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The road to public sector reform in Argentina's provinces

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The road to public sector reform in Argentina's provinces
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Bolus, John M
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ix, 308 leaves : ; 29 cm.

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Civil service ( jstor )
Economic reform ( jstor )
Governance ( jstor )
Personnel evaluation ( jstor )
Political reform ( jstor )
Politicians ( jstor )
Politics ( jstor )
Public administration ( jstor )
Public policy ( jstor )
Public sector ( jstor )
Dissertations, Academic -- Political Science -- UF
Political Science thesis, Ph. D
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non-fiction ( marcgt )

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Thesis (Ph. D.)--University of Florida, 2004.
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Includes bibliographical references.
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Printout.
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Vita.
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by John M. Bolus.

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THE ROAD TO PUBLIC SECTOR REFORM IN ARGENTINA'S PROVINCES













By

JOHN M. BOLUS















A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY

UNIVERSITY OF FLORIDA

2004















ACKNOWLEDGMENTS

I owe a debt of gratitude to many individuals in Entre Rios and San Luis who

made this project possible--Carlos Sergnese, Jeronimo Castillo, Gustavo Menendez,

Rubelinda Borghesse, Claudio Poggi, among others. I also sincerely thank Dr. Goran

Hyden, Dr. Renee Johnson, Dr. Terry McCoy, my parents--Michael and Kathleen Bolus--

and Julia Albarracin.




































i1













TABLE OF CONTENTS
page

ACKNOW LEDGM ENTS ........................................................................................... .... ii

LIST OF TABLES ........................................................................................................... vi

LIST OF FIGURES .................................................................................................... viii

ABSTRACT................................................................................................................. ix

CHAPTER

1 THE REFORM LANDSCAPE............................................................................... 1

1.1 Introduction.................................................................................................... 1
1.2 W hat Is Public Sector Reform ?..................................................... ................. 3
1.3 Administration and Development Studies .................................... ............. 5
1.4 Bringing the M arket Back In ....................................................... ................7
1.5 Comparative Politics...................................................... ............................ 14
1.6 M erging Streams.......................................................................................... 30
Notes ..................................................................................................................33

2 THE ROAD TO PUBLIC SECTOR REFORM ................................... ............ 39

2.1 Introduction...................................................................................................39
2.2 Argentine Federalism: Framing Provincial Public Sector Reform ..................40
2.3 Economic Factors.........................................................................................46
2.4 The Political System .............................................................. ....................55
2.5 The Administrative System .................................. ............. ......................... 60
2.6 The Content of Reform Packages ................................... ................................62
Notes ..................................................................................................................72

3 GOVERNING THE PROVINCES: PAST AND PRESENT..................................79

3.1 Introduction..................................................................................................79
3.2 The Federal-Provincial History............................ ..........................................79
3.3 Entre Rios: From Settler Paradise to Nowhere........................................ ..84
3.4 San Luis: From Nowhere to the Puntano M iracle ........................................... 91
3.5 Conclusion ................................................................................................... 97
3.6 Respondent Profile.......................................................................................98
Notes ................. .....................................................................................................103



iii










4 PROFESSIONALIZATION IN THE PUBLIC SECTOR .......................................107

4.1 Introduction......................................................................................................107
4.2 Elements of Professionalization.................................................................108
4.3 The Changing Face of Argentine Federalism................................................ 135
4.4 Conclusion: Professional or Amateur Public Sectors.. ........................... 138
Notes ...................................................... ............................... ............................ 139

5 MARKETIZATION AND DEMOCRATIZATION IN THE
PUBLIC SECTOR.............................................................................................. 143

5.1 Introduction................................................................................................ 143
5.2 Elements of Marketization.............................................. ............................143
5.3 Elements of Democratization...........................................................................164
5.4 Conclusion .................................................................................................. 187
Notes ...................................................................................................... ................ 188

6 TAKING STOCK OF REFORM: SIMILARITIES, DIFFERENCES
AND LESSONS LEARNED..............................................................................193

6.1 Introduction...... ......... ........ ............ ..... ............................ 193
6.2 Factors Moving the Process ........................................................................... 194
6.3 Professionalization Revisited............................. ............................................ 199
6.4 Marketization Revisited............................................................ ....... .......... 202
6.5 Democratization Revisited................................................... ....................204
6.6 Composition and Tradeoffs......................... ..... ............................................. 206
6.7 Timing ........................................................................................................212
6.8 Reform Fatigue?......................................................................................... 215
6.9 Lessons Learned......................................................................................... 216
6.10 Conclusion ........................................................................................................221
Notes ....................................................................................................................... 222

7 PLACING PUBLIC SECTOR REFORM IN CONTEXT .......................................226

7.1 Introduction................................................................................................226
7.2 Argentina....................................................................................................227
7.3 Latin America ............................................................................................230
7.4 The Global Trend.......................................................................................233
7.5 Conclusion .................................................................................................236
Notes ................................................................................................................237

APPENDIX

A RESEARCH METHODS ........................................................ ....................239




iv









B SURVEY: "PROVINCIAL PUBLIC SECTOR REFORM" ...................................241

C SURVEY (EN ESPANOL) ......... ........................................ ...................... 267

REFERENCE LIST ....... ...........................................................................................293

BIOGRAPHICAL SKETCH ................................................................................. 308

















































v













LIST OF TABLES

Table page

1-1 Summary Comparison of Approaches to Reform................................. ...........32

2-1 Core Propositions Concerning Reform in the Provinces ..................................... 40

2-2 Core Propositions Concerning Socioeconmic Factors...........................................47

2-3 Core Propositions Concerning Political Factors................................................. 55

2-4 Core Propositions Concerning Administrative Factor................................ ...61

3-1 Age Distribution of Public Employees .............................................................98

3-2 Education Levels............................................................................................. 101

4-1 Hiring Practices.............................................................................................. 110

4-2 Position Definition............................................................................................... 112

4-3 Training.......................................................................................................... 116

4-4 Discretion....................................................................................................... 119

4-5 Employee Evaluation ......................................................................................... 121

4-6 Employee Rewards ..............................................................................................123

4-7 Employee Sanctions....................................................................................... 126

4-8 Political Interference ............................................................................................128

4-9 Corruption ....................................................................................................... 131

4-10 Federalism ......................................................................................................136

5-1 Privatizations and Contracting-out ..................................................................146

5-2 Downsizing ....................................................................................................148




vi








5-3 Competition and Restructuring....................................... ...............................153

5-4 Budgeting in Relation to other Activities ....................................................159

5-5 Performance Evaluations and Incentives.......................................... 162

5-6 Legislative Oversight............ ................. ............ .................... ........................1. 67

5-7 Citizen Participation.......... .......................................... ...................................173

5-8 Accountability and Bureaucratic Discretion....................................................179

5-9 Transparency and Openness in the Policy Process..............................................184






































vii














LIST OF FIGURES

Figure page

1-1 M ap of Argentina's Provinces................................................................................. .2

2-1 Provincial Reform Model ................................................................................42

2-2 Components of Public Sector Reform ..................................................................65






































viii














Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy

THE ROAD TO PUBLIC SECTOR REFORM IN ARGENTINA'S PROVINCES

By

John M. Bolus

May 2004


Chair: G6ran Hyden
Major Department: Political Science

Making the state work better has become an article of faith among developed and

developing countries. Argentina's most recent crisis makes public sector reform a high

priority, particularly on the long-neglected provincial level. This study explores the

following questions: what factors shape public sector reform and how can a reform

package be designed (its composition as well as its timing) so as to improve its chances

of implementation and success? Based primarily on surveys and interviews from public

organizations in two provinces, Entre Rios and San Luis, this work offers an empirical

record regarding three sets of issues facing the public sector: professionalization, the use

of market mechanisms, and participation and openness in the policy process. The findings

here suggest professionalization is the only feasible starting point or foundation for

subsequent expansions on the other two fronts. The findings also help explain why public

sector reform in Latin America has often failed in the past as multiple reform planks were

attempted simultaneously on an unrealistic timetable.


ix













CHAPTER 1
THE REFORM LANDSCAPE


1.1 Introduction

Public sector reform in Argentina's provinces is not an orderly picture from any

vantage point. Taking an aerial perspective, the state apparatus appears too large

compared to the market or civil society. On the ground, the borders between state, market

and civil society are less well defined. Part of the confusion surely results from the

multiple ends pursued under the broad heading of institutional reform. Often at once,

reform addresses issues of efficiency and accountability, of effectiveness and legibility. It

is a busy agenda, one that has no doubt been delayed too long. But neither Argentines nor

outside observers and friends should breathe a sigh of relief simply because the

provincial public sector now sits in the reformers' crosshairs. I counsel caution and

believe that even a short survey of the reform/development literature exposes a few

important conceptual, methodological and programmatic gaps in the research.

There has never been a single research puzzle for all students of institutional

reform or development.' The puzzle or question at the heart my study is twofold: what

factors shape the public sector reform and how can a reform package be designed (its

composition as well as its timing) so as to improve its chances of implementation and

success? This study focuses on two Argentine provinces--Entre Rios and San Luis--and

takes on the first question in the next chapter with the help of Christopher Pollitt and

Geert Bouckaert's (2000) reform model and other works that aid in understanding the




I





2


road to reform. Figure 1-1 shows where these provinces are located. Exploring the second

question requires categorizing and then digging into the important sets of issues involved

in public sector reform, which are professionalization, marketization and

democratization. The categories are influenced by the World Bank's (1997, 2000) three

"drivers" of public sector reform and Blanca Heredia and Ben Ross Schneider's (2000)

work on state reform. Digging through these sets of issues is the business of Chapters 4-

6. These are based on surveys and interviews conducted in each province's Ministry of

Economy during 2002. This chapter's subsequent sections explain what "public sector

reform" is and then looks at existing research streams that speaks to my concerns.




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Figure 1-1 Map of Argentina's Provinces (Entre Rios=ERI, San Luis=UIS).





3


1.2 What Is Public Sector Reform?

Reform is defined in the English language as a change for the better or a

movement that tries to improve a sociopolitical situation without revolutionary change. In

some ways, the official definition of reform rings truer to the rhetoric of government

reform than skeptics realize.2 Reform, whether geared toward efficiency and

accountability or legitimacy and effectiveness, is a near permanent fixture in most

countries today. And leaving aside the issues of incompatible goals and timing, most

governments and reformers do actually strive to govern better. However, assuming

reform is synonymous with improvement is often a step too far. Instead, it seems safer to

say that reform means a departure from the status quo.

Next, it is necessary to define reform that falls under the heading of "public

sector." The public sector includes the whole array of institutions designed to exercise

collective control and influence over the societies and economies for which they have

been given responsibility (Peters 1996:1). This definition captures the great significance

of the public domain in most societies, but it probably fails to demarcate the public

sector's boundaries sufficiently. This sector encompasses the ends as well as the means of

public institutions and organizations. The relevance of means and ends merits further

explanation because public sector reform in Latin America continues to simultaneously

address both aspects of state action.

Public sector reform certainly includes an administrative system's concern with

the means for accomplishing goals established by public authorities. This is familiar

territory for rich and poor countries alike. It is normal business for administrative systems

to adopt new information systems, training programs and the like to improve the quality









and cost-effectiveness of government goods and services. This is the domain of resource

and operations management, and it has to varying degrees occupied public and

development administration, as well as today's public management (Kettl 2000). It

should, then, come as no surprise that reform packages in Latin America have a strong

managerialist orientation.3 In general, such reengineering efforts do not redistribute

power among institutions or societal actors and thus they typically do not appear ripe for

political analysis.4

Public sector reform also necessarily includes a government's objectives. It is

possible to understand this aspect of reform as the inclusion of policy choices. Observers

in Latin America note how the state has by and large passed from the stabilization phase

of reform into the longer structural adjustment phase (Costin 1999). This phase often

involves policy changes. In most OECD countries major policy shifts are not a regular

occurrence. In those environments it is easier to divide the conceptual landscape between

management issues and policy or political concerns. When the goals of public

organizations are subject to significant revision, an analysis of the reform landscape has

little choice but to account for the ends as well as the means of government.

Next it seems best to fan out through the relevant literature by focusing first on

the long-standing link between administrative and development studies. Second, I look at

the contribution of public management and economic institutionalism to today's

development mainstream. Third, I analyze perspectives from comparative politics that, to

varying degrees, tackle the issue of public sector reform. Last, I provide a brief summary

of how governance and public management approaches stack up against "public sector

reform" ones.





5


1.3 Administrative and Development Studies

After the Second World War, the interests of rich and poor countries converged

on development. Development, as a goal, focuses on raising the material well-being of

people, typically within the context of nation-states. Public administration embraced this

opportunity to export Western know-how to developing societies. There is no denying

that effective administration plays a key role in national development (Siffin 1976:66).

But the main problem of this period was detaching administrative issues from contextual

factors such as political instability, economic weakness and culture. Development

thinking stressed the maintenance role of administration while neglecting its

developmental or creative aspects (Siffin 1976:68).5 However, arriving at the moment

where the maintenance role might take precedence proved elusive while situations that

called for the creative or adaptive aspects of administration cropped up time and time

again.

This is not to be dismissive of administration's role in public sector reform or

development today. On the contrary, my experience in Argentina illustrates why solid

administration is indispensable for making the provincial state work effectively. Public

administration has proved capable of understanding development when it avoids the

conceptual and programmatic traps in the politics-administration dichotomy. Defending

that conceptualization on the grounds that it protects democratic accountability is

untenable.6 Separating political and administrative systems invites the equally

problematic separation of officials who make public policy from bureaucrats who

implement it. Administrative studies that capture the political, socioeconomic and





6


historical context around reform are the most valuable for determining what it takes to

craft a reform package that can be successfully implemented.

By the late 1950s or early 1960s development administration emerged as a

distinct subfield of public administration (Siffin 1991). The core assumption of

development administration was that administration had to contribute directly to

economic growth (Siffin 1976:66). Today's studies, which probe for a relationship

between measures of state size and economic growth, have inherited the mantle from

development administration.7 Interestingly, the initial strength and eventual weakness

of development administration was its economics-based agenda. This was a departure

from the narrow focus on improving public administration. Indeed, development

administration not only endorsed administrative innovation for fueling state-led growth; it

also busied itself conceptualizing on the system level where administration, culture and

society blurred.8 As Guy Peters (1994) points out, development administration believed it

could become the "master science" of public administration.

In addition, development administration added new themes such as poverty

reduction, decentralization and participation to its repertoire in an attempt to modify its

old modernization lenses. Ultimately, though, theoretical ambitions and extended visits to

Third World locales did not save development administration from being outflanked by

political and economic events. The demise of the Keynesian economic model made the

developmental state untenable. In the West, the neoclassical or neoliberal economic

alternative rearranged the content of development and the identities of development

administration (Touraine 1994). On the content level, downsizing the state in accordance

with budget pressures and external debt removed many development functions from the





7


public sector. During this period, attention shifted from the program level to the policy

level in an effort to restart socioeconomic development (Hyden 1998:3). Naturally, the

gravity of this turn of events obscured both the benefits and shortcomings of development

administration research.9

An obvious lesson of the development administration experience remains the

difficulty in bringing the diverse processes and outcomes of socioeconomic change in the

Third World under a single theoretical roof. This failure and the subsequent

fragmentation of the field should sensitize us to the shortcomings of this approach.

Explaining the content of public sector reform today and its potential impact on human

development appear too wrapped in contextual factors for universal covering laws to

carry much currency. But development administration has adapted to the post-Keynesian

world. Notably, it is has managed to see beyond the state, continuing to focus on local

development realities. Development studies are more interdisciplinary than they were two

or three decades ago. In general, social scientists are being consulted when it comes to

program or project level initiatives, but there remain considerable gaps in linking the

micro level (studies of non-governmental organizations are one example) to

administrative and political systems undergoing structural changes.

1.4 Bringing the Market Back In

Academics and practitioners did not lose interest in questions of administrative

capacity or development itself after the decline of development administration. It is true,

however, that a market-centered mainstream emerged in development circles. The main

source of new insights, if not inspiration, for public sector reform and development came

from microeconomic theory and economic institutionalism (Acufia and Tommasi 2000).





8


Innovations such as principal-agent and transaction cost theory offered impressive

explanations of performance impediments in administrative systems (Tommasi, et al.

2001). This body of solid theoretical work was taken seriously by politicians and

ministers in countries such as New Zealand.10 But it also had a major impact on the field

of public administration. In effect, many public administrators began to think of

themselves as public managers when they realized private sector influences or

competitive pressures were going to occupy state space whenever the political

opportunity presented itself.

On a theoretical and methodological level, disappointments with the new public

management are not uncommon. Besides the major breakthroughs in micro-level

incentives facing individuals and firms, the new public management has not been

particularly innovative theoretically. Few attempts from the new public management

camp have offered plausible explanations of institutional change (or, more tellingly, the

lack of change). This failing cannot be attributed to apolitical conceptualizations. The

New Political Economy, in fact, includes a political framework (Bradford 1994:18-20)."

The problem is that institutional change is viewed as a rationalist exercise in bringing

everyone (those who labor within public institutions) in line by crafting a set of

instrumental incentives.12

The other problem I see is the continued lack of comparative work in the field,

which unfortunately is no more than an extension of the error committed by public

administration during the heyday of the embedded liberalism era.13 These criticisms

certainly do not mean that public management speaks only rarely to the concerns of

public sector reform and development. In the next chapter, we will see its technical foci





9


reflected in the marketizing reform (see Section 2.6) that comprises a sizeable portion of

most reform packages in Latin America today. Additionally, Latin American reformers

are attracted to the ideas of the new public management (see Section 2.4). I estimate

public sector reform is better positioned to succeed when it takes a cue from public

management and learns how to deal effectively with the market.'4

The other critique of the turn to the market relates to the world's important

development banks and their present agenda for Latin America. The content of Latin

America's reform priorities have been summarized by The World Bank in two

documents: "The Long March" (Burki and Perry 1997) and "Beyond the Washington

Consensus: Institutions Matter" (Burki and Perry 1998). In "The Long March," the task is

conceived as one of institutional reforms in five broad policy areas: the development of

human capital, improving financial markets, enhancing the legal and regulatory

environment, increasing the quality of public sector governance and fiscal strengthening.

In particular, there is an explicit reference regarding public sector governance and fiscal

strengthening as preconditions for the reform program. "Beyond the Washington

Consensus" concentrates only on some of the many aspects contained in the five original

policy areas. The 1998 report focuses on institutional reforms regarding banking and

capital markets, education, justice and public administration. The report uses the new

institutional economics to justify both the need to develop institutions in these markets or

hierarchies, and the prescriptions for each policy area.

The reform agenda proposed by the Inter-American Development Bank (IDB)

(2002) enshrines four objectives: deepen market reforms, reduce the sources of volatility,

accelerate the accumulation of human capital, and broaden the tools for pursuing equity.





10


Numerous policy areas are discussed: trade, financial, tax, privatization, labor, monetary

and fiscal policy, education, factor markets and government institutions. The broadness

of the IDB's list suggests that national priorities and the subsequent sequencing of

reforms will depend on politics and private initiatives. In essence, the two major

multilateral development banks propose a similar array of issues for the region to address

in the near future. The IDB's agenda devotes more attention to consolidating the

macroeconomic stabilization objectives that were the centerpiece of the first generation

of state reform.15

There are several important shortcomings in the multilateral banks' enthusiastic

application of public management principles to public policies in developing countries.

First, a majority of the last fiscal year's grants and loans went to programs geared

towards policies classified as "second generation" reform priorities.' Included among

these reform priorities are measures designed to make public organizations more

transparent and outcome conscious. This general thrust has clear merits. However, events

in Argentina, Ecuador, Paraguay and much of Central America speak to the continued

relevance of economic stabilization policies. When confronted with cascading economic,

political and social crises, the public sector cannot afford to be equipped with working

assumptions and tools designed for calm waters. Effective crisis management goes

beyond shoring up central bank reserves during tough spots, and thus the International

Monetary Fund (IMF) alone cannot address the policy aspects of crises.17

Related to this first point, the multilateral banks assume there is sufficient

political and popular support for "cleaning up" the public sector, even when development

indicators are stalled or retreating. This assumption flies in the face of historical








experiences in most OECD countries. In truth, development generally raced out in front

of public sector reform.'8 In turn, when we analyze the road to reform the role of politics

is often central. It is, of course, only fair to remember the banks are not supposed to be

taking political sides. But the failure to make politics and societal support a more explicit

part of their reform frameworks leads to unrealistic expectations about the content and

pace of institutional change. Overall, such an omission is part and parcel to

misunderstanding the overlap between the first and second-generation reforms in the

region.19 Thus, for example, rooting out corruption, introducing competitive pressures

and being responsive to citizens are goals whose time has come provided that favorable

conditions (namely, consolidated gains in living standards) exist.

Second, development as public management falls into many of the same

conceptual and operational traps as development administration. On a programmatic

level, public management mainly emphasizes the technical or quantitative dimensions of

policy choices. Economic analysis, particularly marginal cost, is a useful though probably

over-weighted decision-making yardstick in the hands of managers responding to new

organizational incentives. Equity-based considerations are, at least by conventional

measures since 1980, taking a backseat to policy goals such as individual choice and

private investment.20 Unfortunately the banks' development frameworks are unclear

about what to do when private investment fails to materialize and choice becomes

something of an oxymoron as public goods are priced out of reach for poor people. The

big paradigmatic difference between public management and development administration

is reliance on the market as opposed to the state for the realization of development





12


objectives. Yet development administration's mechanistic conception of institutional

change appears largely alive and well in public management today.

Last, a preponderance of the public management literature forgets management is

social activity. This seems somewhat curious because the organizational theory subfield

of public and business administration boasts many excellent accounts of the social

dimensions of management.21 A public management approach to development must find

ways to motivate public employees and earn the confidence of the wider public.

Experience in Western Europe and North America tells us this is no easy task.22 The task

is made more difficult in the Latin American context where comprehensive reform not

only threatens public employees on a personal level, it frequently represents a betrayal of

long-standing social values. It is in such a context that the banks' often-blurry distinction

between institutions and organizations becomes problematic.

The World Bank (1997:7-9) defines institutions as the rules of the game and the

mechanisms through which they are monitored and enforced; they include organizational

rules and routines, formal laws and informal norms. The IDB (2002) similarly

understands institutions to be shared norms that facilitate collective action. Definitions

such as these have been widely accepted and reflect an academic and professional

mainstream that stresses the importance of institutions for collective action and

development. There is nonetheless a problem distinguishing between institutions and

organizations, as well as clarifying what public sector reform means to the whole

business. I argue this distinction matters because reform affects the institutionalization

process, which can go forward or backward with serious consequences for development.

The Banks' public sector reform frameworks pay too little attention to how the





13


institutionalization process can possibly go awry and risk turning institutions into

organizations.

Distinguishing between institutions and organizations centers on the issues of

regularity, legitimacy and durability. For Selznick (1957), the organization and the

institution are two different but related systems. Organizations are instrumental, a formal

structure of roles and offices, rationally engineered to achieve efficiency. Institutions

consist of the framework of symbols and values to which members commit themselves

emotionally. Huntington (1965:378) has described institutions as "stable, recurring

patterns of behavior," and he points out that "Institutionalization is the process by which

organizations and procedures acquire value and stability." According to Uphoff

(1994:200-203), institutions are distinguished by sources of non-instrumental or diffuse

support. In contrast, organizations are sustained by their instrumental value by those who

benefit directly and immediately. There seems, then, to be a case for differentiating

between organizations and institutions.

Of course, in reality, considerable overlap exists. For students of public sector

reform, most public organizations are also institutions. It is clearly desirable that public

organizations--structures of recognized and accepted roles--effectively serve collectively

valued purposes (Uphoff 1994:202). Public management has important insights for

making the state work better. Improvement necessarily requires change and public

organizations or even institutions can and must change to maintain their relevance in

ordering public life and collective action. However, the banks' version of the new public

management underestimates the risk of inadvertently making organizations less

institutional. At the present time in Latin America we likely cannot afford to be balancing





14


on such a fine line. The next section reviews politically minded development

frameworks, which avoid some of the new public management's pitfalls.

The point is not to criticize the multilateral banks for making public management

a priority, nor is it to fault them for omissions outside their mandates. But there remains a

need to ask if a public management orientation to development provides the necessary

leverage for tackling the tough challenges of development. In short, it would be

irresponsible to underestimate the banks' experience with the new public management.

For starters, these organizations produce a large percentage of the professional literature

on public sector reform and development, particularly in the context of developing

countries. Ignoring their conceptualizations of public management reform leaves us

vulnerable to overlooking the actual criteria applied to institutional change and policy

choices.23

1.5 Comparative Politics

The well-documented separation of public administration from political science

belies the contribution of comparative politics to the study of public sector reform and

development. Comparative politics has deepened the conceptual reservoir that students of

policy and management can draw on. Likewise, it has broadened the dialogue about the

state, institutions and development. My brief survey begins with the body of literature

whose analysis centers on state or bureaucratic reform. Next, research focusing on

democratic consolidation in Latin America proves relevant despite the general lack of

well-developed discussion on state reform. Third, comparative politics has been the

source of original and influential work on governance. Last, comparativists are providing





15


useful pictures of the development landscape through systematic analysis of

institutions.24

The field of public administration, as noted earlier, properly deserves credit for

initiating the political study of public sector reform. Yet recent, important works are

based in comparative politics. These contributions, which I call "state reform as a

political process," are filling the void created by public administration's reluctance to

internationalize its teaching and research agendas.25 As we know, interest in state reform

was piqued during the early 1990s when the consolidation of market-based reforms was

identified as being dependent on reforming the state's bureaucracy. A branch in

comparative politics seized onto this aspect of institutional change and seeks to explain it

either via strategic action on the part of the reformers or the confluence of place specific

values and pressures.

Both perspectives believe the content and pace of reform are not determined by a

plan's technical correctness. Also, each accepts the centrality of politics in explaining

process outputs. The first school of thought on this matter understands reform as a

process that succeeds or fails on the basis of political calculation and action. Stephan

Haggard (1997:57) states, "the design of new administrative structures must be seen as a

coalition-building process." Agents of reform cannot sell reform on its own merits;

instead they must cultivate and neutralize key political constituencies to push state

reform. 26 This conceptualization usefully emphasizes the tensions between economic and

political liberalization. It also represents a more accurate depiction of state reform in

Latin America than explanations that rely too heavily on the use of presidential decrees.





16


The state reform as a political process approach analyzes politico-institutional

factors to good effect. For instance, party systems have attracted considerable attention in

this literature. Haggard (1997) hypothesizes that governments backed by disciplined

parties with a majority in the legislature (in which party fragmentation is low) will be

better able to enact significant reform. This argument's explanatory power has proved

mixed because even majority parties are not monolithic and it pays insufficient attention

to stakeholders other than politicians and bureaucrats. Thus, Geddes (1994) counters that

when clientelist resources are pivotal in electoral politics, politicians will not approve

civil service reforms, except under conditions when such reforms hurt patronage-

dependent parties equally. Again, the argument's ability to explain state reform is limited.

In general, these institutional hypotheses seem to lack "content," which is to say that

looking where we think the action should be cannot substitute for immersion in the actual

venues for action.27

To get a better handle on reality, proponents of the politico-institutional approach

include coherence within the executive as a primary independent variable (Heredia and

Schneider 2000). Adding this element pries open the state and accounts for where key

sectors or groups in society are represented in government. Any reform packages,

particularly ones that presume to be at least somewhat comprehensive, face the

challenges of commitment and coordination. Commitment from the upper reaches of

ministries and agencies is a necessary though often insufficient condition for reform

implementation. Additionally, coordination across public (and private) organizations

becomes indispensable. This is hardly surprising given the interconnectedness of most

development priorities. Acufia and Tomassi (2000) point out how essential it is to





17


scrutinize islands of resistance within the state and to learn how particular organizations

and institutions become susceptible to uncooperative organized interests.

Overall, this particular approach reflects the political economy background of its

authors.28 Specifically, state reform is viewed as the outcome of political transactions,

which imply the rewriting of the "contract" between politicians and civil servants

(Tommasi, et al. 2001). Understanding the reform process as strategic interaction

between the state's institutions and organized societal constituencies has advantages and

disadvantages. On the plus side, focusing on political institutions is warranted because

merely providing economic recipes or writing rules has been proven ineffective across a

range of cases in Latin America. Instead, reform measures or policies of any kind should

be aimed at the level of institutional reform. By looking at the most tangible political

institutions through a transactional or contractual lens, interactions are framed in an

orderly way, which at least in theory facilitates comparison.

Unfortunately, changing the incentives facing politicians and bureaucrats is easier

said than done. A set of changes as dramatic as Latin America's economic liberalization

created unexpected obstacles to objectively designed institutional reform. Foremost, the

scope of change exposed the weakness of the private sector at least as much as it did the

public sector.29 Even during growth years the private sector failed to make sufficient

investments in infrastructure, backward linkages and emergent sectors (CEPAL 2002),

despite favorable evaluations of region-wide efforts to rationalize state institutions

(World Bank 2000, Guasch and Spiller 1999). It thus reasons that this school of thought

will have to better account for the wider stream in which the public sector operates.

Doing so requires greater attention to international factors, informal institutions, non-state





18


actors and history itself. In addition to the scope of change, more effort has to be made to

accommodate the pace of change. There is ample reason to believe the pace of reform is

far from constant and its timing can have major consequences for its implementation.30

It is fine to begin by explaining or evaluating state reform by referral to key

features of the political system. However, there appears to be a more maximalist political

process approach that places increased emphasis on environmental and social factors.

Much like the transaction approach, the political nature of state reform serves as the

starting point. Likewise, strategic negotiation figures prominently in the reform process

(Gollis 2000). While negotiations take place in a highly politicized environment, the

relevant venues for political give-and-take clearly extend beyond the state's formal

institutions. Because of this, negotiation is often understood in a less structured or

mechanical fashion. Public organizations pursue goals in a more ambiguous or fluid

external environment and decision-makers clarify or adjust priorities by understanding

the interests and power positions of various stakeholders. In this way, conceptualizations

of organizational and political reality are based on mutual adjustment rather than

command and control.

Despite this well-established view of the wider political landscape, questions

about how to incorporate state reform's social or cultural context into the moving picture

remain compelling. Public sector reform is purposeful and directed efforts at change, but

the reform process also involves factors that render change difficult and unexpected. To

know more about this unpredictable landscape is to better ascertain how reform plans

relate to politics and society. The study of values and political culture are well established

in comparative politics.31 Among comparativists interested in the question of public





19


sector reform, Judith Tendler (1997) offers an in-depth look at the bases for successful

local government in northeast Brazil. Though she does not specify the relationship

between governance reform and development, her work is reminiscent of Albert O.

Hirschman's sustained focus on the local and social bases for development in Latin

America. Also along those lines, Putnam's (1993) famous study of regional government

performance in Italy makes a strong case for the centrality of social capital in reform

outcomes.

A drawback of the former branch (and at times the latter one) of this approach has

been the tendency to attribute reform and development failures to politics.32 Various

political actions often work against development, but to simply conclude that corrupt or

otherwise inefficient political systems are the root of failure misses the point. With regard

to blaming politics, it seems pointless to maintain a fixation on the deleterious effects of

politics because, while there is obviously some truth to this complaint, it does not prove

particularly useful. Another problem concerns the role of expert or technical advice in the

reform process. Acknowledging the highly political nature of state reform has by no

means produced a clear position on the desirability of apolitical solutions to public

policy.33 This is ironic given what the development community now knows about the

limitations of technocratic fixes.

Next, perspectives on democratic consolidation have raised the issue of a

'working' state. In Latin America the successful transition from authoritarian regimes to

democratic ones helped ease some of the pain associated with economic decline during

the 1980s.34 By the 1990s, however, attention increasingly focused on the problems of

democratic consolidation. One of these problems identified with the consolidation





20


process has been state reform.35 It is noted that vestiges of authoritarian rule can be found

in most Latin American states (Loveman 1994, O'Donnell 1994), as well as in many of

the ministries and agencies within the state (Heredia and Schneider 2000, Hopkins 1995).

The state's illiberal tendencies thus amount to more than a crisis of representation; they

compromise the credibility of the policy process across various sectors.

The relevance of public sector reform to larger questions of democratic

accountability and consolidation extends beyond the state and civil society. The second

generation of reform has the significant challenge of bringing citizens more concrete

returns on their investment in political and economic liberalization.36 In particular,

making the state work better is a necessary (though probably not sufficient) component of

shaking the private sector out of its lethargy. The private sector (notably large

enterprises) has for too long been characterized by predatory and parasitic relationships

with the state.37 Democratic consolidation is bound to be incomplete unless the unholy

(and incredibly unproductive) alliance between business and state is judged by its actual

economic and social accomplishments. Fortunately, during the 1980-90s Latin America

witnessed an unprecedented level of individual and collective expression outside political

parties. However, civil society and ordinary citizens are still waiting on the public

sector's clear commitment to democracy.38

The downside of this work is obvious enough. Democratic consolidation literature

is perhaps, at best, only tangentially related public sector reform. After all, it grows out of

the transition literature that dealt with regime change, which left little conceptual space or

energy for questions of administration and public policy. In this way, it devotes more

attention to the state's formal institutions--constitutions, congress, chief executive, armed





21


forces and courts--than it does to the ministries and agencies responsible for the success

or failure of public policies. To be fair, there is greater recognition that we frequently

need to look beyond the formal institutions of government to see how informal or

particularistic processes in and around the state undermine public trust (O'Donnell 1994).

But this effort still requires more in the way of concrete policy studies that clearly

demonstrate when and how ordinary citizens are compromised by "delegative

democracies." Even when the often-overlooked dimensions of state reform are

mentioned, there is rarely discussion about making public organizations more

professional or effective.

Our third contribution, governance, from the comparative field has probably

achieved the most recognition in contemporary development thinking. Governance is a

concept that emerged in policy circles in the late 1980s in response to the failures of

state-led development and limitations of a purely market-based formula for promoting

development. International organizations such as the World Bank and the United Nations

utilize governance as a sort of universal principle capable of guiding state reform

processes. The UNDP (1996:2) defines governance as "the exercise of economic,

political and administrative authority to manage a country's affairs at all levels. It

comprises the mechanisms, processes and institutions through which citizens and groups

articulate their interests, exercise their legal rights, meet their obligations and mediate

their interests." In development vernacular today, then, governance is a broad and ample

concept. To see its strengths and weaknesses, though, it is necessary to introduce at least

two academic formulations of governance.





22


The first major work on governance in comparative politics was Goran Hyden and

Michael Bratton's (1992) edited volume, Governance and Politics in Africa. Hyden

(1992:7) introduces governance as a meta or politics-level process; specifically, it is "the

conscious management of regime structures with a view to enhancing the legitimacy of

the public realm." Authority, reciprocity, trust and accountability are the cornerstones of

governance. The rationale for focusing on the political dimensions of development is

twofold. First, development experience in the 1960-90 period rendered meaningless many

old assumptions about building a modern, prosperous state.39 Both liberal, Western and

communist blueprints for development proved incapable of translating technology and

moder organizational forms into rising living standards. Despite various modifications

to the original plan, and notably an emphasis on "bottom-up" initiatives, politics appeared

to be the missing piece of the puzzle.

Second, successful regime management in the developing world runs into the long

shadow cast by Western democracies. Governance, conceptually at least, offers an

alternative to the political and social norms of the West. The purpose is to have a

framework for assessing regime legitimacy while avoiding the normative bias inherent in

studies of democracy. The cornerstones of governance attest to its relational nature. Thus,

Hyden argues that governance is a product of human agency and is maintained by the

interactions of states and their societies. At the same time, regime management is

constrained by history and environment, which is to say that we do not make our

circumstances. Governance has earned a considerable following because it is compatible

with the present institutional foci in development and, moreover, it opened a few

analytical doors of its own. In particular, it provides some intellectual order to the study





23


of developing country politics without reverting back to the linear political development

model or merely blaming politics for Africa's woes. Of course, the practical challenge for

reformers is to make the state less bloated and more intelligible to society.

Yet governance, as a framework for the study of politics, shows signs of

weakness and has attracted its share of critics. While progress has been made in

specifying and measuring attributes of governance, here the concept is nonetheless too

theoretically abstract to serve as an organizing principle for public sector reform.

Academic conceptualizations will have to provide or attract case studies that apply the

governance framework. Even then, the openness of the concept may lead to descriptions

of formal or informal institutions that are hard to compare. For students of public sector

reform, it will be necessary to simultaneously apply governance on the political and

policy levels, since the latter is where many of the impacts of a reform package manifest

themselves. In addition to how the conceptual framework is employed, where the

framework can be effectively applied also matters. Development problems in Africa are

not foreign to Latin America, but we have to be aware of key differences.

There are critics of development that reject governance as an organizing principle

for understanding development. For these critics, the emergent governance discourse is

flawed because it cannot challenge and perhaps even reinforces the capitalist imperative

built into development. On one level, the functional or performance orientation of

governance often validates the technocratic side of governing while ignoring the

discourse of development. To put it differently, historical-political analysis is foregone in

the sincere rush to solve problems already stamped with one-sided diagnoses. On another

level, joining politics and governance obscures the question of authentic democratization





24


(Schmitz 1995:75-76).40 Governance is faulted for being flexible insofar as it proves

compatible with multiple regime types and economic systems.41 The primary complaint

with the governance framework, then, seems to be its perceived lack of transformative

power on the world system level.

Another important conceptualization of governance comes to us from Western

European public administration and policy studies but introducing it here, in the section

on comparative politics, is more useful for the purpose of comparison. In Modern

Governance, Jan Kooiman (1993) emphasizes that we are building conceptual

frameworks in an environment that is dynamic, complex and diverse. In this

environment, modes of social-political governing emerge and evolve in response to social

context. Governing is seen as the whole range of interactions crisscrossing the public

realm. Kooiman refers to the actions and interactions of public and private entities that

steer or manage parts of society (1993:2). Thus, governance is essentially the dominant or

recurrent patterns of governing in the public realm.

Informed by Western experience, the authors in this volume dwell less on the role

of political legitimacy in development than on accounting for how and why new modes

of governing emerge and affect policy outcomes. The objectives of the welfare state are

not indicted, yet the needs and capacities of political and social actors are clearly

reexamined. This particular governance approach addresses the crisis of the welfare state

(Mayntz 1993). It is encouraged that we keep in mind that the crisis of the welfare state

has been a product of financial strains and new ideas.42 This approach momentarily sets

aside the costs and capacities for state action, and explains that the distance between state

and society seemed to preclude the sort of cooperation and coordination necessary for





25


solving complicated problems. Therefore, the state has undergone profound changes,

which have led to new understandings of the reform process and its impact on

development.

The fields of public management and policy (in particular, policy networks),

political economy and sociology have made contributions to the governance framework's

understanding of Western societies. Again, the governance formulations reviewed here,

not unlike the political process approaches, are to some degree subscribing to evidence

that the state had effectively crowded out much of the problem solving potential in (civil)

society. The Western European literature on governance has refined the "governance as

steering" conception through the accumulation of many case studies and wider research

projects.43 It remains to be seen how well the governance framework inspired by the

crisis of the Western European welfare state will adapt to Latin America.

The last contribution from comparative politics actually spans a number of

theoretical frameworks, including political economy, institutionalism, state theory and

governance. In general, the common dependent variables are development outcomes of

some sort. The other important similarity among these works is the use of quantitative

data from a large number of cases. The remainder of this section seeks to clarify what a

few of these studies demonstrating a link between institutions and development tell us

about public sector reform.

The turn to the market in development circles renewed an old debate about the

relationship between the size and quality of a state's bureaucracy and its economic

performance. The Washington Consensus espoused the view that economic liberalization

in Latin America would produce a virtuous cycle of growth and rising real incomes by





26


applying unfettered competition to investment and allocation decisions. A smaller, more

business like state was also hypothesized to have a positive impact on economic growth

(Guasch and Spiller 1999). Within the Western Hemisphere there appeared to be a slight,

positive correlation between smaller states and higher growth rates (World Bank 1992).

However, later in the 1990s the causal link was still not borne out by the empirical

evidence and there were even contradictory signals about the correlation (CEPAL 2002,

Gollds 2000). In Latin America, it appears that private or foreign investment decisions in

growth sectors of an economy are not particularly sensitive to the per capita size of the

state.

The second part of the state size issue concerns the level of government. Giving

greater political voice and policy responsibility to subnational levels of government has

proved to have great appeal in most regions of the world. Consequently, employment in

these lower levels of government rose during the 1990s, while national governments

often saw at least a modest decline in their workforces (Kettl 2000). Advocates for

downsizing the state have not adequately addressed the new distributions of power and

duties between levels of government.44 Yet on both sides of the debate there needs to be

more research devoted to comparing subnational levels within and across countries.

There has also been a long-term effort to study the quality of bureaucracy in

developing countries. The Weberian Comparative Data Project, headed by Peter Evans

and James Rauch, has collected data for 35 countries in the last ten years.45 National

bureaucracies are rated in terms of meritocratic hiring, internal promotion and career

stability, compensation and "stateness." Not surprisingly, it is found that meritocratic

hiring corresponds to higher levels of bureaucratic quality and lower levels of corruption





27


(Rauch and Evans 2000). Bureaucratic quality was among Campos and Nugent's (1999)

five independent variables that probed relationships between development performance

and the "institutions of governance.'46 Among the East Asian cases, bureaucratic quality

stands out as the primary institutional determinant of development performance, while in

Latin America this variable is not the strongest predictor of outcomes.

