v e l o f capacity. In the early introd u ction of in s t it u t io n a l d e v e lo p m e n t p r o g r a m s (institu tional b u ild in g an d in s t it u t io n a l s t r e n g t h e n in g p e r io d s ) blic institu tions and their capacity w ere approached and analyzed by lo o k in g at th e i n d i v id u a l organization and not at the broad er environm ent or sector. H ow ever, it argued in this article than since the
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early 1980s the institu tional capacity a n d a n a ly s i s h a s b e e n u n d e r t a k e n from a m ore com prehensive or these system ic perspective (Morgan 1999). Fo r e x a m p l e , t h e U N D P a p p l i e s a three-level conceptu al approach to analyze and assess the capacity of public institu tions in a system ic m anner. As show n in Figu re 2.1, the three levels in this approach, which can also be u sed to analyze factors that m ay hind er the capacity of g o v e r n m e n t in s t it u t io n s , a r e t h e s y s t e m , t h e e n t it y , a n d th e individual levels. In the UN DP approach, capacity pu is s u e s s h o u ld b e a n a ly z e d a t t h e s e d ifferent levels, and program s focu sing on institu tional or capacity d e v e lo p m e n t in d eveloping cou ntries shou ld recognize and take is into account the inter-play and inter-
An Analytical Framewor Drs. Amir Imbaruddin, MDA, Ph.D
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
connectedness of factors within these three levels (UN DP 1997; UN DP 1998).
Figure 2.1 A three-level approach to institutional capacity Source: UN DP, 1997. Capacity Development, Technical Advisory Paper 2, UNDP, New York: 25.
The ind ivid ual level refers to the skills and com petencies of staff a v a i la b l e in each in d iv id u a l
Level 1
level in the UN DP approach to analyzing capacity, the question of capacity has shifted from the entity/organizational level to this system level becau se analysis at this level also com prehensively inclu d es factors w ithin both the entity and ind ivid ual levels (UN DP 1998:710).In line w ith the UN DP's three- level approach, but inserting m ore detail, H ild erbrand and Grind le (1997) argu e that factors influ encing th e capacity of g o v er n m en t institu tions can be analyzed by grou ping these factors into five d ifferent d im e n s i o n s . Th e s e d im e n s io n s are th e action e n v i r o n m e n t d im e n s i o n , t h e p u b l i c sector institu tional context, the task network dimension, the organization d im ension, and the hu m an resou rces d im ension. The follow ing sections briefly analyze th e factors influ encing institu tional capacity in each of these five d im ensions as set ou t in the fram ew ork show n in Figure 2.2. 1. The action environment The first d im ension, that is, the action e n v ir o n m e n t d im e n s io n , refers to the social, political, and econom ic cond itions of a cou ntry in w hich p u blic sector institu tions perform their activities. H ild erbrand a n d G r in d l e a r g u e t h a t g o o d political and social stability w ith sou nd econom ic cond itions facilitate
Level 2
Level 3
Individual
Entity System
i n s t i t u t i o n a n d t h e w o r k e t h ic t h a t the staff em braces in perform ing their functions efficiently and effectively w ithin the entity or w ithin a broad er context. The Entity or organization level relates to an o r g a n iz a t io n s stru ctures an d w orking m echanism s, its w orking culture, and its resources. H ow ever, the organizational capacity is likew ise influ enced by external factors in the w id er institu tional environm ent such as political, econom ic and cultural factors. Lastly, the system level refers to the national and regional Regulatory framework and policies t h a t m a n a g e t h e in s t i t u t i o n s , a n d how these institutions inter-relate, interact and d epend on each other. Althou gh it is the m ost com plex
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
the ability of governm ent to perform its fu nctions. On the other hand , a h i g h l e v e l o f p o l i t i ca l i n s t a b i l i t y a n d social conflict m akes it d ifficu lt for governm ent m achinery to fu nction (H ild erbrand and Grind le 1997:37). In l i n e w i t h H i l d e r b r a n d a n d Grind le's argum ent, but more specifically, Rainey (1991 :Chapter 2) id entifies the environm ental factors that m ay im pact on the capacity of p u b l i c o r g a n iz a t i o n s a s t h e g e n e r a lscience and technological stage of a cou ntry, the governm ent system , the le v e l o f p r o s p e r it y a n d th e characteristics of popu lation, as w ell a s t h e p r e d o m i n a n t v a lu e s , a t t i t u d e s , and belief of the society. The m ore cond u cive these factors in a cou ntry are, the m ore capable are its pu blic organizations to perform their functions. Based on their case stud ies, H ild erbrand and Grind le (1997:39) ind icate that factors w ithin the action environm ent are m u ch m ore im portant as constraints in som e cou ntries than in others. For exam ple, experience in the Central African Repu blic left little d oubt that u ntil basic cond itions of econom ic d evelopm ent, political com m itm ent, and social stability are pu t in place, little can be d one along other d im ensions that w ou ld contribu te to im p r o v in g p u b lic sector perform ance. In Morocco, by contrast, capacity build ing initiatives
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w ou ld not need to pay m u ch a t t e n t i o n t o i m p r o v i n g a g e n e r a l ly positive or at least benign action environm ent. In other cases, w hile the action environm ent w as far from id e a l, in t e r v e n t io n s a t o t h e r le v e ls cou ld d o m u ch to red ress the capacity gaps that w ere id entified . Fo r e x a m p l e , d e s p i t e h a v i n g a l e s s favorable econom ic environm ent becau se of consid erably low er per capita incom e, Sri Lanka w as able im pressively to im prove the capacity o f i t s p u b l i c a d m i n i s t r a t io n b y
directing its lim ited resources to s u p p o r t h u m a n d e v e lo p m e n t in a ll levels (H ild erbrand and Grind le 1994:29).
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
Figure 2.2 A five-dimensional framew ork of institutional capacity
Action Environment Public Sector Institutional Context Economic Factors
Growth Labor market International economic relationships & conditions Private sector Development Concurrent policies Public service rules and regulations Budgetary support Role of the state Management practices Formal & informal power relationships
Task Network
Communications and interactions among Primary Organizations Secondary Organizations Support Organizations
ORG3
Organisation Political Factors
Leadership support Mobilization of civic society Stability Legitimacy Political institutions ORG2 Goals Structure of work Incentive system Management/leadership Physical resource Formal & informal communication Behavioral norms Technical assistance ORG1
ORG4
Performance Output
Effectiveness Efficiency Sustainability Quality
ORG5
Human Resources Social Factors
Overall human resource development Social conflict Class structures Organization of civic society Training Recruitment Utilization Retention
Source: Hilderbrand, M .E. and Grindle, M .S., 1997. Building sustainable capacity in the public sector: what can be done? in M .S. Grindle (ed.), Getting Good Government: capacity building in the public sectors of developing countries, Harvard University Press, Harvard:36.
