What has gone wrong?

On the beginning 2000, the Tanzanian government embarked on an 11-year Public Service Reform Programme (PSRP). The programme has four core areas:
– a pay reform to raise and differentiate public sector salaries in order to increase motivation and reduce corruption,
– downsizing of the public sector through privatisation to limit government inefficiencies,
– rationalisation of the government bureaucracy and introduction of performance monitoring systems to reduce the size of the bureaucracy, and finally
– decentralisation of powers to local governments to increase efficiency of service delivery and effectiveness of developmental planning.

Evaluations of the reform programme have – by and large – been supportive of the government, highlighting the processes of administrative re-structuring that has been made. Any criticism has mostly been directed at the pace and accuracy of the reforms. The reality, however, looks a little bit different. Despite the much-lauded reforms of the public procurement mechanisms, and the 1999 National Anti-Corruption Strategy Action Plan, corruption seems to have increased. This has been evidenced by the latest scandal which involved concessions to independent power providers in the electricity sector, one of the flagship sectors of the liberalisation programme. The reforms were supposed to lead to a downsizing of bureaucracy. Instead the number of ministries, departments and agencies (MDAs) and size of bureaucracy has increased. After almost a decade of generously donor-funded programmes such as the Sustainable Cities Programme, the quality of urban living is deteriorating with rising incidences of chronic epidemics (malaria, cholera) and the breakdown of critical public infrastructure.

Local-government reform

The Tanzanian government has proclaimed reforms in local government as central to the whole programme. Reform measures include placing some sectors like primary education, health, and public utilities under local government jurisdiction, increasing their fiscal autonomy, as well as restructuring legislative and executive powers. The highest legislative decision-making body now is the Council, made up of elected councillors. Daily business is run by the local-government civil service, headed by a district executive director. These reforms have opened up an opportunity for communities to actively influence their own development. But because these reforms are still not far-reaching enough, local governments remain too weak to implement developmental programmes.

Local governments have a problem of viability because they are economically too fragmented. The low revenue bases of most of them – with the exception of few, major urban municipalities – cannot sustain the administrative machinery. Furthermore, duplication of infrastructure affects the quality of ser­vice delivery. Recently, for example, the government decreed that every ward should have a secondary school, although in low-density, poor districts with a shortage of teachers, a pooling of resources among wards would be a more efficient allocation of resources.

As economic hardship has increased, people have shown the ability to make modest contributions to social welfare schemes (for example, cost-sharing in health care). They also have organised themselves in informal, group-based loan rotation schemes, non-formal village cooperative “banks”, and institutionalised savings-and-credit cooperative schemes. While the major reasons for joining such schemes is still consumptive, an increasing number of people are also using them for start-up or working capital for small businesses. Local governments have failed to provide adequate infrastructural support to these grass-root initiatives, with many of these credit-and-saving schemes being plagued by financial mismanagement and embezzlement.
Political pluralism has even contributed to the weakening of accountability and performance of local government. Political patronage also hampers efficient implementation of service delivery programmes. Local government councils – the legislative bodies – often enact policies the implementation of which is diluted or hampered by the same councillors in their capacity as politicians seeking to win constituency support. Also the central government still tends to intervene in what should – under the law – be the jurisdiction of local government, begging the question of the government’s commitment to the reform programme. Often, such intervention is politically motivated.

A more fundamental reason, however, is that jurisdiction of local governments is still limited. Key central-government departments have not been adequately devolved, leaving local governments resembling more a parallel appendage to the central government system than an integral part of the country’s government system.

However much one would wish to highlight the merits of the reform programme, the way it is being implemented raises serious doubts as to the political wisdom and sincerity behind it. So, what has gone wrong?