The clearest advantage of this research for the study of public sector reform is its

unambiguous concern with bureaucracy. The studies provide a useful reference point for

framing more detailed analyses of state reform (Heredia and Schneider 2000). Yet a clear

drawback of the approach is its inability to explain either where bureaucracies come from

or where they are going. Thus, even though the studies confirm a link between high

quality bureaucracy and development success, specifics about reform options and

tradeoffs are simply absent from the analysis. The measurement of bureaucratic quality is

problematic but moving in the direction of public sector quality measures adds small but

welcomed layers to reform research. Hopefully, the link between quality bureaucracy and

positive development outcomes will help focus reform agendas on improving the public

sector rather than ignoring or indiscriminately downsizing it.47

The last point that relates to the size or quality of the state is a historical one. As I

said already, quantitative cross-national studies do not offer enough a wide enough

picture of the reform landscape. To be fair, Evans (1995) and others provide more

informative case studies and state analysis, and this message seems relevant as Latin

America struggles to create economic opportunities in a more market-driven world than

we knew thirty years ago. I would agree that the historical experience of the West has

real lessons. Taking the United States as an example, it certainly appears that building a





28


large, professional bureaucracy was by no means superfluous or detrimental to

development when it came time to improve infrastructure in poor or remote regions and

pull the country through the Great Depression.48 This is not a matter of placing today's

reform experience in Latin America in a historical context that no longer exists; it seems

precisely a matter of paying attention to the socioeconomic and political contexts.

Theories of bureaucracy or, more generally, the state have a chance to inform the reform

dialogue if concrete studies are forthcoming.49

There is also a growing interest in measuring the performance of governments,

using indictors of governance and institutional quality. This body of research attempts to

uncover relationships between quantifiable governance or institutional variables and

development. Thus far, governance studies pursuing large-N samples have opted to share

the democratization literature's concern with the civil liberties and development. For

instance, on the micro level, it has been found that civil liberties are positively related to

the successful implementation of World Bank-financed development projects (Isham,

Kaufmann and Pritchett 1997:237). The appeal of traditional democracy indicators can be

explained, in part, by their long-standing availability.50 The other reason governance

indicators fail to reflect the two governance frameworks reviewed earlier in this section is

perhaps a matter of confusion or divergent objectives.

More specifically, cross-national tabulations only become viable when

governance's important characteristics are decided on and measurement issues resolved.

For example, Campos and Nugent (1999) reckon that governance has five components--

the Executive, the bureaucracy, rule of law, character of the policy-making process and

civil society. Measurement is accomplished through existing data sets with less than ideal





29


data for their purpose. The measurements prove problematic because they are static and

poorly designed. Bureaucracy, for instance, is "captured" by the speed with which the

bureaucracy processes customs clearances and requests for foreign exchange remittances.

Generalizing about the public sector based on such a narrow concern of foreign

businesspersons ought to be worrisome. In addition, the openness or transparency of the

policy-making process is actually not measured at all, instead being wholly created from

the other four characteristics. It seems the policy-making process has been deemed

important enough to be included as an explanatory variable, though it is actually not

analyzed or measured at all.

It is only reasonable to be skeptical about the relevance of "significant"

relationships. If one understands governance as a political or social landscape full of

process related variables, then decisions about public sector reform cannot be informed

on the basis of thin explanations, nor can the road to reform be well understood. Without

a doubt, better data sets will depend on the development of full-fledged sample surveys

designed specifically to measure governance.51 But case studies, preferably comparative

ones, remain the most viable method of inquiry into the causes, conditions and problems

of public sector reform.

My last concern here is with the paucity of energy spent on studying provincial

reform. Development studies that depend on the collection of cross-national data or the

availability of existing data sets typically ignore institutional change on subnational

levels of government. There are two main reasons for this trend. First, there is sometimes

a lack of accurate statistical information in developing countries. For these countries, this

problem is even more pronounced in lower levels of government. This, of course, can be





30


contrasted with OECD countries where more and better information exists for all levels.

Likewise, even when interested outside parties (e.g. United Nations, World Bank, or

academic researchers) may be compelled to systematically catalog development

experience, creating data sets is a time consuming and expensive proposition that does

not pay immediate dividends. Second, research based on national level findings is

appealing because the results are often thought to carry greater theoretical weight.

1.6 Merging Streams

Approaches to development have shifted considerably in the last four or five

decades. Institutional reform has become a focal point in development strategies today.

Public sector reform, as I have defined it in Section 1.2, is for better or worse the

frontline of institutional reform in much of Latin America today. Unfortunately, the

concerns of public sector reform have been conceptualized incompletely in the literatures

surveyed here. The impetus for improved research actually has two dimensions. First of

all, the road to reform passes through a complicated landscape and the challenge is to

provide some conceptual order without privileging managerial or political approaches.

Overall, managerial approaches misunderstand the context for reform. Political

approaches have filled in the institutional context and the politics of reform processes, but

they ignore the organizational level where most government reform actually takes place.

Second, and foremost, drawing on administrative or managerial studies and comparative

politics is a means for contributing to the practical debate over how to proceed through

the present stage of institutional reform.52 Merging conceptual streams seems the most

promising way to answer important questions about public sector reform.





31


Another way to look at how this project's conceptualization of public sector

reform fits into related streams of scholarship is to compare it in summary form to

governance and public management (see Table 1-1). The rationale for further

comparisons between these three approaches is simple enough: 1) each makes a serious

effort to occupy the operational and intellectual space held by development

administration during the 1960-70s; 2) whereas other approaches reviewed in this chapter

(though they are useful for understanding the road to reform) do not seek this space

because they are not prescriptive; 3) and ultimately this research project has been most

influenced by governance and public management. It seems appropriate to focus on

differences in conceptual level, centrality of politics, research subject, the key to

development and applicability to Latin America's Southern Cone countries. Clearly this

is not an exhaustive breakdown of major points of interest, and the classifications are

simplified for the purposes of comparison.53

Summarizing these three approaches to reform attempts to give a basic sense of

what each one offers and how the "public sector" lens has a chance to merge conceptual

streams. Governance, public sector reform and management reside on different

conceptual levels. Governance hopes to provide a framework for understanding regime

maintenance through state-society interactions. On this meta-level, the political system

and politics of developing countries are central for tapping the strengths of society and

fostering an environment where development is possible. For affluent, liberal societies,

the focus is on what patterns of governing mean to democracy and vice versa. So, then,

the recurring research subject is the political system with society. Just as drawing on the

core strengths of society is central to regime maintenance, the key to development is





32


social capital (Hyden 1998), which according to Elinor Ostrom (1990:183-184) accrues

to collectivities through the functioning of shared norms and patterns of reciprocity.

Table 1-1 Summary Comparison of A proaches to Reform
Conceptual Level Centrality of Subject Key to Applicability to
Politics Development Southern Cone
Governance High Political System Social Capital Med
with Society
Public Sector Med Organization in Policy Steering High
Society
Management Low Organization in Economic Low
Market Rationality


Reform from a "public sector" perspective is less focused on regime maintenance.

There is, instead, a focus on change in public organizations. Thus while politics plays a

major role in explaining how a particular reform package comes together, the political

system itself (liberal or otherwise) is not the research subject. Instead, the point is to

capture patterns of governing on the policy level (i.e. the organization in society) where

both the means and ends of state action come together. Because the professed aim of

reformers in this study is the establishment of public-private partnerships, policy steering

serves as the key to development.54 In this sense, policy management calls for the

integration and involvement of outside stakeholders. Social capital is an essential input,

but this approach concentrates more on how public organizations fare in facilitating

socially credible action networks.

Public management reform differs from the previous two approaches. In general,

the centrality of politics in public management recommendations is low. Part of the

reason for this stems from the primary source of inspiration for the new public

management approach. Microeconomic theory, particularly transaction costs and

principal-agent since the mid-1980s, has focused greater attention on inefficiencies in





33


public sector activities. A great deal of this approach's attention is spent on the micro

level--the organization or firm in the market. This focus makes central the role of

incentives and competition, technology and expert know-how; it likewise sees clients and

customers where governance and public sector reform see citizens and stakeholders.

Overall, most research on this conceptual level does not presume to have "answers" for

development, but it is implied that managers and organizations making the state more

amenable to the market contribute to development.

The conceptual level we operate on has substantive effects on the type of research

questions open to us. Likewise, the salient reform issues in a particular country or region

logically have an impact on our choice of analytical approaches. In Latin America, many

of the high-profile institutions of the state--the electoral system, the Congress, the

Presidency, and the Courts--underwent significant changes in the first decade or two

since the return to democracy. Economic liberalization had also progressed fairly quickly

for much of the hemisphere.5 Today, the prime areas for research are, on the one hand,

social and political responses to economic downturns; and, on the other, "lower-profile"

bureaucratic reform meant to finally improve the problem-solving capacity of the public

sector in the current market environment. Looking at this agenda, there is no doubt a need

for multiple streams of scholarship. For the second of the prime research areas identified

here, a "public sector" approach is the most applicable to Argentina and the countries of

South America's Southern Cone, while the other two approaches are also valuable for

understanding issues relevant to this study.

Notes


Research questions and approaches have always varied considerably; see Bradford (1994), Peters (1994),
Esman (1988). It seems safe, though, to contend that we can locate the vast majority of research questions






34



within the dominant development paradigm of their day. Today, for example, there is a strong interest in
how liberal institutional arrangements facilitate development.

2 The pervasiveness of "reform" initiatives in contemporary democratic polities makes some observers
skeptical about the credibility of such proposals. It is noted that "reformism" has become something of a
rhetorical device rather than a substantive and plausible course for change; see Fox and Miller (1995). I am
not, however, convinced that proposals to change the state and its apparatus are mainly political rhetoric.
While reform is defined by politics (and is often useful to political agendas), I agree with Peters (1996) that
most of these initiatives are serious attempts to make government work better.

3 Certainly, in recent years, many accounts of reform design and implementation shed light on why such an
orientation continues to be popular; see Guasch and Spiller (1999), Kettl (2000). One ought also keep in
mind earlier works offering analysis of the technocratic bent in Latin American reform since the 1970s; see
O'Donnell (1973).

4 It is true that technical aspects of reform, new information systems for instance, may not redistribute
power within the state. However, there is increasing recognition that even managerialist or means-centered
reform requires a more systematic inclusion of politics; see Pollitt and Bouckaert (2000), Tommasi, et al.
(2001), Tendler (1997).

5 Despite the rise and fall of the developmental state, the ascendancy of the market and neoliberalism's
subsequent embrace of "getting the institutions right," development thinking continues to erroneously view
the organizations that shape and implement public policies as engaged in a technical or scientific endeavor;
see Turner and Hulme (1997).

6 The discussion about accountability is analyzed in Chapter 5 of this work.

7 These studies come from the fields of economics, political science and public policy. Of particular note;
see Gollds (2000), Evans and Rauch (1999), Mattos (1989).

8 Fred Riggs was probably the trailblazer in this regard with his conceptualization of the prismatic society.
Riggs and others attempted to capture the essence or ecology of public administration in modernizing
societies. Such efforts, though ambitious, failed to serve as the basis for theory-building in development
administration; see Esman (1988).

9 My contention is that development administration remains useful for the study of public sector reform in
contemporary Latin America. But, like Milton Esman (1988:128) said, "The democratic ethos had begun to
supplant the elitism of the modernization paradigm. Development would require less public administration
and more public policies that facilitate structural changes, liberate individual energies and reward local self-
help." This observation continues to be relevant; in fact, surveying development administration is an
incomplete exercise unless public sector reform research draws on insights from public management,
governance and comparative politics.

10 Reagan and Thatcher were clearly strong proponents of deregulation and public sector downsizing.
However, their administrations' ideological zeal did not produce comprehensive public management
reform in the United States and Great Britain. It has been argued that successive administrations in New
Zealand truly understood the economic bases of their reform agendas and thereby won over upper level
public managers through the consistent application of those microeconomic principles; see Kettl (2000).

One of the New Political Economy's obvious breakthroughs is the development of a well-specified
political framework, where decisions or actions are explained systematically by way of assumptions about
self-interest. Bradford (1994) compares the NPE approach to others-Pluralist Theory, Technopol Model
and Partisan Theory- to show that its political framework often resorts to explaining empirical evidence
post facto because incentive-centered reforms do not work in a frictionless environment.






35



12 The most frequent criticism is over-reliance on instrumental rationality at the expense of procedural
rationality or social forms that may explain the motivations of public managers. Konig (1996) and Pollitt
and Bouckaert (2000) observe and criticize the rational choice model at length.

13 Baker (1994) and Peters (1994) offer good accounts of the inadequacies of the research agenda pursued
by public administration in the post-World War Two era. See also Brodie (1996) for a clarification of
"embedded liberalism," as well as ideas on why today's research agenda should include understanding the
social bases for state reform in rich and poor countries.

14 The point is not that "managerialism" ought to dominate the composition of public sector reform.
Instead, I am echoing many voices skeptical ofneoliberalism who nonetheless acknowledge problems
associated with state control and accept the expanded role of private stakeholders, including the market.
This goes back to my earlier observation that most research operates within the recognizable bounds of
today's development paradigm.

'5 This is somewhat curious given the relatively small role the IDB played in the economic stabilization
phase. Perhaps the IDB views the persistence of high interest rates in most Latin American countries as a
problem related monetary policy, which has often been among the first issues tackled in stabilization
measures.

16 According to the World Bank (2000:3, 16-18), all forms (lending and non-lending) of governance related
assistance have risen both in real terms and as a percentage of Bank disbursements.

17 There are two related sides to this coin: the multilateral Banks' are still not particularly adept at
supplying populations in immediate need of social services with timely relief; and the IMF, at least in the
case of Argentina, has proved inconsistent in its monetary policy prescriptions and consistently short-
sighted in its fiscal policy ones. The Nobel Laureate economist Joe Stiglitz makes similar points in an
interview with one of Argentina's leading newspaper, La Naci6n (10-13-01).

"8 Historically, public sector or civil service reform lags behind economic development. A thorough
introductory public administration text, such as Garvey (1997), will often recount at least the U.S. and
British cases. Many other developed country cases conform to this development first, then reform pattern.

19 First-generation reforms, typified by privatization and economic stabilization in newly restored
democracies, were often managed by insulated, inner-circles in the Executive. Second-generation reforms
involve lengthier processes of change, and thus are more contingent on political factors. See Saba (2000),
Acuila and Tommasi (2000).

20 CEPAL (2002) has made a greater effort to explain rising socioeconomic inequality in the region than
either of the development banks surveyed here. While the World Bank and the IDB are very active on the
project and program levels in fighting poverty in Latin America, there is little systematic evaluation of non-
market alternatives in various policy sectors.

21 For decades, public and business administration scholars have identified important social, cultural and
historical dimensions of management; see March and Olsen (1989), Olsen (1988), Selznick (1957).

22 Attempts to apply new public management principles have been mixed; see Chapters 5 and 10 in Turner
and Hulme (1997). In particular, comprehensive plans have not worked on the national level in such
countries as the U.S., Canada, and France; see Peters and Savoie (1994), Pollitt and Bouckaert (2000).
Given the difficulties in realizing major overhauls in administrative systems, such a strategy is unlikely to
work in Latin America on either the national or subnational level.

'" Public management principles are having an impact on public sector organizations and policymaking,
often. Consequently we should pay ample attention to how these principles are operationalized into tools
for evaluating alternatives.






36




24 This designation is problematic: Comparativists concerned with various research questions engage in
'systematic' institutional analysis. I use "systematic" to mean large-N studies.

25 Baker (1994), along with others from the "Bloomington School" of development, makes a good case for
the need to internationalize American public administration and policy programs.

26 Przeworski employs this line of explanation in Democracy and the Market. See, for instance, his
discussion of sectoral interests in Argentina (1991:52-53).

27 Other approaches from the field of comparative politics, notably governance and historical institutional
ones, extend analysis beyond the formal institutions of government.

28 The political economy background that I refer to here encompasses only a limited portion of the political
economy theoretical spectrum. Specifically, these authors build on theoretical scaffolding that includes
transaction costs and principal-agent. There are, of course, macro-based approaches to political economy.

29 Azpiazu (1998) and Saba (2000) make this point. Indeed, with the benefit of hindsight, more observers
may seek explanations for the unimpressive performance of the private sector during robust growth years of
the 1990s.

30 Haggard (1997), Heredia and Schneider (2000) and others do focus on the timing of decisions. However,
they pay too little attention to the pace of public sector reform. This reflects, I think, reluctance (or perhaps
unfamiliarity) on the part of political scientists interested in institutional reforms to explore change on the
organizational or policy level.
31 It can be argued that organizational culture is a distinct venue of study from political culture. Yet the
study of values and political culture stands to enrich inquiries into public sector reform.

32 Culture, too, attracts criticism as an obstacle to reforming administrative systems and development. And,
much like the case of blaming politics, I argue the usefulness of such observations is limited.

33 It may, perhaps, be premature to conclude a consensus is emerging on how politics impacts public sector
reform. But, on balance, the literature today is far more convinced politics plays a major role in the success
of failure of reform. On the surface, then, it seems curious that reform packages often seek to keep 'values'
out of the public sector. For examples of apolitical reform and policy advice; see Caballero and Dornbusch
(2002), Guasch and Spiller (1999), Tommasi, et al. (2001).

34 The case of Argentina is instructive. Argentine society was relieved by the return of democracy, which
made patience possible in the face of major economic problems. Alfonsin's (1983-1989) administration
dealt with defining the roles of key institutions such as Congress, the Armed Forces and political parties.
However, it did not deal with the issues of public sector reform; see Porto (1990), Saba (2000).

35 By state reform I refer to not only to revamping institutions such as the Courts or the Executive, but also
to making the policy process and public organizations more transparent and less arbitrary.

6 There is a modest, though growing, trend that shows public support for economic liberalization and, in
limited cases, democracy is falling, see Lagos (2001) based on data compiled by Latinbarometer in
Argentina, Brazil, Chile, Ecuador and Paraguay.

37 One may argue the weakness of the private sector is either 1) a long-standing product of an international
system that favors corporations in developed countries; 2) or a product of the import substitution
industrialization (ISI) era. Subscribing too strongly to either viewpoint is overly simplistic. In the Argentine
case; see Sawers (1996) and Azpiazu (1998) for methodologically distinct but equally insightful analyses of
past and present problems with the private sector.






37




38 In Latin America the public sector's role in environmental management and development, for example,
highlights many of the state's illiberal tendencies; see Ferradds (1998), Hopkins (1995), Quiroga, et al.
(1994), Ribeiro (1994).

39 Foremost, by the late 1970s, the assumption that state planning was the key to development had been
widely discredited; see Turner and Hulme (1997) for discussion of this shift.

40 This is basically the criticism leveled against the multilateral development banks use of governance.

41 Again, there is considerable dissatisfaction with the way multilateral banks have finessed good
governance into a faceless, universal principle, which stretches across various regimes and capitalist forms;
see Merrien (1998), Schmitz (1995). In this sense, I believe much of the criticism, when directed toward the
academic conceptualizations reviewed here, is at least partially misguided because the true quarrel appears
to be with the multilateral banks.

42 Financial strains on the welfare state are not unique to Western Europe. Other countries, such as the
medium to medium-high income ones in Latin America, have had to face similar forces; see World Bank
(1997). Fiscal stresses are clearly one set of factors; see L6pez Murphy and Muscovits (1999). The other set
of factors can be described as motivational; see Mayntz (1993), Touraine (1994).

43 The "deepening" of the European Union has reinforced this trend in Western Europe scholarship.

44 For example, the IMF is pressing Argentina to impose deep personnel cuts on the provincial level.
Studies on such questions would be highly relevant.

45 Many Latin America countries, including Argentina, are among these 35 developing-country cases.
Evans and Rauch have coded qualitative responses by mostly academic experts.

46 The other independent variables are rule of law, strength of civil society, executive accountability and
transparency in policy-making.

47 In my estimation, this is certainly an enduring lesson of Evans' many fine works.

48 1 chose the U.S. as an example because the notion that development was wholly accomplished by private
initiative is something of a myth. Of course, for the modern nation-states of Europe, the major role of the
state and its bureaucratic apparatus in development is far less ambiguous.

49 In other words, looking back into the past is crucial to understanding reform today. But there remains a
need for updated studies that demonstrate when and how the state can further development objectives.

50 For instance, the Freedom House indexes of political freedoms and civil liberties were used in cross-
country research long before any of the other evaluative indicators. Thus when the precise indictor sought
by a researcher is not available, political freedom and civil liberties ones are often used.

51 Progress is being made in this regard. Of note, Goran Hyden and Julius Court, under the auspices of the
United Nations, are presently compiling responses from their "World Governance Survey."

52 1 contend that being well schooled in research from comparative politics and public administration or
policy is an advantage for the job at hand. Peters (1994) provides a strong case for the necessity of drawing
on both research traditions.

3 Table 1-1 is not meant to be an exhaustive summary of the streams of thought surveyed in this chapter. I
opt to compare reform as seen from a "public sector" angle to governance and public management. These
two approaches, conceptually and empirically, aid greatly in informing my understanding of the reform






38



processes playing out in Argentina. Neither are the classifications used here exhaustive. Mainly, I want to
point out how these approaches vary in general terms along a few basic but important dimensions.

54 The governance approach that emphasizes policy steering and policy networks is closely related to what I
refer to the public sector reform approach. This particular governance approach does not, however, frame
issues such as civil service reform.

55 According to the World Bank (2000:7-11), economic liberalization was truly the centerpiece of first-
generation reforms. See also Guasch and Spiller (1999).













CHAPTER 2
THE ROAD TO PUBLIC SECTOR REFORM


2.1 Introduction

Argentina's most recent and ongoing encounter with the economic abyss raises

serious questions about the adequacy of public sector reform on the national level. On

many counts, the country's attention to the "institutional backbone" of the state's

restructuring process compares favorably to efforts in transitional economies around the

world (Guasch and Spiller 1999, Chapter 3).1 In fact, it has been said that Argentina's

reformers successfully slipped through the "window of opportunity" after the 1987-89

hyperinflation crisis (World Bank 2000:27). But despite considerable accomplishments in

restoring democracy and opening the economy, remaking the state remains an ambitious

and contentious project. The necessity for a change-centered agenda is not surprising in

light of Argentina's persistent economic crisis and public anger at state institutions. We

quickly see the national level landscape includes unfinished business as well as

accomplishments.

A similarly important, though far less well understood story is unfolding on the

provincial level. Public sector reform on the provincial level is in its early stages (Esteso

and Cao 2001, Silvera 2001). But the time appears right to investigate the road to reform

in places like Entre Rios and San Luis, as well as other provinces.2 This chapter

introduces a model of public sector reform adapted from Pollitt and Bouckaert's (2000)

model of public management reform. In the sections that follow, important sets of




39





40


factors--Argentine federalism, economic, political, and administrative--are introduced

and analyzed from the provincial context. This provides a window for seeing provincial

public sector reform's influences. The latter part of the chapter classifies the content of

public sector reform through three sets of issues--professionalization, marketization and

democratization. It also explains a few of the elements included in each set and provides

at least an overview of why these issues have currency.

2.2 Argentine Federalism: Framing Provincial Public Sector Reform

Argentina is a federal republic consisting of twenty-three provinces and a federal

capitol.5 Provinces have political representation in the national Congress and small-

population provinces are significantly overrepresented in the Senate, which gives them

enormous political power at the national level.6 As late as the 1850s, federalistas sought

to interest domestic and foreign producers in economic activity in their heartland along

the Parand River (Rock 1987:120-25).7 Ultimately, though, financial and commercial

interests from Buenos Aires imposed their vision of a "seamless," modem, and European

nation on the provinces (Rock 1987), culminating in the 1862 Constitution that

established a federal system of government. Argentina prospered during the following six

or seven decades even as most parts of its interior remained economically stagnant. In

terms of administrative systems, the central government followed continental European

models of professional bureaucracy, while provincial governments found neither the

political nor the socioeconomic impetus to do so.8

Table 2-1 Core Propositions Concerning Reform in the Provinces
P1. The division of political power and policy jurisdictions is a product of historical
compromises between the Argentine state and the provinces. This institutional framework
strongly affects the structures, functions and values of public organizations at both levels
of government.





"Table 2-1. Continued" 41


P2. In federal systems, there are typically strong (downward) redistributive fiscal
mechanisms. Argentina has been no exception. Changes to the norm of coparticipaci6n
constitute a major departure from the old order. Therefore, provincial public sector
reform has the significant responsibility and challenge of providing an adequate
replacement.


P3. Sudden changes in the federal-provincial framework upset existing balances of
political power. Comprehensive reform is also difficult for programmatic reasons (i.e.,
relearning too much at once takes people away from doing their jobs). Public sector
reform in the provinces is therefore unlikely to be comprehensive.


P4. Nor is public sector reform likely to be uniform across a large, regionally diverse
federalist country. One size will not fit all the provinces, as the evidence from Entre Rios
and San Luis helps illustrate.


P5. The relationship between Buenos Aires and the interior has not been one of the center
draining resources from the periphery. Instead, Argentine federalism has transferred large
amounts of resources to the poor provinces with disappointing results. Provincial public
sector reform thus represents an opportunity to improve on those results.


In the midst of the Great Depression, Argentina altered federal-provincial relations

with the passage of the Coparticipation Law, la ley de la coparticipaci6n (1935), which

gave the provinces a share of federal revenue (Pirez 1986).9 The logic behind

institutionalizing a downward redistributive fiscal mechanism reflected two realities. First,

the Argentine state planned to grow (public employees and expenditures) as it assumed a

greater role in industrialization and social policy. Second, provincial backwardness was

seen as a national problem. Successive administrations, civilian and military, handled this

political issue by targeting resources throughout the system so as to discourage

independent alternatives to development (Porto 1990).10 In this way, expanding provincial

bureaucracies was foremost an investment in political relationships rather than one in

administrative capacity.








/ Fiscal Deficit
E External Debt
/ Int'l Economic Forces 4.......... / Constitutional-Legal Constraints
/ Socio-demo(graphic Change V/ Political Parties
V Domestic Productivity Citizen Participation
/ Domestic Policies v New Reform Ideas
S(Coaliti(ons
Economi' S\'ste/
SPo/i//t',/ S }'ttem/





Desired Reform Package........


A Minister-(Career civil servant relationship
SRechtsstaat or Public Interest
v / Diversity of advice on reform or policy



Feasible Reform Package -*-- dminiA t 'tt Site
Fe'i/ure 2-P-1 Pr'inc/l Rl ( d ll titt, 2(i


Figure 2-1 Provincial Reform Model (adapted from Pollitt & Bouckaert, 2000)





43


The point is not that institutional inertia has stamped out change in Argentina's

federal system. In fact, the century-old Argentine brand of "centralized federalism"

(Sloan 1984) has been changing to accommodate new fiscal and political realities. Carlos

Menem's first administration moved a number of important policy portfolios from the

central government to the provinces. Yet evidence from the last ten years shows

provincial ministries have managed these policy domains in virtually the same manner as

national ministries, despite the fact the main reason for devolving responsibility was to

improve policy outcomes (Artana 1998). However, this growing degree of expenditure

decentralization appears to be an outlier when evaluated within the context of the

country's vertical fiscal imbalance (Tommasi, et al. 2001:150).' In other words,

institutional arrangements such as coparticipaci6n prove resilient because they represent

historical compromises between the Argentine state and the provinces.

So we see that while change has been part of the policy landscape in this federal

system, improved performance depends on public sector reform on the provincial level.

What additional core propositions concerning the federal-provincial relationship frame

the challenge of public sector reform? Argentina's federal revenue-sharing arrangement

is one of the institutional cornerstones that impact provincial public sector reform. Even

small changes in coparticipaci6n represent potentially significant departures in what the

state does and how it ultimately pursues those goals. Since coparticipaci6n is one part of

the legal-constitutional bedrock that frames negotiations between the two levels of

government, an alternative arrangement will not automatically be conferred institutional

status.2 For provincial public organizations to operate effectively, they will require an





44


institutional framework that is considered fair and legitimate. Provincial reform has the

significant challenge and responsibility of providing a socially intelligible replacement.13

A couple of additional points should be made about the centrality of the federal-

provincial relationship in the model. First, judging from the shape of national level

reforms in many countries, institutional frameworks do not prove particularly pliable to

comprehensive reform efforts. Reformers, instead, settle for incremental changes that are

feasible in particular sectors.14 Moreover, no matter how pure or comprehensive the

designs of well-placed reformers, reforms typically belie any single design or designer

(Goodin 1996). The relationship between Argentina and its provinces is sufficiently

complex and historically grounded that wholesale changes have proved exceedingly

rare.15 Legal-constitutional pillars provide continuity and set constraints on the reform

process. The centrality of a cumbersome federal-provincial relationship also speaks to the

fact there is no united reformist group, elite or otherwise, defining what is desirable, let

alone what is feasible.16

Second, the resolution of the federal revenue-sharing negotiations, which was

finally achieved in mid-November 2001 and subsequently undone when De la Riia

resigned a month later, does not create an easy-to-follow recipe for provincial reform.7

The federal-provincial relationship merely assists us in making the choices on the

provincial level legible. From there, one should fully expect to see the limits of rational

planning exposed. As Goodin (1996:28) states, "Institutions are often the product of

intentional activities gone wrong--unintended by-products, the products of various

intentional actions cutting across one another, misdirected intentions or just plain

mistakes." Public sector reform often takes the shape it does because efforts at





45


"optimization" are thwarted by cognitive limitations, unintended consequences, and

organized opposition (March and Olsen 1995). Strenuous opposition to reform may

reflect divergent values, and it is thus important to build the process around testing where

public managers and private stakeholders envision the comfort zone for provincial

reform.18

Attempts at comprehensive reform raise hard questions about how public

organizations can simultaneously relearn their business while effectively serving citizens.

Likewise, the frame of reference employed in this study is skeptical of attempts to treat

the reform process as an exercise in rational planning. With those two points in mind, it

follows that sudden, sudden or dramatic changes are the exception to the norm. The

institutional bases of the federal-provincial relationship have historically insulated the

provinces against unwanted reform. From the provinces' perspective, avoiding politically

unpopular measures is logical. But the problem really compounded in the second half of

the 20h century.19 Not only was unwanted reform avoided, relatively painless and

potentially advantageous measures were viewed with suspicion and ignored.

Today, in the face of falling living standards and social unrest, provincial officials

wonder about what kind of a state is most likely to reverse that trend and what steps they

should take now. These officials are not alone in asking such a fundamental question. In

general, proponents of a leaner, more business-like state believe the incompleteness of

structural adjustment cause chronic cycles of fiscal imbalance (Guasch and Spiller 1999,

Peterson 1997, Tommasi, et al. 2001). Meanwhile, skeptics of the small-state vision

espoused by multinational corporations and the International Monetary Fund (IMF)

instead argue that cross-national studies do not demonstrate a causal link between public





46


sector size and economic growth or human development (Evans 1995, Gollas 2000).

Argentina's economic fortunes since the 1930s caution against simplistic arguments

about "too much state" versus "too little state."20

The relationship between the federal government and the provinces lies at the

heart of the provincial reform model (see Fig. 2-1, p. 42). As much as possible, I have

sought out the common points and experiences within an admittedly complex and diverse

federal system. And though I expect regional similarities to emerge, the road to reform is

bound to differ across provinces. The core propositions discussed already reappear

throughout the model and will hopefully inform the debate about public sector reform

and development in what has become a difficult and uncertain time for Argentina. It is

next necessary to look closer at the factors that determine the content of and prospects for

reform.

2.3 Economics Factors

In Latin America, experience with so-called first-generation (regularizing checks

and balances among the branches of government, privatizing state industries, etc.)

institutional reforms provided both fans and critics with economic-based explanations for

their arguments. For market enthusiasts, reform efforts in the 1990s reflected a long-

overdue attention to economic signals by the region's governments (Acufia and Tommasi

2000, Guasch and Spiller 1999). Governments, by and large, followed free market

economic prescriptions.21 Yet assuming economic factors propelled, much less clinched,

reform trajectories is misleading. The reality of economic liberalization and state reform

has been more complicated. This perspective overlooks the political and social support,

or least willingness, for market-friendly reform. One needs only to examine past





47


economic crises to see that "rational" arguments for, say, trimming budget deficits or

deregulating the economy have generally been ignored (Pastor and Wise 1999).


Table 2-2 Propositions Concerning Socioeconomic Factors
P6. Second-generation reforms (in particular, public sector reform) will be relatively less
defined by their economic context than first-generation ones.


P7. To the extent economic factors shape reform packages, they reinforce a top-down
process. Severe economic crises produce top-down (outside-in) effects on provincial
reform, weakening previous institutional constraints while abbreviating the time-span for
developing new ones.


P8. Cyclical deficits are, contrary to rational expectations, generally incapable of
prompting reform that can either be implemented or sustained.


P9. Demographic and value shifts are highly relevant to the reform landscape, but overall
the salience of such factors is relatively muted unless they find support within the
political or administrative systems.


For critics of reform, it seems equally tempting to assign disproportionate

explanatory power to economic factors. A central role is thus assigned to the structural

characteristics of the global economy. In this way, pro-market reformers simply carry the

day by selling the state to the highest bidder, whether foreign or domestic. However,

understanding reform is not ultimately enhanced by discounting the broader ideational

power of market solutions. First-generation reforms in Argentina, for example, enjoyed

substantial electoral support (Pastor and Wise 1999).22 Thus, using the crisis of the

developmental state as our reference point, it is by no means clear that economic factors

were decisive in the adoption of many first generation reforms. Rather it appears the

rationale for market-friendly reform was partnered with social support, particularly in the

political and administrative systems.





48


The irony, then, is that arguments for and against "too much state" and "too little

state" each relied too heavily on the influence of economic factors over the reform

process. Hindsight tells us these explanations are incomplete. Moreover, they are

precisely the wrong frame of reference by which to inform second-generation reform,

particularly as it applies to subnational levels of government. When we ask the question

"what's next?" it seems safer to treat economic factors as sets of signals or thresholds that

constrain choices than as telltale signs with incontrovertible meanings for the people and

organizations involved in the process of institutional change.

Among economic factors, fiscal deficits are a logical starting place. Fiscal crises

have been recognized as a triggering mechanism for public sector reform (Heredia and

Schneider 2000, World Bank 1997). And with most of the easy budget balancing options

like selling state assets already tapped out, it reasons that "rightsizing" (i.e., layoffs) and

"retooling" the civil service is inevitable. For better or worse, the answer is yes and no.

Recent developments in Argentina's national government support seemingly support the

hypothesis that pressure to balance the books ensures rightsizing the civil service.23 But if

one examines the relationship between fiscal deficits and civil service restructuring

across OECD countries, there is little correlation either in terms of action or timing

(Pollitt and Bouckaert 2000). Fiscal deficits in the 1-4 percent of GDP range have not

prompted major structural changes in most OECD countries' civil service.24 Likewise,

fiscal deficits often exist for years and then suddenly at a moment of budgetary calm

substantive public sector reform finds acceptance.25

Latin America may possibly represent a less well-insulated set of cases. Fiscal

deficits are a luxury available only to those states that print money or have the confidence





49


of creditors. Argentina has lost former lines of credit, and thus it seems the Argentine

case could affirm the causal link between deficits and reform.26 However, two issues

stand in the way of assigning significant explanatory power to this variable. First, legal

obstacles stand in the way of rightsizing the civil service at all levels of government.

Conceivably, labor laws are alterable; but my sense is the process for debating and taking

action on this front would be lengthier than either an economic recovery or a regime

meltdown. The bottom line is that a political or administrative order tends not be

rewritten as a result of fiscal deficits, even in the face of constraining and persistent ones.

Second, federal systems pose unique problems for ascertaining the impact of

deficit spending. In most federal systems, deficit spending by the "second" level of

government is constitutionally forbidden.27 In contrast, Argentina's provinces are allowed

to incur deficits with permission from the federal government. The rightsizing and

retooling aspects of public sector reform on the provincial level are immeasurably

complicated by this arrangement. By now, there is evidence that the severity of the

current economic crisis has set the stage for continued departures from "centralized

federalism." Coparticipaci6n, a cornerstone of the federal-provincial relationship, figures

prominently in deficit analyses at all levels. The legal-constitutional nature of the

revenue-sharing arrangement has the effect of making the deficit a structural--deep-

rooted and long-lasting--variable rather than a cyclical one.

Yet attaining "structural" status does not make the deficit decisive in questions of

public sector reform. The four-year recession has pushed the always-tenuous federal

revenue-sharing arrangement into jeopardy, but abruptly holding coparticipaci6n to

economic standards of rationality overlooks more than it can afford to. Coparticipaci6n





50


exists because socioeconomic opportunity in the interior lagged far behind Buenos Aires.

Unfortunately this is still true, and shifting policy responsibilities to the provinces in the

1990s inadvertently exacerbated the problem. Deep, across the board cuts in provincial

governments, in this climate, are likely to make some provinces ungovernable.2 Making

a systematic inventory of the status quo's inefficiencies is useful,29 but drastic revenue-

sharing reform can only be pressed at great risk in the short-run. Neither are seemingly

modest revisions immaterial. Coparticipaci6n has symbolic and practical meaning, and

even small changes in this institutional framework precipitate major changes in public

sector activity in the provinces.

Argentina's national debt is a more clear-cut structural variable. The recently

defaulted on debt demands constant inter-governmental attention. The debt presently

stands at approximately $155 billion, which amounts to nearly 60 percent of the country's

GDP (INDEC 2001). During economic downturns, pressures arising from the debt limit

policy alternatives and lead to reductions in government spending and public sector

activity. Provincial debts have also grown to worrisome levels.30 At this point in time

there is no working agreement on exactly how the national government and the provinces

will manage provincial debts; however, it is increasingly plausible that Argentina's debt

(both national and provincial) has the power to impact the tenor of public sector reform in

the provinces.

Again, the question comes down to whether an economic variable has the power

to shape reform. Defaulting on the foreign portion of the debt, in a sense, moves the issue

more squarely into the political realm. If and when repayment resumes, it will be the

result of political negotiations, regardless of whether parties (e.g. the International





51


Monetary Fund) privy to the negotiations are comfortable classifying them as such.

Public sector reform in the provinces is sensitized to structural economic constraints.

However, reformers are increasingly sensitized to "social default" in Argentina and their

home provinces.31 When walking a fine line between restoring the public's trust,

reactivating the economy and providing the right signals to private capital, the salience of

economic factors like this one are bound to be watered down.

International economic factors also impact Argentina's economy. The first

generation of reforms, regardless of one's assessment of Menem's policies, depended

heavily on the advice and participation of foreign investors and consultants (Acuiia and

Tommasi 2000). The second or institutional wave of reforms places relatively less

emphasis on international actors. However, international financial institutions such as the

IMF remain influential in encouraging monetary and fiscal policies. Meanwhile, the

World Bank is playing a wider role in providing financial and technical resources for

countries (and, now, subnational governments) prepared to make long-term commitments

to improving the efficiency and accountability of the public sector.

The conviction in development circles that "institutions matter" does not

necessarily increase the power of international actors vis-A-vis domestic ones, but it

reflects the determination of international actors to play a significant role in shaping the

content of public sector reform. As discussed already, critics of market-oriented reforms

are quick to assign responsibility or blame to economic factors (particularly international

ones) for shaping the content of public sector reform. International development

organizations such as the World Bank have faced criticism for discounting the impact of

its interventions on women, the environment and the poor. Questions persist despite





52


documentation the Bank's interventions have become more sensitive to social context

(Cernea 1989). Institutional reform, distinct from older Bank interventions, is becoming a

core function.33 The bad news is that the institutional or public sector reform subset of the

Bank's portfolio has graded out below average (World Bank 2000:15-17). At this point

the multilateral banks are not the most crucial actors in the reform process, but their

experiences in the region are important to this study.

Beyond the banks and other development organizations, the global economy is

widely believed to impact governance. Both critics and enthusiasts of globalization are

quick to point out that domestic policymakers exert less control over economic policy

than during the Keynesian "embedded liberalism" era (1945-1973) (Brodie 1996).34 The

magnitude and speed of capital flows, along with the internationalization of production,

leaves governments with reduced policymaking latitude. In particular, competitive

pressures have a penchant for narrowing governments' financial latitude.35 There is, then,

a palpable sense the public sector's scope and methods are moving towards international

norms of good governance. But one must be careful not to overstate the influence of

globalization's economic forms on institutional reform. The dominance of international

economic factors is at best unclear because public sector reform in countries facing

similar international pressures displays diverse points of emphasis (Baker 1994, Pollitt

and Bouckaert 2000). Given this diversity on the national level, it is useful to explore

how these factors influence reform in the similar provinces selected for this study.

Socio-demographic change is another background pressure that merits attention.