A n u m b e r o f o t h e r s t u d ie s h a v e show n how factors w ithin this action e n v ir o n m e n t d im e n s i o n h ave affected the capacity of the pu blic sector in d ifferent cou ntries (see, for exam ple, Polid ano 2000; Oseiw ed ie 1998; Migd al 1988). For example, M ig d a l (1988) h as com prehensively a n a ly s e d h ow ethnic fragm entation in m any d eveloping cou ntries has created social and political instability that h a s d i s a b l e d s t a t e i n s t i t u t io n s b y a k e n i n g t h e ir i m p l e m e n t a t i o n he capacity. Whereas in econom ic terms, Polidano (2000:811) asserts
that a severe econom ic crisis can red u ce pu blic sector capacity in m any countries in tw o w ays. Firstly, an econom ic d ow ntu rn red u ces capacity becau se governm ents have to m ake sharp cu tbacks to the pu blic H sector. Second ly, econom ic crisis w eakens the capacity of pu blic institu tions because the pu rchasing p ow er of the-already-low-paid pu blic officials is red u ced w hich com pels them to seek alternative means of earning their living. w e In d o n e s i a i s p r o b a b l y o n e o f t best exam ples of how social, political, and econom ic cond itions have w eakened the capacity of
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Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
public institutions. Before the Asian econom ic crisis in 1997, together w ith H ong Kong, Japan, Malaysia, Singapore, South Korea, Taiw an, and Thailand , the World Bank(1993:1-3) inclu d ed Ind onesia as one of the m iracle cou ntries in East Asia becau se of its high econom ic perform ance in term s of average a n n u a l g r o w t h r a t e a n d a st ea d y d ecrease of inequ ality (see also Schw arz 1994:57). In term s of poverty alleviation, in 1990 the World Bank reported that for the last t w e n t y y e a r s In d o n e s i a h a d t h e highest annu al red u ction in the incid ence of poverty am ongst all cou ntries stud ied (1990:45). In 1971, 68 m i l l i o n I n d o n e s i a n p e o p l e w e r e consid ered as poor. In 1990, even w ith a 50 percent increase in p o p u la t io n , t h e n u m b e r o f p e o p le consid ered as poor had fallen to 18 m illio n (N aisbitt 1997:181). Accord ing to H ill (1994:55), one of the reasons for this im pressive achievem ent w as the existence of a stable econom ic and political e n v ir o n m e n t , a lt h o u g h th e g o v e r n m e n t s o m e t im e s h a d t o t a k e tough and unpopular decisions. H o w ev er , th e capacity of In d o n e s i a n p u b l i c i n s t i t u t i o n s t o d eliver pu blic services severely d eteriorated follow ing the Asian econom ic crisis, w hich in Ind onesia w as follow ed by social d isorder, political restru ctu ring, and the
ou tbreak of d ebilitating com m u nal conflicts across the cou ntry. The q u a lit y a n d q u a n t it y o f g o v e r n m e n t - provid ed social services, su ch as ed u cation and health, d eclined becau se of bu d get red u ctions. For e x a m p le , p u b lic s p e n d in g o n h e a lt h d u ring the crisis w as d ram atically cu t, resu lting in d eclining stand ard s of care (BPS, Bappenas and UN DP 2001:39). The availability of m ost antibiotics an d contraceptives d eclined at pu blic health facilities and pu blic health centers seem ed to be closed m ore frequ ently than they w ere open (Knowles et al. 1999:29- 30). In term s of poverty alleviation, the resu lts achieved before the Asian financial crisis w ere reversed . For exam ple, those living in poverty rose to arou nd 24 per cent of the popu lation in 1999 from ju st 12 per cent in 1996 (UNDP 2001:2-4). 2. Public sector institutional context A second d im e n s i o n of institu tional capacity, the pu blic sector institu tional context, refers to the overall ru les and proced ures that govern governm ent organizations and employees across the country. In o t h e r w o r d s , t h i s d im e n s io n i s concerned w ith the nature of pu blic sector em ploym ent w hich inclu d es the ad equ acy of rew ard s and incentives, th e existence of perform ance e v a lu a t i o n ,
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recruitm ent, an d p r o m o t io n proced ures for g o v er n m en t em ployees, and form al and inform al influences that affect how public institutions function. It is argued that better institutional capacity in public organizations is im possible to achieve unless governm ent salaries and incentives are able to attract a capable w orkforce and there are s o m e r u le s a ndguidelinesabout organizational stru ctures, job d escriptions, hiring proced ures, inform ation sy st em s, an d perform ance stand ard s (Hilderbrand Grind le 1997:37). Bolger (2000:3) grou ps together both the action environm ent and pu blic sector institu tional context and calls this t h e e n a b l in g e n v i r o n m e n t . In d eveloped cou ntries, the im portant role that factors w ithin t h is d im e n s io n p la y , in d e t e r m in in g the capacity of pu blic organizations, h a s b e e n w e l l a d d r e s s e d . In t h e United States, for exam ple, Volcker (1990:33) points ou t that th e com m itm ent to perform ance cannot lo n g s u r v iv e u n le s s th e g o v e r n m e n t p r o v id e s a d e q u a t e p a y , recognition for jobs d one, accessible t r a in in g , a n d d ecent w orking cond itions . In Singapore, one of the r ea son s th at th e Singaporean governm ent can attract and retain its caliber pu blic servants and sustain the capacity of its pu blic sector organizations has been salary
l e v e l s t h a t a r e e x t r e m e l y h ig h b y in t e r n a t io n a l st a n d a r d s (Quah 1995:337-8). In m any d eveloping cou ntries, how ever, the existing cond itions, policies, and regu lations within this d im ension are generally not cond u cive for pu blic sector organizations to im prove their capacity (see, for exam ple, Mengers 2000; Werlin 1991b). In term s of salary, for exam ple, a com m on e x p r e s s io n a m o n g p u b lic s e r v a n t s in Eastern Eu rope, ind icating the relationship between their low salary and their low prod u ctivity and , and therefore, the lack of capacity of their organizations, h as b een th e g o v er n m en t p r et en d s t o p a y u s, a n d w e p r eten d t o w or k (Werlin 1991b:198). In terms of hiring and firing systems, another factor w ithin the pu blic sector institu tional context id entified b y H i ld erbrandandGrindle,ando t h e r s , is t h a t a n o p e n a n d com petitive recru itm ent system , in w hich i n d i v id u a l organizations possess significant autonom y in term s of selection, increases the capacity of pu blic organizations to perform (H ild erbrand and Grind le 1997:45; N u nberg 1992:21). Again, in d eveloped cou ntries this kind of open and com petitive recru itm ent system has long been in place. In high Au stralia, for exam ple, it is believed that recruitm ent based on m erit is the life-blood of a professional
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
public service (McCallum 1984:23749). Therefore, tensions som etim es occu r b et w een in d iv id u a l d ep a r t m en t s or organisations w anting to get the staff they w ant as o n a s p o s s ib le , a n d t h e n a t io n a l pu blic service authority w anting to m ake sure that the m erit principle is alw ays strictly applied . In m any d eveloping cou ntries w here fam ily a n d k i n s h i p r e la t i o n s h i p s s t i l l influ ence recru itm ent d ecisions, civil servants, politicians and m ilitary officials are all expected to u se their p o s i t i o n s t o a s s i s t o r r e p a y t h e ir fam ilies by recru iting them into governm ent organizations (Hague et al. 1992:362). Similarly, perform ance evalu ation an d career ad vancem ent of g o v e r n m e n t e m p lo y e e s in m a n y d eveloping cou ntries is not based on m erit system , w ith im pacts w hich demoralize e m p lo y e e s an d negatively influ ence the capacity of governm ent institu tions (Ozgediz 1983:49). It m ay be true that m any eveloping cou ntries have equ ipped ures them selves w ith m eritocracy ru les and proced ures for pu blic sector e m p lo y m e n t . H o w e v e r , t h e s e r u le s procedures sometimes exist only on paper and not in practice becau se public sector e m p lo y m e n t is politicized for the sake of pow erfu l i t e s w h o w a n t t o m a i n t a in t h e ir positions (Nunberg 1992:36).
In d o n e s i a h as experienced fu nd am ental changes in the last six years, follow ing the resignation of Presid ent Soeharto after being in pow er for three d ecad es. One of the s o changes has been the introd u ction of new law s that give local governm ent e x t e n s iv e r e s p o n s ib ilit y an d au thority. Althou gh the new local g o v er n m en t la w g iv e s local g o v e r n m e n t s t h e o p p o r t u n it y t o create their ow n local ru les and proced u res, m ost local governm ents continu e to apply the existing national civil service ru les and proced u res. In general, these civil service r u le s an d proced ures acknow led ge that both local and central governm ent institutions and p e r s o n n e l i n In d o n e s i a a r e p a r t o f t h e n a t io n a l a d m i n i s t r a t io n o r bu reau cracy, and therefore both are a g o v e r n e d b y t h e s a m e r u le s a n d procedures (for extensive Indonesian civil service ru les and proced ures, see, for exam ple, H alligan and Turner 1995; Rohdewohld 1995). d Apart from the ru les and proced g o v e r n in g p u b lic e m p lo y m e n t , form al an d inform al p ow er relationships are one of the factors and w ithin the pu blic sector institu tional context that can affect the capacity of pu blic institu tions to perform its functions (H ild erbrand and Grind le e l 1997:37). In the context of m unicipal local governm ents in Ind onesia, the form al as w ell as inform al pow er