Accountability and equity

The fundamental problem is accountability and control. The government reforms have – whether by accident or design – increasingly placed government decision-making processes outside parliamentary controls and public scrutiny. This explains why corruption has increased despite the pay reforms. Parliamentary control has been difficult, since the majority of the members of parliament belong to the ruling party, and have by and large refrained from voting for stricter government accountability so far. Under the pay-reform programme ministries, moreover, departments and agencies have de facto been given a free hand to set their own remuneration schemes. At a time when wages in the education, health, and engineering sector are de-motivating, it is relevant to ask whether the high pay schemes for top-level civil service employees – such as the Selected Accelerated Salary Enhancement (SASE) are justifiable. In the government agencies, a low-level employee like a gardener or driver may earn four times more than a qualified teacher or doctor in the same government service. The reforms are creating a privileged class that is perceived to be self-serving.

At the local-government level, the ordinary taxpayer is faced with an increase in the number of taxes and levies, but receives little back in terms of adequate and reliable public services. Moreover, from an equity perspective the manner in which public services are prioritised and delivered often constitutes a subsidisation of the rich by the poor. Examples are street-lighting and road-upgrading projects that tend to start and end in wealthy neighbourhoods.

Public-private partnerships

The economic reforms being undertaken are meant to facilitate growth of the private sector, but it is perhaps pertinent to pose the question: is the private sector, in turn, killing the goose that lays the golden egg?

Public-private partnerships (PPPs) are not improving efficiencies in service delivery, but adversely affect local government finances and accountability. Local governments are increasingly outsourcing service delivery – even the tax collection – to the private sector, in arrangements that are often not transparent, difficult to monitor and which appear to be motivated by self-interest and patronage. As a result, local communities end up with poor services and considerably less money in the public coffers. These arrangements also create monopolistic situations that stifle competition and encourage inefficiencies. The regulation mechanisms in the public sector have demonstrated a bias towards private-sector interests to the detriment of consumers (for instance, in reviews of public-utility tariffs such as electricity and water).

The links between foreign private-sector investment and the central-government political class also appears to be undermining the local-government reform programme. Investment permits granted by the Tanzania Investment Centre at times contravene the autonomy of local governments. In other cases, local governments are being pressured or misled into granting concessions to private investors. In the long run, this exploitative relationship between private sector and public coffers will not only jeopardise the viability and credibility of local governments, but also hamper growth of the private sector itself.

NGOs and local governance

Non-governmental organisations funded by donors are implementing crucial, large-scale development programmes like water, roads, and health at the local government level. However, the tendency to channel Official Development Aid (ODA) through NGOs seems to undermine the capacities and credibility of local government systems. NGO programmes usurp – rather than support – local government activities, and tend to tie-up critical local government management staff and resources, thus creating service delivery problems elsewhere. The psychological effect of such NGO “dominance” is potentially harmful.

Small-scale NGO partnerships between communities in donor countries and recipient communities in Tanzania are providing much-needed inputs in schools, health centres and households. However, NGOs have also shown a structural inability to work together to harmonise activities at the grassroots level, a factor which has contributed to the problem of fragmentation of resources. One example is NGO assistance to small vocational-training centres in the rural areas. NGOs mainly donate equipment and pay training fees for students from disadvantaged families. But because almost every parish has a NGO-funded vocational centre offering the same courses, the centres are unable to get sufficient students to achieve financial viability and employ good teachers, with the result that the quality of training is poor, and the donated equipment remains under-used or not used at all.

In this sense, donor behaviour has been ambivalent. On the one hand, they call for a more vigorous fight against corruption. Yet they provide aid and even loans to programmes that facilitate corruption by weakening accountability and control mechanisms.

Summary

Public-sector reform in Tanzania has demonstrated three major weaknesses:
– it is being implemented outside the constitutional mechanisms of control and accountability, which encourages corruption and equity problems;
– there is no effective regulation mechanism in place resulting in rising costs to taxpayers; and
– local governments still lack sufficient autonomy.

Donor governments have the obligation to rectify aid programmes – and loans – that facilitate these negative impacts. Administrative reform in Tanzania has to be more far-reaching to properly release the potentials inherent in local communities.