Despite Argentina's relatively slow population growth, the country and its provinces

nonetheless face pressures arising from changes in the pattern of life for millions of





53


citizens. In terms of the structure of its population, Argentina has an aging population

thus placing increased demands on the health and social security systems. Economic

liberalization during the 1990s contributed to a significant rise in unemployment as over-

staffed state enterprises were privatized. Moreover, the long-term presence of

unemployment rates between 15 and 25 per cent (25-35 percent in many provinces) has

made the downsizing plank in the reform agenda particularly inflammatory.36 As Pollitt

and Bouckaert (2000:29) point out, phenomena such as aging populations and high levels

of unemployment do not directly produce particular types of public sector change.

However, these structural elements in society do provide incentives for politicians and

civil servants to look for ways of easing the strain on the system.

Socio-demographic change also encompasses value shifts across generations or

through experience with public and private agents acting in the name of development.

These changes take a variety of forms. For example, since Argentina's political

liberalization in the 1980s citizens have increasingly questioned the environmental

impacts of government sponsored or sanctioned projects.37 Not all values are subject to

profound change as a result of regime change or economic liberalization. In other words,

while the developmental state built during the Per6n era has given way to a more limited

one, reformers have to balance easing strains on the system with protecting popular social

policies. In fact, among those who voted in the October elections, the "winning" segment

of the population appears more attached to a social democratic vision of society than a

neoliberal one.38 Overall, both sides (demographics and values) of the socio-demographic

coin affect political participation.





54


Domestic economic production and policies enable and constrain public sector

activity. In the early 1990s Menem's economic strategy simultaneously sold off state

assets and attracted foreign investment. During this time, the country enjoyed the highest

growth rates in the Americas (World Bank 1997, Guasch and Spiller 1999). However,

since 1998, economic indicators have turned negative. Even though downturns in

productivity and investment are cyclical, both levels of government have been trying

various policy instruments to resolve the economic crisis. Parts of the public sector

reform agenda no doubt can be understood as responses to the performance of the

Argentine economy.39 The conceptual challenge is to see around the immediate shadow

of economic exigencies and provide more complete explanations for the reform process.

Experiences in Western, high income countries point to a gulf between reform

deemed desirable by economic theory or shifts in performance and reform that is feasible

(Pollitt and Bouckaert 2000:30, Caiden 1999). Figuring out what is feasible depends on a

closer survey of the reform landscape. Going back to the core propositions, we recall that

Argentine federalism is a frame for understanding the public's sectors role in

development. By development standards, Argentina is a middle-income country, and

therefore the lessons learned in Western Europe or North America about public sector

reform have relevance in a way that they would not in the world's poorest countries.40

But paving the way for useful comparison requires rounding out the model with

propositions about the political and administrative systems that ultimately decide what

reform package is feasible.





55


2.4 The Political System

Locating the study of public sector reform in the previous chapter pointed to the

value of bringing political explanations on board. Political systems contain formal and

informal institutions and procedures, channels for participation, and strong ideas about

the role of the state's administrative apparatus. Political actors normally play a key role in

crafting public sector reform. Fortunately, there has been a growing awareness of

political factors in the study of state reform, which provides an opportunity to test a

couple of popular hypotheses in subnational cases.41 Overall, my expectation is that,

while politics has a key role in inspiring and legitimating reform, the political system's

relationship with the administrative system proves crucial in second-generation reforms.

This is because these reforms are less geared to regime maintenance or reengineering the

formal institutions of the state, instead being more oriented to building capacity in the

public sector for policy steering or management.

Table 2-3 Propositions Concerning Political Factors
P10. Public sector reform is primarily a top-down, political process. The content of
reform depends on political calculation but even more so it depends on the sources or
origin of reformers' ideas. The prospects for reform, likewise, depend on strategic action
(executive coherence, in particular); however, success or failure ultimately depends on
the public sector being intelligible to society.


P 11. Professionalizing reforms require a broad basis of political support. Two party-
parity is better for minimizing clientelistic practices, but occurrences of two party-parity
are not a precise signal that civil service reform is forthcoming.


P12. Marketizing reforms require support from non-state domestic interests or
international ones. While this was the centerpiece of first generation reforms, building
and sustaining support for such measures will be significantly harder in the second
generation.





"Table 2-3. Continued" 56


P13. Democratizing reforms are appealing to middle-class constituencies regardless of
economic conditions. However, opening up the policymaking process depends more on a
galvanizing event that raises awareness and prompts action.


First, the political system is embedded in the federal-provincial institutional

framework. Among the structural features in a federal system, constitutional-legal

protections for subnational levels of government are crucial because such arrangements

define where the commitment for reform must materialize.42 Argentina's provincial

governments are provided significant constitutional protection. Likewise, legal-

institutional arrangements such as coparticipaci6n further impede central government

efforts to impose any particular reform agenda on the provinces. Of course,

coparticipacion may be altered with carrot or stick-like intent, but as with any

institutionalized arrangement or relationship the costs of casting it aside are considerable

(Tommasi, et al. 2001).43 Therefore, even in the worst of times, public sector reform in

the provinces is largely dependent on political support for reform on that level.

The second distinguishing political feature of reform is, overall, the top-down

nature of the process. This may seem counterintuitive since the presence of popular or

grassroots clamoring for change often purports to explain processes based on the

devolution of political power.44 Public sector reform, not unlike devolution, rarely

captures the imagination of the average citizen. Even well-informed citizens are hard

pressed to engage sufficiently to understand the details of the process. For instance, in

Argentina today, reformers would do well to assemble political support for measures that

generally fit the social landscape: minimize economic dislocation, root out corruption and

insist on transparent policymaking.45 There is still room to maneuver and hammer out

details that enhance professionalism, efficiency and accountability, but failing to locate





57


reform in general parameters defined by public opinion is risky. Specifically, locating

reform with little regard for its context may inadvertently strengthen bottom-up

responses, which promise to make the process far more uncertain. Assuming the process

remains primarily mediated from within the system, an analysis of the following political

factors stands to tell us a great deal more about the road to reform.

Since the restoration of democracy in 1983 political parties have played a major

role in the public affairs of all twenty-three provinces. In terms of their impact on public

sector reform, political parties and party systems are relatively well-studied factors. It is

logical that governments backed by disciplined parties with a majority in the legislature

appear most likely to pursue significant public sector reform (Haggard 1997). Argentina's

experience on the national level is a useful reference point. Menem's Partido Justicialista

(PJ) essentially gave the executive a free hand in reducing the scope of the state during

the 1990s. Chile's Frei was able to accomplish a broader range of public sector reforms

with similarly auspicious circumstances. Looking more broadly across Latin America,

one finds a number of cases that fail to hold to form--Mexico, Costa Rica, and

Paraguay.46 Therefore, this first proposition, which encompasses both party

fragmentation and discipline, is by no means conclusive when it comes to assessing the

role parties play in reforming central governments.

Party-parity, two roughly equal major parties, is another way to focus on the

general prospects for reform. According to Barbara Geddes (1994), when clientelist

resources are pivotal in electoral politics, politicians will not approve civil service

reforms, except under conditions when such reforms hurt patronage-dependent parties

equally. Reform in the United States is often accepted as a classic example in this





58


regard.47 Yet in many countries, including Argentina, one finds periods of inaction during

periods of party-parity and frenzies of reform approved by the legislature at the behest of

the president. Nonetheless it is interesting to pay close attention to cases with party-parity

on the provincial level to better learn the extent to which party-parity serves as a

disincentive for protecting clientelistic practices.48

Citizen participation is a factor in the political system, which may or may not be

primarily channeled through political parties. Two issues regarding participation seem

relevant for public sector reform. First, the middle class is historically a pro-reform force

in Western societies.49 Thus parties largely geared toward middle class values and

interests are more likely to enact significant public sector reform. In Argentina there is

certainly more support for reform among the middle class.50 Two developments,

however, weaken this variable on the national level. Firstly, virtually all Argentine parties

court the middle class vote as one of several constituencies. Moreover, not a single major

party campaigned on this issue in the midterm elections last month."5 Secondly, and

perhaps more ominously, the middle class itself appears to be shrinking at a rate

unparalleled in Argentine history (INDEC 2001). Second-generation reformers will no

doubt have to earn support from citizens who do not associate structural adjustment with

a better life.

Second, political participation independent of political parties is beginning to

influence public sector reform. For large parts of the 20th century, Argentines primarily

accepted political parties as a vehicle for political representation if not personal

expression. Party identification proved to be more class-based than, say, the United States

or inchoate Latin American cases, but far less so than classic Western European cases.





59


Today, however, a broad segment of the voting population is not only further blurring

class-party lines but seems to be rejecting political parties altogether.52 In other words,

the content of reform agendas may increasingly be shaped by political participation

outside traditional political parties. Under such circumstances, elected officials and public

managers will have to hold together reform coalitions that require support outside their

own constituencies.

New ideas about public sector reform are frequently dynamic elements in the

political system. These ideas range from generic management wisdom (e.g. Total Quality

Management, Management by Objectives, etc.) to insights derived from microeconomic

theory (transaction cost economics, public choice and principal-agent, etc.).53 While the

application of such innovations has largely been carried out in OECD countries,

particularly Anglo ones, inter-country borrowing extends to all corners of the Americas.

Internationally popularized reform ideas are well received by Argentina's major political

parties, though perhaps only rhetorically at times. The extent to which these ideas take on

currency depends on political appeal and conviction, along with support from

administrative elites. Overall, new ideas about public sector reform are likely to enter the

domestic political system in a sort of"outside-in" (brought in, for instance, by political

mavericks such as Domingo Cavallo or Elisa Carri6) manner and be mediated from there

in a "top-down" one.

Change in the public sector depends on the pursuit of new objectives and methods

by those who actually govern. The party system clearly has an impact on the necessity for

coalitions and we must also bear in mind that even a single governing party may have

opposing factions. Separating what is feasible and desirable thus depends, in part, on





60


coherence within the executive. Executive coherence is a variable that draws mostly on

party discipline, coalition politics and the broad acceptance of particular reform ideas

(Heredia and Schneider 2000). Implementing a reform agenda across a given level of

government necessitates commitment and coordination among various ministries and

agencies. Menem's first administration enjoyed a high level of coherence because

virtually all appointees were loyalists to the president.54 This made it difficult for

opponents to find suitable beachheads for fighting the reforms.

Executive coherence does not, however, translate into any particular reform

bundle. For starters, as the Argentine case shows, carefully placing reformers in key

positions should not be confused with a uniformity of interests. Menem had, not unlike

the case of many of the country's governors today, urban and rural constituencies to

consider. The direct costs of public sector reform in the 1990s were borne mainly by

urban Argentines (Heredia and Schneider 2000:447, Tommasi, et al. 2001). The related

corollary is that the reform agenda of the Menem administration stopped short of

remaking the state on the provincial level. In short, executive coherence becomes

indispensable as far as implementation goes, but it often tells us less about how or why a

particular reform package comes together in the first place.

2.5 The Administrative System

If/reform and, even more so, what reform depend also on the administrative

system in question. Pollitt and Bouckaert (2000, Chapter 3) identify three dimensions that

can be helpful in understanding if and how an administrative system will relate to reform.

First, the relationship between ministers and career civil servants is potentially important.

This relationship may be characterized as either integrated or separate (Pierre 1995).





61


Integration implies the careers of ministers and top mandarins are intertwined. A

common professional socialization tends to "invest" the upper management in the reform

process. Separate career paths, such as in Argentina, produces a different dynamic.

Ministers typically have a political background and they may well not view top

mandarins as co-equals in policy management. In this case, reformers are unwise to

assume a shared perspective exists. Instead, reformers need to understand the public

sector's values and history, work tirelessly to win the trust of top mandarins, and insist on

implementation over a viable timeframe.

Table 2-4 Propositions Concerning Administrative Factors
P14. In a system characterized by separate career paths, fast-track or comprehensive
reform is risky, likely to be stalled or implemented unevenly.


P15. Highly politicized administrative systems are unlikely to increase accountability
(both in terms of performance and stakeholder access to governance processes) through
further politicization.


P16. Provincial civil services (closer to the Rechtsstaat mold) will accept
professionalizing reform before either marketizing or democratizing efforts.


The relationship also depends on the politicization of top public sector posts

(Pollitt and Bouckaert 2000:51-52). Except in rare situations, long-term reform is not

aided by wholesale changes in those upper-level posts. Granted, too much continuity

potentially has a deleterious effect on accountability. Argentina, though, leans towards a

politicized administrative system while it simultaneously insulates itself from legislative

and direct citizen oversight.55 Provincial administrative systems fit this mold, but the

ways in which politicization varies from the national system stands to offer clues for

reformers. Second-generation reforms, which may need ten years or a generation to take





62


hold, have no choice but to withstand political tides. But the bottom line is that further

politicization (whether among political appointees or public employees' unions) has little

chance to improve accountability (performance or otherwise). For these systems,

professionalization seems a safer first step.56

Second, administrative systems are products of history. In this way,

administrative cultures--"normal" beliefs, identities, habits--form, evolve and persevere

(Olsen 1988:239-242). In Western countries two classic categorizations--the continental

European Rechtsstaat model versus the Anglo "public interest" model--remain a useful

reference point. Rechtsstaat systems reflect the state's role as the central integrating force

in society and carry out that role in a highly legalistic manner (Pollitt and Bouckaert

2000:53-54). Argentina resembles the continental European model. Argentina's colonial

legacy set the stage for the state's subsequent dominance in public affairs. Civil servants,

particularly on the national level, commonly have backgrounds in law. Policymaking and

management in this context often works from the assumption that citizens have system-

defined rather than individual-defined rights and duties. Public sector reform has to be

mindful of how, when and where change can be accommodated so as to avoid costly

mistakes.

Last, administrative systems can be defined by the diversity of sources of advice

on managerial reform (Baker 1994, Pollitt and Bouckaert 2000:42). The basic point in

question is the extent to which reforms are defined by insiders, civil servants, or

outsiders--academics, consultants, and development organizations. On this continuum,

the United States and the Anglo countries are unique in the pronounced diversity of this

kind of policy input, which increases the likelihood that "new" ideas about public sector





63


reform are favorably received. European public managers, in contrast, draw far more

exclusively on advice rooted in the experiences of their professional peers. In general,

Argentina's policy process remains relatively closed to non-governmental actors.

However, at least on the national level, the reform process has been more open. In

particular, private-sector and World Bank consultants have played a major role, while to

a lesser extent academics and think tanks have influenced the process.57

The influences of the political and administrative systems include structural,

functional and cultural elements. The expectation that provincial public sector reform

varies in its scope and points of emphasis gives this project an opportunity to assess the

predictive powers of the variables discussed so far. To summarize, the federal system

limits the ability of central authorities to enact wholesale reform on the provincial level.

Hence, public sector reform becomes largely a subnational phenomenon. From there, the

nature of the provincial executive, party and administrative systems shape reform

packages along with more fluid factors such as socio-demographic change and new ideas

about public sector reform. Next, in an effort to clarify what public sector reform looks

like, it is best to categorize the content of public sector reform.

2.6 The Content of Reform Packages

Professionalization

Based on the first year or two of reform in the provinces, three clusters of

initiatives have emerged. Efforts in the provincial ministries and agencies concentrate on

pushing a reform agenda that includes, together or separately, professionalizing,

marketizing and democratizing the public sector (Figure 2-2, p.65).58 Professionalization

deals mainly with civil service reform. Steps thus are taken to ensure positions are





64


advertised, merit-based, and subject to clear and regular evaluations. Steps are also taken

to define job descriptions. The extent to which a reform package needs to concentrate on

such measures depends in part on the existence of legislation and administrative

procedures (World Bank 2000). But it also clearly depends on the level of compliance

with the formal civil service framework.5

The attraction of a professional civil service is obvious. A poorly managed public

sector is never a positive factor for stability and development (Delp6r6e 1997:83-85).

Almost without exception, modernization and industrialization coincided with the

development of professional bureaucracy.60 Today there are debates about how the

bureaucratic state can reinvent itself to be more efficient and performance-driven, but the

basics of professionalization remain central to making the state work better (Turner and

Hulme 1997). Public sector reform implies purposeful change. And the logic behind

interviews and surveys in provincial government ministries is to better diagnose the

problems and tailor responses in kind.

An often-overlooked component of professionalization is education and training.

Public managers in Argentina are well educated, though a significant educational gap

exists between the national and provincial levels."6 On both levels managing public

resources for a more complex society cannot be the exclusive domain of lawyers.

Administrative law backgrounds are useful, but a less state-centered and more solution-

centered public sector requires technical and managerial skills too. University curriculum,

program development and, finally, recruitment all play a role in rounding out the

educational-training element of professionalizing the public sector. Training is a crucial

capacity building issue facing provincial governments. While many ministries in the








central government have a good track record in this regard, information management and

other technical competencies are inadequate on the provincial level.







Pifessionalibing Marketizing







Democratizing






Figure 2-2 Components of Public Sector Reform



Marketization62

Marketization implies a more mixed bag of measures. First, and most

significantly, the role of the state--what the public sector should do--continues to be

debated.63 In this way, second-generation institutional reforms share the first-generation's

concern for placing resource allocation in the hands of the market. The World Bank

speaks of introducing "competitive pressures" in the delivery of traditionally public

services (2000:24). Privatization and contracting out are among marketization's most

recognizable forms.6 Making resource allocation functions more efficient has thus

commonly entailed reducing the size of the state. Downsizing (i.e. cutting functions and





66


personnel from the public sector) fits under the "marketizing" heading because there

exists at least an implicit assumption the market, or perhaps the so-called third sector,

fills the void.

Another element of this type of market-oriented reform applies competitive

pressure across or within public organizations. In this case, the objective is frequently to

streamline functions and efforts so as to minimize duplication. This may require merging

agencies (thereby reducing the administrative overhead necessary to deliver a service) or

bringing related policy issues (for example, environment) under a single organizational

roof. In fact, for the policy areas I chose to follow closely, this aspect of marketizing

proves crucial to the public sector reform story. Provincial reformers, like their national

level counterparts, are encountering situations where the state cannot simply be relieved

of its responsibilities. Instead, the hope is to achieve market-like coordination and

efficiency in public organizations.

The final set of marketizing measures involves finance, performance evaluation

and "agent" incentive issues. Finance issues in the provinces include intergovernmental

(i.e. political) negotiations on revenue-sharing, but also included are less visible questions

of budget reforms and auditing. The thrust of such reforms is to link the budgeting

process to planning, operational management and performance measurement (Turner and

Hulme 1997, Pollitt and Bouckaert 2000:64-66). Provincial governments are following

this trend, which was popularized in the private sector and adopted by central

governments in most OECD countries (L6pez Murphy and Moskovits 1999). Under

favorable circumstances, linking budget reform to processes that improve long-term

public sector performance would be a bottom-up process. Unfortunately, pressures to





67


reduce public expenditures appear poised to lead provincial finance ministries to cut

programs from the top-down. Few deny the urgency of reigning in waste. The challenge

is to make "performance" measures credible by taking agreed-upon performance targets

seriously.

Performance evaluation is certainly an issue in budget reform but it also resonates

as a managerial tool in its own right. Since the days of Woodrow Wilson and Frederick

Taylor, performance measurement has always been a concern of public administration.

Nonetheless, there has been a recent proliferation of interest in measuring public sector

performance.65 Latin America is not an exception in this regard. Performance

Measurement Systems come in many different shapes and sizes, but they all confront the

questions of how extensive performance measurement should be and who uses the

information (Pollitt and Bouckaert 2000:87-90).

On the first count, it is interesting to see which public organizations fall into the

orbit of performance measurement. Not surprisingly, measuring inputs, processes and

compliance is often times seen as inadequate. Ambitious reforms broaden the scope of

measurement to account for efficiency and effectiveness. However, obvious dilemmas

arise when outputs are detached from outcomes and/or when outcomes are products of

complex, multiple causes. Performance measurement has not progressed far on the

provincial level in Argentina. Rechtsstaat systems are conceivably less comfortable with

experiments in expanded discretion and seemingly ambiguous performance targets.

The second dimension rests on the questions of who exactly are privy to

performance results and how those results play out for public employees. The trend in

"public interest" systems has been to accommodate external calls for more and better





68


information on public sector activity.67 The interested audience includes elected officials,

media and private stakeholders. To varying degrees, then, performance measurement is

potentially more than an internal managerial tool. In Argentina, at all levels of

government, policymaking and implementation generally lack transparency. This may

point to momentum for the introduction of greater outside scrutiny (not only

Congressional committees but also, for instance, consumer or other advocacy groups) of

how the public sector is doing its job. This aspect of marketizing reform actually reaches

over into the concerns of democratizing reform. The danger is that public sector

organizations already under duress may respond poorly, if at all, to unfamiliar sources of

validation.

Last, though on a related note, reformers around the world have been forced to

think seriously about "agent" incentive issues. Agency theory warns that principal-agent

relationships are ubiquitous in the public sector and represent a serious impediment to

improved accountability or performance (Acuhia and Tommasi 2000). The source of the

problem is partially structural in the sense that hierarchical organizations provide good

cover for agents to run amok. But the problem's root is primarily identified as one of self-

interested behavior. Those doing the public's business simply lack the incentives to be

more productive and client oriented.

Public sector reform seeking to ameliorate "shirking" has taken a couple of

general forms. First, job tenure for government workers is a point of ideological

contention in many countries. Argentina is no exception in terms of this issue's

contentious nature, but for now at least provincial and federal public employees enjoy

high levels legal protection.68 Second, building on the previous discussion, linking pay or





69


promotion-track incentives to performance holds some potential for improving the

motivation of public employees. This line of reasoning has been used on the national

level, but considerable resistance and budgetary hardships have coupled to hamper the

implementation of incentive programs.69 Indeed, in the midst of Argentina's current

crisis, a central issue regarding many aspects of marketizing reform is whether they can

be successfully implemented.

Democratization

The final type of public sector reform addresses the issue of accountability in

government. More specifically, the point is to reduce abuses of power, arbitrariness and

unresponsiveness by enhancing democratic control over public organizations.

Accountability is a multidimensional concept and goal (Turner and Hulme 1997:122-

125). Democratization reforms can emphasize control mechanisms through elected

officials or directly by citizens. Increasing political control (top-down) over public

organizations has been at the root of many efforts to make the bureaucratic state work

better. Of course, there are different institutions (the President, Congress, and Courts) that

may become involved in this process. For each institution, it is helpful to examine the

nature of the control exerted and point out what one would expect to see if that institution

is playing a role in democratizing the public sector.

Executive control over the state apparatus in Latin American varies considerably

from country to country (and even from province to province). The region's reputation

for "presidentialism" is somewhat misleading. It is true that presidents often make policy

by decree; and this pattern has appeared, though with varying degrees of effectiveness, in

this study's cases. However, Latin America has also appropriately been classified as





70


having weak regimes within a strong state (Loveman 1994, O'Donnell 1973, 1994). This

implies the state exerts considerable control over society yet assorted crises have the

ability to undo governments or even regimes. Seen in this light, it is tempting to believe

that democratizing the public sector depends on increasing the power of elected officials

vis-a-vis the state.

Executive efforts to democratize the bureaucracy are measurable. First, a simple

analysis of executive decrees concerning public sector reform is a good starting place.

Next, it is also relatively easy to gauge trends in the number or positioning of political

appointees, as well as whether public managers see an improvement in the articulation of

policy from above. Additionally, the effectiveness and authenticity of democratizing

reform need to be considered. Executive control of the reform process or the bureaucracy

may not enhance accountability. In the Menem administration, state reform by decree

insulated reformers from opposition. Political control was, then, to some extent reasserted

over the bureaucracy but political appointees largely failed to coordinate their efforts or

answer to anyone except Menem.70 There was an appearance of getting things done,

which created a false sense of accomplishment and probably contributed to reduce public

confidence in additional reform.71

The national Congress in Argentina has generally taken a backseat to the

Executive on most policy fronts, including public sector reform. Provincial legislatures

are even worse in terms of lacking specialized committees to draft legislation. Overall,

legislation rarely includes much detail and combined with limited policy review, it is not

realistic to say legislators know how public organizations are doing on the job. However,

the paucity of congressional oversight and involvement is starting to be ameliorated, and





71


the congressional records in Entre Rios and San Luis show substantial activity. Moreover,

the present crisis in Argentina's provinces is forcing this institution to get more involved

in public sector reform issues, particularly in coparticipaci6n negotiations and fighting

against the IMF's recent suggestion that 375,000 provincial employees be dismissed.72

The Courts have yet to play a significant role in checking provincial bureaucracies. The

judiciary generally limits itself to ruling on the constitutionality of particular laws rather

than taking up questions of bureaucratic discretion.

In the development community, the real thrust of democratizing reform is

purported to come from direct citizen involvement. The World Bank (2000:xiv-2, 23)

describes the need to emphasize "voice" and partnerships as a means for encouraging

community empowerment, demand-driven public sector activity, and legitimate

authority. This emphasis takes many forms, including efforts inside and outside public

organizations. From within, public organizations have the option of cultivating employee

and public participation. Employee participation fits the broad model of human resource

development aimed at tapping organizational talent, motivating workers and building

capacity (Turner and Hulme 1997:117-118). Public participation is also an important

component in public sector reform for the provincial ministries in this study. Public

participation can be sought out through surveys of citizens, providing a basis for priority

setting and policy evaluation.7 Considering the growing number of policy portfolios

managed primarily on the provincial level, ministries have to consider holding regular

face to face meetings with groups affected by their decisions.

The examples given above are not meant to suggest direct citizen involvement has

to be solicited or orchestrated by public organizations. In fact, "voice" and partnership





72



depends on people working on public affairs without prompting from a public manager or

organization. Concerns exist that grassroots projects have not proved sufficiently broad or

replicable in developing countries.74 But the "voice" and partnership focus in this study

relates to real and perceived changes in the openness of the policy process.

Democratizing the public sector has been on the table in Latin America since the process

of political democratization began two decades ago. Recalcitrance is still found in

political and administrative systems, though recently this type of reform has found

greater acceptance. Public organizations in Entre Rios and San Luis are wrestling with

these issues.

Notes


The fact is that Argentina was the darling of the Washington Consensus throughout the 1990s. The U.S.
Treasury, the IMF and development banks have subsequently jumped off the bandwagon; see Stiglitz
(2002). However, today's post facto excuse-making is certainly in contrast to the official and academic
records written on reform issues (including privatization and civil service reform) during the 1990s.

2 There has been growing consciousness of this dimension of Argentina's problems. Between October 2001
and March 2002, key figures from the IMF and World Bank have alluded to the "dysfunctional" nature of
Argentine federalism; see also Acufla and Tommasi (2000), L6pez Murphy and Muskovits (1999),
Tommasi, et al. (2001). Even President Bush remarked that Argentina has some "tough calls" to make,
particularly with regard to "the states [provinces] and how they operate," as reported in La Naci6n (3-19-
02). The translation is my own.

5 The city of Buenos Aires is essentially a province because it is represented in both houses of congress,
and receives coparticipaci6n shares from the national government.

6 Members of Congress are rarely eager to vote for legislation that strips their provinces of power or
resources.

7 Unfortunately for the region, domestic and foreign economic interests opted not seize on the possibility of
a new economic pole based along the Parana River. Most of the region went on to languish in obscurity
until the turn of century when there was something of an agricultural boom, which coincided with planned
immigration from Europe.

8 By the latter decades of the 19t century, the provinces had lost most of the effective governing authority
they once aspired to; see Platt and di Tella (1985) for insights into this process. The bottom line is that,
without a strong incentive to sharpen their own state apparatuses, most provinces were content to public
sector employment to fall into a pattern of political patronage.

9 It is often believed that Per6n initiated today's system of transfers to the provinces. In fact,
coparticipaci6n was launched during the 1930s in response to the Great Depression and an increased






73




awareness of the inequality between the Argentina's few rich pockets and its vast poor interior; see Sawers
(1996), Porto (1990), Rock (1987).

10 The entire national system of grants and loans for business development reinforced particularistic habits
of governance; see Mattos (1989). Resources flowed to individual corporations or projects rather than into
the supply of public goods. I argue this strategy of targeted resources within the federal-provincial
framework has served as an obstacle to development in the interior.

" The bottom line is the provinces are authorized to spend a lot of money, but they are deprived of most
important revenue sources. Thus, expenditure decentralization is perhaps a good idea with poor execution.

12 In November 2001, De la Ruia's government altered coparticipaci6n, imposing smaller transfer receipts
on the provinces. The new rules of the game were not accorded institutional status by the provinces or most
Argentines in the sense that an issue of major constitutional importance had not been negotiated.

13 There is a consensus that provincial bureaucracies need to change their ways. However, public
organizations have to remain intelligible to the society they serve; failing to do so risks turning institutions
(durable frameworks and arrangements) into merely organizations (offices that may or may not command
respect).

14 The general thrust of this point has been well established in the U.S. context; see Kettl (2000) for a good
summary or Pollitt and Bouckaert (2000) for more detailed cases.

15 This should come as no surprise to students of American administration. In federal systems, students of
constitutional law and state (provincial) politics appreciate former bases of compromise to understand shifts
in the system; see Palacio (1965), Rock (1987).

16 The terms desirable and feasible and what they connote with regard to reform are used to great effect by
Pollitt and Bouckaert (2000), as well as by Peters and Savoie (1994).

17 By February 2002 serious doubts about the durability of the November 2001 agreement were apparent in
ongoing negotiations between Duhalde's administration and the provinces.

18 Former Santa Fe Governor Carlos Reutemann is major proponent of public sector reform on the
provincial level. However, he cautions against reform measures being imposed by Buenos Aires or the
multilateral development banks. Reutemann envisions public and private actors in each province finding
the proper 'comfort zone' for feasible reforms.

19 Import substitution industrialization (ISI) worsened investment and resource allocation decisions. The
central government transferred significant resources to the poorer provinces yet it failed to significantly
close the standard of living gap across or within provinces in Argentina. Among the problems, failing to
develop institutional capacity stands out as a crucial one; see Porto (1990).

20 Turner and Hulme (1997) provide a good overview of the issues surrounding remaking the state. Their
discussion demonstrates historical depth and practical experience, which reminds us of the problems
associated with "too much state" and "too little state" positions.

21 CEPAL (2002) points out that even the region's less open economies like Brazil have, by and large,
embraced market reforms. Of course, it should be pointed out that most Latin American countries, much
like Western Europe, have not liberalized labor markets. The exception to this in some countries has been
the special rules governing maquiladoras or enterprise zones.

22 Heredia and Schneider (2000) make this point in reference to additional cases in Latin America and
Eastern Europe.






74



23 On the national level, there are fewer public employees in Argentina today than there were ten years ago;
see INDEC (2001).

24 The countries of the European Union would seem to be case in point: Maastricht Treaty targets for
advancement into the "eurozone" merely required fiscal deficits under 3 percent of GDP. More stringent
requirements would have made members deal hastily and likely improperly with the myriad issues of
public sector reform: see Pollitt and Bouckaert (2000, Appendix: Country Files).

25 This was the case with the Pendelton Act of 1883, which set the American civil service on a path to
professionalization; see Garvey (1997). Momentum for civil service reform gained strength over the course
of two decades, and the bill's passage came during favorable economic times, well ahead of the global
downturn of 1890-91. In Argentina, the Menem administration's 1994 civil service reform took place at the
height of optimism concerning the country's future.

26 Caballero and Dornbush (2002) view Argentina's fiscal quandary as necessarily leading to a profound
"rightsizing" of the state. In fact, they believe the need for a balanced budget, deficit cero, is so great
Argentina should accept extranational approval of all fiscal and monetary policies until the current crisis is
safely averted.

27 Brazil passed a law in 1996 that prevents state government from running deficits.

28 Dire warnings on this count abound. As Governor Rozas ofChaco said recently, "Aplicar el d6ficit cero
y matar a la gente bastante similar." The message being that the social cost of balancing the budget this
year is unacceptable. Likewise, President Duhalde made frequent reference to Argentine society as a
ticking bomb, una explosi6n social, in his exhortations for international patience and assistance.

29 See Acufia and Tomassi (2000), L6pez Murphy and Muscovits (1999), Tommasi, et al. (2001) for
persuasive studies of the fiscal irrationalities built into the Argentina's revenue sharing system.

30 Provincial debt is presently climbing upward in the ranks of Argentina's economic problems. At present,
in February 2002, the question of provincial debt figures prominently in negotiations between the national
government and the governors. The governors are insisting that the national government accept full
responsibility for all debt in exchange for their acquiescence on reducing the monthly transfer amount
under coparticipaci6n. The IMF has also expressed grave concerns about provincial debts, which are
actually rising if one takes into the consideration that public employees in some provinces have been paid
in provincial bonds for months, if not years.

31 Comparing my interview transcripts from May-July 2000 to those from a year later, I note that reform
protagonists became increasingly wary of reform provoking social unrest. Impatient outsiders may despair
over the reform process being held hostage by piqueteros and saqueadores. Yet it seems only fair to
remember that the point- men in the provincial process live in the same communities as the people affected
by state reform.

33 See, in particular, World Bank (2000) for summaries and classifications of institutional development
programs in various regions. Indeed, Reforming Public Institutions and Strengthening Governance offers
more analysis and evaluation of programs that were far less numerous in the Bank's 1992 report,
Governance and Development.

34 Boyer and Drache (eds.) (1996), States Against Markets: the Limits ofGlobalization, offer a number of
good accounts regarding change in contemporary welfare states, see Brodie's chapter in that volume for
discussion of "embedded liberalism."

35 KOnig (1996) paints a persuasive case regarding reduced financial policymaking latitude.






75



36 De la Rta's resignation has not signaled an end to street protests against austerity measures, el ajuste.
When, in the next year or so, provincial reform gets around to trimming workers, 'politics in the street' will
likely become an even more common occurrence in the provinces.

37 Overall, this point has many layers to it, depending on which part of the country one studies. For a good
starting place on this issue; see Quiroga, et al. (1995), as well as FerradAs (1998) and also Ribeiro (1994).

38 Perhaps oddly, this conclusion is drawn by the relatively conservative La Naci6n (10-20-01). While
polls are certainly not ideal compasses for politicians, there is increasingly reason, in my estimation, to
worry about the short-term impossibility of simultaneously widening and deepening economic
liberalization. Public sector reform in the provinces raises similar questions--too much too soon has long
odds of being implemented (imposed), let alone sustained.

39 Since February 2002, if not before, the IMF is certainly attempting to link these issues, see La Naci6n (2-
11-02) and Buenos Aires Herald (3-29-02).

40 See also Bonvin (1994) for a discussion of Latin America's usefulness in testing governance models that
would simply not be applicable to low income countries that predominate in Africa or South Asia.

41 See, again, Sections 1.5 and 1.6 for highlights regarding the neglect of subnational analysis of public
sector reform.

42 Since the global trend toward bringing political power closer to people cuts across federal and unitary
systems, there has been a growing tendency to ignore the differences, reduced or not, between cases of each
type.

43 See also North (1990:94-96) for a good discussion of what he refers to as the 'increasing returns' of
seemingly inefficient socioeconomic systems and Ostrom (1990).

44 This is not to say that bottom-up clamoring has not played a crucial role in the recent trend toward the
devolution of political power. But the political systems in countries such as Great Britain, France, and Italy
seem to have arrived at this conclusion without the prodding of massive popular movements. In other
words, the institutions of the political system (particularly, political parties) have preempted the bases for a
more bottom-up process.

45 Opinion polls in La Naci6n (10-25-01) and Clarin (2-14-02) demonstrate that Argentines have a very low
opinion of politicians and the costs associated with maintaining the political system. However, the same
polls reflect uncertainty if not hostility about cutting public sector jobs, relying more on the private sector
for the provision of public services and accepting the recommendations of the IMF.

46 The case of Mexico is probably the most famous and perplexing. A string of pro-liberalization
presidents--De la Madrid, Salinas, Zedillo and now Fox--have failed to enact and/or implement significant
public sector reform; see Heredia and Schneider (2000), Gollbs (2000). This is despite the fact that De la
Madrid, Salinas, and Zedillo enjoyed considerable congressional majorities in a system that was famous for
rubber-stamping the Executive's domestic policy priorities. In Costa Rica, Figueres' administration (1994-
1998) was largely unsuccessful winning even minor concessions public employees' unions. Meanwhile in
Paraguay, despite Colorado party control, the Executive and the Congress remain unable or unwilling to
reign in public sector corruption and inefficiency; see McCoy (1999:25).

47In the late 19th and early 20d centuries, there is evidence that supports the party-parity hypothesis in the
United States. However, the party-parity hypothesis does not hold up equally well in recent years in the
United States; see Kettl (2000) for a good summary of recent obstacles to "reinventing government" in the
two-party American system. Likewise, Europe also provides examples that beg the question how does
party-parity explain instances where party-parity exists yet no reform is forthcoming.






76



48 This research project offers an opportunity to test this hypothesis on the provincial level. Entre Rios has
seen power alternate between the UCR and PJ since 1983, while the PJ has ruled in San Luis since the
restoration of democracy.

49 This theory also resonates among Argentine writers; see Palacio (1965), Platt and di Tella (1985).

50 Despite uncertainties about determining who is middle class these days, polls continue to show that
middle class have great faith in democracy and stand firmly behind the principle of public sector reform;
see R6mer (2002) in La Nacidn (3-31-02).

51 Two small parties did make continued state reform a central element in their campaigns: Alternativa para
una Repiiblica de Iguales (ARI) and Acci6n por la Repiblica (ACCREP), founded by Elisa Carri6 and
Domingo Cavallo, respectively. The two major parties emphasized economy recovery and social issues
such as healthcare, education and unemployment insurance, which is not surprising since economic
recovery is what most Argentines rank as the country's number one concern.

52 The midterm elections in October 2001 point out this trend, see La Nacidn's on-line summary at
www.elecciones2001 .gov.ar/

53 See, for instance, Kettl (2000), Peters (1996, Chapter 1).

54 This point is developed clearly in Abdala (2000), Saba (2000). While Menem's tactics made resistance to
reform harder, mistakes made by unqualified loyalists have hurt the credibility of first generation reforms,
and make it harder now to keep second generation reformers insulated from critics today.

55 This has, with no disrespect intended, been described as the worst of both worlds, sharing the
politicization of administrative systems such as the United States without the strong congressional and
citizen oversight inherent in 'public interest' systems. See Artana (1998), Hopkins (1995), Sloan (1984) for
interesting accounts of the unhealthy effects this dynamic exerts on policymaking. Based on my own
experiences in the region (Central America, in particular), I would say Argentina is not an isolated case.

56 In many cases, it is not possible to reinvent government before the basics like full professionalization are
in place. I relay this observation based, in part, on my own conversations with reform protagonists in San
Luis and Entre Rios. See Baker (1994) for an excellent look at the problems associated with the highly
politicized civil services of Eastern Europe during the democratic transitions in that region.

57 Heredia and Schneider (2000) also note this aspect of state reform on the national level in Argentina
during the first Menem administration. My expectation, approximately half-way into my fieldwork, is that
outside involvement in provincial reform processes remains limited, felt primarily through the advice from
the national government and already functioning World Bank and IDB public sector reform programs.

58 Figure 2-2 is adapted from World Bank (1997), and it owes a debt also to Heredia and Schneider (2000)
who likewise seem to have been influenced by the Bank's categorization of reform elements.

59 As in most countries needing civil service reform, the issue tends not to be whether relevant laws and
regulations exist, it depends on whether standing measures are actually enforced.

60 The issue of what comes first--industrialization or professional bureaucracy--is hard to ascertain. In the
U.S., one may certainly argue that significant steps toward industrialization were taken well before the
passage of even the most rudimentary laws covering civil service reform. Many Western European
countries, however, clearly had a strong state tradition, which included professional bureaucracies.

61 Explanations for this gap vary. Buenos Aires attracts many highly educated Argentines, and public
management is not an exception to the rule. Also, the country's best universities are in the greater Buenos






77



Aires metropolitan area. Provincial governments have not made recruitment a high priority, leaving aside
the issue of whether it would be easy to attract top quality people.

62 1 believe the word "marketizing" has become common in public management literature. Ascertaining
who coined the term is difficult: however Pollitt and Bouckaert (2000:93-96) utilize it as a trajectory of
reform, along with "maintaining," "modernizing," and "minimizing." In my categorization, marketizing
includes, more or less, Pollitt and Bouckaert's marketizing and minimizing reform trajectories.

63 Francis Delp6r6e (1997:84-86) poses the issue similarly; he points out that "What kind of a State do we
want?" is the first question we are asking, necessarily followed by "What administration do we want to
give the State?" I concur, and have argued that "public sector reform" is a process that includes action on
the ends and means of governance.

64 Argentina was somewhat exceptional in Latin America in terms of the speed with which privatization
was conducted; see Abdala (2000), Guasch and Spiller (1999), Saba (2000). The scope of privatization was
also impressive. In sum, the scope and pace of privatization represents one of the more defining features of
first generation reforms in Argentina.

65 The search for improved performance is welcomed but it has raised questions about how meaningful and
appropriate some of these measures are; see Kettl (2000), Peters (1994), Turner and Hulme (1997, Chapter
5).

67 Peters (1996) provides thoughtful analysis on the experiences of Anglo countries (drawing mostly on the
United States. Canada, Great Britain, Australia and New Zealand) in crafting modes of governance that are,
among many things, more transparent and democratic.