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Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
r e la t io n s h ip s b et w een local g o v e r n m e n t in s t it u t io n s a n d t h e Mayor (in the m u nicipalities) of the Governor (in the provinces), as the highest chief executive, as well as the local parliam ent, w hich has political o v e r s ig h t r e s p o n s ib ilit ie s , are inclu d ed in t h is d im e n s i o n . Theoretically, the formal relationship betw een the local governm ent in s t it u t io n s a n d t h e M a y o r o r t h e Governor can be seen in the context of ad m inistrative accou ntability, w hereas the form al relationship betw een the local governm ent in s t it u t io n s a s t h e in s t r u m e n t s o f t h e local execu tive w ith the local parliam ent can be seen in the context of political accountability. Schacter (2000b:9) ind icates that lack of accou ntability is one of the factors that w eakens the capacity of pu blic institu tions in Su b-Saharan Africa, whereas Israel (1987:90-1) believes that the existence of political pressure is a su rrogate for m arket com petition w hich can have positive im pacts on th e in s t it u t io n a l perform ance of g o v er n m en t agencies. Others argu e that the higher the d egree of accou ntability that the au thoritative entity exercises over the governm ent agencies, the better the capacity of the agencies in term s of their capacity to d eliver services and be responsive tow ard s their clients (see, for exam ple, Haque
1994; H u ghes 1994:Chapter Thynne and Goldring 1987). 3. Task network dimension
10;
Perform ing particular fu nctions or d elivering specific pu blic services s o m e t im e s n e e d s n o t a s i n g le b u t a n u m b er of g ov er n m en t organizations. Therefore, a third d im ension, the task netw ork, w hich relates to the ability of an organization to bring together other organizations to perform particu lar tasks, can also influ ence the capacity of p u b lic sector in s t it u t io n s . H ild e r b r a n d a n d G r in d le a r g u e t h a t the better the ability of an organization to coord inate with o t h e r o r g a n iz a t io n s , t h e b e t t e r t h e capacity of the organization to perform its fu nctions (Hilderbrand and Grindle 1997:13). The im portance of coord ination in d e v e lo p m e n t lit e r a t u r e is n o t a n e w issue. For example, writing about the i n s t i t u t i o n a l d im e n s i o n i n r e g i o n a l development, Cheem a (1980a:6) observed that good coord ination am ongst governm ent organizations ensu red that lim ited resou rces w ere efficiently u sed and not w asted , conflicting goals w ere elim inated , and overlapping fu nctions w ere red u ced . Cheem a's conclu sion w as that good coord ination am ongst governm ent organizations cou ld be achieved by stand ard ization, by
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Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
planning or by mutual ad justment. capacity of an agency particu larly w Coord ination by stand ard ization cou hen its fu nctions can only be perform ld be im plem ented by creating proced ed in cooperation w ith other u res and ru les that govern the actions organizations. On the other hand , the of each organization into an in d e p e n d pressu re of com petition is m ore e n t r e la t io n s h ip , w h e r e a s coord relevant to the capacity of an agency w ination by planning cou ld be carried hen it com petes w ith other agencies out by setting the bound aries to deliver similar functions. for the interd epend ent organizations Fo r e xa m p le , r e v ie w in g 159 to govern their actions. Coord ination institu tions in d eveloping cou ntries by m utual ad ju stm ent w as seen as Israel (1987) conclu d ed that m ost of d e p e n d e n t o n t h e w illin g n e s s o f t h e t h ese in s t i t u t i o n s enjoyed a organizations involved to m od ify m o n o p o ly o r n e a r m o n o p o ly . t h e ir in t e r n a l o p e r a t io n s for H o w e v e r , w i t h r a i lw a y s b e in g t h e reciprocal task interd epend ency exception, institu tions that w ere (Cheema 1980a:7). e xp o s e d to som e form of H ild erbrand and Grind le indicate com petition had a higher level of that a lack of coord ination that institu tional perform ance than those weakens the capacity of public sector that w ere not (Israel 1987:101-2). agencies can occu r betw een agencies More recently, the World Bank s e t t in g p o l i ce s an d t h ose acknow led ged th e p o t e n t ia l im plem enting them . In m ore recent contribu tion of com petitive pressu re t im e s t h e r e is a ls o a n is s u e o f to the su ccess of d evelopm ent coord ination a m on g d ifferent p r og r a m s an d th e increasing p r o v id e r s , inclu d ing sep a r a t e em pirical evid ence su pporting the governm ent an d p r iv a t e need to introd u ce com petition into o r g a n i s a t io n s (H ild erbrand and pu blic sector organizations to Grind le 1997:46). H ow ever, in the im prove their institu tional capacity case that sim ilar public fu nctions or (Pradhan 1998:55-6). services are d elivered or provid ed by different organizations, it can also be 4. Organisational dimension argu ed that the capacity of an Th e o r g a n i z a t i o n a l d i m e n s i o n o f organization to perform its functions is capacity is u sed by H ild erbrand and d e p e n d e n t m o r e o n it s a b ilit y t o Grindle to refer to the stru ctu res, com pete, than to coord inate w ith, o t h processes and resou rces of the e r o r g a n i z a t i o n s . In o t h e r w o r d s , o r g a n iz a t io n , an d m a n a g em en t w it h in t h e t a s k n e t w o r k d im e n s io n , s t y le s a d o p t e d b y m e m b e r s o f t h e coord ination is im portant to the
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Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
organization. Their view is that the capacity of institutions is affected by, m o n g o t h e r t h in g s , h o w g o a ls a r e e s t a b lis h e d , h ow t a sk s are stru ctu red , how authority relations are d efined , and how incentives and d isincentives are p r o v id e d (H ild erbrand and Grind le 1997:37). Fo rexample,itisarguedthatthe clarity of organizational goals affects institutional capacity becau se clear organizational goals can gu id e staff to perform t h e ir t a sk s an d responsibilities (Zeithaml et al. 1990:83). On the other hand , vague organizational goals d o not help the creation of a sense of m ission and com m itm ent am ongst staff, w hich are also im portant to the capacity of in s t it u t io n s to perform t h e ir functions (H ild erbrand and Grind le 1997:49). Rainey (1991:33) ind icates vagu eness of organizational goals and objectives is m ore observable in governm ent agencies and , ind eed , is one of featu res that ifferentiate pu blic organizations from private organizations. At this point hu m an resou rces m a n a g em en t practices become significant in an organization s ability to achieve its goals. Apart from organizational objectives, the goals that each ind ivid ual w ithin the organization shou ld achieve m u st
ind ivid uals w ithin the organization to achieve their own goals, is another a factor w ithin the organizational d im ension that affects capacity of i n s t i t u t i o n s . If a l l i n d i v i d u a l s i n a n organization com plete their goals, the u nit's goals w ill be achieved , and then the organization's overall objectives w ill be accom plished . On the other hand , w hen staff d o not u nd erstand w hat is expected from them , and how to accom plish that expectation, role am bigu ity m ay em erge and the overall objectives of t h e o r g a n i z a t i o n w i l l n o t b e co m e a reality (Robbins 1994:199). Re w a r d i n g i n d iv i d u a l s w it h in organizations w ho have su ccessfu lly perform ed in accord ance w ith the job d escription, and pu nishing those w ho have failed , is another factor that m ay contribu te to better that the institu tional capacity. In general, a h u m an resou rces m a n a g em en t approach w ill argu e that to m otivate ind ivid uals w ithin the organization d to perform w ell they m ust be r ew a r d ed an d p u n is h e d in accord ance w ith their perform ance (Abow d 1990). H ow ever, to be able to fairly rew ard and pu nish ind ivid uals w ithin an organization, t h e o r g a n iz a t i o n s h o u l d b e e q u i p p e d w ith a w orkable perform ance appraisal system . This perform ance
also be clear and u nd erstand able. Therefore, the existence of a job d escription, w hich can g u id e w ho perform w ell and those w ho
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
a p p r a is a l s h o u ld b e a b le t o d ifferentiate betw een ind ivid uals ad equ ate office equipm ent (Taylor 1992; Phillips 1991).
