Finding a way forward on public employment reform: A Sri Lankan case study

(6814 words, excluding abstract and references) 1 The author wishes to thank aid agency and Sri Lankan government officials whom it is not possible to name, and also Charles Polidano, Tom Redman, Mark Turner and two anonymous referees, all of whom provided valuable comments. The article explores two contrasting models of public employment reform in developing countries in the Asia Pacific region and elsewhere: the dominant current model, labeled the " Washington model " , and an emerging strategic model of reform which is implicit in studies of downsizing in OECD country organizations. A case study of reform in Sri Lanka is then used to explore the viability of the two models, focusing on the political, economic, institutional and employment contexts, and on the content and process of the reform programme. Implications for the conduct of employment reform in developing countries are discussed. The article outlines a modified strategic model as a possible way forward. Employment reform (as it has become known in the public sector) or downsizing (as it has become known, equally euphemistically, in the private sector) is arguably the dominant HR phenomenon of the last fifteen years, affecting countries in the Asia Pacific region and elsewhere even before the recent downturn (Hulme, 1996). Despite its ubiquity and sometimes dramatic scale-China embarked in 1998 on a programme designed to cut the number of its public employees by no fewer than four million people (Economist, 1998)-the interest of HR scholars has developed only recently (Dawkins et al. Probably not by coincidence, reform has often been dictated by financial rather than strategic or human considerations. This is particularly true in the developing countries which are the focus of this article, where the financial bias of reforms derives from severe economic problems and the consequent influence over their governments of international financial institutions and donors, especially the International Monetary Fund (IMF) and the World Bank. That influence has translated into a recipe for public sector downsizing which I call the " Washington model " of employment reform. It has been adopted very widely, but it is entirely uninformed by a Human Resource perspective, has received little independent scrutiny and, as we shall see, has largely failed to achieve its objectives. After one and a half decades of civil service reform in developing countries, a coherent reform model has emerged. It is cost-driven, having developed in the context of a macroeconomic programme …