68 In Brazil, for example, federal and state employees no longer enjoy guarantees of job tenure. Again,
much like the legal framework for hiring procedures, it remains to be seen whether public organizations are
truly utilizing the new framework to weed out underperforming individuals.

69 In most of Argentina's provinces, public employees have not received regular paychecks since 1999-
2000. Instead, cash-strapped provincial governments have resorted to paying wages in provincial bonds
("IOUs" of dubious value), much to the chagrin of public employees, the federal government and the IMF.
Naturally, in this environment, there is scarcely the financial stability to honor performance bonuses.
Indeed, provincial public sector reform programs have the unenviable task of motivating workers unable to
pay for home mortgages, prescription drugs, etc.

70 Menem's perhaps rightly saw a need to act on economic and state reform quickly. However, he acted
opportunistically and, on balance, unwisely by handing privatization and regulatory portfolios to loyalists
who made state reform a highly secretive domain. See Abdala (2000) for a good analysis of the inscrutable,
uncoordinated and financially questionable infrastructure concessions made by the national government in
the early 1990s.

71 This is one of the main reasons second generation reform will be far more difficult to implement than
first generation ones; see Pastor and Wise (1999). The present crisis has led to widespread mistrust of
political institutions, and reformers have little room to maneuver. L6pez Murphy and others make the
argument that, despite the mistakes made in the early 1990s, it would have been far better to cajole the
provinces into serious public sector reform back then.

72 1 have not seen official IMF acknowledgment of their call for a 27 percent (375,000) reduction in
provincial public employees. However, government officials such as Vice-Minister of Economy Todesca
involved in the negotiations are speaking of it; see El Cronista (3-31-02).

73 The provinces of San Luis and Entre Rios, among others I presume, have used citizen surveys since 2000
as part of their public sector reform programs.






78





74 There are numerous well stated accounts of this problem; see Turner and Hulme (1997), World Bank
(2000). The basic argument is that authentic expressions of bottom-up development have been isolated to
small islands of success in seas of failure.













CHAPTER 3
GOVERNING THE PROVINCES: PAST AND PRESENT


3.1 Introduction

Exploring public sector reform on the subnational level in Argentina involves choices

about what aspects of administrative change to study and which cases lend themselves

well to comparison. This chapter deals with the second issue. It is an important one

because many dimensions of public sector reform become clearer when comparable cases

are utilized. Section 3.2 takes a general look at Argentina's federal-provincial history,

which sets the stage for understanding Entre Rios and San Luis. The following two

sections--3.3 and 3.4--explain where the provinces of Entre Rios and San Luis have been

and where they stand today. It becomes apparent why political leadership and a

reasonably well-managed state apparatus go a long way toward explaining the surprising

developmental trajectories of these two provinces. The final section of the chapter moves

the focus away from history and the stories of the two provinces. Instead, it introduces

the basic characteristics of survey respondents from the Ministry of Economy in each

province and leads into Chapters 4 and 5 where survey responses assist in the analysis of

specific reform issues.

3.2 The Federal-Provincial History

The history of Argentina has been described as the history of two Argentinas:

metropolitan Buenos Aires and the interior. Buenos Aires, legally designated Capital

Federal since 1880, became the political, economic and cultural center of the country by




79





80


1800.' Independence from Spain was declared in 1816, and once the fight against the

Spanish was finished an almost immediate struggle began between two competing

visions for the new country. Business interests in Buenos Aires formed the backbone of a

Unitarian perspective, which believed Argentina could not prosper as a loose

confederation of provinces. Leaders from the interior, caudillos sharing a federalist

perspective, believed cosmopolitan interests in Buenos Aires had neither the right nor the

necessary might to impose a central government on them. Thus from its inception as a

republic, Argentina's unitarios and federalistas aggressively sought to define what kind

of relations would prevail between Buenos Aires and the provinces (Rock 1987:81, 88-

104).

Defining the relationship between Buenos Aires and the interior proved to be a

violent affair. Throughout the 1820s national governments made little headway in uniting

the United Provinces of the River Plate, let alone in exporting an administrative system to

the interior. A republican constitution was debated and ratified but too many caudillos

soon resisted the centralizing measures of the Constitution of 1826.2 In particular,

forfeiting provincial tariffs and disbanding personal militias for the mere promise of

revenue sharing sparked resistance and within three years key Unitarians were either

defeated or exiled (Rock 1987:104-107). The new Constitutional Confederation of

Argentina was dominated by the Governor of the province of Buenos Aires. Juan Manuel

de las Rosas. This "Governors' League" had problems too, namely most provinces

wanted a truer federation where all members shared trade revenue equally, but Rosas

refused to grant the interior formal revenue sharing and thereby loosen his power over

provincial politics (Adelman 1999:118-120, Rock 1987:106). In time, however, disputes








with Brazil, France and many of the Confederation's members sapped Rosas' base of

support and precipitated a successful rebellion led by Justo Jos6 de Urquiza, a wealthy

caudillo from Entre Rios.

After Rosas' fall from power in 1852, the project of national unification resumed

again. The fact is much of the interior was happy to move beyond the Confederation

arrangement because terrible economic stagnation had set in. On the other side (literally,

since much of the unitario exile community had resided across the River Plate in

Montevideo), there was greater pragmatism. Unitarians knew Argentina could not model

itself strictly on Napoleonic France or Great Britain. The new Argentine political

community had no choice but to "uncouple liberalism from centralism" and accept a

multi-layered system of governance (Adelman 1999:111). The Constitution of 1853

(which was not ratified by the province of Buenos Aires until 1860) settled on a federal

system that gave the central government control over foreign and interstate commerce but

otherwise most provincial matters were left in provinces' own hands. Additionally, a

national senate provided the interior with a powerful institutional mechanism for making

Buenos Aires a reasonably responsive partner in the federal-provincial relationship.

Overall, then, the first modem constitution seemed to reflect enough of the

federalist vision to position the provinces nicely for determining the republic's future or

at least protecting their interests in the political process. But the centralizing vision of the

unitarios found potential expression in Article 6 of the constitution, which states "The

Federal Government intervenes in the territory of the Provinces to guarantee the

republican form of government or to repel foreign invasions."3 In the hands of a strong

Executive (the 1853 constitution made the president more powerful than Congress or the








Courts), intervenci6n federal became more common than Article 6 suggests on the

surface. The absence of a formal revenue sharing arrangement can also be seen as giving

the federal government considerable leverage in provincial politics. The first president in

the new Argentina, Bartolomd Mitre, used subsidies to forge national consensus and

when that failed he sent federal authority to the province or locality where problems

persisted (Rock 1987:124-127).

Moder Argentina is said to start where the rift between Buenos Aires and the

interior ends. The new, moder state represented a liberal system in the sense that the

state was organized for a laissez faire economic order (Crassweller 1987:40-44). This

period (1870-1930) was also a time of organizational refinement for the state's apparatus.

Mitre and liberals like Sarmiento, Avellaneda and Roca sought to develop a professional

bureaucracy along the lines of Europe's finest.4 Provincial administration was an entirely

other matter, left to the best judgment of the provinces' own political institutions.

Portehos and foreign visitors to the provinces often noted the amateurish nature of

provincial administration, characterizing the functionaries they dealt with as "corrupt and

incompetent" (Ldpori de Pithod 1998:11-13). Unified, moder Argentina certainly had its

share of national projects--immigration and land colonization, the railroads, frontier

development--but administrative reform in the provinces was not one of them.

The Great Depression and Argentina's first military intervention of the 20th

century brought the liberal era to an end in 1930.5 The liberal system had facilitated the

agricultural and infrastructural development of some parts of the country; while Buenos

Aires was considered one of the world's greatest cities. But much of Argentina was

missing out on development. And there was increasingly worry that long-term economic





83


growth would be stunted by the puny domestic market in the country's interior.6 For the

first time in Argentine history, the state went into the business of development

administration, taking on new responsibilities and growing in size. The shift had

immediate and lasting consequences for the federal-provincial relationship and this is the

focus of the remainder of the section.

Until the 1930s the provinces raised and spent their own revenues. Considering

many provinces were very poor places, provincial government did not have the means to

grow. Provincial bureaucracy was patronage based and generally not effective, but at

least it was small and counted on for very little. The first federal revenue sharing law, la

ley de la coparticipaci6n, was passed in 1935 and it quickly changed the old dynamic.

Provinces responded by hiring public employees and providing public goods and services

that had previously been nonexistent or scarce. The federal government also began to

have sizeable numbers of federal employees in the provinces. Next, Per6n's governments

expanded the state's role in the economy and further institutionalized the new federal-

provincial relationship. The commitment to Argentines living in the interior was

commendable in many ways. However, even as coparticipaci6n was recalibrated many

times in subsequent years, two main problems persisted. First, the separation of revenue

collection (almost exclusively federal from the 1930s until the late 1990s) from

provincial spending made the fiscal side of the arrangement unmanageable. Second, the

quality of most provincial public sectors remained poor. In this sense, the new federal-

provincial relationship was a classic case of getting the cart before the horse.

For Per6n's political opponents, the 1960s and 70s were heralded as a time of

reform and national renewal. In reality, the federal-provincial relationship did not change





84


much at all. Most provinces made small strides towards civil service reform.7 But this

period of tragic upheaval did not translate into a focus and consensus necessary for public

sector reform. Moreover, the political and social forces involved in the democratic

transition provided no fresh impetus to solving the federal-provincial problem. By the

1990s the federal government set out to privatize state assets and devolve most key policy

portfolios to the provinces, thereby trimming its own workforce and hoping the provinces

could do more with less. Menem held together provincial support for his neoliberal

economic plan, but only at the expense of tabling meaningful provincial public sector

reform.8 The recession that started in 1999 ultimately closed the old chapter and made

federal-provincial relations a political issue to an extent not seen in decades.

The federal-provincial relationship has been one of contestation, rapprochement,

unfulfilled promise and now uncertainty over what comes next. Rolling back the past

seven decades is not an option. Adjusting the vertical fiscal imbalance in the system is

virtually assured.9 But making the provincial state work better could get lost in the

shuffle like it has so many times in the past. This outcome has to be avoided. For the

provinces to get more out of the federal-provincial relationship, it has to function more as

a partnership where the strengths of each level complement the other. But one has to keep

in mind that speaking of "the provinces" can be misleading when it implies they are a

monolithic entity. The following sections illustrate two different development

experiences from the interior.

3.3 Entre Rios: From Settler Paradise to Nowhere

Entre Rios is aptly named in Spanish as the land between rivers. Its southern and

western boundaries are defined by the mighty Parana River; the eastern boundary is the





85


Uruguay River. Rolling plains and forested valleys define the natural landscape of this

region, Mesopotamia, and the province is blessed with pampean soil and abundant

rainfall. Significant numbers of Spanish settlers recognized the land's potential and

crossed the rivers when the area's indigenous peoples were killed or forced to flee in the

latter half of the 18th century (Macchi and Masroman 1977:22-31). The other key to Entre

Rios' promise was its close proximity to Buenos Aires. Commerce and investment were

strongly influenced by transportation costs and the proximity of key markets. Another

proximity-related issue was the land's strategic importance as Spanish authorities feared

Portuguese encroachment on the eastern bank of the Uruguay River. Spain and, then,

Argentina thus went out of their way to encourage settlement in the land between the

rivers (Macchi and Masroman 1977:23).

The period of national unification (1853-1862) had a profound impact on Entre

Rios. Entre Rios' governor, Urquiza, had defeated Rosas, held a national assembly

(minus Buenos Aires) that passed the Constitution of 1853, and led the Argentine

Confederation for seven years (Bosch 1978:195-218). Parana was the capital of the

Confederation, and this period saw the construction of many stately buildings and public

spaces in the city. It was also a key moment in bringing outsiders--legislators, foreign

diplomats and investors, artists and intellectuals--to the province and cementing a liberal

optimism among Entrerrianos. Meanwhile, the province was taking good advantage of

the agricultural promise of its rich soil. According to the French geographer Martin de

Moussy, Entre Rios was the "richest and most important province in the Argentine

Confederation . [I]t is the example of the fastest growth that I know in the region."10

The provincial government was also making solid strategic decisions, among the





86


important firsts: founded a university (1857), signed contract with European firms to

incorporate new immigrants (1858) and established an agricultural colony and research

station (1853) (Bosch 1978:202-203, Carb6 1893:360, Macchi and Masroman 1977:116-

118). Bigger and better days clearly lie ahead.

Immigration and modernization defined the "golden years" (1870-1930) of

Argentina's liberal system. And Entre Rios was, in many ways, the poster child for the

progressive forces defining the era. When the province first contracted in 1858 to attract

Europeans immigrants its population was approximately eighty-thousand. In 1869 Entre

Rios' population stood at 135,000, then it more than doubled to 292,000 in 1895, and by

1914 it had grown to 425,000 (Macchi and Masroman 1977:169). The numbers tell only

part of the story, however. The settlers and the planned settlements, colonias, speak

volumes about Argentina's "ideal" immigrants and the type of settlement schema deemed

most likely to further the development of the province.

Entre Rios, like Argentina, Brazil or Canada, had certain ideas about what sort of

immigrants would contribute the most to development. Entre Rios attracted large

numbers of German, French, Italian, Swiss, Jewish and Spanish immigrants (Bourlot

1991:184-187). This process cemented the province's European profile. A large

percentage of the immigrants settled in colonias that were essentially land grants from the

government or arrangements financed by private companies. A typical colonia had about

500 people working family farms in the 40 hectare range, with the trades and professions

mixed in, along with a school and a church (Carb6 1893:371-455). The immigrants also

established numerous mutual-aid societies, widening and deepening the presence of

philanthropic organizations in the province. The entrerriano habit of community





87


involvement and organization impressed visitors of the era (Bosch 1978:266-267, 281,

Macchi and Masroman 1977:148). Overall, it has to be acknowledged these rural middle-

class enclaves were fairly unique in Argentina and downright extraordinary in Latin

America. It was the ideal settler pattern for development and Entre Rios had pulled off

the same historical coup as the United States, Canada or Australia.

The "golden years" were also characterized by clear signs of economic progress

and sound political stewardship. Agricultural production rose to new heights. The

numbers were astounding for a province of 75,457 km/sq., in 1892: 1,425 kilos of wheat

per hectare, 3 million cows, 5 million sheep; Entre Rios, on a per capita basis, ranked

among the top three Argentine provinces in each category (Carb6 1893:24-28,464).

Agriculture was big business and the province's export earnings were enhanced by the

completion of rail lines linking its primary cities to each other and Entre Rios to Buenos

Aires (Bourlot 1991:163,176). Governing the province was still a fairly modest affair,

though political leadership and administrative competence had already proved evident in

the Office of Colonization and General Council of Education (Carb6 1893). Apparently,

Entre Rios' government continued to go about its work capably and without much

appetite for national intrigues. According to the Argentine historian Beatriz Bosch, in the

late 1920s when most provincial governments were wracked with political division over

President Yrigoyen, Entre Rios (its political leaders and the bureaucracy) stayed centrist

and liberal, thereby avoiding federal intervention after the military coup removed

Yrigoyen in 1930."

The seeds of the province's eventual decline were probably cast in the 1930s. In

some ways, Entre Rios was inadvertently a victim of its own success relative to the





88


grinding poverty of much of the interior. When the conservative nationalists of the 1930

coup and later Per6n adopted the cause of the poor provinces, it brought along a new

institutional environment--coparticipaci6n--that gradually changed politics and

administration in Entre Rios. The national decision to shift to a state-led development

strategy with centralized control over most policies and revenue sources was ultimately

bad for a province that had successfully been collecting taxes, providing education, and

providing public space for a vibrant non-state sector. There was no option to opt out and

retain the old incentive structure. In practical terms, Entre Rios' public sector grew

rapidly to play its new role as junior partner in a developmental state with a mixed

economy (Bosch 1978:290). But worrisome trends appeared: vastly increased

opportunities for political patronage, state spending crowding out private investment and

the once vibrant philanthropic sector, and reduced accountability in a system that

separates responsibility for revenue collection from responsibility for spending.

The period between 1955 (Entre Rios' first military governor in over eighty years)

and 1983 (its last military governor) failed to reverse the reality of centralized federalism.

Public administration had become the only consistent growth sector in the formal labor

market of most provinces. Attempts to reign in political patronage and make the civil

service more professional were not uncommon. From 1955-58 Governor Calder6n

created a commission to look into "irregularities" in the public administration (Bourlot

1991:247). A new civil service code took effect in 1959-60, but political leadership

(civilian and military) for public sector reform was lacking in the years that followed.

Entrerrianos wanted to put the luster back on their province's fading star but many of

them (especially the young and educated) voted with their feet--128,000 left between





89


1960-70 (Bourlot 1991:278, Bosch 1978:302-303). Even the finest accomplishment of

the period, the completion of the sub fluvial tunnel connecting Parana with Santa Fe, did

not serve as a catalyst for regional integration and manufacturing.'2 In fact, when the

military assumed control for the last time in 1976, the provincial public sector was

treading water as socioeconomic and political crises swept the country. Yet "bureaucratic

authoritarianism" in Argentina was hardly defined by the technocrats. Plans to whip

provincial bureaucracies into shape or change the prevailing development model were

scarcely realized (Duarte 1999:2-4).

The period since 1983 (in particular, 1999-2003) was covered in some detail in

the previous chapter and it ties in often with the discussions on reform issues in

subsequent chapters. However, here, it seems important to make a general point about the

last twenty years and then clarify where Entre Rios stands now among Argentina's

provinces. First, civil servants fired during the Proceso Nacional were given the option of

returning to their former government positions and many surely accepted. But afterwards,

Entre Rios continued to do a poor job controlling the growth of the permanent

bureaucracy in the late 1980s and effectively managing the devolved policy portfolios

like education and health in the early 1990s.13 Governors Montiel and Busti, with two

terms each since 1983, deserve a fair share of the blame for dancing around these

problems (AR-ER 2002). Second, recent results are discouraging. The province ranks

near the middle of the country's twenty-four provinces in per capita GDP and near the

bottom of Argentina's middle-third in terms of the quality of governance.'4 This

represents a steep drop for a place that appeared favored by nature, its settlers and





90


settlement pattern, and the habits of good government that emerged during its formative

years.

Entre Rios' decline has mostly been a solitary affair. Even in Argentina. few well-

educated people recognize the province went from one the country's most successful to

merely a place trying to hold onto average. But sometimes arriving at "nowhere" can be

interrupted by unwanted attention. Argentina's recent economic crisis placed a few

provinces under the national microscope as they struggled to pay public employees and

creditors with provincial bonds or quasi-money. The popular 11 p.m. news program

"Despu6s la Hora," favored by upscale portehos and anchored by the witty Antonio Laje,

began making light of Entre Rios' tragicomic situation in April 2002. There was plenty of

thinly veiled humor focused on the province's third or fourth printing of quasi-money,

bonosfederales and the near impeachment of Governor Sergio Montiel. I felt bad for my

Entrerriano friends. I can imagine listening to Mr. Laje ridicule Entre Rios must have

been dispiriting. For the middle-aged and elderly, it no doubt hurts to see where the

province is today compared to where it was a few decades ago. And for the young it is

discouraging to come of age in a place widely reported to have seen its best days.

The transition from settler paradise to "nowhere" did not happen overnight.

Parana's unofficial historian, par excellence, Rubelinda Borghesse, told me that she did

not become acutely aware of her province's governance problem until ten or fifteen years

ago.5 Many veteran civil servants made similar comments, noting how the obscurities of

intergovernmental relations in Argentina made it hard to know what was wrong and

whether provincial administrative practices were to blame. I often thought about the

settler paradise as I walked through the entrance hall into the open air courtyard of the





91


beautiful Casa del Gobierno. It seemed hard to believe a pacesetter in a country of

progress and promise had stumbled--chipped paint and bonosfederales, unheated offices

with dead phone lines and apprehension about the "medicine" required for this "sick"

patient. Sudden disasters are probably easier to recover from since individual and

collective know-how can step forward to reconstitute whatever was lost. In contrast,

gradual declines are harder to reverse because assets like political leadership, sound

administration, and public confidence are lost slowly and renewal depends on relearning

the habits that supported them in the first place.

3.4 San Luis: From Nowhere to the Puntano Miracle

San Luis has never occupied a prime piece of real estate in Argentina's birth as a

nation or its subsequent development. Sanluisefios, known also as Puntanos for the Punta

de los Venados mountains in the heart of the province, number about 380,000 on a

rectangular shaped 77,000 km/sq., bordering the western most reaches of the pampa to

the east and the eastern foothills of the Andes to the west. The land is mostly sierra, with

the south of province being harsh plains and the northern half defined by three mountain

ranges and their valleys. The capitol, San Luis, sits close to the province's center. In the

colonial period, present-day San Luis was not ideally located to take advantage of the

mule trains and commerce that traveled between Buenos Aires and the silver mines of

Potosi. Nor was San Luis blessed with wide tracts of fertile land to draw new immigrants

following the wars of independence.

The province's early decades in the United Provinces and Argentine

Confederation seem to speak to the problems associated with lacking natural resources

and close proximity to Buenos Aires (Nufiez and Vacca 1967:Vol.II). San Luis' fame was




Full Text
219
public employees per 1000 provincial inhabitants. It is hard to say which way the
pendulum is swinging in this regard. I was far from alarmed by the views expressed by
ministers, directors, and legislators in the provinces. They said the right things about the
need to build administrative capacity and the danger in jumping to conclusions regarding
how to proceed. But as I said in Section 6.2, there is also reason to worry that important
actors such as the IMF and Kirchners government may do a deal that precludes balanced
reform based on serious research.
The contrast between Entre Ros and San Luis is not striking across the entire
range of issues. In fact there are points of commonality, and this is why I have suggested
both should pay particular attention to professionalization issues. And there is little doubt
the administrative systems of the two provinces are not favorably disposed to
management models dominated by individual initiative and incentives. But clearly
significant differences appear in the comparison. For instance, Entre Ros lacks the strong
managerial control that one expects to see in hierarchical organizations. San Luis
ministries, by contrast, are tightly run organizations and managers squeeze results out of
their units despite having human resources on par with Entre Rios. Democratization
related issues are another area where significant differences can be found. The more
Weberian organizational profile in San Luis is lukewarm about accommodating greater
public participation. Likewise, there is relatively little clamoring in sanluiseo society for
changing a winning formula. In Entre Ros, however, there is wide scale popular
dissatisfaction with politics and administration as usual. And public employees show
strong backing for accommodating greater participation. These are just a couple of the
many examples that illustrate why one size does not fit all provinces. The problem is that


156
melted away as election cycles respond to anti-adjustment sentiment. Related to
restructuring efforts, competition in the public sector is another set of issues that animate
reform discussions. To effectively assess how much internal competition should be a
priority for reform plans it seems helpful to think about competition between
organizations and competition between individuals
Competition between public organizations or units within an organization for
resources and policy portfolios is commonplace. As academics and practitioners have
illustrated, the causes range from power or self-preservation to political calculation or
institutional inertia 15 There are also plusses and minuses therein. So long as costly
duplications of resources and responsibility are avoided, competition may encourage
beneficial synergies such as following up on good, untested ideas for fear another unit
may do so and then be poised to take on new work. The downside is duplication, low
capacities for working effectively with related units and a preoccupation with the
organizational implications of a given role rather than unbroken policy or outcome focus.
In the provinces, the extent of competition is not clear from the responses in Table 5-3.
Rather than finding a disposition for or against competition, I found the greatest
determinant to be the relationship between directors within a ministry
The next assessment is whether civil servants in the provinces believe competition
between public organizations leads to greater efficiency and effectiveness. In Entre Rios,
most respondents are very skeptical of this purported link; and fewer than one in four
hold unambiguously positive expectations for the idea Meanwhile, approximately one in
three Sanluiseos would not expect to see appreciable gains in efficiency and
effectiveness from the promotion of such competition. The difference here may be more


tougher spot, and the suspicion and skepticism found on an issue like this reflects low
organizational morale. San Luis has managed its affairs better. Consequently, public
151
employees see considerable latitude for the province to decline any one size fits all
approach to public sector reform on the provincial level. The final question in Table 5-2
is instructive. Sanluiseos express significantly more confidence the provinces ability to
resist unwarranted changes than their counterparts in Entre Ros. Likewise, in San Luis,
successful reform experiences have made public employees more favorably disposed to
future plans to modernize the public sector.
5.2.3 Competition and Restructuring
Attempts to make the public sector more efficient go beyond high-profile issues
such as privatization, contracting-out and downsizing. In fact, much of the effort to make
the state work better relates to competition and restructuring. Competition describes, on
the one hand, the drive between public employees and organizations to control activities
and resources. But it also connotes here a general issue of efficiency and flexibility,
including the relationship between efficiency and flexibility. Restructuring is
organizational change in the form of altered combinations of personnel, resources and
responsibilities, lines of authority and channels of communication.
The first three questions in Table 5-3 begin a line of inquiry into the complicated
terrain of efficiency and flexibility. Provincial public organizations have been asked to do
more since the early 1990s. Important policy portfolios devolved from Buenos Aires to
the provinces. But revenues have fallen off since the mid-1990s, and the reality is thus
that provincial governments are being asked to do more with less.12 Meeting this
challenge is a question of efficiency, in some form or another. The intergovernmental


11
experiences in most OECD countries. In truth, development generally raced out in front
of public sector reform.18 In turn, when we analyze the road to reform the role of politics
is often central. It is, of course, only fair to remember the banks are not supposed to be
taking political sides. But the failure to make politics and societal support a more explicit
part of their reform frameworks leads to unrealistic expectations about the content and
pace of institutional change. Overall, such an omission is part and parcel to
misunderstanding the overlap between the first and second-generation reforms in the
region.19 Thus, for example, rooting out corruption, introducing competitive pressures
and being responsive to citizens are goals whose time has come provided that favorable
conditions (namely, consolidated gains in living standards) exist.
Second, development as public management falls into many of the same
conceptual and operational traps as development administration. On a programmatic
level, public management mainly emphasizes the technical or quantitative dimensions of
policy choices. Economic analysis, particularly marginal cost, is a useful though probably
over-weighted decision-making yardstick in the hands of managers responding to new
organizational incentives. Equity-based considerations are, at least by conventional
measures since 1980, taking a backseat to policy goals such as individual choice and
private investment.20 Unfortunately the banks development frameworks are unclear
about what to do when private investment fails to materialize and choice becomes
something of an oxymoron as public goods are priced out of reach for poor people. The
big paradigmatic difference between public management and development administration
is reliance on the market as opposed to the state for the realization of development


276
62. En general, cmo dira usted que los mejores empleados (ms trabajadores) son
tratados con respecto al resto de los empleados?
Mucho mejor
Un poco mejor
Igual
Peor
63. En los ltimos 3 aos, ha habido sanciones disciplinarias en su organismo por
alguna de las siguientes razones?
Desempeo pobre
Malversacin de caudales pblicos
Desobediencia
Adhesin a huelgas o paros
Otro, por favor, explique
64. Si han habido sanciones disciplinarias en su organismo, con qu frecuencia
considera que han sido justas?
Frecuentemente
Ocasionalmente
Casi Nunca
Nunca
65. Pueden los empleados apelar las sanciones o despidos?
S No
66. En los ltimos 3 aos, algn empleado de su organismo ha sido premiado o
promovido por alguna de las siguientes razones?
Tomar medidas inmediatas ante reclamos del pblico
Proveer sobresalientes servicios
Ahorrar dinero al gobierno
Otro
No he sabido de premios o promociones
67. Cuntos empleados de su organismo con buen o excelente desempeo no han
recibido promociones o premios?
Muchos
Algunos
Casi ninguno
Ninguno
68. Por qu cree usted que empleados con buen o excelente desempeo no han
recibido promociones o premios?
Falta de dinero
El buen trabajo no es generalmente premiado
Por diferencias personales o polticas con autoridades
Otra, por favor, explique


255
No, there would be far less pressure
Comments:
85.To what extent is the push for greater efficiency actually creating conditions for
greater flexibility in your day-to-day decision-making and policy implementation?
Highly
Somewhat
Minimally
Not at all
Comments:
86.To what extent do you estimate that greater flexibility would be beneficial for the
delivery of services and goods to the public?
Highly likely
Likely
Somewhat likely
Unlikely
Not at all
Comments:
87.To what extent is duplication of tasks and efforts a problem in your organization and
the province's public sector?
Very serious
Serious
Somewhat serious
Minimal
Not at all


71
the congressional records in Entre Rios and San Luis show substantial activity. Moreover,
the present crisis in Argentinas provinces is forcing this institution to get more involved
in public sector reform issues, particularly in coparticipacin negotiations and fighting
against the IMFs recent suggestion that 375,000 provincial employees be dismissed.
The Courts have yet to play a significant role in checking provincial bureaucracies. The
judiciary generally limits itself to ruling on the constitutionality of particular laws rather
than taking up questions of bureaucratic discretion.
In the development community, the real thrust of democratizing reform is
purported to come from direct citizen involvement. The World Bank (2000:xiv-2, 23)
describes the need to emphasize voice and partnerships as a means for encouraging
community empowerment, demand-driven public sector activity, and legitimate
authority. This emphasis takes many forms, including efforts inside and outside public
organizations. From within, public organizations have the option of cultivating employee
and public participation. Employee participation fits the broad model of human resource
development aimed at tapping organizational talent, motivating workers and building
capacity (Turner and Hulme 1997:117-118). Public participation is also an important
component in public sector reform for the provincial ministries in this study. Public
participation can be sought out through surveys of citizens, providing a basis for priority
setting and policy evaluation. Considering the growing number of policy portfolios
managed primarily on the provincial level, ministries have to consider holding regular
face to face meetings with groups affected by their decisions.
The examples given above are not meant to suggest direct citizen involvement has
to be solicited or orchestrated by public organizations. In fact, voice and partnership


299
Instituto Nacional Administracin Pblico (INAP). 2002. Gestin administrativa,
www.inap.gov.ar/foros/gestionadmin, 6-1-02.
Instituto Nacional de Estadsticas y Censo (INDEC). 2001. Anuario estadstico 2001.
Buenos Aires: Instituto Nacional de Estadsticas y Censo.
Instituto Nacional de Estadsticas y Censo (INDEC). 2003. www.indec.gov.ar, 1-9-04.
Instituto de Desarrollo Industrial (IDI). 1994. La ineficiencia administrativa. Buenos
Aires: IDI.
Inter-American Development Bank (IDB). 2002. www.idb.org/sds/document.cfm/186
Inter-American Development Bank (IDB). 1997. Latin America after a Decade of
Reforms: Economic and Social Progress in Latin America, 1997 Report. Washington
DC: IDB.
International Monetary Fund (IMF). 2000. IMF Completes First Argentina Review.
IMF News Brief No. 00/89. Washington: IMF.
International Monetary Fund. 1997. Good Governance: The IMFs Role. Washington
DC: IMF.
Isham, Jonathon, Daniel Kaufmann and Lant Pritchett. 1997. Civil Liberties,
Democracy, and the Performance of Government Projects, World Bank Economic
Review, Vol. 11, No. 2, pp. 219-242.
Kettl, Donald F. 2000. The Global Public Management Revolution: A Report on the
Transformation of Governance. Washington: The Brookings Institution Press.
Klingner, Donald E. 1996. Public Personnel Management and Democratization: A View
from Three Central American Republics, Public Administration Review, Vol. 56,
No. 4, pp. 390-399.
Kodras, Janet E. 1996. Restructuring the State: Devolution, Privatization, and the
Geographic Redistribution of Power and Capacity in Governance, in Lynn A.
Staeheli, Janet E. Kodras and Colin Flint (eds.) State Devolution in America:
Implications for a Diverse Society. London: Sage.
Knig, Klaus. 1996. On the Critique of New Public Management. Speyer, Germany:
Speyerer Forschumgsberichte.


281
85.Hasta qu punto la presin por mayor eficiencia crea mayor flexibilidad (menos
apego a las reglas y ms libertad de accin) en el cumplimiento diario de sus
funciones (decisiones de poltica e implementacin)?
Alto
Bastante
Un poco
Nada
Comentarios:
86.Hasta qu punto usted estima que una mayor flexibilidad sera beneficiosa para la
provisin de bienes y servicios por parte del estado?
Muy probable
Bastante probable
Probable
Poco probable
Muy improbable
Comentarios:
87.Hasta qu punto la duplicacin de tareas o esfuerzos es un problema en su
organismo y en el sector pblico de la provincia?
Muy serio
Serio
Algo serio
Mnimo
Para nada
Comentarios:
88.Ha habido reestructuracin significativa en su organismo en los ltimos aos?
S, por favor, explique
No


62
hold, have no choice but to withstand political tides. But the bottom line is that further
politicization (whether among political appointees or public employees unions) has little
chance to improve accountability (performance or otherwise). For these systems,
professionalization seems a safer first step.56
Second, administrative systems are products of history. In this way,
administrative culturesnormal beliefs, identities, habitsform, evolve and persevere
(Olsen 1988:239-242). In Western countries two classic categorizationsthe continental
European Rechtsstaat model versus the Anglo public interest modelremain a useful
reference point. Rechtsstaat systems reflect the states role as the central integrating force
in society and carry out that role in a highly legalistic manner (Pollitt and Bouckaert
2000:53-54). Argentina resembles the continental European model. Argentinas colonial
legacy set the stage for the states subsequent dominance in public affairs. Civil servants,
particularly on the national level, commonly have backgrounds in law. Policymaking and
management in this context often works from the assumption that citizens have system-
defined rather than individual-defined rights and duties. Public sector reform has to be
mindful of how, when and where change can be accommodated so as to avoid costly
mistakes.
Last, administrative systems can be defined by the diversity of sources of advice
on managerial reform (Baker 1994, Pollitt and Bouckaert 2000:42). The basic point in
question is the extent to which reforms are defined by insiders, civil servants, or
outsidersacademics, consultants, and development organizations. On this continuum,
the United States and the Anglo countries are unique in the pronounced diversity of this
kind of policy input, which increases the likelihood that new ideas about public sector


3
1.2 What Is Public Sector Reform?
Reform is defined in the English language as a change for the better or a
movement that tries to improve a sociopolitical situation without revolutionary change. In
some ways, the official definition of reform rings truer to the rhetoric of government
reform than skeptics realize.2 Reform, whether geared toward efficiency and
accountability or legitimacy and effectiveness, is a near permanent fixture in most
countries today. And leaving aside the issues of incompatible goals and timing, most
governments and reformers do actually strive to govern better. However, assuming
reform is synonymous with improvement is often a step too far. Instead, it seems safer to
say that reform means a departure from the status quo.
Next, it is necessary to define reform that falls under the heading of public
sector. The public sector includes the whole array of institutions designed to exercise
collective control and influence over the societies and economies for which they have
been given responsibility (Peters 1996:1). This definition captures the great significance
of the public domain in most societies, but it probably fails to demarcate the public
sectors boundaries sufficiently. This sector encompasses the ends as well as the means of
public institutions and organizations. The relevance of means and ends merits further
explanation because public sector reform in Latin America continues to simultaneously
address both aspects of state action.
Public sector reform certainly includes an administrative systems concern with
the means for accomplishing goals established by public authorities. This is familiar
territory for rich and poor countries alike. It is normal business for administrative systems
to adopt new information systems, training programs and the like to improve the quality


224
16 See Sloan (1984), Hopkins (1995), Ribeiro (1994) and ODonnell (1994). These accounts point to
problems in the lack of openness in Argentina. The situation is actually much worse in many if not most of
the Argentinas provinces.
17 Surprisingly there are suggestions to this effect in Argentina. For example, considering millions of savers
have watched the federal government seize their private bank accounts, there would seem to be little faith
in the present pension system and even less in privatization plans.
18 Pollitt and Bouckaert (2000:159-161) basically take this position as well. They argue the only instances
where cost cutting causes performance enhancement are technological breakthrough. The authors also point
out that extremely inefficient organizations may seemingly be able to simultaneously accomplish cost
savings and improved performance as they reform. We may see Argentinas provinces as having
dysfunctional public sectors that could realize both objectives. Theoretically, this has appeal but
empirically it probably will not hold up. The provincial governments in this study have not paid public
employees in many months, so in a sense considerable cost savings were already achieved.
l9The IMF made one suggestion that 472,000 provincial civil servants may need to be dismissed. See La
Nacin (1-28-02). I have no idea what the formula for this suggestion was. But it would amount to
something like a 27 percent reduction in force, so there is little doubt most governors would have large-
scale social mobilizations on their hands. In fact this type of proposal is precisely the kind of starting point
that if it becomes a sticking point would seriously jeopardize other, less controversial parts of the reform
agenda.
20In principle it is reasonable to believe that meritorious public employees with good training and clearly
defined roles will be less likely to see moves to raise the bar for tenure or to institute some form of
incentive-based pay as attacks on their personal security.
21 The issue of hydroelectric development along the Paran River was, I think, a pivotal moment in setting a
norm of public involvement in environmental and infrastructure issues in Entre Ros, while there has not
yet been a similar watershed event in San Luis.
22 The World Bank (2000:xiv-xv) discusses best fit in a way that implies a greater awareness of tradeoffs
in the reform process. See also Turner and Hulme (1997:230-236) offer an overview, along with thoughtful
analysis, of the development mainstreams thinking on public management.
23See Clarn (3-22-02).
24 See Caiden (1994).
25 Pasantes are usually paid interns that arrived in their position through political connections. In an ideal
world there would not be anything terribly wrong with paid interns learning useful skills and fostering an
appreciation for public service. But in reality it is an indulgence most provincial governments cannot
afford. From my experience in the Ministry of Economy in Entre Ros and San Luis, there were plenty of
pasantes with little or nothing to do.oquis are basically employees collecting a paycheck for little or no
work rendered. These individuals can be absent permanent employees or, more likely, they are individuals
hired on a limited contract or consulting basis. This is a much-abused avenue for getting friends and
political connections salaries (often, good ones) for little or no justifiable reason. The reason for calling
them oquis is interesting. In Italian culture, it is good luck to eat oquis on the 29th of every month, which
brought a payday in the next day or two. Public employees traditionally have been paid between the 1st and
5l of every month. Hence, the good folks getting paid for doing little were christened oquis by Argentines
since they would, at least figuratively, only show up for work close to payday.
6 See Decreto No. 158/00 (January 2000). Seniority is richly rewarded in Entre Ros, far more so than in
most administrative systems. For instance, individuals with equal responsibility can find themselves
receiving far greater differentials in pay than most systems allow for: ten years seniority gets you 42


166
41.3 percent describe the capacity as low. Legislators in San Luis are apparently doing
better. Nearly half of the respondents rate the awareness/understanding of these elected
officials as moderate, though almost as many rate them as either low or very low.
It is probably wise, however, not to make too much out of these figures. Adversarial
relationships between state bureaucracies and elected officials exist to varying degrees in
all governments. Agents always know more than their principals. On the provincial level,
concern rightly exists about the number and quality of legislators. Chapter 4 exposed
plenty of agent shortcomings and, in fairness, the lack of professionalization among
some legislators (e.g. full-time pay for putting in part-time hours) is a serious problem.
It remains necessary to further explore to what extent political institutions can
better complement democratizing reforms on the organizational level. In Latin America,
legislative and executive weakness in policy management has become a major issue as
democratic regimes mature. For the Executive, some countries have tried to lighten the
presidential load through the formation of a jefe del gabinete, a pseudo-prime minister
(Sartori 1994:92-97). For the Congress, there is some interest in developing legislative
committees to improve the institutions oversight capacity. On the national level in
on
Argentina this process is advanced (Mustapic 2000:587-588). On the provincial level,
however, legislative committees with oversight responsibilities for specific public
organizations or policy portfolios are not the norm (see responses in Table 5-6). Another
issue is whether those legislative committees with oversight responsibilities actually
function well. According to the public employees surveyed in Entre Ros, the majority
rate the effectiveness of such committees as poor or totally ineffective, and a sizeable
minority admit they do not know if this oversight proves effective or not. In San Luis, the


Table 4-10 Continued
137
Which of the following sentences best describes the role of the province (your ministry, in particular) in
Argentinas federal system?
Entre Ros
San Luis
The provincial government
decides and funds policies and
programs
31.7
48.3
Other
6.4
1.1
(Entre Ros N=63, San Luis N=91). See Appendix B for the Professionalization survey in its
. ^
entirety.
Communicating and coordinating policies and performance across levels of
government is a key element for public sector success in any political system, but this is
particularly the case in federal systems. Public employees in Argentinas provinces are
not painting a picture of diligent cooperation. When the choices almost never and
never are combined. 66.7 percent and 57.1 percent in Entre Rios and San Luis,
respectively, are accounted for. Entrerrianos may believe there is less active cooperation
because their provinces crisis has been worse and the national government has not
stepped in to reduce the uncertainty facing provincial civil servants. But. overall, one
would not expect to find substantial differences between the provinces and indeed the
variations are relatively small.
In question three, significantly more Entrerrianos estimate that policies designed
by the national government could work fine for their province. When things are not
working well, it is natural to think alternatives may be better. On the other hand, a sizable
minority45 percentin San Luis consider such policies minimally or not at all
appropriate for their province. Again, the explanation relates to employee and public
confidence in the public sector. Senator Sergnese summed it up this way, We work
harder and smarter than the national government. Whether entirely true or not, his point


76
48 This research project offers an opportunity to test this hypothesis on the provincial level. Entre Rios has
seen power alternate between the UCR and PJ since 1983, while the PJ has ruled in San Luis since the
restoration of democracy.
49 This theory also resonates among Argentine writers; see Palacio (1965), Platt and di Telia (1985).
50 Despite uncertainties about determining who is middle class these days, polls continue to show that
middle class have great faith in democracy and stand firmly behind the principle of public sector reform;
see ROmer (2002) in La Nacin (3-31-02).
51 Two small parties did make continued state reform a central element in their campaigns: Alternativa para
una Repblica de Iguales (ARI) and Accin por la Repblica (ACCREP), founded by Elisa Carri and
Domingo Cavallo, respectively. The two major parties emphasized economy recovery and social issues
such as healthcare, education and unemployment insurance, which is not surprising since economic
recovery is what most Argentines rank as the countrys number one concern.
52 The midterm elections in October 2001 point out this trend, see La Nacins on-line summary at
www.elecciones2001 .gov.ar/
53 See, for instance. Kettl (2000), Peters (1996, Chapter 1).
54 This point is developed clearly in Abdala (2000), Saba (2000). While Menems tactics made resistance to
reform harder, mistakes made by unqualified loyalists have hurt the credibility of first generation reforms,
and make it harder now to keep second generation reformers insulated from critics today.
55 This has, with no disrespect intended, been described as the worst of both worlds, sharing the
politicization of administrative systems such as the United States without the strong congressional and
citizen oversight inherent in public interest systems. See Artana (1998), Hopkins (1995), Sloan (1984) for
interesting accounts of the unhealthy effects this dynamic exerts on policymaking. Based on my own
experiences in the region (Central America, in particular), I would say Argentina is not an isolated case.
56 In many cases, it is not possible to reinvent government before the basics like full professionalization are
in place. I relay this observation based, in part, on my own conversations with reform protagonists in San
Luis and Entre Ros. See Baker (1994) for an excellent look at the problems associated with the highly
politicized civil services of Eastern Europe during the democratic transitions in that region.
57 Heredia and Schneider (2000) also note this aspect of state reform on the national level in Argentina
during the first Menem administration. My expectation, approximately half-way into my fieldwork, is that
outside involvement in provincial reform processes remains limited, felt primarily through the advice from
the national government and already functioning World Bank and IDB public sector reform programs.
58 Figure 2-2 is adapted from World Bank (1997), and it owes a debt also to Heredia and Schneider (2000)
who likewise seem to have been influenced by the Banks categorization of reform elements.
59 As in most countries needing civil service reform, the issue tends not to be whether relevant laws and
regulations exist, it depends on whether standing measures are actually enforced.
60 The issue of what comes firstindustrialization or professional bureaucracyis hard to ascertain. In the
U.S., one may certainly argue that significant steps toward industrialization were taken well before the
passage of even the most rudimentary laws covering civil service reform. Many Western European
countries, however, clearly had a strong state tradition, which included professional bureaucracies.
61 Explanations for this gap vary. Buenos Aires attracts many highly educated Argentines, and public
management is not an exception to the rule. Also, the countrys best universities are in the greater Buenos


88
grinding poverty of much of the interior. When the conservative nationalists of the 1930
coup and later Pern adopted the cause of the poor provinces, it brought along a new
institutional environmentcoparticipacinthat gradually changed politics and
administration in Entre Ros. The national decision to shift to a state-led development
strategy with centralized control over most policies and revenue sources was ultimately
bad for a province that had successfully been collecting taxes, providing education, and
providing public space for a vibrant non-state sector. There was no option to opt out and
retain the old incentive structure. In practical terms, Entre Rios public sector grew
rapidly to play its new role as junior partner in a developmental state with a mixed
economy (Bosch 1978:290). But worrisome trends appeared: vastly increased
opportunities for political patronage, state spending crowding out private investment and
the once vibrant philanthropic sector, and reduced accountability in a system that
separates responsibility for revenue collection from responsibility for spending.
The period between 1955 (Entre Rios first military governor in over eighty years)
and 1983 (its last military governor) failed to reverse the reality of centralized federalism.
Public administration had become the only consistent growth sector in the formal labor
market of most provinces. Attempts to reign in political patronage and make the civil
service more professional were not uncommon. From 1955-58 Governor Caldern
created a commission to look into irregularities in the public administration (Bourlot
1991:247). A new civil service code took effect in 1959-60, but political leadership
(civilian and military) for public sector reform was lacking in the years that followed.
Entrerrianos wanted to put the luster back on their provinces fading star but many of
them (especially the young and educated) voted with their feet-128,000 left between


221
define roughly similar goals may try alternative means to serve those goals. With no
single right answer, public sector reform varies across and within countries.
6.10 Conclusion
Drawing together a complete picture of public sector reform in Argentinas
provinces is difficult because there are many factors impacting the process and a large
number of issues on the agenda. Moreover, the road to reform is overwhelmingly in front
of us and this adds to the difficulty of providing a complete picture. It would surely be
easier if more of the reform process was in the rearview mirror. Accepting these
difficulties for what they are, my strategy in this study has been to clarify real sets of
issues facing public organizations in the provinces. This took me to the organizational
level in Entre Rios and San Luis, and I hope the on the ground perspective has clarified
what might work and what might not work. If it has accomplished this, then it points out
the value in making serious, empirically-based diagnoses of what provincial
administrations need and what they can successfully implement. Also, comparing cases
adds perspective to the study of public sector reform. In my view, Entre Ros and San
Luis have been powerful tools for seeing both the impact of government and the potential
dangers of a one size fits all approach to provincial reform.
One of the reasons I decided to investigate public sector reform in the provinces
was its currency in crisis and post-crisis Argentina. Reform, however, is not new in
Argentina or Latin America. Governments and plenty of other reform players have grown
accustomed to public sector reform since the drying up of easy credit (early 1980s) and
the end of the Cold War. In Latin America, many politicians gifted in reform-speak
Carlos Salinas, Alberto Fujimori and, of course, Carlos Menemhave come and gone.