perform bad ly, and shou ld be applied impartially. Th e s t yle of m anagement a d o p t e d w i t h i n a n o r g a n iz a t i o n i s another im portant factor th at d e t e r m in e s w h e t h e r o r n o t a n institu tion has the capacity to perform its fu nctions. Generally, a le s s hierarchical m anagement approach, a high participation of low er level staff in d ecision-making processes, and an intense bu t less form al com m u nication an d interaction s t y le b et w een m anagem ent and low er level staff, is seen by the hu m an resou rces m anagem ent approaches as likely to contribu te positively to the capacity of organizations to perform their fu nctions an d achieve t h e ir objectives (Hughes et al. 1996; Werlin 1991b; Yoder and Eby 1990). The availability of physical resou rces n e e d e d b y i n d iv i d u a l s w it h i n t h e organizations to perform their fu nctions is also an im portant contribu tion to capacity of an in s t it u t io n . In t h e ir st u d y , H ild erbrand and Grind le (1997:50) s h o w t h a t g o v e r n m e n t in s t it u t io n s occu pying aged , bad ly m aintained and abu sed bu ild ings w hich lack office equ ipm ent tend to have a significantly low er capacity to perform t h e ir fu nctions th an organizations h a v in g m or e convenient and pleasant offices and 5. Human resources dimension Becau se organizations involve g r o u p s o f p e o p le w o r k in g t o g e t h e r inter-d epend ently to achieve com m on goals, m anaging those hu m an resou rces is one d im ension that can significantly constrain or assist the capacity of organizations to perform . This is particu larly cru cial for pu blic organizations becau se generally governm ents are not able to recru it the best people in the w orkforce, either becau se the financial rew ard is not as attractive as in private com panies or becau se of the problem of corru ption. In ad d ition, m any governm ents can not afford to train their pu blic servants to im prove their capacity. Therefore, the UN DP (1998:10) believes that hu m an resou rces are central to capacity d evelopm ent and is the m ost critical factor to consid er in analyzing capacity. Accord ing to H ild erbrand and Grind le (1997:14) this fifth d im ension of capacity r e la t e s t o t h e a b ilit y o f a n organization to recru it, u tilize, train, and retain em ployees, especially t h ose w ho are m a n a g e r ia l l y , professionally, an d technically capable. Factors w it h in t h is d im ension have long been concerns both in pu blic and private sector
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
o r g a n iz a t io n s , a n d h a v e b een extensively d iscussed und er the h u m an resources m a n a g em en t re (see, for example, Torrington and H all 1998; Noe et al. 1996; Stone 1991). For exam ple, recru itm ent and initial placem ent of staff are d ecisive in d eterm ining the continu ing quality and capacity of pu blic organizations (N u nberg 1992). A merit-based recru itm ent system has been argued as one of the reasons for su ccess in som e African countries, an d s p o ile d an d politicized recru itm ent practices have been b la m e d for th e continu ing d ysfu nction of m an y p u b lic in s t it u t io n s in ot h er African countries (Catlett and Schu ftan 1994; w u and Sm oke 1992; Gu lhati 1991; Phillips 1991). Apart from recru itm ent, effective u tilization of personnel w ithin the organization p la y s an im p o r t a n t r o le in d eterm ining w hether or not staff can contribu te m axim ally to the capacity of the organization to perform its fu nctions. Generally, staff w ill not be positively m otivated to contribu te to the su ccess of the organization w hen t h e y b e l ie v e t h a t t h e i r t a l e n t s t o carry out the tasks are not appropriately acknow led ged and considered (H ild erbrand an d Grind le 1997). Sim ilarly, it is u nlikely that staff w ill be satisfied w ith their jobs if they are w orking in
a position w hich d oes not m atch their skills (Yoder and Eby 1990). Retaining skilled staff is another lit e r a t u im portant factor w ithin the hu m an resou rces d im ension w hich m ay d e t e r m in e w h e t h e r o r n o t t h e capacity of pu blic institu tions can be su stainable. It is not u nu su al for h ig h ly t r a in e d an d skilful g o v e r n m e n t e m p lo y e e s t o m o v e t o p r i v a t e o r g a n iz a t i o n s o r e v e n t o g o overseas in search of better jobs, le a d in g t o a d e t e r io r a t io n in t h e capacity of pu blic organizations (Franks 1999). Finally, training is a n ot h er a l t e r n a t iv e th a t can significantly im prove the capacity of g o v er n m en t in s t it u t io n s . C o n s e q u e n t ly it is h a r d ly s u r p r is in g that international aid organizations Olu place a very high priority on staff training (Catlett and Schu ftan 1994; Werlin 1991b). H ow ever, it is also s o m e t im e s a r g u ed that im provem ents in the perform ance of staff, w hich can contribu te to im p r o v e m e n t of organizational capacity as a resu lt of attend ing training, is too often zero (Carter 1991). Conclusion The capacity of public institutions to perform their functions varies and is affected by a nu m ber of factors. Early approaches analyzed pu blic institu tions and their capacity based
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
o n t h e i n d i v id u a l o r g a n iz a t io n a n d n o t o n t h e b r o a d e r e n v ir o n m e n t o r sector. H ow ever, there has been an increasing argument to suggest that a m ore com prehensive perspective or systemic approach should be used to analyze institutional capacity. One of the system ic approaches to analyze institu tions and factors affecting t h e ir capacity is H ild erbrand and Grind le's fived im e n s io n a l fram ew ork. Th i s approach argu es that d eterm inants affecting capacity of p u b lic institu tions can be fou nd in one or ore of these five d im ensions; that the action environment, the public sector institu tional context, the task network d im e n s io n , th e organization, and th e h u m an resou rces. W it h in th e action environm ent d im ension, factors that m ay affect capacity inclu d e the overall econom ic d evelopm ent as w ell as social and political stability of a country, w hereas w ithin the pu blic sector institu tional context, ru les and proced ures that govern these institu tions, inclu d ing form al and inform al pow er relationship, are factors that m ay d eterm ine capacity of public institutions. W it h in t h e t a s k n e t w o r k d im e n s io n , the capacity of institu tions can be affected by tw o broad factors. Firstly, in the case of particu lar fu nctions being perform ed by a nu m ber of institu tions, the capacity
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o f a n in s t it u t io n d e p e n d s o n it s ability to coord inate and cooperate w i t h o t h e r i n s t i t u t io n s . H o w e v e r , i n the case that a num ber of institu tions perform sim ilar fu nctions, the pressure of com petition is believed to influ ence positively the capacity of an institution.
Different in s t it u t io n s o p e r a t in g within a similar economic, social and political environm ent, governed by sim ilar rules and proced ures, m ay still have d ifferent capacity. This happens becau se the capacity of institu tions m ay also be affected by m factors w ithin the organizational is, d im ension w hich inclu d e how goals a r e e s t a b lis h e d , h o w t a s k s a r e stru ctu red , how authority relations are d efined , and w hat m anagem ent s t y l e s a r e a d o p t e d w i t h i n i n d i v id u a l institu tions. Finally, d ifferences in capacity m ay also stem from the d ifferent capability of the hu m an resou rces available in d ifferent institu tions and d ifferent hu m an resou rces m anagem ent practices adopted by these institutions. References Abow d , J.M., 1990. 'D o es performance-based m a n a g e r ia l com pensation affect corporate perform ance?' Industrial and Labour Relations Review 43:52-73.
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
Bolger, J., 2000. Capacity Franks, T., 1999. 'Capacity bu ild ing Development, C a n a d ia n and institutional In t e r n a t i o n a l D e v e lo p m e n t d evelopm ent: reflections on Agency, Canada. water', Public A dministration and Development 19:51-61. BPS (Biro Pu sat Statistik or In d o n e s i a n Bu reau of Statistics), Bappenas (Bad an Perencanaan P em b a n g u n a n N a s io n a l In d o n e s i a n or N a t io n a l D e v e lo p m e n t Planning Agency) and United N a t io n s D e v e lo p m e n t Program s, 2001. Indonesia Human Development Report 2001: towards a new consensus democracy and human development in Indonesia, BPS, Bapenas, U n it e d N a t io n s D e v e lo p m e n t P r og r a m m e, Jakarta. Carter, A., 1991. 'Managem ent training', Training Development 9:25-32. Catlett, M. and Schu ftan, C., 1994. ' Le s s o n s from in s t it u t io n bu ild ing in Kenya', Public A dministration and Development 14:153-68. Cheem a, G.S., 1980a. 'Introd u ction' in G.S. C h eem a (ed .), Institutional Dimensions of Regional Development, United N ations Center for Regional Developm ent, H ong Kong:110. and Gu lhati, R., 1991. 'Im passe in Zambia', Public A dministration and Development 11:239-44. H alligan, J. and Turner, M., 1995. Profiles of Government A dministration in A sia, A u s t r a l ia n Gov er n m en t Publishing Service, Canberra. H aque, M.S., 1994. 'The em erging challenges to bureau cratic accou ntability: a critical perspective' in A. Farazm and (ed.), Handbook of Bureaucracy, Marcel D ek k er , N ew York:265-86. H ild erbrand , M.E. and Grind le, M.S., 1994. Building Sustainable Capacity: challenges for the public sector, H arvard Institute for In t e r n a t i o n a l D e v e lo p m e n t , C a m b r id g e , Massachusetts. H ild erbrand , M.E. and Grind le, M.S., 1997. 'Bu ild ing su stainable capacity in the pu blic sector: w hat can be d one?' in M.S. Grind le (ed .), Getting Good Government: capacity building in the public sectors of developing countries,
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H a r v a r d U n iv e r s it y Harvard:30-61.
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the Third W orld , Princeton University Press, Princeton. Morgan, P., 1999. 'Som e o b s e r v a t i o n s a n d le s s o n s o n capacity bu ild ing' in K. Forss and P. Venson (ed s), Capacity Building Supported by the United N ations: some evaluations and some lessons, U n it e d N a t io n s , W a s h in g t o n D.C.:Chapter 2. N aisbitt, J., 1997. Megatrends A sia: the eight A sian megatrends that are changing the world, N icholas Brealey Publishing, London. N oe, R.A., H ollenbeck, J.R., Gerhart, B. and Wright, P.M., 1996. Human Resource M anagement: gaining a competitive advantage, Irwin McGraw-Hill, Boston. N unberg, B., 1992. Managing the Civil Service: what LDCs can learn from developed country reforms, World Bank, Washington D.C. Olu w u , D. and Sm oke, P., 1992. 'Determ inants of su ccess in African local governm ents: an overview', Public A dministration and Development 12:1-17. Osei-H w ed ie, B., 1998. ' The role of ethnicity in multi-party politics in M alawi and Z ambia' , Journal of Contem porary African Studies 16:227-46.
H ill, H ., 1994. 'The Econom y' in H . H ill (ed .), Indonesia' s N ew order: the dynamics of socioeconomic transformation, Allen and Unwin, Sydney:54-114. H u g h es, O.E., 1994. Public M anagement and A dministration: an introduction, St. Martin's Press, N ew York, New York. Is r a e l , A., 1987. Institutional Development: incentives to performance, Johns H opkins University Press, Baltim ore and London.
Know les, J.C., Pernia, E.M. and Racelis, M., 1999. Social Consequences of the Financial Crisis in A sia, A s ia n Development Bank, Manila. McCallum , B., 1984. The Public Service M anager: an introduction to personnel management in the A ustralian public service, Lo n g m a n Chesire, Melbourne. Mengers, H .A., 2000. ' M aking urban sector lending work: lessons from a capacity building program in Karnataka, India' , Habitat International 24:375-90. Migdal, J.S., 1988. Strong Societies and W eak States: state-society relations and state capabilities in
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Ozged iz, S., 1983. M anaging the Public Service in Developing Countries: issues and prospects, World Bank, Washington D.C.
