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Downsizing the civil service in developing countries: the golden handshake option revisited
Authors:John Macgregor  Stephen Peterson  Claudio Schuftan
Abstract:In recent years, more and more calls are being heard in a growing number of developing countries to downsize their civil services. It is argued that downsizing is needed because of the increasing shortfalls in government recurrent and development budgets. This situation results in underutilized, underfunded staff and often in the siphoning-off of donor funds in the development budget for recurrent expenditure. The main problems addressed in this article are why should and how can the civil service in developing countries be downsized. The questions of how much to trim the bureaucracy and how to redeploy redundant public servants in the private sector are also addressed. The article examines alternative strategies for significantly downsizing the civil service. It is contended that problems in this area are indeed common to many developing countries. Various golden handshake options for civil service leavers receive particular attention. It is suggested that economic jumpstart is a better term than golden handshake to characterize the incentives package offered to induce staff to accept voluntary redundancy. Civil service reform is not presented here as a panacea for all developing countries' ills. The article makes a number of mostly untried but nevertheless attractive suggestions that bring some fresh thinking to bear on a difficult issue. Paths and avenues worth exploring when starting to design civil service trimming operations are presented, including some of their limitations. The point is finally made that this type of downsizing is overdue in many places. The article should be considered as a contribution to demystifying the process of downsizing the civil service in developing countries. © 1998 John Wiley & Sons, Ltd.
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