APPENDIX A
RESEARCH METHODS
Case Selection
Studying provincial public sector reform in a country with two dozen provinces
and the means only to sample a small cross-section makes the selection of cases an
important issue. My perspective was that it is better to compare similarly sized provinces
(which also facilitated conducting the study in similarly sized ministries). Entre Rios and
San Luis qualify in this regard; they are among the smaller provinces in Argentina. I also
believe that not all provincial comparisons make equal sense if the goal is to show the
impact of good government over time. For instance, comparing a province with historical
advantages in human and physical resources that continues to be at the head of the class
with a historically disadvantaged one that continues to languish near the bottom is far less
useful. After all, is todays level of development simply being driven by yesterdays
progress? One could make a convincing case for how good government has been integral
to success and absent in failure. But there are a great number of intervening variables
standing in the way of getting a good read of the impact of things like political leadership
or sound administration. The case seems more persuasive when it is possible to
simultaneously study a success story that has hit hard times (Entre Rios) and another (San
Luis) without any such historical pedigree that has beat the odds, to catch them when they
have recently passed each other heading in opposite directions.
239


295
Caiden, Gerald E. 1999. Administrative Reform-Proceed with Caution. International
Journal of Public Administration, Vol. 22, No. 6, pp. 815-832.
Caiden, Gerald E. 1994. Administrative Reform, (pp. 107-118) in Randall Baker (ed.),
Comparative Public Management: Putting U.S. Policy and Implementation in
Context. Westport, CT: Praeger.
Campos, Nauro F. and Jeffrey B. Nugent. 1999. Development Performance and the
Institutions of Governance: Evidence from East Asia and Latin America, World
Development, Vol. 27, No. 3, pp. 439-452.
Carb, Alejandro. 1893. La Provincia de Entre Ros. Paran: Gobierno de la Provincia.
Casaburi, Gabriel and Diana Tussie. 1997. Governance and the New Lending Strategies
of the Multilateral Development Banks: Some Research Questions, Serie de
Documentos e Informes de Investigacin, Working Paper No. 1. Buenos Aires:
FLASCO.
Castillo, Jernimo and Carlos J.A. Sergnese. 2000. Ro Quinto: Problemtica y
Soluciones. San Luis: Payn S.A.
Castro, Mara Giselle. 2003. Las provincias no cumpliran las metas fiscales con el
FMI, La Nacin, 7-15-03.
Castro, Mara Giselle. 2003. El Fondo insiste en pedirle mayor responsabilidad fiscal al
interior, La Nacin, 7-8-03.
Catn, Thomas. Cavallo in Attack on Provincial Profligacy, Financial Times, 10-27-
01.
Caviglia, Femando. 2002. Entre Ros: Polticas pblicas y competitividad en una regin.
Paran: Consejo Empresario de Entre Ros.
Cayer, N. Joseph and Louise F. Weschler. 1988. Public Administration: Social Change
and Adaptive Management. New York: St. Martins.
Centro Latinoamrica Administracin para el Desarrollo (CLAD). 2002. Empleo
pblico en Amrica Latina. www.clad.org/ve/siare/tamano/decal990/cons/html, 10-
24-02.
Centro Latinoamrica Administracin para el Desarrollo (CLAD). 2002. Argentina:
empleo pblico, por tipo de organizacin.
www.clad.org/ve/siare/tamano/decal 980/80cau32.html, 10-24-02.
Comisin Econmica para Amrica Latina y el Caribe (CEPAL). 2002. Anuario
estadstico de Amrica Latina y el Caribe. Santiago: CEPAL.


82
Courts), intervencin federal became more common than Article 6 suggests on the
surface. The absence of a formal revenue sharing arrangement can also be seen as giving
the federal government considerable leverage in provincial politics. The first president in
the new Argentina. Bartolom Mitre, used subsidies to forge national consensus and
when that failed he sent federal authority to the province or locality where problems
persisted (Rock 1987:124-127).
Modem Argentina is said to start where the rift between Buenos Aires and the
interior ends. The new, modem state represented a liberal system in the sense that the
state was organized for a laissez faire economic order (Crassweller 1987:40-44). This
period (1870-1930) was also a time of organizational refinement for the states apparatus.
Mitre and liberals like Sarmiento, Avellaneda and Roca sought to develop a professional
bureaucracy along the lines of Europes finest4 Provincial administration was an entirely
other matter, left to the best judgment of the provinces own political institutions.
Porteos and foreign visitors to the provinces often noted the amateurish nature of
provincial administration, characterizing the functionaries they dealt with as corrupt and
incompetent (Lpori de Pithod 1998:11-13). Unified, modem Argentina certainly had its
share of national projectsimmigration and land colonization, the railroads, frontier
developmentbut administrative reform in the provinces was not one of them.
The Great Depression and Argentinas first military intervention of the 20th
century brought the liberal era to an end in 1930/ The liberal system had facilitated the
agricultural and infrastructural development of some parts of the country: while Buenos
Aires was considered one of the worlds greatest cities. But much of Argentina was
missing out on development. And there was increasingly worry that long-term economic


on such a fine line. The next section reviews politically minded development
frameworks, which avoid some of the new public managements pitfalls.
14
The point is not to criticize the multilateral banks for making public management
a priority, nor is it to fault them for omissions outside their mandates. But there remains a
need to ask if a public management orientation to development provides the necessary
leverage for tackling the tough challenges of development. In short, it would be
irresponsible to underestimate the banks experience with the new public management.
For starters, these organizations produce a large percentage of the professional literature
on public sector reform and development, particularly in the context of developing
countries. Ignoring their conceptualizations of public management reform leaves us
vulnerable to overlooking the actual criteria applied to institutional change and policy
choices.23
1.5 Comparative Politics
The well-documented separation of public administration from political science
belies the contribution of comparative politics to the study of public sector reform and
development. Comparative politics has deepened the conceptual reservoir that students of
policy and management can draw on. Likewise, it has broadened the dialogue about the
state, institutions and development. My brief survey begins with the body of literature
whose analysis centers on state or bureaucratic reform. Next, research focusing on
democratic consolidation in Latin America proves relevant despite the general lack of
well-developed discussion on state reform. Third, comparative politics has been the
source of original and influential work on governance. Last, comparativists are providing


91
beautiful Casa del Gobierno. It seemed hard to believe a pacesetter in a country of
progress and promise had stumbledchipped paint and bonos federales, unheated offices
with dead phone lines and apprehension about the medicine required for this sick
patient. Sudden disasters are probably easier to recover from since individual and
collective know-how can step forward to reconstitute whatever was lost. In contrast,
gradual declines are harder to reverse because assets like political leadership, sound
administration, and public confidence are lost slowly and renewal depends on relearning
the habits that supported them in the first place.
3.4 San Luis: From Nowhere to the Puntano Miracle
San Luis has never occupied a prime piece of real estate in Argentinas birth as a
nation or its subsequent development. Sanluiseos, known also as Pntanos for the Punta
de los Venados mountains in the heart of the province, number about 380,000 on a
rectangular shaped 77,000 km/sq., bordering the western most reaches of the pampa to
the east and the eastern foothills of the Andes to the west. The land is mostly sierra, with
the south of province being harsh plains and the northern half defined by three mountain
ranges and their valleys. The capitol, San Luis, sits close to the provinces center. In the
colonial period, present-day San Luis was not ideally located to take advantage of the
mule trains and commerce that traveled between Buenos Aires and the silver mines of
Potos. Nor was San Luis blessed with wide tracts of fertile land to draw new immigrants
following the wars of independence.
The provinces early decades in the United Provinces and Argentine
Confederation seem to speak to the problems associated with lacking natural resources
and close proximity to Buenos Aires (Nufiez and Vacca 1967:Vol.II). San Luis fame was


162
Table 5-5 Performance Evaluations and Incentives
To what extent does your organization evaluate programs and personnel?
Entre Rios
San Luis
Thoroughly
4.8
14.3
Considerably
9.5
29.7
Somewhat
19.0
31.8
Marginally
36.5
16.5
Not at all
30.2
7.7
To what extent are performance measures designed and implemented for political expediency (i.e. to
satisfy critics) rather than effective internal purposes?
Entre Ros
San Luis
Completely
11.1
6.6
Considerably
25.4
4.4
Somewhat
34.9
39.6
Not much
14.3
34.1
Not at all
9.5
15.4
No evaluations
4.8
0.0
Compared to five years ago, to what extent has your organization taken steps to create incentives for
employees to improve their performance?
Entre Ros
San Luis
A great deal
0.0
3.3
Significantly
3.2
12.1
Somewhat
9.5
35.1
Very little
20.6
25.3
Not at all
63.5
20.9
Dont know
3.2
3.3
With regard to managers in your organization, would management contracts on premise of performance
incentives be desirable?
Entre Ros
San Luis
Ideal
20.6
11.0
Good idea
38.1
38.4
More or less a good idea
27.0
30.8
Not a good idea
11.1
12.1
Not a good idea at all
3.2
7.7
Dont know
0.0
0.0
To what extent do you think incentives are or would be positive for your organization?
Entre Ros
San Luis
Ideal
22.2
12.1
Good idea
31.7
36.2
More or less a good idea
30.1
37.4
Not a good idea
17.5
13.2
Not a good idea at all
0.0
1.1


36
24 This designation is problematic: Comparativists concerned with various research questions engage in
systematic institutional analysis. I use systematic to mean large-N studies.
25 Baker (1994), along with others from the Bloomington School of development, makes a good case for
the need to internationalize American public administration and policy programs.
26 Przeworski employs this line of explanation in Democracy and the Market. See, for instance, his
discussion of sectoral interests in Argentina (1991:52-53).
27 Other approaches from the field of comparative politics, notably governance and historical institutional
ones, extend analysis beyond the formal institutions of government.
28 The political economy background that 1 refer to here encompasses only a limited portion of the political
economy theoretical spectrum. Specifically, these authors build on theoretical scaffolding that includes
transaction costs and principal-agent. There are, of course, macro-based approaches to political economy.
29 Azpiazu (1998) and Saba (2000) make this point. Indeed, with the benefit of hindsight, more observers
may seek explanations for the unimpressive performance of the private sector during robust growth years of
the 1990s.
30 Haggard (1997), Heredia and Schneider (2000) and others do focus on the timing of decisions. However,
they pay too little attention to the pace of public sector reform. This reflects, 1 think, reluctance (or perhaps
unfamiliarity) on the part of political scientists interested in institutional reforms to explore change on the
organizational or policy level.
31 It can be argued that organizational culture is a distinct venue of study from political culture. Yet the
study of values and political culture stands to enrich inquiries into public sector reform.
32 Culture, too, attracts criticism as an obstacle to reforming administrative systems and development. And,
much like the case of blaming politics, I argue the usefulness of such observations is limited.
33 It may, perhaps, be premature to conclude a consensus is emerging on how politics impacts public sector
reform. But, on balance, the literature today is far more convinced politics plays a major role in the success
of failure of reform. On the surface, then, it seems curious that reform packages often seek to keep values
out of the public sector. For examples of apolitical reform and policy advice; see Caballero and Dombusch
(2002), Guasch and Spiller (1999), Tommasi, et al. (2001).
34 The case of Argentina is instructive. Argentine society was relieved by the return of democracy, which
made patience possible in the face of major economic problems. Alfonsins (1983-1989) administration
dealt with defining the roles of key institutions such as Congress, the Armed Forces and political parties.
However, it did not deal with the issues of public sector reform; see Porto (1990), Saba (2000).
j5 By state reform I refer to not only to revamping institutions such as the Courts or the Executive, but also
to making the policy process and public organizations more transparent and less arbitrary.
36 There is a modest, though growing, trend that shows public support for economic liberalization and, in
limited cases, democracy is falling, see Lagos (2001) based on data compiled by Latinbarometer in
Argentina, Brazil, Chile, Ecuador and Paraguay.
7 One may argue the weakness of the private sector is either 1) a long-standing product of an international
system that favors corporations in developed countries; 2) or a product of the import substitution
industrialization (ISI) era. Subscribing too strongly to either viewpoint is overly simplistic. In the Argentine
case; see Sawers (1996) and Azpiazu (1998) for methodologically distinct but equally insightful analyses of
past and present problems with the private sector.


264
More participation would have no effect
Comments:
Part III: Accountability
114.To what extent are civil servants accountable for their actions?
Highly accountable
More than enough
Sufficiently accountable
Not very accountable
Not accountable at all
Comments:
115.To what extent is the permanent bureaucracy influential in the design of policies
(For example, deciding on the organizations priorities and how to deliver them)?
Highly influential
Considerably Influential
Somewhat influential
Not very influential
Not influential at all
Comments:
116.How would you characterize the media's role in making the provincial government
more accountable to the public?
Highly effective
Considerably Effective
Somewhat effective
Not very effective
Not effective at all
Comments:


173
province. NGOs and civic associations appear to be more important in Entre Rios, though
this form of participation has become central in San Luis too. Issue-based groups of like-
minded neighbors or citizens are typically less formal and perhaps even temporary in
nature. The economic crisis has raised the profile of this form of participation in many
provinces, including Entre Rios where almost 70 percent of public employees note its
prevalence in public affairs. Participation through political parties (overwhelmingly the
Partido Justialista) continues to be a primary source of citizen mobilization in San Luis.
While party identification remains exceptionally high among Pntanos, it has declined
sharply in Entre Ros.35 Finally, for Entrerrianos, the choice of other generally made
mention of recent strikes by unionized workers in the province. The overall balance
between these forms of participation illustrates why public organizations have to prepare
for different situations.
Table 5-7 Citizen Participation
How often does your organization solicit input/feedback from the public?
Entre Rios
San Luis
Very frequently
0.0
3.3
Often
4.8
7.7
At times
14.3
29.7
Rarely
42.8
35.1
Never
38.1
24.2
If so, indicate the mechanisms for feedback that have been used
Entre Ros
San Luis
Interviews
42.9
28.6
Focus groups
25.4
31.9
Surveys
19.0
24.2
Cabildos abiertos
11.1
27.5
Assemblies
12.7
20.9
How often have the citizens of your province pursued independent (unsolicited) participation?
Entre Ros
San Luis
iri +*
Very frequently


2
road to reform. Figure 1-1 shows where these provinces are located. Exploring the second
question requires categorizing and then digging into the important sets of issues involved
in public sector reform, which are professionalization, marketization and
democratization. The categories are influenced by the World Banks (1997, 2000) three
drivers of public sector reform and Blanca Heredia and Ben Ross Schneiders (2000)
work on state reform. Digging through these sets of issues is the business of Chapters 4-
6. These are based on surveys and interviews conducted in each provinces Ministry of
Economy during 2002. This chapters subsequent sections explain what public sector
reform is and then looks at existing research streams that speaks to my concerns.
Figure 1-1 Map of Argentinas Provinces (Entre Ros=ERI, San Luis=UIS).


273
No
Parte III: Misiones y Funciones del Organismo
46.Describa brevemente las misiones y funciones de su organismo:
47. En su opinin, qu tan exitoso ha sido su organismo en cumplir con sus misiones
y funciones?
Muy exitoso
Algo exitoso
Poco exitoso
Nada exitoso
48. Qu tan compatibles o incompatibles son las distintas funciones atribuidas a su
organismo?
Muy compatibles
Ms compatibles que incompatibles
Ms incompatibles que compatibles
Muy incompatibles
49. Qu proporcin de las misiones y funciones de su organismo son dictadas por el
gobiernos nacional?
Casi todas
Bastantes
Algunas
Pocas
Casi ninguna
Ninguna
50. Con qu frecuencia discute usted u otra persona de su organismo las polticas y
programas con representantes del gobierno nacional?
A diario
Semanalmente
Mensualmente
Anualmente
Casi Nunca
Nunca
51. En su opinin, en qu medida las polticas dictadas por la nacin sern aplicables
a su provincia?
Muy Alta
Alta
Moderada


278
75.Las privatizaciones y contrataciones de terceros en su organismo han afectado el
funcionamiento del mismo:
Empeorndolo
Empeorndolo un poco
No ha afectado
Ha ayudado un poco
Ha ayudado mucho
Comentarios:
76.Hasta qu punto privatizaciones y otras reformas que imiten al sector privado
remediaran los problemas econmicos de su provincia?
Muy poco
Algo
No haran diferencia
Bastante
Mucho
Comentarios:
77.Hasta qu punto privatizaciones y otras reformas que imiten al sector privado
aumentaran la confianza del pblico en el gobierno?
Muy poco
Algo
No haran diferencia
Bastante
Mucho
Comentarios:
Privatizaciones, contratacin de terceros y otras reformas de mercado buscan
facilitar una asignacin de recursos ms eficiente (hacer lo mismo o ms con menos
recursos). Muchas veces, reducir o achicar el estado constituye un tema importante


from the crisis and post-crisis landscape with a public sector that is both viable and
legible for Argentines.
188
Notes
1 The shift started in the late 1970s and a consensus in favor of economic liberalization consolidated in the
1980s. In Argentina, for example, the states role in the economy decreased decisively during the 1990s--
state enterprises were privatized, employment on the national level decreased, and the volume of trade and
foreign direct investment increased dramatically; see Pastor and Wise (1999).
2See La Nacin (2-21 -02).
3See Latinobarmetro (2002).
4The questions in Table 5-1 are located in Section 2, Part 1 of my survey entitled Provincial Public Sector
Reform.
5See Latinobarmetro (2002).
6The national government did reduce the number of public employees in the early 1990s, but the reduction
was largely ephemeral since many of those federal civil servants became provincial civil servants as policy
portfolios like education and healthcare devolved to the provinces during the first Menem administration.
Critics of provincial profligacy point out that government employment in most provinces is a form of
disguised (and excessively expensive) unemployment insurance; see La Nacin (2-21-02) and Buenos Aires
Herald (11-7-01 and 11-8-01).
7The IMF favors a provincial reduction in force; see La Nacin (9-6-01), Catn (2001). Province-specific
plans have been slow to materialize, however. And, indeed, Entre Rios and San Luis have never officially
suggested planning for cuts in tenured personnel.
Virtually all civil service systems maintain some bias in favor of seniority. However, because of the
importance of specialized skills and the utilization of performance evaluations, most reduction in force
decisions are based on a mixed criteria; see Garvey (1997:48-67) for a good example. The responses I
received from public employees in Argentinas provinces seems to reflect an acceptance of mixed criteria,
though the vast majority of these same respondents are strenuously opposed to any reduction in force.
9The questions in Table 5-2 are located in Section 2, Part I of my survey entitled Provincial Public Sector
Reform.
l0San Luis has mainained a sound fiscal position through the 1990s and into the present decade; see
Fundacin de Investigaciones Econmicas Latinoamericanas (1998). In my discussions with Minister
Poggi, he indicated that his ministry had no expectations of downsizing. Senator Carlos Sergnese told me
that he expected provincial revenues to weather the economic crisis, yet he also said the government would
have to be flexible since no one could anticipate how the post-crisis revenue sharing, la nueva ley de la
coparticipacin, would affect provincial spending.
"Entre Ros and San Luis had hiring freezes in place during 2000 and 2002, when I conducted the research
there. The freezes are still in effect now, late in 2003. Entre Ros, like many other provinces, set
challenging budgetary targets, cutting some programs and services in an effort to avoid deficit spending
while the federal government fell behind in coparticipacin transfers. However, Entre Ros financed deficit
spending through the circulation of quasi-money, bonos federales, during 2001 and 2002. At least twelve
other provinces followed a similar course because revenue dropped faster than spending, even in provinces
that tried harder than Entre Ros to restrain spending.


97
3.5 Conclusion
Not all provincial comparisons make equal sense if the goal is to show the impact
of good government over time. For instance, comparing a province with historical
advantages in human and physical resources that continues to be at the head of the class
with a historically disadvantaged one that continues to languish near the bottom is far less
useful. After all, is todays level of development simply being driven by yesterdays
progress? One could make a convincing case for how good government has been integral
to success and absent in failure. But there are a great number of intervening variables
standing in the way of getting a good read of the impact of things like political leadership
or sound administration. The case seems more persuasive when it is possible to
simultaneously study a success story that has hit hard times and another without any such
historical pedigree that has beat the odds, to catch them when they have recently passed
each other heading in opposite directions.
Argentinas economy and polity have intrigued scholars for decades. Most of the
interest has centered on the national level: how a resource-rich country failed to sustain
economic growth and why political consensus proved elusive. The big riddles of 20th
century Argentina have not drawn much attention to the provincial level. In this chapter,
two of the fascinating stories left for our consideration are the unexpected developmental
success of San Luis and Entre Ros equally unforeseen decline. This chapter offered
background on the federal-provincial relationship and tried to explain where the
provinces stood at various stages of Argentinas history. The hope is historical context
will be an aid in understanding the empirical side of public sector reform. The argument
is also made that political leadership and quality administration have impacted the current


96
what it means to be a Puritano reflects a context where tangible things have been
accomplished in the last twenty years. And, of course, the accomplishments appear that
much more noteworthy from a comparative perspective. Among Argentina's provinces
San Luis presently ranks in the top four in both per capita GDP and the quality of
governance. Critics say the province merely played a good hand well in recent years,
while there is too little democratic debate over public policies. There is some truth to this
criticism and it gets a serious hearing in Chapters 5 and 6 when issues related to
democratization in the public sector are analyzed.
Today, Sanluiseos are fond of saying San Luis, Otro Pas (in English, literally,
San Luis: Another Country) because their province has defied the downward trend line in
Argentina and accomplished more than resource-advantaged provinces. I have to admit
there is an air of progress and optimism. On a late fall afternoon I drove thirty minutes
out of the capitol to take a few pictures of La Punta, a new town surrounded by sierra. It
looked modest to me, as it would to Argentines accustomed to living in the countrys
pockets of established prosperity. The houses are small and tightly spaced; the place felt
dusty; and there was a sort of strange newness to everything. However, this represents
real progress for many Sanluiseosbuying a house, having a school nearby, and
anticipating the next generation may find good opportunities in the province. People,
whose grandparents had been shepherds and sharecroppers, contratistas, see the glass as
more than half full. And the Puntano Miracle is as much about appreciating where San
Luis came from as it is affirming the latest GDP or employment figures.


35
12 The most frequent criticism is over-reliance on instrumental rationality at the expense of procedural
rationality or social forms that may explain the motivations of public managers. Konig (1996) and Pollitt
and Bouckaert (2000) observe and criticize the rational choice model at length.
13 Baker (1994) and Peters (1994) offer good accounts of the inadequacies of the research agenda pursued
by public administration in the post-World War Two era. See also Brodie (1996) for a clarification of
embedded liberalism, as well as ideas on why todays research agenda should include understanding the
social bases for state reform in rich and poor countries.
14 The point is not that managerialism ought to dominate the composition of public sector reform.
Instead, I am echoing many voices skeptical of neoliberalism who nonetheless acknowledge problems
associated with state control and accept the expanded role of private stakeholders, including the market.
This goes back to my earlier observation that most research operates within the recognizable bounds of
todays development paradigm.
15 This is somewhat curious given the relatively small role the IDB played in the economic stabilization
phase. Perhaps the IDB views the persistence of high interest rates in most Latin American countries as a
problem related monetary policy, which has often been among the first issues tackled in stabilization
measures.
16 According to the World Bank (2000:3, 16-18), all forms (lending and non-lending) of governance related
assistance have risen both in real terms and as a percentage of Bank disbursements.
17 There are two related sides to this coin: the multilateral Banks are still not particularly adept at
supplying populations in immediate need of social services with timely relief; and the IMF, at least in the
case of Argentina, has proved inconsistent in its monetary policy prescriptions and consistently short
sighted in its fiscal policy ones. The Nobel Laureate economist Joe Stiglitz makes similar points in an
interview with one of Argentinas leading newspaper, La Nacin (10-13-01).
18 Historically, public sector or civil service reform lags behind economic development. A thorough
introductory public administration text, such as Garvey (1997), will often recount at least the U.S. and
British cases. Many other developed country cases conform to this development first, then reform pattern.
19 First-generation reforms, typified by privatization and economic stabilization in newly restored
democracies, were often managed by insulated, inner-circles in the Executive. Second-generation reforms
involve lengthier processes of change, and thus are more contingent on political factors. See Saba (2000),
Acua and Tommasi (2000).
20 CEPAL (2002) has made a greater effort to explain rising socioeconomic inequality in the region than
either of the development banks surveyed here. While the World Bank and the IDB are very active on the
project and program levels in fighting poverty in Latin America, there is little systematic evaluation of non-
market alternatives in various policy sectors.
21 For decades, public and business administration scholars have identified important social, cultural and
historical dimensions of management; see March and Olsen (1989), Olsen (1988), Selznick (1957).
22 Attempts to apply new public management principles have been mixed; see Chapters 5 and 10 in Turner
and Hulme (1997). In particular, comprehensive plans have not worked on the national level in such
countries as the U.S., Canada, and France; see Peters and Savoie (1994), Pollitt and Bouckaert (2000).
Given the difficulties in realizing major overhauls in administrative systems, such a strategy is unlikely to
work in Latin America on either the national or subnational level.
23 Public management principles are having an impact on public sector organizations and policymaking,
often. Consequently we should pay ample attention to how these principles are operationalized into tools
for evaluating alternatives.


B SURVEY: PROVINCIAL PUBLIC SECTOR REFORM 241
C SURVEY (EN ESPAOL) 267
REFERENCE LIST 293
BIOGRAPHICAL SKETCH 308
v


209
feels betrayed by politicians, the introduction of innovations that, say, promise market-
based private pension accounts is unlikely to be well received.17 In this type of a reform
environment, there is something to be said for searching out ways to enhance stability
(Turner and Hulme 1997, Caiden 1994). For all their faults, bureaucracies have served
modem states fairly well in terms of providing predictability and continuity. Innovations
are not necessarily anathema to trust and stability. But the further introduction of market-
based mechanisms has to handled cautiously and perhaps seen as a viable option when
the provinces administrative and political systems are on more solid footing.
There is also a central, recurrent tradeoff within marketization. The discussions
about the federal-provincial relationship in Argentina have made it clear that cost savings
is crucial. For many reformers (mostly those residing outside the provinces), near-term
cost savings is thought to be the big prize in public sector reform Second generation
structural adjustments are also part of a long-term project aimed at relieving the financial
burden on the welfare state. But many elements of marketization are likewise insistent on
managers improving organizational performance (Makn 2000). There is of course a
contradiction or at least a tradeoff here since the majority of provincial budgets are spent
on education and social services and cost cutting does not lead to improved performance.
The public organizations responsible in those sectors may not perform better with more
spending but there is no reason to believe cost cutting will produce improved
performance. Few deny public sector reform in Argentinas provinces has to rein in
expenditures but it seems prudent to rein in unrealistic promises about improved
performance.


270
23.Qu persona lo evalu ltima vez?
24. Usted cree que fue evaluado justamente?
S
No
Ms o menos
Si no le molesta, indique la evaluacin que
recibi
25. Cmo comunica su organismo a los empleados las expectativas o estndares de
desempeo o rendimiento?
Por escrito
El jefe inmediato le explica a cada empleado o a un grupo
Los empleados con mayor antigedad le explican a los nuevos
Otro, por favor, explique
26. Esos estndares, a lo largo del tiempo, tienden a:
Mantenerse igual
Cambiar un poco
Cambiar significativamente
27. De los siguientes factores, marque aquellos que ayudan a mejorar su desempeo o
lo empeoran:
Ayudan a mejorar desempeo: Empeoran desempeo:
Libertad de accin Regulaciones y reglas estrictas
Disponibilidad de recursos Falta de recursos
Entrenamiento provisto por su Entrenamiento provisto por su
organismo (adecuado) organismo (inadecuado)
Cultura de creatividad/innovacin Miedo al cambio en innovacin
Educacin (apropiada) Educacin (insuficiente para funcin)
Informacin (adecuada) Falta de informacin
Mi jefe o supervisor me gua Mi jefe o supervisor no me gua
Mi rol est claramente definido Mi rol no es claro
28. En general, cunta discrecin o libertad tiene en el desempeo de sus funciones?
Demasiada libertad
Una cantidad apropiada de libertad
Muy poca libertad
29. Los otros empleados de su organismo tienen en el desempeo de sus funciones, a
su criterio:
Demasiada libertad
Una cantidad apropiada de libertad
Muy poca libertad


80
1800. Independence from Spain was declared in 1816, and once the fight against the
Spanish was finished an almost immediate struggle began between two competing
visions for the new country. Business interests in Buenos Aires formed the backbone of a
Unitarian perspective, which believed Argentina could not prosper as a loose
confederation of provinces. Leaders from the interior, caudillos sharing a federalist
perspective, believed cosmopolitan interests in Buenos Aires had neither the right nor the
necessary might to impose a central government on them. Thus from its inception as a
republic, Argentinas unitarios an federalistas aggressively sought to define what kind
of relations would prevail between Buenos Aires and the provinces (Rock 1987:81, 88-
104).
Defining the relationship between Buenos Aires and the interior proved to be a
violent affair. Throughout the 1820s national governments made little headway in uniting
the United Provinces of the River Plate, let alone in exporting an administrative system to
the interior. A republican constitution was debated and ratified but too many caudillos
soon resisted the centralizing measures of the Constitution of 1826.2 In particular,
forfeiting provincial tariffs and disbanding personal militias for the mere promise of
revenue sharing sparked resistance and within three years key Unitarians were either
defeated or exiled (Rock 1987:104-107). The new Constitutional Confederation of
Argentina was dominated by the Governor of the province of Buenos Aires. Juan Manuel
de las Rosas. This Governors League had problems too. namely most provinces
wanted a truer federation where all members shared trade revenue equally, but Rosas
refused to grant the interior formal revenue sharing and thereby loosen his power over
provincial politics (Adelman 1999:118-120, Rock 1987:106). In time, however, disputes


93
Luis was part of the other Argentina, the economically insecure mestizo half (Sawers
1996). As a result, the province was also losing population to more prosperous places like
Mendoza. Crdoba and Buenos Aires. The combination of limited natural resources and
missing out on the ideal development pattern continued to raise doubts about the
provinces prospects for long-term improvement.
The politics and administration of the period may provide other clues. The small,
cash-strapped sanluiseo administration was generally undistinguished but it made
considerable efforts to modernize the administration according to the scientific principles
of the day (Pastor 1970:304-345, Nez and Vacca 1967:651-674). For example, Ortizs
government created a Department of Topography in the 1880s and also made sustained
inquiry into the water shortages facing the province. The politics of the province were
more complicated. The small urban middle class clamored for universal male suffrage
and in 1904 opponents of Governor Mendoza showed up at his home armed with
Winchesters, securing the governor and his ministers resignations (Nez and Vacca
1967:693-694). There were two federal interventions shortly afterwards and various
governments in the later stages of the liberal era complained that development had been
hampered by shortages of capital for private and public investment (Nez 1980:590-
596, Nez and Vacca 1967:707-716). It appeared, as Argentina stood on the cusp of
political change, that San Luis was at least running to catch up.
The modem coparticipacin era was probably the first real signal for a poor
province like San Luis that development on par with the countrys richer provinces was
possible. The progress proved modestmore secondary and technical education, a
university, a few hospitals and basic infrastructure-but the infusion of resources held the


302
North, Douglass C. 1990. Institutions, Institutional Change and Economic Performance.
Cambridge University Press.
Nez, Urbano J. 1980. Historia de San Luis. Buenos Aires: Plus Ultra.
Nez, Urbano J. and Duval Vacca. 1968. Historia de San Luis. San Luis: Godeva.
ODonnell, Guillermo. 1994. Delegative Democarcy, Journal of Democracy, Vol. 5,
No. 5, pp. 55-69.
ODonnell, Guillermo. 1993. On the State, Democratization and Some Conceptual
Problems, World Development, Vol. 21, No. 8, pp. 1355-1369.
ODonnell, Guillermo. 1973. Modernization and Bureaucratic-Authoritarianism.
Berkeley: Institute of International Studies, University of California.
Olsen, Johan P. 1988. Administrative Reform and Theories of Organization, (pp. 233-
253) in Colin Campbell and B. Guy Peters (eds.) Organizing Government, Governing
Organizations. Pittsburgh, PA: University of Pittsburgh Press.
Organization of American States (OAS). 2003. Strengthening the Democratic
Commitment. www.oas.org.keyissues, 7-17-03.
Organisation for Economic Co-operation and Development (OECD). 1998.
Decentralization and Local Infrastructure in Mexico: A New Public Policy for
Development. Paris: OECD.
Ostrom, Elinor. 1990. Governing the Commons: The Evolution of Institutions for
Collective Action. Cambridge University Press.
Oszlak, Oscar. 2001. El servicio civil en Amrica Latina y el Caribe: situacin actual y
retos futuros. Paper presented at the 6lh Congreso Internacional del CLAD sobre la
Reforma del Estado y la Administracin Pblica, Argentina, 5-9 noviembre 2001.
Oszlak, Oscar. 2000. El mito del estado mnimo: una dcada de reforma estatal en la
argentina, Paper presented at the 6th Congreso Internacional del CLAD sobre la
Reforma del Estado y la Administracin Pblica, Santo Domingo.
Palacio, Ernesto. 1965. Historia de la Argentina. Buenos Aires: Lillo.
Pastor, Manuel Jr. and Carol Wise. 1999. Stabilization and its Discontents: Argentinas
Economic Restructuring in the 1990s, World Development, Vol. 27, No. 3, pp. 477-
503.