Africa: le s s o n s from experience in s u p p o r t in g sou nd governance, United Nations, Washington D.C.
Phillips, A.O., 1991. 'Institutional Schw arz, A., 1994. A nation in reform in N igeria', Public waiting: Indonesia in the 1990s, A dministration and Allen & Unw in, St. Leonard s, Development 11:229-32. New South Wales. Polid ano, C., 2000. 'Measu ring pu blic sector capacity', World Development 28:805-22. Prad han, S., 1998. 'Reinvigorating state in s t it u t io n s ' in R. Picciotto and E. Wiesner (ed s), Evaluation and Development: the institutional dimension, World Bank, N ew Bru nsw ick and London:55-71. Quah, J., 1995. 'Su staining qu ality in the Singaporean Civil Service', Public A dministration and Development 15:335-43. Rainey, H .G., 1991. Understanding and M anaging Public Organizations, Jossey-Bass Publishers, San Francisco. Robbins, S.P., 1994. Management, Prentice-H all, En g l e w o o d Cliffs, New Jersey. Rohd ew ohld , R., 1995. Public A dministration in Indonesia , Montech, Melbourne. Schacter, M., 2000b. Monitoring and Ev a l u a t i o n Capacity Developm ent in Su b-Saharan Taylor, H ., 1992. 'Pu blic sector p e r s o n n e l m a n a g e m e n t in t h r ee African cou ntries: cu rrent p r o b le m s an d possibilities', Public A dministration and Development 12:193-207. Thynne, I. and Gold ring, J., 1987. Accou ntability and Control: governm ent officials and the exercise of pow er, Law Book Company, Sydney. Torrington, D. and H all, L., 1998. Human Resource M anagement, Prentice H all, Lond on and New York. UN DP, 2001. Partnership to Fight Poverty, U n it e d N a t io n s D e v e lo p m e n t Pr og r am m e Indonesia, Jakarta. _____, 1998. Capacity A ssessment and Development In a Systems and Strategic M anagement Context, U n it e d N a t io n s D e v e lo p m e n t Programme, New York. _____, 1997. Capacity Development, United N ations Developm ent Programme, New York.
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Volcker, P., 1990. Lead ership for Am erica: r e b u i ld i n g th e public service, Lexington Books, Lexington. World Bank, 2000. Reform ing Pu blic In s t i t u t i o n s an d Strengthening Governance, W o r ld Bank, Washington D.C. _____, 1993. The East Asian Miracle: econom ic grow th and public policy, W o r ld Bank, Washington, D.C. Yod er, R.A. and Eby, S.L., 1990. 'Participation, job satisfaction and d ecentralization: the case of Sw aziland ', Public A dministration and Development 10:153-63. Zeitham l, V.A., Parasuram an, A. an d Berry, L.L., 1990. Delivering Quality Service: balancing customer perceptions and expectations, Free Press, New York.
doc_763621002.docx
Generally speaking, analytic refers to the "having the ability to analyze" or "division into elements or principles."
Research Report on Institutional Capacity: An Analytical Framework
Abstract Many functions of the public sector or government can broadly be grouped into three broad categories; that is, policy-making, service delivery, and oversight and accountability. Most of these functions are performed by various public sector institutions and, in order to successfully perform these tasks, public sector institutions have to have a relatively high level of capacity. In the early introduction of institutional development programs (institutional building and institutional strengthening periods) public institutions and their capacity were approached and analyzed by looking at the individual organization and not at the broader environment or sector
Many functions of the pu blic sector or governm ent can broad ly be grou ped into three broad categories; are policy-m aking, service d e liv e r y , an d o v e r s ig h t an d accountability (World Bank 2000:xii). Most of these fu nctions are perform ed by variou s pu blic sector in s t it u t io n s a n d , in o r d e r t o su ccessfu lly perform these tasks, pu blic sector institu tions have to h a v e a r e l a t i v e ly h i g h l e v e l o f capacity. In the early introd u ction of in s t it u t io n a l d e v e lo p m e n t p r o g r a m s (institu tional b u ild in g an d in s t it u t io n a l s t r e n g t h e n in g p e r io d s ) blic institu tions and their capacity w ere approached and analyzed by lo o k in g at th e i n d i v id u a l organization and not at the broad er environm ent or sector. H ow ever, it argued in this article than since the
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early 1980s the institu tional capacity a n d a n a ly s i s h a s b e e n u n d e r t a k e n from a m ore com prehensive or these system ic perspective (Morgan 1999). Fo r e x a m p l e , t h e U N D P a p p l i e s a three-level conceptu al approach to analyze and assess the capacity of public institu tions in a system ic m anner. As show n in Figu re 2.1, the three levels in this approach, which can also be u sed to analyze factors that m ay hind er the capacity of g o v e r n m e n t in s t it u t io n s , a r e t h e s y s t e m , t h e e n t it y , a n d th e individual levels. In the UN DP approach, capacity pu is s u e s s h o u ld b e a n a ly z e d a t t h e s e d ifferent levels, and program s focu sing on institu tional or capacity d e v e lo p m e n t in d eveloping cou ntries shou ld recognize and take is into account the inter-play and inter-
An Analytical Framewor Drs. Amir Imbaruddin, MDA, Ph.D
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
connectedness of factors within these three levels (UN DP 1997; UN DP 1998).
Figure 2.1 A three-level approach to institutional capacity Source: UN DP, 1997. Capacity Development, Technical Advisory Paper 2, UNDP, New York: 25.
The ind ivid ual level refers to the skills and com petencies of staff a v a i la b l e in each in d iv id u a l
Level 1
level in the UN DP approach to analyzing capacity, the question of capacity has shifted from the entity/organizational level to this system level becau se analysis at this level also com prehensively inclu d es factors w ithin both the entity and ind ivid ual levels (UN DP 1998:710).In line w ith the UN DP's three- level approach, but inserting m ore detail, H ild erbrand and Grind le (1997) argu e that factors influ encing th e capacity of g o v er n m en t institu tions can be analyzed by grou ping these factors into five d ifferent d im e n s i o n s . Th e s e d im e n s io n s are th e action e n v i r o n m e n t d im e n s i o n , t h e p u b l i c sector institu tional context, the task network dimension, the organization d im ension, and the hu m an resou rces d im ension. The follow ing sections briefly analyze th e factors influ encing institu tional capacity in each of these five d im ensions as set ou t in the fram ew ork show n in Figure 2.2. 1. The action environment The first d im ension, that is, the action e n v ir o n m e n t d im e n s io n , refers to the social, political, and econom ic cond itions of a cou ntry in w hich p u blic sector institu tions perform their activities. H ild erbrand a n d G r in d l e a r g u e t h a t g o o d political and social stability w ith sou nd econom ic cond itions facilitate
Level 2
Level 3
Individual
Entity System
i n s t i t u t i o n a n d t h e w o r k e t h ic t h a t the staff em braces in perform ing their functions efficiently and effectively w ithin the entity or w ithin a broad er context. The Entity or organization level relates to an o r g a n iz a t io n s stru ctures an d w orking m echanism s, its w orking culture, and its resources. H ow ever, the organizational capacity is likew ise influ enced by external factors in the w id er institu tional environm ent such as political, econom ic and cultural factors. Lastly, the system level refers to the national and regional Regulatory framework and policies t h a t m a n a g e t h e in s t i t u t i o n s , a n d how these institutions inter-relate, interact and d epend on each other. Althou gh it is the m ost com plex
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
the ability of governm ent to perform its fu nctions. On the other hand , a h i g h l e v e l o f p o l i t i ca l i n s t a b i l i t y a n d social conflict m akes it d ifficu lt for governm ent m achinery to fu nction (H ild erbrand and Grind le 1997:37). In l i n e w i t h H i l d e r b r a n d a n d Grind le's argum ent, but more specifically, Rainey (1991 :Chapter 2) id entifies the environm ental factors that m ay im pact on the capacity of p u b l i c o r g a n iz a t i o n s a s t h e g e n e r a lscience and technological stage of a cou ntry, the governm ent system , the le v e l o f p r o s p e r it y a n d th e characteristics of popu lation, as w ell a s t h e p r e d o m i n a n t v a lu e s , a t t i t u d e s , and belief of the society. The m ore cond u cive these factors in a cou ntry are, the m ore capable are its pu blic organizations to perform their functions. Based on their case stud ies, H ild erbrand and Grind le (1997:39) ind icate that factors w ithin the action environm ent are m u ch m ore im portant as constraints in som e cou ntries than in others. For exam ple, experience in the Central African Repu blic left little d oubt that u ntil basic cond itions of econom ic d evelopm ent, political com m itm ent, and social stability are pu t in place, little can be d one along other d im ensions that w ou ld contribu te to im p r o v in g p u b lic sector perform ance. In Morocco, by contrast, capacity build ing initiatives
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w ou ld not need to pay m u ch a t t e n t i o n t o i m p r o v i n g a g e n e r a l ly positive or at least benign action environm ent. In other cases, w hile the action environm ent w as far from id e a l, in t e r v e n t io n s a t o t h e r le v e ls cou ld d o m u ch to red ress the capacity gaps that w ere id entified . Fo r e x a m p l e , d e s p i t e h a v i n g a l e s s favorable econom ic environm ent becau se of consid erably low er per capita incom e, Sri Lanka w as able im pressively to im prove the capacity o f i t s p u b l i c a d m i n i s t r a t io n b y
directing its lim ited resources to s u p p o r t h u m a n d e v e lo p m e n t in a ll levels (H ild erbrand and Grind le 1994:29).
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
Figure 2.2 A five-dimensional framew ork of institutional capacity
Action Environment Public Sector Institutional Context Economic Factors
Growth Labor market International economic relationships & conditions Private sector Development Concurrent policies Public service rules and regulations Budgetary support Role of the state Management practices Formal & informal power relationships
Task Network
Communications and interactions among Primary Organizations Secondary Organizations Support Organizations
ORG3
Organisation Political Factors
Leadership support Mobilization of civic society Stability Legitimacy Political institutions ORG2 Goals Structure of work Incentive system Management/leadership Physical resource Formal & informal communication Behavioral norms Technical assistance ORG1
ORG4
Performance Output
Effectiveness Efficiency Sustainability Quality
ORG5
Human Resources Social Factors
Overall human resource development Social conflict Class structures Organization of civic society Training Recruitment Utilization Retention
Source: Hilderbrand, M .E. and Grindle, M .S., 1997. Building sustainable capacity in the public sector: what can be done? in M .S. Grindle (ed.), Getting Good Government: capacity building in the public sectors of developing countries, Harvard University Press, Harvard:36.
A n u m b e r o f o t h e r s t u d ie s h a v e show n how factors w ithin this action e n v ir o n m e n t d im e n s i o n h ave affected the capacity of the pu blic sector in d ifferent cou ntries (see, for exam ple, Polid ano 2000; Oseiw ed ie 1998; Migd al 1988). For example, M ig d a l (1988) h as com prehensively a n a ly s e d h ow ethnic fragm entation in m any d eveloping cou ntries has created social and political instability that h a s d i s a b l e d s t a t e i n s t i t u t io n s b y a k e n i n g t h e ir i m p l e m e n t a t i o n he capacity. Whereas in econom ic terms, Polidano (2000:811) asserts
that a severe econom ic crisis can red u ce pu blic sector capacity in m any countries in tw o w ays. Firstly, an econom ic d ow ntu rn red u ces capacity becau se governm ents have to m ake sharp cu tbacks to the pu blic H sector. Second ly, econom ic crisis w eakens the capacity of pu blic institu tions because the pu rchasing p ow er of the-already-low-paid pu blic officials is red u ced w hich com pels them to seek alternative means of earning their living. w e In d o n e s i a i s p r o b a b l y o n e o f t best exam ples of how social, political, and econom ic cond itions have w eakened the capacity of
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Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
public institutions. Before the Asian econom ic crisis in 1997, together w ith H ong Kong, Japan, Malaysia, Singapore, South Korea, Taiw an, and Thailand , the World Bank(1993:1-3) inclu d ed Ind onesia as one of the m iracle cou ntries in East Asia becau se of its high econom ic perform ance in term s of average a n n u a l g r o w t h r a t e a n d a st ea d y d ecrease of inequ ality (see also Schw arz 1994:57). In term s of poverty alleviation, in 1990 the World Bank reported that for the last t w e n t y y e a r s In d o n e s i a h a d t h e highest annu al red u ction in the incid ence of poverty am ongst all cou ntries stud ied (1990:45). In 1971, 68 m i l l i o n I n d o n e s i a n p e o p l e w e r e consid ered as poor. In 1990, even w ith a 50 percent increase in p o p u la t io n , t h e n u m b e r o f p e o p le consid ered as poor had fallen to 18 m illio n (N aisbitt 1997:181). Accord ing to H ill (1994:55), one of the reasons for this im pressive achievem ent w as the existence of a stable econom ic and political e n v ir o n m e n t , a lt h o u g h th e g o v e r n m e n t s o m e t im e s h a d t o t a k e tough and unpopular decisions. H o w ev er , th e capacity of In d o n e s i a n p u b l i c i n s t i t u t i o n s t o d eliver pu blic services severely d eteriorated follow ing the Asian econom ic crisis, w hich in Ind onesia w as follow ed by social d isorder, political restru ctu ring, and the
ou tbreak of d ebilitating com m u nal conflicts across the cou ntry. The q u a lit y a n d q u a n t it y o f g o v e r n m e n t - provid ed social services, su ch as ed u cation and health, d eclined becau se of bu d get red u ctions. For e x a m p le , p u b lic s p e n d in g o n h e a lt h d u ring the crisis w as d ram atically cu t, resu lting in d eclining stand ard s of care (BPS, Bappenas and UN DP 2001:39). The availability of m ost antibiotics an d contraceptives d eclined at pu blic health facilities and pu blic health centers seem ed to be closed m ore frequ ently than they w ere open (Knowles et al. 1999:29- 30). In term s of poverty alleviation, the resu lts achieved before the Asian financial crisis w ere reversed . For exam ple, those living in poverty rose to arou nd 24 per cent of the popu lation in 1999 from ju st 12 per cent in 1996 (UNDP 2001:2-4). 2. Public sector institutional context A second d im e n s i o n of institu tional capacity, the pu blic sector institu tional context, refers to the overall ru les and proced ures that govern governm ent organizations and employees across the country. In o t h e r w o r d s , t h i s d im e n s io n i s concerned w ith the nature of pu blic sector em ploym ent w hich inclu d es the ad equ acy of rew ard s and incentives, th e existence of perform ance e v a lu a t i o n ,
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recruitm ent, an d p r o m o t io n proced ures for g o v er n m en t em ployees, and form al and inform al influences that affect how public institutions function. It is argued that better institutional capacity in public organizations is im possible to achieve unless governm ent salaries and incentives are able to attract a capable w orkforce and there are s o m e r u le s a ndguidelinesabout organizational stru ctures, job d escriptions, hiring proced ures, inform ation sy st em s, an d perform ance stand ard s (Hilderbrand Grind le 1997:37). Bolger (2000:3) grou ps together both the action environm ent and pu blic sector institu tional context and calls this t h e e n a b l in g e n v i r o n m e n t . In d eveloped cou ntries, the im portant role that factors w ithin t h is d im e n s io n p la y , in d e t e r m in in g the capacity of pu blic organizations, h a s b e e n w e l l a d d r e s s e d . In t h e United States, for exam ple, Volcker (1990:33) points ou t that th e com m itm ent to perform ance cannot lo n g s u r v iv e u n le s s th e g o v e r n m e n t p r o v id e s a d e q u a t e p a y , recognition for jobs d one, accessible t r a in in g , a n d d ecent w orking cond itions . In Singapore, one of the r ea son s th at th e Singaporean governm ent can attract and retain its caliber pu blic servants and sustain the capacity of its pu blic sector organizations has been salary
l e v e l s t h a t a r e e x t r e m e l y h ig h b y in t e r n a t io n a l st a n d a r d s (Quah 1995:337-8). In m any d eveloping cou ntries, how ever, the existing cond itions, policies, and regu lations within this d im ension are generally not cond u cive for pu blic sector organizations to im prove their capacity (see, for exam ple, Mengers 2000; Werlin 1991b). In term s of salary, for exam ple, a com m on e x p r e s s io n a m o n g p u b lic s e r v a n t s in Eastern Eu rope, ind icating the relationship between their low salary and their low prod u ctivity and , and therefore, the lack of capacity of their organizations, h as b een th e g o v er n m en t p r et en d s t o p a y u s, a n d w e p r eten d t o w or k (Werlin 1991b:198). In terms of hiring and firing systems, another factor w ithin the pu blic sector institu tional context id entified b y H i ld erbrandandGrindle,ando t h e r s , is t h a t a n o p e n a n d com petitive recru itm ent system , in w hich i n d i v id u a l organizations possess significant autonom y in term s of selection, increases the capacity of pu blic organizations to perform (H ild erbrand and Grind le 1997:45; N u nberg 1992:21). Again, in d eveloped cou ntries this kind of open and com petitive recru itm ent system has long been in place. In high Au stralia, for exam ple, it is believed that recruitm ent based on m erit is the life-blood of a professional
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
public service (McCallum 1984:23749). Therefore, tensions som etim es occu r b et w een in d iv id u a l d ep a r t m en t s or organisations w anting to get the staff they w ant as o n a s p o s s ib le , a n d t h e n a t io n a l pu blic service authority w anting to m ake sure that the m erit principle is alw ays strictly applied . In m any d eveloping cou ntries w here fam ily a n d k i n s h i p r e la t i o n s h i p s s t i l l influ ence recru itm ent d ecisions, civil servants, politicians and m ilitary officials are all expected to u se their p o s i t i o n s t o a s s i s t o r r e p a y t h e ir fam ilies by recru iting them into governm ent organizations (Hague et al. 1992:362). Similarly, perform ance evalu ation an d career ad vancem ent of g o v e r n m e n t e m p lo y e e s in m a n y d eveloping cou ntries is not based on m erit system , w ith im pacts w hich demoralize e m p lo y e e s an d negatively influ ence the capacity of governm ent institu tions (Ozgediz 1983:49). It m ay be true that m any eveloping cou ntries have equ ipped ures them selves w ith m eritocracy ru les and proced ures for pu blic sector e m p lo y m e n t . H o w e v e r , t h e s e r u le s procedures sometimes exist only on paper and not in practice becau se public sector e m p lo y m e n t is politicized for the sake of pow erfu l i t e s w h o w a n t t o m a i n t a in t h e ir positions (Nunberg 1992:36).