179
Table 5-8 Accountability and Bureaucratic Discretion
To what extent are civil servants accountable for their actions?
Entre Rios
San Luis
Highly accountable
12.7
14.3
More than enough
12.7
32.9
Sufficiently accountable
41.3
37.4
Not very accountable
31.7
11.0
Not accountable at all
1.6
4.4
To what extent is the permanent bureaucracy influential in the design of policies?
Entre Rios
San Luis
Highly influential
25.4
11.0
Considerably influential
17.5
20.9
Somewhat influential
44.4
39.6
Not very influential
9.5
26.4
Not influential at all
3.2
2.2
How would you characterize the medias role in making the provincial government more accountable?
Entre Rios
San Luis
Highly effective
9.5
4.4
Considerably effective
34.9
22.0
Somewhat effective
31.7
41.7
Not very effective
22.2
30.8
Not at all effective
1.6
1.1
Overall, to what extent do your organizations policies reflect public preferences?
Entre Rios
San Luis
Very closely
0.0
7.7
More than enough
9.5
29.7
Somewhat
38.1
45.0
Verv little
50.8
15.4
Not at all
1.6
2.2
(Entre Ros N=63, San Luis N=91). See Appendix B for the Democratization survey in its
entirety.40
Next it is useful to consider the medias role in making the provincial government
more accountable. Media outletsprint, radio, television, internetcan play a major role
in keeping government honest by reporting what politicians and other public servants are
doing with the resources and responsibilities entrusted to them. The relationship between


140
6In the professionalization survey respondents were asked to indicate what percentage of public employees
were hired based on merit. It is, of course, impossible to say for sure if employees have overestimated or
underestimated the percentage hired on merit. I believe the numbers are reasonably accurate since other
questions in the survey identify the prevalence of major stumbling blocks to merit hiring: political
patronage and the absence of public bids for many jobs.
In this regard, interview data with high level appointees largely backs up the survey data from public
managers and employees. However, political appointees such as Poggi or Menndez stress the steps being
taken to correct non-systemic problems; whereas civil servants are more likely to characterize the problem
of non-merit hiring as systemic and mostly untreated by reform thus far.
8This remains an interesting question because economic development in Latin America has not made
patronage a marginal practice. Therefore, many social scientists continue to look at the institutional and
historical dimensions, among others, of the problem.
9ln Table 4-1, the questions are adapted from Part II (questions 16, 9.1, 11 and 12) of the World Banks
(2001) questionnaire on administrative and civil service reform.
10 In Table 4-2, the first and second questions are adapted from Part II (questions 17 and 18) of the World
Banks (2001) questionnaire on administrative and civil service reform.
1 'Menndez and Poggi both indicated that, while they had recalled tenured civil servants being terminated
in the past, the process was a long, difficult one. When I asked if they believed tenure was serving its
intended purpose of fostering stability and keeping professionals free from political retribution, they
answered affirmatively, estimating that on balance the benefits of tenure outweighed the costs.
l2The point is best illustrated by example. In Entre Ros two engineers working in identical positions yet
separated by 15 years of service will have a 100 percent pay differential. In the United States, for instance,
these two individuals sharing the pay grade classification could not achieve such a pay differential even
with a 30 year service differential. In the course of my interviews in the provinces, quite a few veteran civil
servants suggested the real problem was that government employment was undercompensating their more
junior colleagues. Well, this may or may not be true (I think it is not) but the point is the system
discourages movement out of government service and it creates a situation where the provincial
government is essentially bidding against itself for the services of public employees. This creates a
profound distortion in provincial labor markets.
' This general line of insight first comes from the so-called human relations approach; see Douglas
McGregor (1960).
14 In Table 4-3, the first question is adapted from Part II (question 19) of the World Banks (2001)
questionnaire on administrative and civil service reform.
i5As I have argued, amigismo is clearly a less than desirable foundation for building organizational
capacity. And, indeed, the two provinces share this problem, though the Entrerrianos experience it more
acutely. However, the issue of training lies at the heart of what we can do about the hand we have been
dealt. San Luis has significantly outpaced Entre Rios in this regard. My judgment of the situation in
Argentinas provinces is that the razing the house option and starting anew with a leaner, efficient state is
neither realistic nor advisable. Instead, fixing the house entails getting more out of individuals even if
they were originally an amigismo hire. San Luis experience supports the value of this lesson.
16In this case, I am referring only to San Luis.
l7The new public management, on balance, favors making the public sector less rule-bound and more apt to
innovate. As I discuss in Chapter 4, there is generally not a managerial maverick just waiting to break out


'Table 2-3. Continued'
56
PI3. Democratizing reforms are appealing to middle-class constituencies regardless of
economic conditions. However, opening up the policymaking process depends more on a
galvanizing event that raises awareness and prompts action.
First, the political system is embedded in the federal-provincial institutional
framework. Among the structural features in a federal system, constitutional-legal
protections for subnational levels of government are crucial because such arrangements
define where the commitment for reform must materialize.42 Argentinas provincial
governments are provided significant constitutional protection. Likewise, legal-
institutional arrangements such as coparticipacin further impede central government
efforts to impose any particular reform agenda on the provinces. Of course,
coparticipacin may be altered with carrot or stick-like intent, but as with any
institutionalized arrangement or relationship the costs of casting it aside are considerable
(Tommasi, et al. 2001 ).4j Therefore, even in the worst of times, public sector reform in
the provinces is largely dependent on political support for reform on that level.
The second distinguishing political feature of reform is, overall, the top-down
nature of the process. This may seem counterintuitive since the presence of popular or
grassroots clamoring for change often purports to explain processes based on the
devolution of political power.44 Public sector reform, not unlike devolution, rarely
captures the imagination of the average citizen. Even well-informed citizens are hard
pressed to engage sufficiently to understand the details of the process. For instance, in
Argentina today, reformers would do well to assemble political support for measures that
generally fit the social landscape: minimize economic dislocation, root out corruption and
insist on transparent policymaking.4 There is still room to maneuver and hammer out
details that enhance professionalism, efficiency and accountability, but failing to locate


171
Perhaps this oversight mechanism is developing, but it should be noted Entre Rios is a
case of divided government (UCR governor and PJ majority in Congress). In San Luis,
the situation is considerably different. Many respondents who marked scarcely or not
at all wrote comments explaining the vast majority of appointees have proved capable,
yet they do not believe the legislature is a serious oversight body if a mistake were in the
making. The other difference is the constancy of unified government (PJ governors and
majorities in Congress since 1983).
5.3.2 Citizen Participation
Todays democratization and development mainstreams are strongly committed to
participation (IDB 2002). Two basic arguments support this position. First, consolidating
democracy in the region depends on people being involved in public affairs (Daneri
2001). Second, development failures are reduced when people are active stakeholders in
managing public affairs (Ribeiro 1994, Cernea 1991). However, moving from principle to
practice or from good advice to well used advice remains the challenge for governments
such as those in Argentinas provinces. One of the primary issues for these governments
is finding a willing and able partner in the permanent bureaucracy.
The first question in Table 5-7 looks at the issue of participation from the
organizational side of the equation. Overall, seeking out input or feedback from the
public is a rare occurrence in provincial management. Few respondents in Entre Ros and
San Luis estimate public organizations solicit outside participation with great regularity.
On the other hand, approximately 80 and 65 percent in Entre Ros and San Luis,
respectively, classify the frequency of solicitation as rarely or never. Next, regardless
of to what extent seeking public input has been the norm, it is valuable to review


131
There is certainly no dodging the issue of corruption in the context of public sector
reform in Argentinas provinces. The first and perhaps even the second question in Table
4-9 have been asked before in public opinion polls around Argentina. But public
employees may well have a more unique, insiders perspective on the corruption
problem. In these samples, public employees see the countrys corruption problem every
bit as if not more grave than the average man or woman on the streetnearly 70 percent
classify the problem as very serious in Entre Rios and just over 80 percent do so in San
Luis.
The second question, focusing on the provinces themselves, is less readily
interpreted. Here, Entrerrianos clearly identify corruption as a more serious problem than
Sanluiseos77.7 percent as opposed to 26.4, respectively, when the top two quintiles are
combined. Looking closer at the frequencies in each range, the figures from San Luis are
remarkable by Argentine crisis standards. Over 30 percent of respondents are basically
saying San Luis has either solved or never developed the corruption problem that plagues
Argentina. This sizable minority is perhaps simplifying reality or seeing the cup as half
full, but additional evidence from my interviews substantiates the basic picture on
corruption emerging from the professionalization survey. Therefore, I do not believe the
difference between the provinces is primarily a reflection of economic growth holding
critics at bay while economic decline brings out an array of unfair detractors.
Table 4-9 Corruption
To what extent is corruption a problem in Argentina?
Entre Rios
San Luis
Very serious
68.2
82.4
Considerable
25.4
15.4
Somewhat
4.8
2.2
Small
1.6
0.0


185
In the earlier section on public participation there were indications NGOs and
other forms of associational life have become important in the two provinces. The next
question looks at whether the policy process is now open to more stakeholders than it was
5 or 10 years ago. Public employees in Entre Ros appear to be saying their province has
perhaps taken a step backwards in this regard. On the other hand, public employees in
San Luis view the policy process as more inclusive than it used to be. Unfortunately,
there is no precise way to know the respective starting points in 1993 or 1998. My
sense, drawn mostly from interviews and the study of river development projects in each
province, is that Entre Ros was more inclusive than San Luis.48 And Entre Ros is likely
still more inclusive from the standpoint that its constellation of stakeholders is more
diversified and independent than is the case in San Luis. So while Entrerrianos may not
see the state keeping up with demands for inclusion, it seems unlikely San Luis would be
more able to successfully manage the socio-political environment in Entre Rios.
Policymakers and managers in San Luis are, however, expanding the circle of
participants as the provinces social profile moves from modernizing to something more
post-modern.49
Public organizations around the world have been trying hard to improve the point
of contact experience for citizens. For starters, clients have to be treated with courtesy
and inquiries have to be handled capably and expeditiously, no matter the ultimate
answer to an inquiry. The fourth question in Table 5-9 considers how well public
organizations in Argentinas provinces respond to citizen inquiries. In general, the
numbers are far from ideal in the provinces. San Luis is performing bettermore than
one-third describing their organizations approach as open and helpful and a mere 3.3


CHAPTER 1
THE REFORM LANDSCAPE
1.1 Introduction
Public sector reform in Argentinas provinces is not an orderly picture from any
vantage point. Taking an aerial perspective, the state apparatus appears too large
compared to the market or civil society. On the ground, the borders between state, market
and civil society are less well defined. Part of the confusion surely results from the
multiple ends pursued under the broad heading of institutional reform. Often at once,
reform addresses issues of efficiency and accountability, of effectiveness and legibility. It
is a busy agenda, one that has no doubt been delayed too long. But neither Argentines nor
outside observers and friends should breathe a sigh of relief simply because the
provincial public sector now sits in the reformers crosshairs. I counsel caution and
believe that even a short survey of the reform/development literature exposes a few
important conceptual, methodological and programmatic gaps in the research.
There has never been a single research puzzle for all students of institutional
reform or development.1 The puzzle or question at the heart my study is twofold: what
factors shape the public sector reform and how can a reform package be designed (its
composition as well as its timing) so as to improve its chances of implementation and
success? This study focuses on two Argentine provincesEntre Ros and San Luisand
takes on the first question in the next chapter with the help of Christopher Pollitt and
Geert Bouckaerts (2000) reform model and other works that aid in understanding the
1


240
Surveys of Civil Servants
Entre Ros and San Luis agreed to host my study at the beginning of 2002.1
elected to accept access to the Ministry of Economy in each province (the precise
secretarios and direcciones vary slightly therein). Entre Ros and San Luis Ministry of
Economy are comparably sizedapproximately 330 employees. With the help of the
personnel specialists I randomly selected 120 employees from each province. In Entre
Ros I collected sixty-three completed surveys; while in San Luis I recovered ninety-one.
Interviews with Civil Servants, Political Appointees and Legislators
Public sector reform is a complicated and undeniably human process. To
complement the survey instrument that I used, I also relied heavily on interviews with
civil servants, political appointees and legislators. I spoke personally with more than one-
hundred civil servants, as well as many upper-level public managers and legislators in the
provinces. The interviews were generally semi-structured because I was checking on
specific issues while also attempting to gain a fuller picture of those issues. I most often
referred to my interview transcripts when there was a need to further clarify and explain
survey responses.
Analysis of Legislation, Executive Decrees and Ministerial Directives
I examined legislation, executive decrees and ministerial directives related to
public sector reform in each province. In a federal system the provinces play the primary
role in managing the states apparatus. For this reason, it is necessary to evaluate what
each province has officially done on the matters related to professionalization, the
introduction of market mechanisms, and participation and accountability.


283
Comentarios:
Parte III. Finanzas, Evaluacin e Incentivos
92.Qu nivel de participacin ha tenido su organizacin en las charlas con el
gobierno nacional respecto de la coparticipacin y reduccin de dficit?
A diario o semanalmente
Mensualmente
Una vez en los ltimos seis meses
Una vez en el ltimo ao
Nunca
Comentarios:
93.Qu actividades se relacionan con la elaboracin del presupuesto en su
organismo?
Planificacin
Necesidades operativas
Evaluacin de resultados
Otro, por favor explique
Comentarios:
94.En condiciones favorables, la reforma de la elaboracin de presupuesto se hara en
consulta con los empleados. Dada la severidad de la situacin econmica, hasta
qu punto su organizacin ha impuesto las reformas en la elaboracin de
presupuesto sin consultar con los empleados?
Completamente
Mayormente


301
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Assessment. Prepared for the Center for Latin American Studies. Gainesville, FL:
University of Florida.
McGregor, Douglas. 1960. The Human Side of Enterprise. New York: McGraw-Hill.
Meacham. Carl E. 1999. Administrative Reform and National Economic Development
in Latin America and the Caribbean (post-dictatorships). Policy Studies Review, Vol.
16, No. 2 (Summer 1999), pp. 41-63.
Merrien, Francios-Xavier. 1998. Governance and Modem Welfare States. International
Social Science Journal, Vol. 50, No. 1 (March 1998), pp. 57-65.
Ministerio de Economa y Obras Pblicas. 2002. Presupuestos Provinciales (Base
Devengado). www.geocities.com/fielargentina/series/86.htm, 11-20-03.
Mustapic, Ana. 2000. Oficialistas y diputados: las relaciones Ejecutivo-Legislativo en
Argentina, Desarrollo Econmico, Vol. 39, No. 156, pp. 571-595.


This dissertation was submitted to the Graduate Faculty of the Department of
Political Science in the College of Liberal Arts and Sciences and to the Graduate School
and was accepted as partial fulfillment of the requirements for the degree of Doctor of
Philosophy.
May 2004
Dean, Graduate School


181
One explanation for why policies are out of step with public preferences goes back to the
earlier responses related to participation: not enough public participation to properly
design, implement and adjust policies. There is little doubt that major shortfalls in public
participation produce conditions where accountability, no matter how capable and honest
the bureaucracy, remains elusive. Another level of explanation is unmistakably political.
In Entre Ros, for example, public employees are well aware public satisfaction with
provincial government is at an all-time low and thus many are resigned to conceding their
organizations policies reflect public preferences very little.
5.3.4 Transparency and Openness in the Policy Process
The case for transparency in markets has long been established. The case for
transparency in governance has likewise become an article of faith in state reform
discussions over the past two decades (World Bank 2000). Transparency issues are not
isolated to political institutions like the Executive, Congress or the Courts. The states
administrative apparatus also makes numerous determinations about the degree to which
aspects of policy management are concealed from interested parties. For instance,
transparency can be as mundane as hiring decisions or contract bids and as vital as the
methodology for estimating the effects of river dredging. The extent to which the policy
process is inclusive or exclusive often mirrors the question of transparency. In Latin
America, and notably in Argentina, the policy process has remained relatively closed
despite two decades of democracy (Hopkins 1995).43 The issue is relevant at all levels of
government and public employees have a unique vantage point on where things actually
stand. This section completes the survey of democratization issues facing public


225
percent more salary than your newly hired equivalent and twenty-five years seniority is worth 100 percent
more than a new hire with equal qualifications and responsibility.
27 See World Bank (2000).
28 The roots of the decline go back further than the 1990s or even the post-1983 era. Roffman (1981:80-87)
shows that industrial productivity in Entre Ros was declining in the 1950-60s. By the 1990s, Porto
(1996:157-167) demonstrates that Entre Ros was well behind many provinces, including San Luis, in
terms the development of industrial parks, zones and areas.
29 Eduardo Cepeda, an analyst from the IDI (1994) study, said that Argentina needs to keep clientalism
away from public organizations in the provinces.
30 I think the 1990s has left a bad taste in many provincial public managers mouths. Being asked to work
miracles on a shoestring budget is never an envious position to be in. But to be expected to do so after
decades of neglect in the basics of professionalization is entirely unrealistic and probably inappropriate.
However, now (the first decade of the 21st century) is the time to start mending these fences and getting the
basics right.
3'The lessons learned do not seem to be lost on the people that matter in the provinces. Legislators like
Sergnese (San Luis), the President of the Senate, Campos (Entre Rios) Vice-President of the Senate,
Allende (Entre Ros), among others are keen to explore the issues researched here and make the process a
well-reasoned and controlled one.


! 47
and in San Luis 20.9 percent take that position while another 38.4 estimate only marginal
benefits. Optimism for a further turn to the market is scarce in the provinces. Optimism
about market solutions in the country at-large is also in short supply, with fewer than 5
percent expressing satisfaction with the market economy (Latinobarmetro 2002).5 There
is also the question of how these changes have affected the publics confidence in the
state. Here again, pro-market reformers have their work cut out for them, particularly in
Entre Ros. Even when the most favorable three quintiles are combined, a mere 23.8 and
40.7 percent in Entre Rios and San Luis, respectively, suggest pro-market reforms have
increased public confidence in the state to any meaningful extent.
5.2.2 Downsizing
The issue of downsizing or reducing the number of public employees is not
detached from the previous discussion on privatizations and contracting-out. With some
exceptions, significant privatizations and contracting-out has led to reductions in public
sector employment or at least signaled that the state can no longer be a growth sector
within the labor market.6 However. I estimate that the downsizing issue deserves separate
attention because in most of Argentinas provinces it has become the flashpoint for
opposition to public sector reform. And. moreover, pressures to shed personnel exist in
many provincial ministries quite apart from a privatization or contracting-out cause. In
other words, provinces are expected to reduce their payrolls to face new coparticipacin
targets.7
The questions and responses in Table 5-2 provide a sense of how public
employees assess the role of downsizing in the public sector reform process. Entrerrianos
clearly see more turbulent waters ahead than their counterparts in San Luis. In fact.


272
No es comn
Es muy raro
Nunca ocurre
39.Cundo se realizan ajustes o cortes al presupuesto solicitado, cules son los rubros
ms comnmente afectados?
40. Qu tanta libertad tiene su organismo para decidir en dnde aplicar los cortes o
ajustes?
Absoluta
Mucha
Un poca
Muy poca
Nada
41. Su organismo ha excedido el monto presupuestado durante los ltimos 3 aos?
S No
42. Si su respuesta a la pregunta anterior es afirmativa, indique en cuntas ocasiones:
1
2
3
43. Si su organismo excedi su presupuesto, incurri en sanciones por dicha accin?
S No
44. Si su respuesta a la pregunta anterior es afirmativa, la sancin recibida fue
(marque las que crea que se aplican )
Impuesta por otro organismo
Impuesta por la autoridad superior del ministerio o secretara a la que pertenece
Ambas de las opciones anteriores
Despidos
Degradacin
Multas al organismo
Multas a los empleados
Recorte en el sueldo o beneficios del funcionario responsable
Reduccin del presupuesto para el ao siguiente
Otra, explique
45.Si su organismo no incurri en sanciones por exceder el presupuesto, sabe usted
qu sancin o sanciones hubieran correspondido en caso de hacerlo?
S. Por favor, explique


258
94.Under favorable circumstances, linking budget reform to processes that improve
long-term public sector performance would be a bottom-up process. Given the severity of
the current economic crisis, to what extent has your organization resorted to making
budget cuts without consulting employees?
Completely
Mostly
Somewhat
Not much
Not at all
Comments:
95.To what extent does your organization evaluate programs and personnel?
Thoroughly
Considerably
Somewhat
Marginally
Not at all
Comments:
96.To what extent are performance measures designed and implemented for political
expediency (i.e. to satisfy critics) rather than effective internal purposes?
Completely
Considerably
Somewhat
Not much
Not at all
Comments:


169
Entre Ros, the main worry is the permanent bureaucracy will be blamed by legislators
for the provinces problems. The other major concern is making Congress a more
attractive venue for backroom dealing between legislative committees and powerful
interests. In San Luis, the primary concern relates to non-experts getting more involved in
organizational operations. The second, related preoccupation is that legislative oversight
can easily reach burdensome levels, which causes more paper shuffling and delays.
The four side-effects considered here are not meant to be an exhaustive list of the
factors that can impede effective legislative control. Nor should it be implied the costs
associated with these problems are greater than the democratic benefits of legislative
oversight. Argentinas provincial governments clearly need substantive improvements in
democratic oversight. But the problems identified by public employees are worth
thinking about because public sector reform is primarily based on the organizational
level. Moreover, on this front, the foremost preoccupations of the two permanent
bureaucracies are strikingly different. Entrerrianos are most worried about corruption and
political maneuvering to deflect and assign blame for the states decay. For them,
problems like additional paperwork and closer consultation with non-experts seem
relatively minor. Sanluiseos prioritize avoiding obstacles to the modernizing state; in
other words, the technocrats are respectfully declining what they see as potentially too
much help in doing their jobs. The lesson is twofold: first, reformers should intimately
know the permanent bureaucracy because even positives like legislative oversight carry
consequences; and second, even in a single federal system the bureaucratic terrain can
vary significantly across governments.


245
30.Does your organization have financial records from the last five years?
Yes No
31.How difficult is it to obtain information from those records?
Very difficult
Difficult
Easy
Very easy
Part II: Budget Management
32. How involved are you in budget preparation?
Not at all involved
Somewhat involved
Very involved
33. How involved are you in budget implementation
Not at all involved
Somewhat involved
Very involved
34. How involved are you in budget evaluation?
Not at all involved
Somewhat involved
Very involved
35. Do you expect that actual funds for your organization will differ from budgeted funds
this year?
Yes No
36. Will budgeted funds compared to actual funds be:
Equal
Greater
Smaller
37. If you answered greater than or less than to the previous question, to what extent do
you expect that actual funds will differ from budgeted funds?
A large amount
A moderate amount
A small amount
38. How common is it, in your experience, for actual funds to differ from budgeted
funds?
Very common
Common


275
57.En los ltimos 3 aos, los funcionarios electivos o miembros de partidos polticos
han interferido o perjudicado las decisiones de su organismo?
S No
Comentarios:
58.Si su respuesta a la pregunta anterior es afirmativa, indique la frecuencia con la
que ha ocurrido:
Muy Alta
Alta
Moderada
Baja
Muy Baja
Comentarios:
59. En general, en qu medida ha respondido su organismo a esas interferencias?
Muy Alta
Alta
Moderada
Baja
Muy Baja
60. A qu atribuye usted la respuesta de su organismo a esas interferencias?
61.En general, cmo dira usted que los empleados con contactos polticos o
personales son tratados con respecto al resto de los empleados?
Mucho mejor
Un poco mejor
Igual
Peor
Comentarios:


Table 4-2. Continued
113
How does your organization primarily communicate expectations and standards to its employees?
Entre Rios
San Luis
Managers explains them to an
employee or a group of
39.7
58.2
Veteran employees explain
things to the newer ones
25.4
18.7
Other
6.3
9.9
Not communicated at all
23.8
1.1
Of the following factors, mark those that help and/or those that hurt you in your position?
Entre Rios
San Luis
Helps: My role is clearly defined
19.1
44.0
Hurts: My role is not clear
44.4
23.1
(Entre Ros N=63, San Luis N=91; Question 2: Entre Ros N=15, San Luis N=28). See Appendix
B for the Professionalization survey in its entirety.10
The accuracy of written job descriptions in San Luis can be attributed to a couple
of factors. First, as discussed in the last chapter, San Luis ministries and managers have
made professionalization a priority. Experience has shown them that major
developmental objectives set by the provinces elected officials are attainable when
organizations and employees receive clear marching orders. As Minister Poggi said, We
try to simplify what is asked of each employee and control those activities. Second,
success creates environments where employees are more likely to accept directives,
written or otherwise, from above as logical and adequate. On the other hand, failure and
reduced expectations in Entre Rios have invited public employees to suspect the validity
of even a written job description.
The third question, which focuses on the primary means of communicating
standards and expectations, is telling in one or perhaps two respects. Obviously, the
absence of communication, according to nearly one-quarter of the respondents
(particularly since this response was a write-in choice) in Entre Ros, is a dangerous


104
6 The nationalists had a complicated set of reasons for wanting to reach out to the interior and promote
development there. One could see the logic as strictly political; in other words, the nationalists needed to
broaden its constituency to be a force in national politics. One could also see the move in economic terms.
By the time Pern became president in the mid-1940s, the emphasis on industrialization was predicated on
the expansion of Argentinas domestic market. In effect this meant Import Substitution Industrialization
(ISI) would not work without a process of modernization that reached the poor interior. Last, the
nationalists felt strongly about the protection of traditional Spanish values, la hispanidad, and genuinely
felt the plight of much of the countrys interior was a mark of shame for a great nation. Pern, for instance,
had in his army career spent many years in various parts of the country and he developed a respect for the
poor, honorable people he knew. To be sure, these experiences affected national policies in the 1940-50s.
See Crassweller (1987) and Rock (1987).
7 In Entre Rios and San Luis, for example, explicit, modem civil service statutes were drafted and passed in
the early 1960s. The extent to which they were subsequently minded is another matter.
8 Menem carried out an ambitious economic liberalization agenda, perhaps the most rapid privatization
program in all of Latin America. There was also a program for modernizing the national bureaucracy. On
all these fronts, however, Menem held together political support by sparing the interior the costs of reform.
See Heredia and Schneider (2000).
9The preponderance of literature on Argentinas vertical fiscal imbalance is impressive; see Artana (1998),
Lpez Murphy and Muskovits (1999), and Tommasi, et al. (2001). During the economic crisis of 1999-
2002, steps were taken to return some revenue sources to provincial control. This logic, of course, being
that provincial governments will have an incentive to crack down on tax evasion and also to act with
greater prudence in their expenditures. The problem, and hence the limitations of the steps taken, is that
poor provinces have poor revenue streams and thus coparticipacin remains indispensable if the
distribution of national resources is a policy objective.
l0See Bosch (1978:207). The translation is my own. De Moussy believed the province was favored by
nature and, starting in the 1850s, the industriousness of its government and growing citizenry.
"President Hiplito Yrigoyen was the long-time leader of the Unin Cvica Radical (UCR), which is
largely credited with bringing universal male suffrage to Argentina. Yrigoyen won the presidency in 1916,
thanks to the electoral reform passed in 1912, and governed until his term ended in 1922. See Rock
(1987:186-190). Yrigoyens second term started in 1928 and lasted until a military coup overthrew his
government in September 1930. It was a contentious two years as Yrigoyen faced bitter opposition from the
Conservatives and a split in the UCR. The UCR essentially divided into two camps: personalistas (those
who backed the president) and antipersonalistas who felt Yrigoyen had used political patronage to an
extent unbecoming an honest democrat. In many provinces in the months preceding September 1930,
personalistas tried to keep their home provinces in the presidents camp. Their efforts led the newly
installed military government to intervene in every province except Entre Ros and San Luis. See Bosch
(1978:286-287). Regarding Entre Rios, the implication was that the political community in the province
had centrist instincts and showed the steady governing hand that had served the province well since the
1850s.
12 Entre Ros industrial growth and productivity was already uneven and frequently falling the in the 1950-
60s (when many provinces were rising), see Roffman (1981:79-81). The arguments have not changed all
that much over the recent decades. See AR-ERs (2002:1-14) recent elaboration of what needs to be done.
In addition, I interviewed Fernando Caviglia, Director of the Consejo Empresario de Entre Ros (CEER), in
June 2002. CEER is basically a pro-business interest group that encourages market friendly government
policies. CEERs position is that provincial government needs to improve in the provision of public goods
like infrastructure, education and worker retraining. CEER envisions that Entre Ros should do much better
in terms of exports given its strategic location in the Mercosur zone.
13 See AR-ER (2002) and CEER (2001).


266
U nchanged
Somewhat less open
Significantly less open
Comments:
121. How would you characterize your organization's approach to citizen inquiries?
Open and very helpful
Reasonably accommodating
Adequate
Slow and incomplete
Completely inadequate
Comments:
122. Again, considering the many tough issues involved in public sector reform, to what
extent do you consider greater openness in the policy process a priority for the reform
agenda?
Very high
High
Moderate
Low
Very low
Comments:


236
question, for what state, is dicier still, if one has in mind to trade in the old state for a
newer make.
7.5 Conclusion
Nstor Kirchners government is fond of saying (in television and radio spots)
ArgentinaUn Pas En Serio or, in English, Argentina: A Serious Country. I suppose
the message is obvious enough: the government is touting itself as the antidote to decades
of mismanagement and encouraging Argentines to feel reassured by President Kirchners
understated style. The message is also suggestive in the sense that it encourages
Argentines to work hard and insist on better governance. Well, time will tell if post-crisis
Argentina dedicates itself to making the state work better. It has been said Argentine
society and its governments have preferred to look at the distant stars and not at their
more earthly and necessary work, moving from fad to failure, from elation to regret,
without much regard for the responsibility in each stage (Buenos Aires Herald 3-29-02).
Expressions of societal-reproach and pessimism are not recent phenomena. In the famous
tango Cambalache by E.S. Discpolo (1934), the protagonist feels disillusioned by a
society where bad guys and cheats, chorros, win and decent people go unrewarded.9
Times change but people in many walks of life (teachers, taxi drivers, recent university
grads, etc.) echo these frustrations now. Among the questions to ask is how can
Entrerrianos, Sanluiseos and the rest of the Argentines make government work more
effectively?
After months of pursuing public sector reform in Argentina and months of writing
about the experience, this question remains a difficult one. My expectations of what I
would find when I went to Entre Ros and San Luis are at least partially unfulfilled. I


208
The other problem is that accountability, whether in the form of political
oversight, transparency or citizen participation, may seriously be compromised by private
sector management models. In an ideal world public managers could be judged by elected
officials and the public on their results and left alone in the course of getting the job done.
But results in the public sector tend to be fuzzy because contradictory objectives drive
policies and programs and widely agreed on performance measures have not become the
norm.15 We know political oversight in, for example, the U.S. has not been reduced,
despite the fact that nearly all politicians embrace the principle of freeing managers to
manage (Kettl 2000). And wider participation (in particular in the early stages when
public employees are learning new methods) surely slows decisions and raises costs. It
appears simplistic to assume managers, politicians and the public can simultaneously be
empowered by freeing managers to manage (Pollitt and Bouckaert 2000:156-157).
Furthermore, transparency in the policy process and public administration is not
something most publics will knowingly sacrifice. Public sector reform in Argentinas
provinces should be particularly mindful of the transparency issue because the political
and administrative systems there have historically graded out poorly in that respect.16 For
this reason, I would be hesitant to give the state a fresh, cutting-edge excuse for falling
short on accountability.
The next tradeoff also involves marketization and democratization as it relates to
state legitimacy. Marketizing reforms embrace the transformative power of innovation.
Specifically, technological (e.g. automation of services), economic (e.g. consumer
choice) and evaluation innovations are sought. The problem is that sizeable portions of
the public may feel ill at ease with changes. Particularly in a context where the public


20
process has been state reform.3^ It is noted that vestiges of authoritarian rule can be found
in most Latin American states (Loveman 1994, ODonnell 1994), as well as in many of
the ministries and agencies within the state (Heredia and Schneider 2000, Hopkins 1995).
The states illiberal tendencies thus amount to more than a crisis of representation; they
compromise the credibility of the policy process across various sectors.
The relevance of public sector reform to larger questions of democratic
accountability and consolidation extends beyond the state and civil society. The second
generation of reform has the significant challenge of bringing citizens more concrete
returns on their investment in political and economic liberalization. In particular,
making the state work better is a necessary (though probably not sufficient) component of
shaking the private sector out of its lethargy. The private sector (notably large
enterprises) has for too long been characterized by predatory and parasitic relationships
"XI
with the state. Democratic consolidation is bound to be incomplete unless the unholy
(and incredibly unproductive) alliance between business and state is judged by its actual
economic and social accomplishments. Fortunately, during the 1980-90s Latin America
witnessed an unprecedented level of individual and collective expression outside political
parties. However, civil society and ordinary citizens are still waiting on the public
sectors clear commitment to democracy.38
The downside of this work is obvious enough. Democratic consolidation literature
is perhaps, at best, only tangentially related public sector reform. After all, it grows out of
the transition literature that dealt with regime change, which left little conceptual space or
energy for questions of administration and public policy. In this way, it devotes more
attention to the states formal institutionsconstitutions, congress, chief executive, armed


135
4.3 The Changing Face of Argentine Federalism
The issues associated with professionalizing the public sector are even more
vital today because Argentinas provinces can no longer hide behind the old centralized
federalism that effectively accepted provincial incompetence so long as it acquiesced to
national authority. Whether by default or design provincial governments have no choice
but to embark on the road to public sector reform. Despite 2002-03 proving to be a period
of upheaval for the federal republic of Argentina, it is useful to take a snapshot picture of
how parallel sets of public employees in Entre Ros and San Luis understand the
relationship between their province and the national government. Namely, to what extent
the relationship is viewed as unequal, to what extent coordination and communication
exist, to what extent national policymakers design appropriate solutions to the provinces
problems and what best describes the provincial role in terms of dimensions like
policymaking and funding.
For the first question in Table 4-10, some and few are most often used to
estimate the proportion of the provinces goals and functions dictated by the national
government. There is not a significant difference between the provinces through those
two preferred choices. Moving towards the poles of the continuum, Sanluiseos are more
likely to believe many goals and functions are dictated by Buenos Aires, whereas
approximately 20 percent Entrerrianos respond almost none. The truth is, since the
early 1990s, the national government has handed over a number of key policy portfolios
to the provinces. The provinces actually have considerable discretion (and inadequate
funding) over how to manage policies. Therefore, 1 estimate the distribution of responses
from Entre Ros appears more accurate or objective.


THE ROAD TO PUBLIC SECTOR REFORM IN ARGENTINAS PROVINCES
By
JOHN M. BOLUS
A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY
UNIVERSITY OF FLORIDA
2004

ACKNOWLEDGMENTS
I owe a debt of gratitude to many individuals in Entre Rios and San Luis who
made this project possibleCarlos Sergnese, Jernimo Castillo, Gustavo Menndez,
Rubelinda Borghesse, Claudio Poggi, among others. 1 also sincerely thank Dr. Goran
Hyden, Dr. Rene Johnson, Dr Terry McCoy, my parentsMichael and Kathleen Bolus
and Julia Albarracin.
11

TABLE OF CONTENTS
page
ACKNOWLEDGMENTS ii
LIST OF TABLES vi
LIST OF FIGURES viii
ABSTRACT ix
CHAPTER
1 THE REFORM LANDSCAPE 1
1.1 Introduction 1
1.2 What Is Public Sector Reform? 3
1.3 Administration and Development Studies 5
1.4 Bringing the Market Back In 7
1.5 Comparative Politics 14
1.6 Merging Streams 30
Notes 33
2 THE ROAD TO PUBLIC SECTOR REFORM 39
2.1 Introduction 39
2.2 Argentine Federalism: Framing Provincial Public Sector Reform 40
2.3 Economic Factors 46
2.4 The Political System 55
2.5 The Administrative System 60
2.6 The Content of Reform Packages 62
Notes 72
3 GOVERNING THE PROVINCES: PAST AND PRESENT 79
3.1 Introduction 79
3.2 The Federal-Provincial History 79
3.3 Entre Rios: From Settler Paradise to Nowhere 84
3.4 San Luis: From Nowhere to the Puntano Miracle 91
3.5 Conclusion 97
3.6 Respondent Profile 98
Notes 103
in

4PROFESSIONALIZATION IN THE PUBLIC SECTOR
107
4.1 Introduction 107
4.2 Elements of Professionalization 108
4.3 The Changing Face of Argentine Federalism 135
4.4 Conclusion: Professional or Amateur Public Sectors 138
Notes 139
5 MARKETIZATION AND DEMOCRATIZATION IN THE
PUBLIC SECTOR 143
5.1 Introduction 143
5.2 Elements of Marketization 143
5.3 Elements of Democratization 164
5.4 Conclusion 187
Notes 188
6 TAKING STOCK OF REFORM: SIMILARITIES, DIFFERENCES
AND LESSONS LEARNED 193
6.1 Introduction 193
6.2 Factors Moving the Process 194
6.3 Professionalization Revisited 199
6.4 Marketization Revisited 202
6.5 Democratization Revisited 204
6.6 Composition and Tradeoffs 206
6.7 Timing 212
6.8 Reform Fatigue? 215
6.9 Lessons Learned 216
6.10 Conclusion .221
Notes -222
7 PLACING PUBLIC SECTOR REFORM IN CONTEXT 226
7.1 Introduction 226
7.2 Argentina 227
7.3 Latin America 230
7.4 The Global Trend .233
7.5 Conclusion 236
Notes 237
APPENDIX
A RESEARCH METHODS .239
IV

B SURVEY: PROVINCIAL PUBLIC SECTOR REFORM 241
C SURVEY (EN ESPAOL) 267
REFERENCE LIST 293
BIOGRAPHICAL SKETCH 308
v

LIST OF TABLES
Table page
1-1 Summary Comparison of Approaches to Reform 32
2-1 Core Propositions Concerning Reform in the Provinces 40
2-2 Core Propositions Concerning Socioeconmic Factors 47
2-3 Core Propositions Concerning Political Factors 55
2-4 Core Propositions Concerning Administrative Factor 61
3-1 Age Distribution of Public Employees 98
3-2 Education Levels 101
4-1 Hiring Practices 110
4-2 Position Definition 112
4-3 Training 116
4-4 Discretion 119
4-5 Employee Evaluation 121
4-6 Employee Rewards 123
4-7 Employee Sanctions 126
4-8 Political Interference 128
4-9 Corruption 131
4-10 Federalism 136
5-1 Privatizations and Contracting-out 146
5 -2 Downsizing 148
vi

5 -3 Competition and Restructuring 153
5-4 Budgeting in Relation to other Activities 159
5-5 Performance Evaluations and Incentives 162
5-6 Legislative Oversight 167
5-7 Citizen Participation 173
5-8 Accountability and Bureaucratic Discretion 179
5-9 Transparency and Openness in the Policy Process 184
Vll

LIST OF FIGURES
Figure page
1 -1 Map of Argentinas Provinces 2
2-1 Provincial Reform Model 42
2-2 Components of Public Sector Reform 65
Vlll

Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy
THE ROAD TO PUBLIC SECTOR REFORM IN ARGENTINAS PROVINCES
By
John M. Bolus
May 2004
Chair: Goran Hyden
Major Department: Political Science
Making the state work better has become an article of faith among developed and
developing countries. Argentinas most recent crisis makes public sector reform a high
priority, particularly on the long-neglected provincial level. This study explores the
following questions: what factors shape public sector reform and how can a reform
package be designed (its composition as well as its timing) so as to improve its chances
of implementation and success? Based primarily on surveys and interviews from public
organizations in two provinces, Entre Ros and San Luis, this work offers an empirical
record regarding three sets of issues facing the public sector: professionalization, the use
of market mechanisms, and participation and openness in the policy process. The findings
here suggest professionalization is the only feasible starting point or foundation for
subsequent expansions on the other two fronts. The findings also help explain why public
sector reform in Latin America has often failed in the past as multiple reform planks were
attempted simultaneously on an unrealistic timetable.
IX

CHAPTER 1
THE REFORM LANDSCAPE
1.1 Introduction
Public sector reform in Argentinas provinces is not an orderly picture from any
vantage point. Taking an aerial perspective, the state apparatus appears too large
compared to the market or civil society. On the ground, the borders between state, market
and civil society are less well defined. Part of the confusion surely results from the
multiple ends pursued under the broad heading of institutional reform. Often at once,
reform addresses issues of efficiency and accountability, of effectiveness and legibility. It
is a busy agenda, one that has no doubt been delayed too long. But neither Argentines nor
outside observers and friends should breathe a sigh of relief simply because the
provincial public sector now sits in the reformers crosshairs. I counsel caution and
believe that even a short survey of the reform/development literature exposes a few
important conceptual, methodological and programmatic gaps in the research.
There has never been a single research puzzle for all students of institutional
reform or development.1 The puzzle or question at the heart my study is twofold: what
factors shape the public sector reform and how can a reform package be designed (its
composition as well as its timing) so as to improve its chances of implementation and
success? This study focuses on two Argentine provincesEntre Ros and San Luisand
takes on the first question in the next chapter with the help of Christopher Pollitt and
Geert Bouckaerts (2000) reform model and other works that aid in understanding the
1

2
road to reform. Figure 1-1 shows where these provinces are located. Exploring the second
question requires categorizing and then digging into the important sets of issues involved
in public sector reform, which are professionalization, marketization and
democratization. The categories are influenced by the World Banks (1997, 2000) three
drivers of public sector reform and Blanca Heredia and Ben Ross Schneiders (2000)
work on state reform. Digging through these sets of issues is the business of Chapters 4-
6. These are based on surveys and interviews conducted in each provinces Ministry of
Economy during 2002. This chapters subsequent sections explain what public sector
reform is and then looks at existing research streams that speaks to my concerns.
Figure 1-1 Map of Argentinas Provinces (Entre Ros=ERI, San Luis=UIS).

3
1.2 What Is Public Sector Reform?
Reform is defined in the English language as a change for the better or a
movement that tries to improve a sociopolitical situation without revolutionary change. In
some ways, the official definition of reform rings truer to the rhetoric of government
reform than skeptics realize.2 Reform, whether geared toward efficiency and
accountability or legitimacy and effectiveness, is a near permanent fixture in most
countries today. And leaving aside the issues of incompatible goals and timing, most
governments and reformers do actually strive to govern better. However, assuming
reform is synonymous with improvement is often a step too far. Instead, it seems safer to
say that reform means a departure from the status quo.
Next, it is necessary to define reform that falls under the heading of public
sector. The public sector includes the whole array of institutions designed to exercise
collective control and influence over the societies and economies for which they have
been given responsibility (Peters 1996:1). This definition captures the great significance
of the public domain in most societies, but it probably fails to demarcate the public
sectors boundaries sufficiently. This sector encompasses the ends as well as the means of
public institutions and organizations. The relevance of means and ends merits further
explanation because public sector reform in Latin America continues to simultaneously
address both aspects of state action.
Public sector reform certainly includes an administrative systems concern with
the means for accomplishing goals established by public authorities. This is familiar
territory for rich and poor countries alike. It is normal business for administrative systems
to adopt new information systems, training programs and the like to improve the quality

4
and cost-effectiveness of government goods and services. This is the domain of resource
and operations management, and it has to varying degrees occupied public and
development administration, as well as todays public management (Kettl 2000). It
should, then, come as no surprise that reform packages in Latin America have a strong
managerialist orientation/ In general, such reengineering efforts do not redistribute
power among institutions or societal actors and thus they typically do not appear ripe for
political analysis.4
Public sector reform also necessarily includes a governments objectives. It is
possible to understand this aspect of reform as the inclusion of policy choices. Observers
in Latin America note how the state has by and large passed from the stabilization phase
of reform into the longer structural adjustment phase (Costin 1999). This phase often
involves policy changes. In most OECD countries major policy shifts are not a regular
occurrence. In those environments it is easier to divide the conceptual landscape between
management issues and policy or political concerns. When the goals of public
organizations are subject to significant revision, an analysis of the reform landscape has
little choice but to account for the ends as well as the means of government.
Next it seems best to fan out through the relevant literature by focusing first on
the long-standing link between administrative and development studies. Second, I look at
the contribution of public management and economic institutionalism to todays
development mainstream. Third, I analyze perspectives from comparative politics that, to
varying degrees, tackle the issue of public sector reform. Last, I provide a brief summary
of how governance and public management approaches stack up against public sector
reform ones.