In d o n e s i a h as experienced fu nd am ental changes in the last six years, follow ing the resignation of Presid ent Soeharto after being in pow er for three d ecad es. One of the s o changes has been the introd u ction of new law s that give local governm ent e x t e n s iv e r e s p o n s ib ilit y an d au thority. Althou gh the new local g o v er n m en t la w g iv e s local g o v e r n m e n t s t h e o p p o r t u n it y t o create their ow n local ru les and proced u res, m ost local governm ents continu e to apply the existing national civil service ru les and proced u res. In general, these civil service r u le s an d proced ures acknow led ge that both local and central governm ent institutions and p e r s o n n e l i n In d o n e s i a a r e p a r t o f t h e n a t io n a l a d m i n i s t r a t io n o r bu reau cracy, and therefore both are a g o v e r n e d b y t h e s a m e r u le s a n d procedures (for extensive Indonesian civil service ru les and proced ures, see, for exam ple, H alligan and Turner 1995; Rohdewohld 1995). d Apart from the ru les and proced g o v e r n in g p u b lic e m p lo y m e n t , form al an d inform al p ow er relationships are one of the factors and w ithin the pu blic sector institu tional context that can affect the capacity of pu blic institu tions to perform its functions (H ild erbrand and Grind le e l 1997:37). In the context of m unicipal local governm ents in Ind onesia, the form al as w ell as inform al pow er
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r e la t io n s h ip s b et w een local g o v e r n m e n t in s t it u t io n s a n d t h e Mayor (in the m u nicipalities) of the Governor (in the provinces), as the highest chief executive, as well as the local parliam ent, w hich has political o v e r s ig h t r e s p o n s ib ilit ie s , are inclu d ed in t h is d im e n s i o n . Theoretically, the formal relationship betw een the local governm ent in s t it u t io n s a n d t h e M a y o r o r t h e Governor can be seen in the context of ad m inistrative accou ntability, w hereas the form al relationship betw een the local governm ent in s t it u t io n s a s t h e in s t r u m e n t s o f t h e local execu tive w ith the local parliam ent can be seen in the context of political accountability. Schacter (2000b:9) ind icates that lack of accou ntability is one of the factors that w eakens the capacity of pu blic institu tions in Su b-Saharan Africa, whereas Israel (1987:90-1) believes that the existence of political pressure is a su rrogate for m arket com petition w hich can have positive im pacts on th e in s t it u t io n a l perform ance of g o v er n m en t agencies. Others argu e that the higher the d egree of accou ntability that the au thoritative entity exercises over the governm ent agencies, the better the capacity of the agencies in term s of their capacity to d eliver services and be responsive tow ard s their clients (see, for exam ple, Haque
1994; H u ghes 1994:Chapter Thynne and Goldring 1987). 3. Task network dimension
10;
Perform ing particular fu nctions or d elivering specific pu blic services s o m e t im e s n e e d s n o t a s i n g le b u t a n u m b er of g ov er n m en t organizations. Therefore, a third d im ension, the task netw ork, w hich relates to the ability of an organization to bring together other organizations to perform particu lar tasks, can also influ ence the capacity of p u b lic sector in s t it u t io n s . H ild e r b r a n d a n d G r in d le a r g u e t h a t the better the ability of an organization to coord inate with o t h e r o r g a n iz a t io n s , t h e b e t t e r t h e capacity of the organization to perform its fu nctions (Hilderbrand and Grindle 1997:13). The im portance of coord ination in d e v e lo p m e n t lit e r a t u r e is n o t a n e w issue. For example, writing about the i n s t i t u t i o n a l d im e n s i o n i n r e g i o n a l development, Cheem a (1980a:6) observed that good coord ination am ongst governm ent organizations ensu red that lim ited resou rces w ere efficiently u sed and not w asted , conflicting goals w ere elim inated , and overlapping fu nctions w ere red u ced . Cheem a's conclu sion w as that good coord ination am ongst governm ent organizations cou ld be achieved by stand ard ization, by
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Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
planning or by mutual ad justment. capacity of an agency particu larly w Coord ination by stand ard ization cou hen its fu nctions can only be perform ld be im plem ented by creating proced ed in cooperation w ith other u res and ru les that govern the actions organizations. On the other hand , the of each organization into an in d e p e n d pressu re of com petition is m ore e n t r e la t io n s h ip , w h e r e a s coord relevant to the capacity of an agency w ination by planning cou ld be carried hen it com petes w ith other agencies out by setting the bound aries to deliver similar functions. for the interd epend ent organizations Fo r e xa m p le , r e v ie w in g 159 to govern their actions. Coord ination institu tions in d eveloping cou ntries by m utual ad ju stm ent w as seen as Israel (1987) conclu d ed that m ost of d e p e n d e n t o n t h e w illin g n e s s o f t h e t h ese in s t i t u t i o n s enjoyed a organizations involved to m od ify m o n o p o ly o r n e a r m o n o p o ly . t h e ir in t e r n a l o p e r a t io n s for H o w e v e r , w i t h r a i lw a y s b e in g t h e reciprocal task interd epend ency exception, institu tions that w ere (Cheema 1980a:7). e xp o s e d to som e form of H ild erbrand and Grind le indicate com petition had a higher level of that a lack of coord ination that institu tional perform ance than those weakens the capacity of public sector that w ere not (Israel 1987:101-2). agencies can occu r betw een agencies More recently, the World Bank s e t t in g p o l i ce s an d t h ose acknow led ged th e p o t e n t ia l im plem enting them . In m ore recent contribu tion of com petitive pressu re t im e s t h e r e is a ls o a n is s u e o f to the su ccess of d evelopm ent coord ination a m on g d ifferent p r og r a m s an d th e increasing p r o v id e r s , inclu d ing sep a r a t e em pirical evid ence su pporting the governm ent an d p r iv a t e need to introd u ce com petition into o r g a n i s a t io n s (H ild erbrand and pu blic sector organizations to Grind le 1997:46). H ow ever, in the im prove their institu tional capacity case that sim ilar public fu nctions or (Pradhan 1998:55-6). services are d elivered or provid ed by different organizations, it can also be 4. Organisational dimension argu ed that the capacity of an Th e o r g a n i z a t i o n a l d i m e n s i o n o f organization to perform its functions is capacity is u sed by H ild erbrand and d e p e n d e n t m o r e o n it s a b ilit y t o Grindle to refer to the stru ctu res, com pete, than to coord inate w ith, o t h processes and resou rces of the e r o r g a n i z a t i o n s . In o t h e r w o r d s , o r g a n iz a t io n , an d m a n a g em en t w it h in t h e t a s k n e t w o r k d im e n s io n , s t y le s a d o p t e d b y m e m b e r s o f t h e coord ination is im portant to the
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organization. Their view is that the capacity of institutions is affected by, m o n g o t h e r t h in g s , h o w g o a ls a r e e s t a b lis h e d , h ow t a sk s are stru ctu red , how authority relations are d efined , and how incentives and d isincentives are p r o v id e d (H ild erbrand and Grind le 1997:37). Fo rexample,itisarguedthatthe clarity of organizational goals affects institutional capacity becau se clear organizational goals can gu id e staff to perform t h e ir t a sk s an d responsibilities (Zeithaml et al. 1990:83). On the other hand , vague organizational goals d o not help the creation of a sense of m ission and com m itm ent am ongst staff, w hich are also im portant to the capacity of in s t it u t io n s to perform t h e ir functions (H ild erbrand and Grind le 1997:49). Rainey (1991:33) ind icates vagu eness of organizational goals and objectives is m ore observable in governm ent agencies and , ind eed , is one of featu res that ifferentiate pu blic organizations from private organizations. At this point hu m an resou rces m a n a g em en t practices become significant in an organization s ability to achieve its goals. Apart from organizational objectives, the goals that each ind ivid ual w ithin the organization shou ld achieve m u st
ind ivid uals w ithin the organization to achieve their own goals, is another a factor w ithin the organizational d im ension that affects capacity of i n s t i t u t i o n s . If a l l i n d i v i d u a l s i n a n organization com plete their goals, the u nit's goals w ill be achieved , and then the organization's overall objectives w ill be accom plished . On the other hand , w hen staff d o not u nd erstand w hat is expected from them , and how to accom plish that expectation, role am bigu ity m ay em erge and the overall objectives of t h e o r g a n i z a t i o n w i l l n o t b e co m e a reality (Robbins 1994:199). Re w a r d i n g i n d iv i d u a l s w it h in organizations w ho have su ccessfu lly perform ed in accord ance w ith the job d escription, and pu nishing those w ho have failed , is another factor that m ay contribu te to better that the institu tional capacity. In general, a h u m an resou rces m a n a g em en t approach w ill argu e that to m otivate ind ivid uals w ithin the organization d to perform w ell they m ust be r ew a r d ed an d p u n is h e d in accord ance w ith their perform ance (Abow d 1990). H ow ever, to be able to fairly rew ard and pu nish ind ivid uals w ithin an organization, t h e o r g a n iz a t i o n s h o u l d b e e q u i p p e d w ith a w orkable perform ance appraisal system . This perform ance
also be clear and u nd erstand able. Therefore, the existence of a job d escription, w hich can g u id e w ho perform w ell and those w ho
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
a p p r a is a l s h o u ld b e a b le t o d ifferentiate betw een ind ivid uals ad equ ate office equipm ent (Taylor 1992; Phillips 1991).