5
1.3 Administrative and Development Studies
After the Second World War, the interests of rich and poor countries converged
on development. Development, as a goal, focuses on raising the material well-being of
people, typically within the context of nation-states. Public administration embraced this
opportunity to export Western know-how to developing societies. There is no denying
that effective administration plays a key role in national development (Siffln 1976:66).
But the main problem of this period was detaching administrative issues from contextual
factors such as political instability, economic weakness and culture. Development
thinking stressed the maintenance role of administration while neglecting its
developmental or creative aspects (Siffin 1976:68)/ However, arriving at the moment
where the maintenance role might take precedence proved elusive while situations that
called for the creative or adaptive aspects of administration cropped up time and time
again.
This is not to be dismissive of administrations role in public sector reform or
development today. On the contrary, my experience in Argentina illustrates why solid
administration is indispensable for making the provincial state work effectively. Public
administration has proved capable of understanding development when it avoids the
conceptual and programmatic traps in the politics-administration dichotomy. Defending
that conceptualization on the grounds that it protects democratic accountability is
untenable.6 Separating political and administrative systems invites the equally
problematic separation of officials who make public policy from bureaucrats who
implement it. Administrative studies that capture the political, socioeconomic and

historical context around reform are the most valuable for determining what it takes to
craft a reform package that can be successfully implemented.
6
By the late 1950s or early 1960s development administration emerged as a
distinct subfield of public administration (Siffin 1991). The core assumption of
development administration was that administration had to contribute directly to
economic growth (Siffin 1976:66). Todays studies, which probe for a relationship
between measures of state size and economic growth, have inherited the mantle from
development administration.7 Interestingly, the initial strength and eventual weakness
of development administration was its economics-based agenda. This was a departure
from the narrow focus on improving public administration. Indeed, development
administration not only endorsed administrative innovation for fueling state-led growth; it
also busied itself conceptualizing on the system level where administration, culture and
society blurred.8 As Guy Peters (1994) points out, development administration believed it
could become the master science of public administration.
In addition, development administration added new themes such as poverty
reduction, decentralization and participation to its repertoire in an attempt to modify its
old modernization lenses. Ultimately, though, theoretical ambitions and extended visits to
Third World locales did not save development administration from being outflanked by
political and economic events. The demise of the Keynesian economic model made the
developmental state untenable. In the West, the neoclassical or neoliberal economic
alternative rearranged the content of development and the identities of development
administration (Touraine 1994). On the content level, downsizing the state in accordance
with budget pressures and external debt removed many development functions from the

7
public sector. During this period, attention shifted from the program level to the policy
level in an effort to restart socioeconomic development (Hyden 1998:3). Naturally, the
gravity of this turn of events obscured both the benefits and shortcomings of development
administration research.4
An obvious lesson of the development administration experience remains the
difficulty in bringing the diverse processes and outcomes of socioeconomic change in the
Third World under a single theoretical roof. This failure and the subsequent
fragmentation of the field should sensitize us to the shortcomings of this approach.
Explaining the content of public sector reform today and its potential impact on human
development appear too wrapped in contextual factors for universal covering laws to
carry much currency. But development administration has adapted to the post-Keynesian
world. Notably, it is has managed to see beyond the state, continuing to focus on local
development realities. Development studies are more interdisciplinary than they were two
or three decades ago. In general, social scientists are being consulted when it comes to
program or project level initiatives, but there remain considerable gaps in linking the
micro level (studies of non-governmental organizations are one example) to
administrative and political systems undergoing structural changes.
1.4 Bringing the Market Back In
Academics and practitioners did not lose interest in questions of administrative
capacity or development itself after the decline of development administration. It is true,
however, that a market-centered mainstream emerged in development circles. The main
source of new insights, if not inspiration, for public sector reform and development came
from microeconomic theory and economic institutionalism (Acua and Tommasi 2000).

8
Innovations such as principal-agent and transaction cost theory offered impressive
explanations of performance impediments in administrative systems (Tommasi, et al.
2001). This body of solid theoretical work was taken seriously by politicians and
ministers in countries such as New Zealand.10 But it also had a major impact on the field
of public administration. In effect, many public administrators began to think of
themselves as public managers when they realized private sector influences or
competitive pressures were going to occupy state space whenever the political
opportunity presented itself.
On a theoretical and methodological level, disappointments with the new public
management are not uncommon. Besides the major breakthroughs in micro-level
incentives facing individuals and firms, the new public management has not been
particularly innovative theoretically. Few attempts from the new public management
camp have offered plausible explanations of institutional change (or, more tellingly, the
lack of change). This failing cannot be attributed to apolitical conceptualizations. The
New Political Economy, in fact, includes a political framework (Bradford 1994:18-20).11
The problem is that institutional change is viewed as a rationalist exercise in bringing
everyone (those who labor within public institutions) in line by crafting a set of
instrumental incentives.12
The other problem I see is the continued lack of comparative work in the field,
which unfortunately is no more than an extension of the error committed by public
administration during the heyday of the embedded liberalism era.13 These criticisms
certainly do not mean that public management speaks only rarely to the concerns of
public sector reform and development. In the next chapter, we will see its technical foci

9
reflected in the marketizing reform (see Section 2.6) that comprises a sizeable portion of
most reform packages in Latin America today. Additionally, Latin American reformers
are attracted to the ideas of the new public management (see Section 2.4). I estimate
public sector reform is better positioned to succeed when it takes a cue from public
management and learns how to deal effectively with the market.14
The other critique of the turn to the market relates to the worlds important
development banks and their present agenda for Latin America. The content of Latin
Americas reform priorities have been summarized by The World Bank in two
documents: The Long March (Burki and Perry 1997) and Beyond the Washington
Consensus: Institutions Matter (Burki and Perry 1998). In The Long March, the task is
conceived as one of institutional reforms in five broad policy areas: the development of
human capital, improving financial markets, enhancing the legal and regulatory
environment, increasing the quality of public sector governance and fiscal strengthening.
In particular, there is an explicit reference regarding public sector governance and fiscal
strengthening as preconditions for the reform program. Beyond the Washington
Consensus concentrates only on some of the many aspects contained in the five original
policy areas. The 1998 report focuses on institutional reforms regarding banking and
capital markets, education, justice and public administration. The report uses the new
institutional economics to justify both the need to develop institutions in these markets or
hierarchies, and the prescriptions for each policy area.
The reform agenda proposed by the Inter-American Development Bank (IDB)
(2002) enshrines four objectives: deepen market reforms, reduce the sources of volatility,
accelerate the accumulation of human capital, and broaden the tools for pursuing equity.

10
Numerous policy areas are discussed: trade, financial, tax, privatization, labor, monetary
and fiscal policy, education, factor markets and government institutions. The broadness
of the IDBs list suggests that national priorities and the subsequent sequencing of
reforms will depend on politics and private initiatives. In essence, the two major
multilateral development banks propose a similar array of issues for the region to address
in the near future. The IDBs agenda devotes more attention to consolidating the
macroeconomic stabilization objectives that were the centerpiece of the first generation
of state reform.1 ?
There are several important shortcomings in the multilateral banks enthusiastic
application of public management principles to public policies in developing countries.
First, a majority of the last fiscal years grants and loans went to programs geared
towards policies classified as second generation reform priorities.16 Included among
these reform priorities are measures designed to make public organizations more
transparent and outcome conscious. This general thrust has clear merits. However, events
in Argentina, Ecuador, Paraguay and much of Central America speak to the continued
relevance of economic stabilization policies. When confronted with cascading economic,
political and social crises, the public sector cannot afford to be equipped with working
assumptions and tools designed for calm waters. Effective crisis management goes
beyond shoring up central bank reserves during tough spots, and thus the International
Monetary Fund (IMF) alone cannot address the policy aspects of crises.17
Related to this first point, the multilateral banks assume there is sufficient
political and popular support for cleaning up the public sector, even when development
indicators are stalled or retreating. This assumption flies in the face of historical

11
experiences in most OECD countries. In truth, development generally raced out in front
of public sector reform.18 In turn, when we analyze the road to reform the role of politics
is often central. It is, of course, only fair to remember the banks are not supposed to be
taking political sides. But the failure to make politics and societal support a more explicit
part of their reform frameworks leads to unrealistic expectations about the content and
pace of institutional change. Overall, such an omission is part and parcel to
misunderstanding the overlap between the first and second-generation reforms in the
region.19 Thus, for example, rooting out corruption, introducing competitive pressures
and being responsive to citizens are goals whose time has come provided that favorable
conditions (namely, consolidated gains in living standards) exist.
Second, development as public management falls into many of the same
conceptual and operational traps as development administration. On a programmatic
level, public management mainly emphasizes the technical or quantitative dimensions of
policy choices. Economic analysis, particularly marginal cost, is a useful though probably
over-weighted decision-making yardstick in the hands of managers responding to new
organizational incentives. Equity-based considerations are, at least by conventional
measures since 1980, taking a backseat to policy goals such as individual choice and
private investment.20 Unfortunately the banks development frameworks are unclear
about what to do when private investment fails to materialize and choice becomes
something of an oxymoron as public goods are priced out of reach for poor people. The
big paradigmatic difference between public management and development administration
is reliance on the market as opposed to the state for the realization of development

objectives. Yet development administrations mechanistic conception of institutional
change appears largely alive and well in public management today.
12
Last, a preponderance of the public management literature forgets management is
social activity. This seems somewhat curious because the organizational theory subfield
of public and business administration boasts many excellent accounts of the social
dimensions of management.21 A public management approach to development must find
ways to motivate public employees and earn the confidence of the wider public.
Experience in Western Europe and North America tells us this is no easy task. The task
is made more difficult in the Latin American context where comprehensive reform not
only threatens public employees on a personal level, it frequently represents a betrayal of
long-standing social values. It is in such a context that the banks often-blurry distinction
between institutions and organizations becomes problematic.
The World Bank (1997:7-9) defines institutions as the rules of the game and the
mechanisms through which they are monitored and enforced; they include organizational
rules and routines, formal laws and informal norms. The IDB (2002) similarly
understands institutions to be shared norms that facilitate collective action. Definitions
such as these have been widely accepted and reflect an academic and professional
mainstream that stresses the importance of institutions for collective action and
development. There is nonetheless a problem distinguishing between institutions and
organizations, as well as clarifying what public sector reform means to the whole
business. I argue this distinction matters because reform affects the institutionalization
process, which can go forward or backward with serious consequences for development.
The Banks public sector reform frameworks pay too little attention to how the

institutionalization process can possibly go awry and risk turning institutions into
organizations.
13
Distinguishing between institutions and organizations centers on the issues of
regularity, legitimacy and durability. For Selznick (1957), the organization and the
institution are two different but related systems. Organizations are instrumental, a formal
structure of roles and offices, rationally engineered to achieve efficiency. Institutions
consist of the framework of symbols and values to which members commit themselves
emotionally. Huntington (1965:378) has described institutions as stable, recurring
patterns of behavior, and he points out that Institutionalization is the process by which
organizations and procedures acquire value and stability. According to Uphoff
(1994:200-203), institutions are distinguished by sources of non-instrumental or diffuse
support. In contrast, organizations are sustained by their instrumental value by those who
benefit directly and immediately. There seems, then, to be a case for differentiating
between organizations and institutions.
Of course, in reality, considerable overlap exists. For students of public sector
reform, most public organizations are also institutions. It is clearly desirable that public
organizationsstructures of recognized and accepted roleseffectively serve collectively
valued purposes (Uphoff 1994:202). Public management has important insights for
making the state work better. Improvement necessarily requires change and public
organizations or even institutions can and must change to maintain their relevance in
ordering public life and collective action. However, the banks version of the new public
management underestimates the risk of inadvertently making organizations less
institutional. At the present time in Latin America we likely cannot afford to be balancing

on such a fine line. The next section reviews politically minded development
frameworks, which avoid some of the new public managements pitfalls.
14
The point is not to criticize the multilateral banks for making public management
a priority, nor is it to fault them for omissions outside their mandates. But there remains a
need to ask if a public management orientation to development provides the necessary
leverage for tackling the tough challenges of development. In short, it would be
irresponsible to underestimate the banks experience with the new public management.
For starters, these organizations produce a large percentage of the professional literature
on public sector reform and development, particularly in the context of developing
countries. Ignoring their conceptualizations of public management reform leaves us
vulnerable to overlooking the actual criteria applied to institutional change and policy
choices.23
1.5 Comparative Politics
The well-documented separation of public administration from political science
belies the contribution of comparative politics to the study of public sector reform and
development. Comparative politics has deepened the conceptual reservoir that students of
policy and management can draw on. Likewise, it has broadened the dialogue about the
state, institutions and development. My brief survey begins with the body of literature
whose analysis centers on state or bureaucratic reform. Next, research focusing on
democratic consolidation in Latin America proves relevant despite the general lack of
well-developed discussion on state reform. Third, comparative politics has been the
source of original and influential work on governance. Last, comparativists are providing

15
useful pictures of the development landscape through systematic analysis of
institutions.24
The field of public administration, as noted earlier, properly deserves credit for
initiating the political study of public sector reform. Yet recent, important works are
based in comparative politics. These contributions, which I call state reform as a
political process, are filling the void created by public administrations reluctance to
internationalize its teaching and research agendas.2> As we know, interest in state reform
was piqued during the early 1990s when the consolidation of market-based reforms was
identified as being dependent on reforming the states bureaucracy. A branch in
comparative politics seized onto this aspect of institutional change and seeks to explain it
either via strategic action on the part of the reformers or the confluence of place specific
values and pressures.
Both perspectives believe the content and pace of reform are not determined by a
plans technical correctness. Also, each accepts the centrality of politics in explaining
process outputs. The first school of thought on this matter understands reform as a
process that succeeds or fails on the basis of political calculation and action. Stephan
Haggard (1997:57) states, the design of new administrative structures must be seen as a
coalition-building process. Agents of reform cannot sell reform on its own merits;
instead they must cultivate and neutralize key political constituencies to push state
reform.26 This conceptualization usefully emphasizes the tensions between economic and
political liberalization. It also represents a more accurate depiction of state reform in
Latin America than explanations that rely too heavily on the use of presidential decrees.

16
The state reform as a political process approach analyzes politico-institutional
factors to good effect. For instance, party systems have attracted considerable attention in
this literature. Haggard (1997) hypothesizes that governments backed by disciplined
parties with a majority in the legislature (in which party fragmentation is low) will be
better able to enact significant reform. This arguments explanatory power has proved
mixed because even majority parties are not monolithic and it pays insufficient attention
to stakeholders other than politicians and bureaucrats. Thus, Geddes (1994) counters that
when clientelist resources are pivotal in electoral politics, politicians will not approve
civil service reforms, except under conditions when such reforms hurt patronage-
dependent parties equally. Again, the arguments ability to explain state reform is limited.
In general, these institutional hypotheses seem to lack content, which is to say that
looking where we think the action should be cannot substitute for immersion in the actual
27
venues for action.
To get a better handle on reality, proponents of the politico-institutional approach
include coherence within the executive as a primary independent variable (Heredia and
Schneider 2000). Adding this element pries open the state and accounts for where key
sectors or groups in society are represented in government. Any reform packages,
particularly ones that presume to be at least somewhat comprehensive, face the
challenges of commitment and coordination. Commitment from the upper reaches of
ministries and agencies is a necessary though often insufficient condition for reform
implementation. Additionally, coordination across public (and private) organizations
becomes indispensable. This is hardly surprising given the interconnectedness of most
development priorities. Acua and Tomassi (2000) point out how essential it is to

17
scrutinize islands of resistance within the state and to learn how particular organizations
and institutions become susceptible to uncooperative organized interests.
Overall, this particular approach reflects the political economy background of its
authors.28 Specifically, state reform is viewed as the outcome of political transactions,
which imply the rewriting of the contract between politicians and civil servants
(Tommasi, et al. 2001). Understanding the reform process as strategic interaction
between the states institutions and organized societal constituencies has advantages and
disadvantages. On the plus side, focusing on political institutions is warranted because
merely providing economic recipes or writing rules has been proven ineffective across a
range of cases in Latin America. Instead, reform measures or policies of any kind should
be aimed at the level of institutional reform. By looking at the most tangible political
institutions through a transactional or contractual lens, interactions are framed in an
orderly way, which at least in theory facilitates comparison.
Unfortunately, changing the incentives facing politicians and bureaucrats is easier
said than done. A set of changes as dramatic as Latin Americas economic liberalization
created unexpected obstacles to objectively designed institutional reform. Foremost, the
scope of change exposed the weakness of the private sector at least as much as it did the
public sector.29 Even during growth years the private sector failed to make sufficient
investments in infrastructure, backward linkages and emergent sectors (CEPAL 2002),
despite favorable evaluations of region-wide efforts to rationalize state institutions
(World Bank 2000, Guasch and Spiller 1999). It thus reasons that this school of thought
will have to better account for the wider stream in which the public sector operates.
Doing so requires greater attention to international factors, informal institutions, non-state

18
actors and history itself. In addition to the scope of change, more effort has to be made to
accommodate the pace of change. There is ample reason to believe the pace of reform is
far from constant and its timing can have major consequences for its implementation.30
It is fine to begin by explaining or evaluating state reform by referral to key
features of the political system. However, there appears to be a more maximalist political
process approach that places increased emphasis on environmental and social factors.
Much like the transaction approach, the political nature of state reform serves as the
starting point. Likewise, strategic negotiation figures prominently in the reform process
(Golls 2000). While negotiations take place in a highly politicized environment, the
relevant venues for political give-and-take clearly extend beyond the states formal
institutions. Because of this, negotiation is often understood in a less structured or
mechanical fashion. Public organizations pursue goals in a more ambiguous or fluid
external environment and decision-makers clarify or adjust priorities by understanding
the interests and power positions of various stakeholders. In this way, conceptualizations
of organizational and political reality are based on mutual adjustment rather than
command and control.
Despite this well-established view of the wider political landscape, questions
about how to incorporate state reforms social or cultural context into the moving picture
remain compelling. Public sector reform is purposeful and directed efforts at change, but
the reform process also involves factors that render change difficult and unexpected. To
know more about this unpredictable landscape is to better ascertain how reform plans
relate to politics and society. The study of values and political culture are well established
"3 1
in comparative politics. Among comparativists interested in the question of public

19
sector reform, Judith Tendler (1997) offers an in-depth look at the bases for successful
local government in northeast Brazil. Though she does not specify the relationship
between governance reform and development, her work is reminiscent of Albert O.
Hirschmans sustained focus on the local and social bases for development in Latin
America. Also along those lines, Putnams (1993) famous study of regional government
performance in Italy makes a strong case for the centrality of social capital in reform
outcomes.
A drawback of the former branch (and at times the latter one) of this approach has
been the tendency to attribute reform and development failures to politics. Various
political actions often work against development, but to simply conclude that corrupt or
otherwise inefficient political systems are the root of failure misses the point. With regard
to blaming politics, it seems pointless to maintain a fixation on the deleterious effects of
politics because, while there is obviously some truth to this complaint, it does not prove
particularly useful. Another problem concerns the role of expert or technical advice in the
reform process. Acknowledging the highly political nature of state reform has by no
means produced a clear position on the desirability of apolitical solutions to public
policy. This is ironic given what the development community now knows about the
limitations of technocratic fixes.
Next, perspectives on democratic consolidation have raised the issue of a
working state. In Latin America the successful transition from authoritarian regimes to
democratic ones helped ease some of the pain associated with economic decline during
the 1980s.34 By the 1990s, however, attention increasingly focused on the problems of
democratic consolidation. One of these problems identified with the consolidation

20
process has been state reform.3^ It is noted that vestiges of authoritarian rule can be found
in most Latin American states (Loveman 1994, ODonnell 1994), as well as in many of
the ministries and agencies within the state (Heredia and Schneider 2000, Hopkins 1995).
The states illiberal tendencies thus amount to more than a crisis of representation; they
compromise the credibility of the policy process across various sectors.
The relevance of public sector reform to larger questions of democratic
accountability and consolidation extends beyond the state and civil society. The second
generation of reform has the significant challenge of bringing citizens more concrete
returns on their investment in political and economic liberalization. In particular,
making the state work better is a necessary (though probably not sufficient) component of
shaking the private sector out of its lethargy. The private sector (notably large
enterprises) has for too long been characterized by predatory and parasitic relationships
"XI
with the state. Democratic consolidation is bound to be incomplete unless the unholy
(and incredibly unproductive) alliance between business and state is judged by its actual
economic and social accomplishments. Fortunately, during the 1980-90s Latin America
witnessed an unprecedented level of individual and collective expression outside political
parties. However, civil society and ordinary citizens are still waiting on the public
sectors clear commitment to democracy.38
The downside of this work is obvious enough. Democratic consolidation literature
is perhaps, at best, only tangentially related public sector reform. After all, it grows out of
the transition literature that dealt with regime change, which left little conceptual space or
energy for questions of administration and public policy. In this way, it devotes more
attention to the states formal institutionsconstitutions, congress, chief executive, armed

21
forces and courtsthan it does to the ministries and agencies responsible for the success
or failure of public policies. To be fair, there is greater recognition that we frequently
need to look beyond the formal institutions of government to see how informal or
particularistic processes in and around the state undermine public trust (ODonnell 1994).
But this effort still requires more in the way of concrete policy studies that clearly
demonstrate when and how ordinary citizens are compromised by delegative
democracies. Even when the often-overlooked dimensions of state reform are
mentioned, there is rarely discussion about making public organizations more
professional or effective.
Our third contribution, governance, from the comparative field has probably
achieved the most recognition in contemporary development thinking. Governance is a
concept that emerged in policy circles in the late 1980s in response to the failures of
state-led development and limitations of a purely market-based formula for promoting
development. International organizations such as the World Bank and the United Nations
utilize governance as a sort of universal principle capable of guiding state reform
processes. The UNDP (1996:2) defines governance as the exercise of economic,
political and administrative authority to manage a countrys affairs at all levels. It
comprises the mechanisms, processes and institutions through which citizens and groups
articulate their interests, exercise their legal rights, meet their obligations and mediate
their interests. In development vernacular today, then, governance is a broad and ample
concept. To see its strengths and weaknesses, though, it is necessary to introduce at least
two academic formulations of governance.

22
The first major work on governance in comparative politics was Goran Hyden and
Michael Brattons (1992) edited volume, Governance and Politics in Africa. Hyden
(1992:7) introduces governance as a meta or politics-level process; specifically, it is the
conscious management of regime structures with a view to enhancing the legitimacy of
the public realm. Authority, reciprocity, trust and accountability are the cornerstones of
governance. The rationale for focusing on the political dimensions of development is
twofold. First, development experience in the 1960-90 period rendered meaningless many
old assumptions about building a modem, prosperous state.,l) Both liberal, Western and
communist blueprints for development proved incapable of translating technology and
modem organizational forms into rising living standards. Despite various modifications
to the original plan, and notably an emphasis on bottom-up initiatives, politics appeared
to be the missing piece of the puzzle.
Second, successful regime management in the developing world runs into the long
shadow cast by Western democracies. Governance, conceptually at least, offers an
alternative to the political and social norms of the West. The purpose is to have a
framework for assessing regime legitimacy while avoiding the normative bias inherent in
studies of democracy. The cornerstones of governance attest to its relational nature. Thus,
Hyden argues that governance is a product of human agency and is maintained by the
interactions of states and their societies. At the same time, regime management is
constrained by history and environment, which is to say that we do not make our
circumstances. Governance has earned a considerable following because it is compatible
with the present institutional foci in development and, moreover, it opened a few
analytical doors of its own. In particular, it provides some intellectual order to the study

23
of developing country politics without reverting back to the linear political development
model or merely blaming politics for Africas woes. Of course, the practical challenge for
reformers is to make the state less bloated and more intelligible to society.
Yet governance, as a framework for the study of politics, shows signs of
weakness and has attracted its share of critics. While progress has been made in
specifying and measuring attributes of governance, here the concept is nonetheless too
theoretically abstract to serve as an organizing principle for public sector reform.
Academic conceptualizations will have to provide or attract case studies that apply the
governance framework. Even then, the openness of the concept may lead to descriptions
of formal or informal institutions that are hard to compare. For students of public sector
reform, it will be necessary to simultaneously apply governance on the political and
policy levels, since the latter is where many of the impacts of a reform package manifest
themselves. In addition to how the conceptual framework is employed, where the
framework can be effectively applied also matters. Development problems in Africa are
not foreign to Latin America, but we have to be aware of key differences.
There are critics of development that reject governance as an organizing principle
for understanding development. For these critics, the emergent governance discourse is
flawed because it cannot challenge and perhaps even reinforces the capitalist imperative
built into development. On one level, the functional or performance orientation of
governance often validates the technocratic side of governing while ignoring the
discourse of development. To put it differently, historical-political analysis is foregone in
the sincere rush to solve problems already stamped with one-sided diagnoses. On another
level joining politics and governance obscures the question of authentic democratization

24
(Schmitz 1995:75-76).40 Governance is faulted for being flexible insofar as it proves
compatible with multiple regime types and economic systems.41 The primary complaint
with the governance framework, then, seems to be its perceived lack of transformative
power on the world system level.
Another important conceptualization of governance comes to us from Western
European public administration and policy studies but introducing it here, in the section
on comparative politics, is more useful for the purpose of comparison. In Modern
Governance, Jan Kooiman (1993) emphasizes that we are building conceptual
frameworks in an environment that is dynamic, complex and diverse. In this
environment, modes of social-political governing emerge and evolve in response to social
context. Governing is seen as the whole range of interactions crisscrossing the public
realm. Kooiman refers to the actions and interactions of public and private entities that
steer or manage parts of society (1993:2). Thus, governance is essentially the dominant or
recurrent patterns of governing in the public realm.
Informed by Western experience, the authors in this volume dwell less on the role
of political legitimacy in development than on accounting for how and why new modes
of governing emerge and affect policy outcomes. The objectives of the welfare state are
not indicted, yet the needs and capacities of political and social actors are clearly
reexamined. This particular governance approach addresses the crisis of the welfare state
(Mayntz 1993). It is encouraged that we keep in mind that the crisis of the welfare state
has been a product of financial strains and new ideas.42 This approach momentarily sets
aside the costs and capacities for state action, and explains that the distance between state
and society seemed to preclude the sort of cooperation and coordination necessary for

25
solving complicated problems. Therefore, the state has undergone profound changes,
which have led to new understandings of the reform process and its impact on
development.
The fields of public management and policy (in particular, policy networks),
political economy and sociology have made contributions to the governance frameworks
understanding of Western societies. Again, the governance formulations reviewed here,
not unlike the political process approaches, are to some degree subscribing to evidence
that the state had effectively crowded out much of the problem solving potential in (civil)
society. The Western European literature on governance has refined the governance as
steering conception through the accumulation of many case studies and wider research
projects.41 It remains to be seen how well the governance framework inspired by the
crisis of the Western European welfare state will adapt to Latin America.
The last contribution from comparative politics actually spans a number of
theoretical frameworks, including political economy, institutionalism, state theory and
governance. In general, the common dependent variables are development outcomes of
some sort. The other important similarity among these works is the use of quantitative
data from a large number of cases. The remainder of this section seeks to clarify what a
few of these studies demonstrating a link between institutions and development tell us
about public sector reform.
The turn to the market in development circles renewed an old debate about the
relationship between the size and quality of a states bureaucracy and its economic
performance. The Washington Consensus espoused the view that economic liberalization
in Latin America would produce a virtuous cycle of growth and rising real incomes by

26
applying unfettered competition to investment and allocation decisions. A smaller, more
business like state was also hypothesized to have a positive impact on economic growth
(Guasch and Spiller 1999). Within the Western Hemisphere there appeared to be a slight,
positive correlation between smaller states and higher growth rates (World Bank 1992).
However, later in the 1990s the causal link was still not borne out by the empirical
evidence and there were even contradictory signals about the correlation (CEPAL 2002,
Golls 2000). In Latin America, it appears that private or foreign investment decisions in
growth sectors of an economy are not particularly sensitive to the per capita size of the
state.
The second part of the state size issue concerns the level of government. Giving
greater political voice and policy responsibility to subnational levels of government has
proved to have great appeal in most regions of the world. Consequently, employment in
these lower levels of government rose during the 1990s, while national governments
often saw at least a modest decline in their workforces (Kettl 2000). Advocates for
downsizing the state have not adequately addressed the new distributions of power and
duties between levels of government44 Yet on both sides of the debate there needs to be
more research devoted to comparing subnational levels within and across countries.
There has also been a long-term effort to study the quality of bureaucracy in
developing countries. The Weberian Comparative Data Project, headed by Peter Evans
and James Rauch, has collected data for 35 countries in the last ten years.45 National
bureaucracies are rated in terms of meritocratic hiring, internal promotion and career
stability, compensation and stateness. Not surprisingly, it is found that meritocratic
hiring corresponds to higher levels of bureaucratic quality and lower levels of corruption

27
(Rauch and Evans 2000). Bureaucratic quality was among Campos and Nugents (1999)
five independent variables that probed relationships between development performance
and the institutions of governance.46 Among the East Asian cases, bureaucratic quality
stands out as the primary institutional determinant of development performance, while in
Latin America this variable is not the strongest predictor of outcomes.
The clearest advantage of this research for the study of public sector reform is its
unambiguous concern with bureaucracy. The studies provide a useful reference point for
framing more detailed analyses of state reform (Heredia and Schneider 2000). Yet a clear
drawback of the approach is its inability to explain either where bureaucracies come from
or where they are going. Thus, even though the studies confirm a link between high
quality bureaucracy and development success, specifics about reform options and
tradeoffs are simply absent from the analysis. The measurement of bureaucratic quality is
problematic but moving in the direction of public sector quality measures adds small but
welcomed layers to reform research. Hopefully, the link between quality bureaucracy and
positive development outcomes will help focus reform agendas on improving the public
sector rather than ignoring or indiscriminately downsizing it.47
The last point that relates to the size or quality of the state is a historical one. As I
said already, quantitative cross-national studies do not offer enough a wide enough
picture of the reform landscape. To be fair, Evans (1995) and others provide more
informative case studies and state analysis, and this message seems relevant as Latin
America struggles to create economic opportunities in a more market-driven world than
we knew thirty years ago. I would agree that the historical experience of the West has
real lessons. Taking the United States as an example, it certainly appears that building a

28
large, professional bureaucracy was by no means superfluous or detrimental to
development when it came time to improve infrastructure in poor or remote regions and
pull the country through the Great Depression 48 This is not a matter of placing todays
reform experience in Latin America in a historical context that no longer exists; it seems
precisely a matter of paying attention to the socioeconomic and political contexts.
Theories of bureaucracy or, more generally, the state have a chance to inform the reform
dialogue if concrete studies are forthcoming.49
There is also a growing interest in measuring the performance of governments,
using indictors of governance and institutional quality. This body of research attempts to
uncover relationships between quantifiable governance or institutional variables and
development. Thus far, governance studies pursuing large-N samples have opted to share
the democratization literatures concern with the civil liberties and development. For
instance, on the micro level, it has been found that civil liberties are positively related to
the successful implementation of World Bank-financed development projects (Isham,
Kaufmann and Pritchett 1997:237). The appeal of traditional democracy indicators can be
explained, in part, by their long-standing availability.50 The other reason governance
indicators fail to reflect the two governance frameworks reviewed earlier in this section is
perhaps a matter of confusion or divergent objectives.
More specifically, cross-national tabulations only become viable when
governances important characteristics are decided on and measurement issues resolved.
For example, Campos and Nugent (1999) reckon that governance has five components
the Executive, the bureaucracy, rule of law, character of the policy-making process and
civil society. Measurement is accomplished through existing data sets with less than ideal

29
data for their purpose. The measurements prove problematic because they are static and
poorly designed. Bureaucracy, for instance, is captured by the speed with which the
bureaucracy processes customs clearances and requests for foreign exchange remittances.
Generalizing about the public sector based on such a narrow concern of foreign
businesspersons ought to be worrisome. In addition, the openness or transparency of the
policy-making process is actually not measured at all, instead being wholly created from
the other four characteristics. It seems the policy-making process has been deemed
important enough to be included as an explanatory variable, though it is actually not
analyzed or measured at all.
It is only reasonable to be skeptical about the relevance of significant
relationships. If one understands governance as a political or social landscape full of
process related variables, then decisions about public sector reform cannot be informed
on the basis of thin explanations, nor can the road to reform be well understood. Without
a doubt, better data sets will depend on the development of full-fledged sample surveys
designed specifically to measure governance.51 But case studies, preferably comparative
ones, remain the most viable method of inquiry into the causes, conditions and problems
of public sector reform.
My last concern here is with the paucity of energy spent on studying provincial
reform. Development studies that depend on the collection of cross-national data or the
availability of existing data sets typically ignore institutional change on subnational
levels of government. There are two main reasons for this trend. First, there is sometimes
a lack of accurate statistical information in developing countries. For these countries, this
problem is even more pronounced in lower levels of government. This, of course, can be

30
contrasted with OECD countries where more and better information exists for all levels.
Likewise, even when interested outside parties (e.g. United Nations, World Bank, or
academic researchers) may be compelled to systematically catalog development
experience, creating data sets is a time consuming and expensive proposition that does
not pay immediate dividends. Second, research based on national level findings is
appealing because the results are often thought to carry greater theoretical weight.
1.6 Merging Streams
Approaches to development have shifted considerably in the last four or five
decades. Institutional reform has become a focal point in development strategies today.
Public sector reform, as I have defined it in Section 1.2, is for better or worse the
frontline of institutional reform in much of Latin America today. Unfortunately, the
concerns of public sector reform have been conceptualized incompletely in the literatures
surveyed here. The impetus for improved research actually has two dimensions. First of
all, the road to reform passes through a complicated landscape and the challenge is to
provide some conceptual order without privileging managerial or political approaches.
Overall, managerial approaches misunderstand the context for reform. Political
approaches have filled in the institutional context and the politics of reform processes, but
they ignore the organizational level where most government reform actually takes place.
Second, and foremost, drawing on administrative or managerial studies and comparative
politics is a means for contributing to the practical debate over how to proceed through
the present stage of institutional reform.>2 Merging conceptual streams seems the most
promising way to answer important questions about public sector reform.

Another way to look at how this projects conceptualization of public sector
reform fits into related streams of scholarship is to compare it in summary form to
31
governance and public management (see Table 1-1). The rationale for further
comparisons between these three approaches is simple enough: 1) each makes a serious
effort to occupy the operational and intellectual space held by development
administration during the 1960-70s; 2) whereas other approaches reviewed in this chapter
(though they are useful for understanding the road to reform) do not seek this space
because they are not prescriptive; 3) and ultimately this research project has been most
influenced by governance and public management. It seems appropriate to focus on
differences in conceptual level, centrality of politics, research subject, the key to
development and applicability to Latin Americas Southern Cone countries. Clearly this
is not an exhaustive breakdown of major points of interest, and the classifications are
simplified for the purposes of comparison.'^3
Summarizing these three approaches to reform attempts to give a basic sense of
what each one offers and how the public sector lens has a chance to merge conceptual
streams. Governance, public sector reform and management reside on different
conceptual levels. Governance hopes to provide a framework for understanding regime
maintenance through state-society interactions. On this meta-level, the political system
and politics of developing countries are central for tapping the strengths of society and
fostering an environment where development is possible. For affluent, liberal societies,
the focus is on what patterns of governing mean to democracy and vice versa. So, then,
the recurring research subject is the political system with society. Just as drawing on the
core strengths of society is central to regime maintenance, the key to development is

social capital (Hyden 1998), which according to Elinor Ostrom (1990:183-184) accrues
to collectivities through the functioning of shared norms and patterns of reciprocity.
32
Table 1-1 Summary Comparison of A
pproaches to Reform
Conceptual Level
Centrality of
Politics
Subject
Key to
Development
Applicability to
Southern Cone
Governance
High
Political System
with Society
Social Capital
Med
Public Sector
Med
Organization in
Society
Policy Steering
High
Management
Low
Organization in
Market
Economic
Rationality
Low
Reform from a public sector perspective is less focused on regime maintenance.
There is, instead, a focus on change in public organizations. Thus while politics plays a
major role in explaining how a particular reform package comes together, the political
system itself (liberal or otherwise) is not the research subject. Instead, the point is to
capture patterns of governing on the policy level (i.e. the organization in society) where
both the means and ends of state action come together. Because the professed aim of
reformers in this study is the establishment of public-private partnerships, policy steering
serves as the key to development.^4 In this sense, policy management calls for the
integration and involvement of outside stakeholders. Social capital is an essential input,
but this approach concentrates more on how public organizations fare in facilitating
socially credible action networks.
Public management reform differs from the previous two approaches. In general,
the centrality of politics in public management recommendations is low. Part of the
reason for this stems from the primary source of inspiration for the new public
management approach. Microeconomic theory, particularly transaction costs and
principal-agent since the mid-1980s, has focused greater attention on inefficiencies in

33
public sector activities. A great deal of this approachs attention is spent on the micro
level-the organization or firm in the market. This focus makes central the role of
incentives and competition, technology and expert know-how; it likewise sees clients and
customers where governance and public sector reform see citizens and stakeholders.
Overall, most research on this conceptual level does not presume to have answers for
development, but it is implied that managers and organizations making the state more
amenable to the market contribute to development.
The conceptual level we operate on has substantive effects on the type of research
questions open to us. Likewise, the salient reform issues in a particular country or region
logically have an impact on our choice of analytical approaches. In Latin America, many
of the high-profile institutions of the state-the electoral system, the Congress, the
Presidency, and the Courtsunderwent significant changes in the first decade or two
since the return to democracy. Economic liberalization had also progressed fairly quickly
for much of the hemisphere." Today, the prime areas for research are, on the one hand,
social and political responses to economic downturns; and, on the other, lower-profile
bureaucratic reform meant to finally improve the problem-solving capacity of the public
sector in the current market environment. Looking at this agenda, there is no doubt a need
for multiple streams of scholarship. For the second of the prime research areas identified
here, a public sector approach is the most applicable to Argentina and the countries of
South Americas Southern Cone, while the other two approaches are also valuable for
understanding issues relevant to this study.
Notes
1 Research questions and approaches have always varied considerably; see Bradford (1994), Peters (1994),
Esman (1988). It seems safe, though, to contend that we can locate the vast majority of research questions

34
within the dominant development paradigm of their day. Today, for example, there is a strong interest in
how liberal institutional arrangements facilitate development.
2 The pervasiveness of reform initiatives in contemporary democratic polities makes some observers
skeptical about the credibility of such proposals. It is noted that reformism has become something of a
rhetorical device rather than a substantive and plausible course for change; see Fox and Miller (1995). I am
not, however, convinced that proposals to change the state and its apparatus are mainly political rhetoric.
While reform is defined by politics (and is often useful to political agendas), I agree with Peters (1996) that
most of these initiatives are serious attempts to make government work better.
3 Certainly, in recent years, many accounts of reform design and implementation shed light on why such an
orientation continues to be popular; see Guasch and Spiller (1999), Kettl (2000). One ought also keep in
mind earlier works offering analysis of the technocratic bent in Latin American reform since the 1970s; see
ODonnell (1973).
4 It is true that technical aspects of reform, new information systems for instance, may not redistribute
power within the state. However, there is increasing recognition that even managerialist or means-centered
reform requires a more systematic inclusion of politics; see Pollitt and Bouckaert (2000), Tommasi, et al.
(2001), Tendler (1997).
5 Despite the rise and fall of the developmental state, the ascendancy of the market and neoliberalisms
subsequent embrace of getting the institutions right, development thinking continues to erroneously view
the organizations that shape and implement public policies as engaged in a technical or scientific endeavor;
see Turner and Hulme (1997).
6 The discussion about accountability is analyzed in Chapter 5 of this work.
7 These studies come from the fields of economics, political science and public policy. Of particular note;
see Golls (2000), Evans and Rauch (1999), Mattos (1989).
8 Fred Riggs was probably the trailblazer in this regard with his conceptualization of the prismatic society.
Riggs and others attempted to capture the essence or ecology of public administration in modernizing
societies. Such efforts, though ambitious, failed to serve as the basis for theory-building in development
administration; see Esman (1988).
9 My contention is that development administration remains useful for the study of public sector reform in
contemporary Latin America. But, like Milton Esman (1988:128) said, The democratic ethos had begun to
supplant the elitism of the modernization paradigm. Development would require less public administration
and more public policies that facilitate structural changes, liberate individual energies and reward local self-
help. This observation continues to be relevant; in fact, surveying development administration is an
incomplete exercise unless public sector reform research draws on insights from public management,
governance and comparative politics.
10 Reagan and Thatcher were clearly strong proponents of deregulation and public sector downsizing.
However, their administrations ideological zeal did not produce comprehensive public management
reform in the United States and Great Britain. It has been argued that successive administrations in New
Zealand truly understood the economic bases of their reform agendas and thereby won over upper level
public managers through the consistent application of those microeconomic principles; see Kettl (2000).
11 One of the New Political Economys obvious breakthroughs is the development of a well-specified
political framework, where decisions or actions are explained systematically by way of assumptions about
self-interest. Bradford (1994) compares the NPE approach to othersPluralist Theory, Technopol Model
and Partisan Theory to show that its political framework often resorts to explaining empirical evidence
post facto because incentive-centered reforms do not work in a frictionless environment.