perform bad ly, and shou ld be applied impartially. Th e s t yle of m anagement a d o p t e d w i t h i n a n o r g a n iz a t i o n i s another im portant factor th at d e t e r m in e s w h e t h e r o r n o t a n institu tion has the capacity to perform its fu nctions. Generally, a le s s hierarchical m anagement approach, a high participation of low er level staff in d ecision-making processes, and an intense bu t less form al com m u nication an d interaction s t y le b et w een m anagem ent and low er level staff, is seen by the hu m an resou rces m anagem ent approaches as likely to contribu te positively to the capacity of organizations to perform their fu nctions an d achieve t h e ir objectives (Hughes et al. 1996; Werlin 1991b; Yoder and Eby 1990). The availability of physical resou rces n e e d e d b y i n d iv i d u a l s w it h i n t h e organizations to perform their fu nctions is also an im portant contribu tion to capacity of an in s t it u t io n . In t h e ir st u d y , H ild erbrand and Grind le (1997:50) s h o w t h a t g o v e r n m e n t in s t it u t io n s occu pying aged , bad ly m aintained and abu sed bu ild ings w hich lack office equ ipm ent tend to have a significantly low er capacity to perform t h e ir fu nctions th an organizations h a v in g m or e convenient and pleasant offices and 5. Human resources dimension Becau se organizations involve g r o u p s o f p e o p le w o r k in g t o g e t h e r inter-d epend ently to achieve com m on goals, m anaging those hu m an resou rces is one d im ension that can significantly constrain or assist the capacity of organizations to perform . This is particu larly cru cial for pu blic organizations becau se generally governm ents are not able to recru it the best people in the w orkforce, either becau se the financial rew ard is not as attractive as in private com panies or becau se of the problem of corru ption. In ad d ition, m any governm ents can not afford to train their pu blic servants to im prove their capacity. Therefore, the UN DP (1998:10) believes that hu m an resou rces are central to capacity d evelopm ent and is the m ost critical factor to consid er in analyzing capacity. Accord ing to H ild erbrand and Grind le (1997:14) this fifth d im ension of capacity r e la t e s t o t h e a b ilit y o f a n organization to recru it, u tilize, train, and retain em ployees, especially t h ose w ho are m a n a g e r ia l l y , professionally, an d technically capable. Factors w it h in t h is d im ension have long been concerns both in pu blic and private sector
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
o r g a n iz a t io n s , a n d h a v e b een extensively d iscussed und er the h u m an resources m a n a g em en t re (see, for example, Torrington and H all 1998; Noe et al. 1996; Stone 1991). For exam ple, recru itm ent and initial placem ent of staff are d ecisive in d eterm ining the continu ing quality and capacity of pu blic organizations (N u nberg 1992). A merit-based recru itm ent system has been argued as one of the reasons for su ccess in som e African countries, an d s p o ile d an d politicized recru itm ent practices have been b la m e d for th e continu ing d ysfu nction of m an y p u b lic in s t it u t io n s in ot h er African countries (Catlett and Schu ftan 1994; w u and Sm oke 1992; Gu lhati 1991; Phillips 1991). Apart from recru itm ent, effective u tilization of personnel w ithin the organization p la y s an im p o r t a n t r o le in d eterm ining w hether or not staff can contribu te m axim ally to the capacity of the organization to perform its fu nctions. Generally, staff w ill not be positively m otivated to contribu te to the su ccess of the organization w hen t h e y b e l ie v e t h a t t h e i r t a l e n t s t o carry out the tasks are not appropriately acknow led ged and considered (H ild erbrand an d Grind le 1997). Sim ilarly, it is u nlikely that staff w ill be satisfied w ith their jobs if they are w orking in
a position w hich d oes not m atch their skills (Yoder and Eby 1990). Retaining skilled staff is another lit e r a t u im portant factor w ithin the hu m an resou rces d im ension w hich m ay d e t e r m in e w h e t h e r o r n o t t h e capacity of pu blic institu tions can be su stainable. It is not u nu su al for h ig h ly t r a in e d an d skilful g o v e r n m e n t e m p lo y e e s t o m o v e t o p r i v a t e o r g a n iz a t i o n s o r e v e n t o g o overseas in search of better jobs, le a d in g t o a d e t e r io r a t io n in t h e capacity of pu blic organizations (Franks 1999). Finally, training is a n ot h er a l t e r n a t iv e th a t can significantly im prove the capacity of g o v er n m en t in s t it u t io n s . C o n s e q u e n t ly it is h a r d ly s u r p r is in g that international aid organizations Olu place a very high priority on staff training (Catlett and Schu ftan 1994; Werlin 1991b). H ow ever, it is also s o m e t im e s a r g u ed that im provem ents in the perform ance of staff, w hich can contribu te to im p r o v e m e n t of organizational capacity as a resu lt of attend ing training, is too often zero (Carter 1991). Conclusion The capacity of public institutions to perform their functions varies and is affected by a nu m ber of factors. Early approaches analyzed pu blic institu tions and their capacity based
Institutional Capacity: An Analytical Framework Drs. Amir Imbaruddin, MDA, Ph.D
o n t h e i n d i v id u a l o r g a n iz a t io n a n d n o t o n t h e b r o a d e r e n v ir o n m e n t o r sector. H ow ever, there has been an increasing argument to suggest that a m ore com prehensive perspective or systemic approach should be used to analyze institutional capacity. One of the system ic approaches to analyze institu tions and factors affecting t h e ir capacity is H ild erbrand and Grind le's fived im e n s io n a l fram ew ork. Th i s approach argu es that d eterm inants affecting capacity of p u b lic institu tions can be fou nd in one or ore of these five d im ensions; that the action environment, the public sector institu tional context, the task network d im e n s io n , th e organization, and th e h u m an resou rces. W it h in th e action environm ent d im ension, factors that m ay affect capacity inclu d e the overall econom ic d evelopm ent as w ell as social and political stability of a country, w hereas w ithin the pu blic sector institu tional context, ru les and proced ures that govern these institu tions, inclu d ing form al and inform al pow er relationship, are factors that m ay d eterm ine capacity of public institutions. W it h in t h e t a s k n e t w o r k d im e n s io n , the capacity of institu tions can be affected by tw o broad factors. Firstly, in the case of particu lar fu nctions being perform ed by a nu m ber of institu tions, the capacity
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o f a n in s t it u t io n d e p e n d s o n it s ability to coord inate and cooperate w i t h o t h e r i n s t i t u t io n s . H o w e v e r , i n the case that a num ber of institu tions perform sim ilar fu nctions, the pressure of com petition is believed to influ ence positively the capacity of an institution.
Different in s t it u t io n s o p e r a t in g within a similar economic, social and political environm ent, governed by sim ilar rules and proced ures, m ay still have d ifferent capacity. This happens becau se the capacity of institu tions m ay also be affected by m factors w ithin the organizational is, d im ension w hich inclu d e how goals a r e e s t a b lis h e d , h o w t a s k s a r e stru ctu red , how authority relations are d efined , and w hat m anagem ent s t y l e s a r e a d o p t e d w i t h i n i n d i v id u a l institu tions. Finally, d ifferences in capacity m ay also stem from the d ifferent capability of the hu m an resou rces available in d ifferent institu tions and d ifferent hu m an resou rces m anagem ent practices adopted by these institutions. References Abow d , J.M., 1990. 'D o es performance-based m a n a g e r ia l com pensation affect corporate perform ance?' Industrial and Labour Relations Review 43:52-73.
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