35
12 The most frequent criticism is over-reliance on instrumental rationality at the expense of procedural
rationality or social forms that may explain the motivations of public managers. Konig (1996) and Pollitt
and Bouckaert (2000) observe and criticize the rational choice model at length.
13 Baker (1994) and Peters (1994) offer good accounts of the inadequacies of the research agenda pursued
by public administration in the post-World War Two era. See also Brodie (1996) for a clarification of
embedded liberalism, as well as ideas on why todays research agenda should include understanding the
social bases for state reform in rich and poor countries.
14 The point is not that managerialism ought to dominate the composition of public sector reform.
Instead, I am echoing many voices skeptical of neoliberalism who nonetheless acknowledge problems
associated with state control and accept the expanded role of private stakeholders, including the market.
This goes back to my earlier observation that most research operates within the recognizable bounds of
todays development paradigm.
15 This is somewhat curious given the relatively small role the IDB played in the economic stabilization
phase. Perhaps the IDB views the persistence of high interest rates in most Latin American countries as a
problem related monetary policy, which has often been among the first issues tackled in stabilization
measures.
16 According to the World Bank (2000:3, 16-18), all forms (lending and non-lending) of governance related
assistance have risen both in real terms and as a percentage of Bank disbursements.
17 There are two related sides to this coin: the multilateral Banks are still not particularly adept at
supplying populations in immediate need of social services with timely relief; and the IMF, at least in the
case of Argentina, has proved inconsistent in its monetary policy prescriptions and consistently short
sighted in its fiscal policy ones. The Nobel Laureate economist Joe Stiglitz makes similar points in an
interview with one of Argentinas leading newspaper, La Nacin (10-13-01).
18 Historically, public sector or civil service reform lags behind economic development. A thorough
introductory public administration text, such as Garvey (1997), will often recount at least the U.S. and
British cases. Many other developed country cases conform to this development first, then reform pattern.
19 First-generation reforms, typified by privatization and economic stabilization in newly restored
democracies, were often managed by insulated, inner-circles in the Executive. Second-generation reforms
involve lengthier processes of change, and thus are more contingent on political factors. See Saba (2000),
Acua and Tommasi (2000).
20 CEPAL (2002) has made a greater effort to explain rising socioeconomic inequality in the region than
either of the development banks surveyed here. While the World Bank and the IDB are very active on the
project and program levels in fighting poverty in Latin America, there is little systematic evaluation of non-
market alternatives in various policy sectors.
21 For decades, public and business administration scholars have identified important social, cultural and
historical dimensions of management; see March and Olsen (1989), Olsen (1988), Selznick (1957).
22 Attempts to apply new public management principles have been mixed; see Chapters 5 and 10 in Turner
and Hulme (1997). In particular, comprehensive plans have not worked on the national level in such
countries as the U.S., Canada, and France; see Peters and Savoie (1994), Pollitt and Bouckaert (2000).
Given the difficulties in realizing major overhauls in administrative systems, such a strategy is unlikely to
work in Latin America on either the national or subnational level.
23 Public management principles are having an impact on public sector organizations and policymaking,
often. Consequently we should pay ample attention to how these principles are operationalized into tools
for evaluating alternatives.

36
24 This designation is problematic: Comparativists concerned with various research questions engage in
systematic institutional analysis. I use systematic to mean large-N studies.
25 Baker (1994), along with others from the Bloomington School of development, makes a good case for
the need to internationalize American public administration and policy programs.
26 Przeworski employs this line of explanation in Democracy and the Market. See, for instance, his
discussion of sectoral interests in Argentina (1991:52-53).
27 Other approaches from the field of comparative politics, notably governance and historical institutional
ones, extend analysis beyond the formal institutions of government.
28 The political economy background that 1 refer to here encompasses only a limited portion of the political
economy theoretical spectrum. Specifically, these authors build on theoretical scaffolding that includes
transaction costs and principal-agent. There are, of course, macro-based approaches to political economy.
29 Azpiazu (1998) and Saba (2000) make this point. Indeed, with the benefit of hindsight, more observers
may seek explanations for the unimpressive performance of the private sector during robust growth years of
the 1990s.
30 Haggard (1997), Heredia and Schneider (2000) and others do focus on the timing of decisions. However,
they pay too little attention to the pace of public sector reform. This reflects, 1 think, reluctance (or perhaps
unfamiliarity) on the part of political scientists interested in institutional reforms to explore change on the
organizational or policy level.
31 It can be argued that organizational culture is a distinct venue of study from political culture. Yet the
study of values and political culture stands to enrich inquiries into public sector reform.
32 Culture, too, attracts criticism as an obstacle to reforming administrative systems and development. And,
much like the case of blaming politics, I argue the usefulness of such observations is limited.
33 It may, perhaps, be premature to conclude a consensus is emerging on how politics impacts public sector
reform. But, on balance, the literature today is far more convinced politics plays a major role in the success
of failure of reform. On the surface, then, it seems curious that reform packages often seek to keep values
out of the public sector. For examples of apolitical reform and policy advice; see Caballero and Dombusch
(2002), Guasch and Spiller (1999), Tommasi, et al. (2001).
34 The case of Argentina is instructive. Argentine society was relieved by the return of democracy, which
made patience possible in the face of major economic problems. Alfonsins (1983-1989) administration
dealt with defining the roles of key institutions such as Congress, the Armed Forces and political parties.
However, it did not deal with the issues of public sector reform; see Porto (1990), Saba (2000).
j5 By state reform I refer to not only to revamping institutions such as the Courts or the Executive, but also
to making the policy process and public organizations more transparent and less arbitrary.
36 There is a modest, though growing, trend that shows public support for economic liberalization and, in
limited cases, democracy is falling, see Lagos (2001) based on data compiled by Latinbarometer in
Argentina, Brazil, Chile, Ecuador and Paraguay.
7 One may argue the weakness of the private sector is either 1) a long-standing product of an international
system that favors corporations in developed countries; 2) or a product of the import substitution
industrialization (ISI) era. Subscribing too strongly to either viewpoint is overly simplistic. In the Argentine
case; see Sawers (1996) and Azpiazu (1998) for methodologically distinct but equally insightful analyses of
past and present problems with the private sector.

37
38 In Latin America the public sectors role in environmental management and development, for example,
highlights many of the states illiberal tendencies; see Ferrads (1998), Hopkins (1995), Quiroga, et al.
(1994), Ribeiro (1994).
39 Foremost, by the late 1970s, the assumption that state planning was the key to development had been
widely discredited; see Turner and Hulme (1997) for discussion of this shift.
40 This is basically the criticism leveled against the multilateral development banks use of governance.
41 Again, there is considerable dissatisfaction with the way multilateral banks have finessed good
governance into a faceless, universal principle, which stretches across various regimes and capitalist forms;
see Merrien (1998), Schmitz (1995). In this sense, I believe much of the criticism, when directed toward the
academic conceptualizations reviewed here, is at least partially misguided because the true quarrel appears
to be with the multilateral banks.
42 Financial strains on the welfare state are not unique to Western Europe. Other countries, such as the
medium to medium-high income ones in Latin America, have had to face similar forces; see World Bank
(1997). Fiscal stresses are clearly one set of factors; see Lpez Murphy and Muscovits (1999). The other set
of factors can be described as motivational; see Mayntz (1993), Touraine (1994).
43 The deepening of the European Union has reinforced this trend in Western Europe scholarship.
44 For example, the IMF is pressing Argentina to impose deep personnel cuts on the provincial level.
Studies on such questions would be highly relevant.
45 Many Latin America countries, including Argentina, are among these 35 developing-country cases.
Evans and Rauch have coded qualitative responses by mostly academic experts.
46 The other independent variables are rule of law, strength of civil society, executive accountability and
transparency in policy-making.
47 In my estimation, this is certainly an enduring lesson of Evans many fine works.
481 chose the U.S. as an example because the notion that development was wholly accomplished by private
initiative is something of a myth. Of course, for the modem nation-states of Europe, the major role of the
state and its bureaucratic apparatus in development is far less ambiguous.
49 In other words, looking back into the past is crucial to understanding reform today. But there remains a
need for updated studies that demonstrate when and how the state can further development objectives.
50 For instance, the Freedom House indexes of political freedoms and civil liberties were used in cross
country research long before any of the other evaluative indicators. Thus when the precise indictor sought
by a researcher is not available, political freedom and civil liberties ones are often used.
51 Progress is being made in this regard. Of note, Goran Hyden and Julius Court, under the auspices of the
United Nations, are presently compiling responses from their World Governance Survey.
521 contend that being well schooled in research from comparative politics and public administration or
policy is an advantage for the job at hand. Peters (1994) provides a strong case for the necessity of drawing
on both research traditions.
53 Table 1-1 is not meant to be an exhaustive summary of the streams of thought surveyed in this chapter. I
opt to compare reform as seen from a public sector angle to governance and public management. These
two approaches, conceptually and empirically, aid greatly in informing my understanding of the reform

38
processes playing out in Argentina. Neither are the classifications used here exhaustive. Mainly, I want to
point out how these approaches vary in general terms along a few basic but important dimensions.
54 The governance approach that emphasizes policy steering and policy networks is closely related to what I
refer to the public sector reform approach. This particular governance approach does not, however, frame
issues such as civil service reform.
55 According to the World Bank (2000:7-11), economic liberalization was truly the centerpiece of first-
generation reforms. See also Guasch and Spiller (1999).

CHAPTER 2
THE ROAD TO PUBLIC SECTOR REFORM
2.1 Introduction
Argentinas most recent and ongoing encounter with the economic abyss raises
serious questions about the adequacy of public sector reform on the national level. On
many counts, the countrys attention to the institutional backbone of the states
restructuring process compares favorably to efforts in transitional economies around the
world (Guasch and Spiller 1999, Chapter 3).1 In fact, it has been said that Argentinas
reformers successfully slipped through the window of opportunity after the 1987-89
hyperinflation crisis (World Bank 2000:27). But despite considerable accomplishments in
restoring democracy and opening the economy, remaking the state remains an ambitious
and contentious project. The necessity for a change-centered agenda is not surprising in
light of Argentinas persistent economic crisis and public anger at state institutions. We
quickly see the national level landscape includes unfinished business as well as
accomplishments.
A similarly important, though far less well understood story is unfolding on the
provincial level. Public sector reform on the provincial level is in its early stages (Esteso
and Cao 2001, Silvera 2001). But the time appears right to investigate the road to reform
in places like Entre Ros and San Luis, as well as other provinces.2 This chapter
introduces a model of public sector reform adapted from Pollitt and Bouckaerts (2000)
model of public management reform. In the sections that follow, important sets of
39

40
factorsArgentine federalism, economic, political, and administrativeare introduced
and analyzed from the provincial context. This provides a window for seeing provincial
public sector reforms influences. The latter part of the chapter classifies the content of
public sector reform through three sets of issuesprofessionalization, marketization and
democratization. It also explains a few of the elements included in each set and provides
at least an overview of why these issues have currency.
2.2 Argentine Federalism: Framing Provincial Public Sector Reform
Argentina is a federal republic consisting of twenty-three provinces and a federal
captol.5 Provinces have political representation in the national Congress and small-
population provinces are significantly overrepresented in the Senate, which gives them
enormous political power at the national level.6 As late as the 1850s, federalistas sought
to interest domestic and foreign producers in economic activity in their heartland along
the Paran River (Rock 1987:120-25).7 Ultimately, though, financial and commercial
interests from Buenos Aires imposed their vision of a seamless, modem, and European
nation on the provinces (Rock 1987), culminating in the 1862 Constitution that
established a federal system of government. Argentina prospered during the following six
or seven decades even as most parts of its interior remained economically stagnant. In
terms of administrative systems, the central government followed continental European
models of professional bureaucracy, while provincial governments found neither the
political nor the socioeconomic impetus to do so.8
Table 2-1 Core Propositions Concerning Reform in the Provinces
PI. The division of political power and policy jurisdictions is a product of historical
compromises between the Argentine state and the provinces. This institutional framework
strongly affects the structures, functions and values of public organizations at both levels
of government.

Table 2-1. Continued
41
P2. In federal systems, there are typically strong (downward) redistributive fiscal
mechanisms. Argentina has been no exception. Changes to the norm of coparticipacin
constitute a major departure from the old order. Therefore, provincial public sector
reform has the significant responsibility and challenge of providing an adequate
replacement.
P3. Sudden changes in the federal-provincial framework upset existing balances of
political power. Comprehensive reform is also difficult for programmatic reasons (i.e.,
relearning too much at once takes people away from doing their jobs). Public sector
reform in the provinces is therefore unlikely to be comprehensive.
P4. Nor is public sector reform likely to be uniform across a large, regionally diverse
federalist country. One size will not fit all the provinces, as the evidence from Entre Ros
and San Luis helps illustrate.
P5. The relationship between Buenos Aires and the interior has not been one of the center
draining resources from the periphery. Instead, Argentine federalism has transferred large
amounts of resources to the poor provinces with disappointing results. Provincial public
sector reform thus represents an opportunity to improve on those results.
In the midst of the Great Depression, Argentina altered federal-provincial relations
with the passage of the Coparticipation Law, la ley de la coparticipacin (1935), which
gave the provinces a share of federal revenue (Prez 1986).9 The logic behind
institutionalizing a downward redistributive fiscal mechanism reflected two realities. First,
the Argentine state planned to grow (public employees and expenditures) as it assumed a
greater role in industrialization and social policy. Second, provincial backwardness was
seen as a national problem. Successive administrations, civilian and military, handled this
political issue by targeting resources throughout the system so as to discourage
independent alternatives to development (Porto 1990).10 In this way, expanding provincial
bureaucracies was foremost an investment in political relationships rather than one in
administrative capacity.


41
The point is not that institutional inertia has stamped out change in Argentina's
federal system. In fact, the century-old Argentine brand of centralized federalism
(Sloan 1984) has been changing to accommodate new fiscal and political realities. Carlos
Menems first administration moved a number of important policy portfolios from the
central government to the provinces. Yet evidence from the last ten years shows
provincial ministries have managed these policy domains in virtually the same manner as
national ministries, despite the fact the main reason for devolving responsibility was to
improve policy outcomes (Artana 1998). However, this growing degree of expenditure
decentralization appears to be an outlier when evaluated within the context of the
countrys vertical fiscal imbalance (Tommasi, et al. 2001:150).11 In other words,
institutional arrangements such as coparticipacin prove resilient because they represent
historical compromises between the Argentine state and the provinces.
So we see that while change has been part of the policy landscape in this federal
system, improved performance depends on public sector reform on the provincial level.
What additional core propositions concerning the federal-provincial relationship frame
the challenge of public sector reform? Argentinas federal revenue-sharing arrangement
is one of the institutional cornerstones that impact provincial public sector reform. Even
small changes in coparticipacin represent potentially significant departures in what the
state does and how it ultimately pursues those goals. Since coparticipacin is one part of
the legal-constitutional bedrock that frames negotiations between the two levels of
government, an alternative arrangement will not automatically be conferred institutional
status. For provincial public organizations to operate effectively, they will require an

44
institutional framework that is considered fair and legitimate. Provincial reform has the
13
significant challenge and responsibility of providing a socially intelligible replacement.
A couple of additional points should be made about the centrality of the federal-
provincial relationship in the model. First, judging from the shape of national level
reforms in many countries, institutional frameworks do not prove particularly pliable to
comprehensive reform efforts. Reformers, instead, settle for incremental changes that are
feasible in particular sectors.14 Moreover, no matter how pure or comprehensive the
designs of well-placed reformers, reforms typically belie any single design or designer
(Goodin 1996). The relationship between Argentina and its provinces is sufficiently
complex and historically grounded that wholesale changes have proved exceedingly
rare.1 5 Legal-constitutional pillars provide continuity and set constraints on the reform
process. The centrality of a cumbersome federal-provincial relationship also speaks to the
fact there is no united reformist group, elite or otherwise, defining what is desirable, let
alone what is feasible.16
Second, the resolution of the federal revenue-sharing negotiations, which was
finally achieved in mid-November 2001 and subsequently undone when De la Ra
resigned a month later, does not create an easy-to-follow recipe for provincial reform.17
The federal-provincial relationship merely assists us in making the choices on the
provincial level legible. From there, one should fully expect to see the limits of rational
planning exposed. As Goodin (1996:28) states, Institutions are often the product of
intentional activities gone wrongunintended by-products, the products of various
intentional actions cutting across one another, misdirected intentions or just plain
mistakes. Public sector reform often takes the shape it does because efforts at

45
optimization are thwarted by cognitive limitations, unintended consequences, and
organized opposition (March and Olsen 1995). Strenuous opposition to reform may
reflect divergent values, and it is thus important to build the process around testing where
public managers and private stakeholders envision the comfort zone for provincial
reform.18
Attempts at comprehensive reform raise hard questions about how public
organizations can simultaneously relearn their business while effectively serving citizens.
Likewise, the frame of reference employed in this study is skeptical of attempts to treat
the reform process as an exercise in rational planning. With those two points in mind, it
follows that sudden, sudden or dramatic changes are the exception to the norm. The
institutional bases of the federal-provincial relationship have historically insulated the
provinces against unwanted reform. From the provinces perspective, avoiding politically
unpopular measures is logical. But the problem really compounded in the second half of
the 20th century.19 Not only was unwanted reform avoided, relatively painless and
potentially advantageous measures were viewed with suspicion and ignored.
Today, in the face of falling living standards and social unrest, provincial officials
wonder about what kind of a state is most likely to reverse that trend and what steps they
should take now. These officials are not alone in asking such a fundamental question. In
general, proponents of a leaner, more business-like state believe the incompleteness of
structural adjustment cause chronic cycles of fiscal imbalance (Guasch and Spiller 1999,
Peterson 1997, Tommasi, et al. 2001). Meanwhile, skeptics of the small-state vision
espoused by multinational corporations and the International Monetary Fund (IMF)
instead argue that cross-national studies do not demonstrate a causal link between public

46
sector size and economic growth or human development (Evans 1995, Golls 2000).
Argentinas economic fortunes since the 1930s caution against simplistic arguments
about too much state versus too little state.20
The relationship between the federal government and the provinces lies at the
heart of the provincial reform model (see Fig. 2-1, p. 42). As much as possible, I have
sought out the common points and experiences within an admittedly complex and diverse
federal system. And though I expect regional similarities to emerge, the road to reform is
bound to differ across provinces. The core propositions discussed already reappear
throughout the model and will hopefully inform the debate about public sector reform
and development in what has become a difficult and uncertain time for Argentina. It is
next necessary to look closer at the factors that determine the content of and prospects for
reform.
2.3 Economics Factors
In Latin America, experience with so-called first-generation (regularizing checks
and balances among the branches of government, privatizing state industries, etc.)
institutional reforms provided both fans and critics with economic-based explanations for
their arguments. For market enthusiasts, reform efforts in the 1990s reflected a long-
overdue attention to economic signals by the regions governments (Acua and Tommasi
2000, Guasch and Spiller 1999). Governments, by and large, followed free market
economic prescriptions. Yet assuming economic factors propelled, much less clinched,
reform trajectories is misleading. The reality of economic liberalization and state reform
has been more complicated. This perspective overlooks the political and social support,
or least willingness, for market-friendly reform. One needs only to examine past

economic crises to see that rational arguments for, say, trimming budget deficits or
deregulating the economy have generally been ignored (Pastor and Wise 1999).
47
Table 2-2 Propositions Concerning Socioeconomic Factors
P6. Second-generation reforms (in particular, public sector reform) will be relatively less
defined by their economic context than first-generation ones.
P7. To the extent economic factors shape reform packages, they reinforce a top-down
process. Severe economic crises produce top-down (outside-in) effects on provincial
reform, weakening previous institutional constraints while abbreviating the time-span for
developing new ones.
P8. Cyclical deficits are, contrary to rational expectations, generally incapable of
prompting reform that can either be implemented or sustained.
P9. Demographic and value shifts are highly relevant to the reform landscape, but overall
the salience of such factors is relatively muted unless they find support within the
political or administrative systems.
For critics of reform, it seems equally tempting to assign disproportionate
explanatory power to economic factors. A central role is thus assigned to the structural
characteristics of the global economy. In this way, pro-market reformers simply carry the
day by selling the state to the highest bidder, whether foreign or domestic. However,
understanding reform is not ultimately enhanced by discounting the broader ideational
power of market solutions. First-generation reforms in Argentina, for example, enjoyed
substantial electoral support (Pastor and Wise 1999).22 Thus, using the crisis of the
developmental state as our reference point, it is by no means clear that economic factors
were decisive in the adoption of many first generation reforms. Rather it appears the
rationale for market-friendly reform was partnered with social support, particularly in the
political and administrative systems.

48
The irony, then, is that arguments for and against too much state and too little
state each relied too heavily on the influence of economic factors over the reform
process. Hindsight tells us these explanations are incomplete. Moreover, they are
precisely the wrong frame of reference by which to inform second-generation reform,
particularly as it applies to subnational levels of government. When we ask the question
whats next? it seems safer to treat economic factors as sets of signals or thresholds that
constrain choices than as telltale signs with incontrovertible meanings for the people and
organizations involved in the process of institutional change.
Among economic factors, fiscal deficits are a logical starting place. Fiscal crises
have been recognized as a triggering mechanism for public sector reform (Heredia and
Schneider 2000, World Bank 1997). And with most of the easy budget balancing options
like selling state assets already tapped out, it reasons that rightsizing (i.e., layoffs) and
retooling the civil service is inevitable. For better or worse, the answer is yes and no.
Recent developments in Argentinas national government support seemingly support the
hypothesis that pressure to balance the books ensures rightsizing the civil service. But if
one examines the relationship between fiscal deficits and civil service restructuring
across OECD countries, there is little correlation either in terms of action or timing
(Pollitt and Bouckaert 2000). Fiscal deficits in the 1 -4 percent of GDP range have not
prompted major structural changes in most OECD countries civil service.24 Likewise,
fiscal deficits often exist for years and then suddenly at a moment of budgetary calm
substantive public sector reform finds acceptance.2:1
Latin America may possibly represent a less well-insulated set of cases. Fiscal
deficits are a luxury available only to those states that print money or have the confidence

49
of creditors. Argentina has lost former lines of credit, and thus it seems the Argentine
case could affirm the causal link between deficits and reform.26 However, two issues
stand in the way of assigning significant explanatory power to this variable. First, legal
obstacles stand in the way of rightsizing the civil service at all levels of government.
Conceivably, labor laws are alterable; but my sense is the process for debating and taking
action on this front would be lengthier than either an economic recovery or a regime
meltdown. The bottom line is that a political or administrative order tends not be
rewritten as a result of fiscal deficits, even in the face of constraining and persistent ones.
Second, federal systems pose unique problems for ascertaining the impact of
deficit spending. In most federal systems, deficit spending by the second level of
government is constitutionally forbidden.27 In contrast, Argentinas provinces are allowed
to incur deficits with permission from the federal government. The rightsizing and
retooling aspects of public sector reform on the provincial level are immeasurably
complicated by this arrangement. By now, there is evidence that the severity of the
current economic crisis has set the stage for continued departures from centralized
federalism. Coparticipacin, a cornerstone of the federal-provincial relationship, figures
prominently in deficit analyses at all levels. The legal-constitutional nature of the
revenue-sharing arrangement has the effect of making the deficit a structuraldeep-
rooted and long-lastingvariable rather than a cyclical one.
Yet attaining structural status does not make the deficit decisive in questions of
public sector reform. The four-year recession has pushed the always-tenuous federal
revenue-sharing arrangement into jeopardy, but abruptly holding coparticipacin to
economic standards of rationality overlooks more than it can afford to. Coparticipacin

50
exists because socioeconomic opportunity in the interior lagged far behind Buenos Aires.
Unfortunately this is still true, and shifting policy responsibilities to the provinces in the
1990s inadvertently exacerbated the problem. Deep, across the board cuts in provincial
governments, in this climate, are likely to make some provinces ungovernable. Making
a systematic inventory of the status quos inefficiencies is useful, but drastic revenue
sharing reform can only be pressed at great risk in the short-run. Neither are seemingly
modest revisions immaterial. Coparticipacin has symbolic and practical meaning, and
even small changes in this institutional framework precipitate major changes in public
sector activity in the provinces.
Argentinas national debt is a more clear-cut structural variable. The recently
defaulted on debt demands constant inter-governmental attention. The debt presently
stands at approximately $155 billion, which amounts to nearly 60 percent of the countrys
GDP (INDEC 2001). During economic downturns, pressures arising from the debt limit
policy alternatives and lead to reductions in government spending and public sector
activity. Provincial debts have also grown to worrisome levels/0 At this point in time
there is no working agreement on exactly how the national government and the provinces
will manage provincial debts; however, it is increasingly plausible that Argentinas debt
(both national and provincial) has the power to impact the tenor of public sector reform in
the provinces.
Again, the question comes down to whether an economic variable has the power
to shape reform. Defaulting on the foreign portion of the debt, in a sense, moves the issue
more squarely into the political realm. If and when repayment resumes, it will be the
result of political negotiations, regardless of whether parties (e.g. the International

51
Monetary Fund) privy to the negotiations are comfortable classifying them as such.
Public sector reform in the provinces is sensitized to structural economic constraints.
However, reformers are increasingly sensitized to social default in Argentina and their
home provinces.31 When walking a fine line between restoring the publics trust,
reactivating the economy and providing the right signals to private capital, the salience of
economic factors like this one are bound to be watered down.
International economic factors also impact Argentinas economy. The first
generation of reforms, regardless of ones assessment of Menems policies, depended
heavily on the advice and participation of foreign investors and consultants (Acua and
Tommasi 2000). The second or institutional wave of reforms places relatively less
emphasis on international actors. However, international financial institutions such as the
IMF remain influential in encouraging monetary and fiscal policies. Meanwhile, the
World Bank is playing a wider role in providing financial and technical resources for
countries (and, now, subnational governments) prepared to make long-term commitments
to improving the efficiency and accountability of the public sector.
The conviction in development circles that institutions matter does not
necessarily increase the power of international actors vis--vis domestic ones, but it
reflects the determination of international actors to play a significant role in shaping the
content of public sector reform. As discussed already, critics of market-oriented reforms
are quick to assign responsibility or blame to economic factors (particularly international
ones) for shaping the content of public sector reform. International development
organizations such as the World Bank have faced criticism for discounting the impact of
its interventions on women, the environment and the poor. Questions persist despite

52
documentation the Bank's interventions have become more sensitive to social context
(Cernea 1989). Institutional reform, distinct from older Bank interventions, is becoming a
core function.3^ The bad news is that the institutional or public sector reform subset of the
Banks portfolio has graded out below average (World Bank 2000:15-17). At this point
the multilateral banks are not the most crucial actors in the reform process, but their
experiences in the region are important to this study.
Beyond the banks and other development organizations, the global economy is
widely believed to impact governance. Both critics and enthusiasts of globalization are
quick to point out that domestic policymakers exert less control over economic policy
than during the Keynesian embedded liberalism era (1945-1973) (Brodie 1996).34 The
magnitude and speed of capital flows, along with the internationalization of production,
leaves governments with reduced policymaking latitude. In particular, competitive
n c
pressures have a penchant for narrowing governments financial latitude. There is, then,
a palpable sense the public sectors scope and methods are moving towards international
norms of good governance. But one must be careful not to overstate the influence of
globalizations economic forms on institutional reform. The dominance of international
economic factors is at best unclear because public sector reform in countries facing
similar international pressures displays diverse points of emphasis (Baker 1994, Pollitt
and Bouckaert 2000). Given this diversity on the national level, it is useful to explore
how these factors influence reform in the similar provinces selected for this study.
Socio-demographic change is another background pressure that merits attention.
Despite Argentinas relatively slow population growth, the country and its provinces
nonetheless face pressures arising from changes in the pattern of life for millions of

53
citizens. In terms of the structure of its population, Argentina has an aging population
thus placing increased demands on the health and social security systems. Economic
liberalization during the 1990s contributed to a significant rise in unemployment as over
staffed state enterprises were privatized. Moreover, the long-term presence of
unemployment rates between 15 and 25 per cent (25-35 percent in many provinces) has
made the downsizing plank in the reform agenda particularly inflammatory. As Pollitt
and Bouckaert (2000:29) point out, phenomena such as aging populations and high levels
of unemployment do not directly produce particular types of public sector change.
However, these structural elements in society do provide incentives for politicians and
civil servants to look for ways of easing the strain on the system.
Socio-demographic change also encompasses value shifts across generations or
through experience with public and private agents acting in the name of development.
These changes take a variety of forms. For example, since Argentinas political
liberalization in the 1980s citizens have increasingly questioned the environmental
impacts of government sponsored or sanctioned projects.37 Not all values are subject to
profound change as a result of regime change or economic liberalization. In other words,
while the developmental state built during the Pern era has given way to a more limited
one, reformers have to balance easing strains on the system with protecting popular social
policies. In fact, among those who voted in the October elections, the winning segment
of the population appears more attached to a social democratic vision of society than a
neoliberal one.38 Overall, both sides (demographics and values) of the socio-demographic
coin affect political participation.

Domestic economic production and policies enable and constrain public sector
activity. In the early 1990s Menems economic strategy simultaneously sold off state
54
assets and attracted foreign investment. During this time, the country enjoyed the highest
growth rates in the Americas (World Bank 1997, Guasch and Spiller 1999). However,
since 1998, economic indicators have turned negative. Even though downturns in
productivity and investment are cyclical, both levels of government have been trying
various policy instruments to resolve the economic crisis. Parts of the public sector
reform agenda no doubt can be understood as responses to the performance of the
Argentine economy. The conceptual challenge is to see around the immediate shadow
of economic exigencies and provide more complete explanations for the reform process.
Experiences in Western, high income countries point to a gulf between reform
deemed desirable by economic theory or shifts in performance and reform that is feasible
(Pollitt and Bouckaert 2000:30, Caiden 1999). Figuring out what is feasible depends on a
closer survey of the reform landscape. Going back to the core propositions, we recall that
Argentine federalism is a frame for understanding the publics sectors role in
development. By development standards, Argentina is a middle-income country, and
therefore the lessons learned in Western Europe or North America about public sector
reform have relevance in a way that they would not in the worlds poorest countries.40
But paving the way for useful comparison requires rounding out the model with
propositions about the political and administrative systems that ultimately decide what
reform package is feasible.

ss
2.4 The Political System
Locating the study of public sector reform in the previous chapter pointed to the
value of bringing political explanations on board. Political systems contain formal and
informal institutions and procedures, channels for participation, and strong ideas about
the role of the state's administrative apparatus. Political actors normally play a key role in
crafting public sector reform. Fortunately, there has been a growing awareness of
political factors in the study of state reform, which provides an opportunity to test a
couple of popular hypotheses in subnational cases.41 Overall, my expectation is that,
while politics has a key role in inspiring and legitimating reform, the political system's
relationship with the administrative system proves crucial in second-generation reforms.
This is because these reforms are less geared to regime maintenance or reengineering the
formal institutions of the state, instead being more oriented to building capacity in the
public sector for policy steering or management.
Table 2-3 Propositions Concerning Political Factors
P10. Public sector reform is primarily a top-down, political process. The content of
reform depends on political calculation but even more so it depends on the sources or
origin of reformers ideas. The prospects for reform, likewise, depend on strategic action
(executive coherence, in particular); however, success or failure ultimately depends on
the public sector being intelligible to society.
PI 1. Professionalizing reforms require a broad basis of political support. Two party-
parity is better for minimizing clientelistic practices, but occurrences of two party-parity
are not a precise signal that civil service reform is forthcoming.
PI2. Marketizing reforms require support from non-state domestic interests or
international ones. While this was the centerpiece of first generation reforms, building
and sustaining support for such measures will be significantly harder in the second
generation.

'Table 2-3. Continued'
56
PI3. Democratizing reforms are appealing to middle-class constituencies regardless of
economic conditions. However, opening up the policymaking process depends more on a
galvanizing event that raises awareness and prompts action.
First, the political system is embedded in the federal-provincial institutional
framework. Among the structural features in a federal system, constitutional-legal
protections for subnational levels of government are crucial because such arrangements
define where the commitment for reform must materialize.42 Argentinas provincial
governments are provided significant constitutional protection. Likewise, legal-
institutional arrangements such as coparticipacin further impede central government
efforts to impose any particular reform agenda on the provinces. Of course,
coparticipacin may be altered with carrot or stick-like intent, but as with any
institutionalized arrangement or relationship the costs of casting it aside are considerable
(Tommasi, et al. 2001 ).4j Therefore, even in the worst of times, public sector reform in
the provinces is largely dependent on political support for reform on that level.
The second distinguishing political feature of reform is, overall, the top-down
nature of the process. This may seem counterintuitive since the presence of popular or
grassroots clamoring for change often purports to explain processes based on the
devolution of political power.44 Public sector reform, not unlike devolution, rarely
captures the imagination of the average citizen. Even well-informed citizens are hard
pressed to engage sufficiently to understand the details of the process. For instance, in
Argentina today, reformers would do well to assemble political support for measures that
generally fit the social landscape: minimize economic dislocation, root out corruption and
insist on transparent policymaking.4 There is still room to maneuver and hammer out
details that enhance professionalism, efficiency and accountability, but failing to locate

57
reform in general parameters defined by public opinion is risky. Specifically, locating
reform with little regard for its context may inadvertently strengthen bottom-up
responses, which promise to make the process far more uncertain. Assuming the process
remains primarily mediated from within the system, an analysis of the following political
factors stands to tell us a great deal more about the road to reform.
Since the restoration of democracy in 1983 political parties have played a major
role in the public affairs of all twenty-three provinces. In terms of their impact on public
sector reform, political parties and party systems are relatively well-studied factors. It is
logical that governments backed by disciplined parties with a majority in the legislature
appear most likely to pursue significant public sector reform (Haggard 1997). Argentinas
experience on the national level is a useful reference point. Menems Partido Justicialista
(PJ) essentially gave the executive a free hand in reducing the scope of the state during
the 1990s. Chiles Frei was able to accomplish a broader range of public sector reforms
with similarly auspicious circumstances. Looking more broadly across Latin America,
one finds a number of cases that fail to hold to formMexico, Costa Rica, and
Paraguay.46 Therefore, this first proposition, which encompasses both party
fragmentation and discipline, is by no means conclusive when it comes to assessing the
role parties play in reforming central governments.
Party-parity, two roughly equal major parties, is another way to focus on the
general prospects for reform. According to Barbara Geddes (1994), when clientelist
resources are pivotal in electoral politics, politicians will not approve civil service
reforms, except under conditions when such reforms hurt patronage-dependent parties
equally. Reform in the United States is often accepted as a classic example in this

$8
regard.47 Yet in many countries, including Argentina, one finds periods of inaction during
periods of party-parity and frenzies of reform approved by the legislature at the behest of
the president. Nonetheless it is interesting to pay close attention to cases with party-parity
on the provincial level to better learn the extent to which party-parity serves as a
disincentive for protecting clientelistic practices.
Citizen participation is a factor in the political system, which may or may not be
primarily channeled through political parties. Two issues regarding participation seem
relevant for public sector reform. First, the middle class is historically a pro-reform force
in Western societies.49 Thus parties largely geared toward middle class values and
interests are more likely to enact significant public sector reform. In Argentina there is
certainly more support for reform among the middle class/0 Two developments,
however, weaken this variable on the national level. Firstly, virtually all Argentine parties
court the middle class vote as one of several constituencies. Moreover, not a single major
party campaigned on this issue in the midterm elections last month."1 Secondly, and
perhaps more ominously, the middle class itself appears to be shrinking at a rate
unparalleled in Argentine history (INDEC 2001). Second-generation reformers will no
doubt have to earn support from citizens who do not associate structural adjustment with
a better life.
Second, political participation independent of political parties is beginning to
influence public sector reform. For large parts of the 20lh century, Argentines primarily
accepted political parties as a vehicle for political representation if not personal
expression. Party identification proved to be more class-based than, say, the United States
or inchoate Latin American cases, but far less so than classic Western European cases.

59
Today, however, a broad segment of the voting population is not only further blurring
class-party lines but seems to be rejecting political parties altogether.52 In other words,
the content of reform agendas may increasingly be shaped by political participation
outside traditional political parties. Under such circumstances, elected officials and public
managers will have to hold together reform coalitions that require support outside their
own constituencies.
New ideas about public sector reform are frequently dynamic elements in the
political system. These ideas range from generic management wisdom (e.g. Total Quality
Management, Management by Objectives, etc.) to insights derived from microeconomic
theory (transaction cost economics, public choice and principal-agent, etc.).53 While the
application of such innovations has largely been carried out in OECD countries,
particularly Anglo ones, inter-country borrowing extends to all comers of the Americas.
Internationally popularized reform ideas are well received by Argentinas major political
parties, though perhaps only rhetorically at times. The extent to which these ideas take on
currency depends on political appeal and conviction, along with support from
administrative elites. Overall, new ideas about public sector reform are likely to enter the
domestic political system in a sort of outside-in (brought in, for instance, by political
mavericks such as Domingo Cavallo or Elisa Garri) manner and be mediated from there
in a top-down one.
Change in the public sector depends on the pursuit of new objectives and methods
by those who actually govern. The party system clearly has an impact on the necessity for
coalitions and we must also bear in mind that even a single governing party may have
opposing factions. Separating what is feasible and desirable thus depends, in part, on

60
coherence within the executive. Executive coherence is a variable that draws mostly on
party discipline, coalition politics and the broad acceptance of particular reform ideas
(Heredia and Schneider 2000). Implementing a reform agenda across a given level of
government necessitates commitment and coordination among various ministries and
agencies. Menems first administration enjoyed a high level of coherence because
virtually all appointees were loyalists to the president.34 This made it difficult for
opponents to find suitable beachheads for fighting the reforms.
Executive coherence does not, however, translate into any particular reform
bundle. For starters, as the Argentine case shows, carefully placing reformers in key
positions should not be confused with a uniformity of interests. Menem had, not unlike
the case of many of the countrys governors today, urban and rural constituencies to
consider. The direct costs of public sector reform in the 1990s were borne mainly by
urban Argentines (Heredia and Schneider 2000:447, Tommasi, et al. 2001). The related
corollary is that the reform agenda of the Menem administration stopped short of
remaking the state on the provincial level. In short, executive coherence becomes
indispensable as far as implementation goes, but it often tells us less about how or why a
particular reform package comes together in the first place.
2.5 The Administrative System
//'reform and, even more so, what reform depend also on the administrative
system in question. Pollitt and Bouckaert (2000, Chapter 3) identify three dimensions that
can be helpful in understanding if and how an administrative system will relate to reform.
First, the relationship between ministers and career civil servants is potentially important.
This relationship may be characterized as either integrated or separate (Pierre 1995).

61
Integration implies the careers of ministers and top mandarins are intertwined. A
common professional socialization tends to invest the upper management in the reform
process. Separate career paths, such as in Argentina, produces a different dynamic.
Ministers typically have a political background and they may well not view top
mandarins as co-equals in policy management. In this case, reformers are unwise to
assume a shared perspective exists. Instead, reformers need to understand the public
sectors values and history, work tirelessly to win the trust of top mandarins, and insist on
implementation over a viable timeframe.
Table 2-4 Propositions Concerning Administrative Factors
PI4. In a system characterized by separate career paths, fast-track or comprehensive
reform is risky, likely to be stalled or implemented unevenly.
PI5. Highly politicized administrative systems are unlikely to increase accountability
(both in terms of performance and stakeholder access to governance processes) through
further politicization.
PI6. Provincial civil services (closer to the Rechtsstaat mold) will accept
professionalizing reform before either marketizing or democratizing efforts.
The relationship also depends on the politicization of top public sector posts
(Pollitt and Bouckaert 2000:51-52). Except in rare situations, long-term reform is not
aided by wholesale changes in those upper-level posts. Granted, too much continuity
potentially has a deleterious effect on accountability. Argentina, though, leans towards a
politicized administrative system while it simultaneously insulates itself from legislative
and direct citizen oversight.^ Provincial administrative systems fit this mold, but the
ways in which politicization varies from the national system stands to offer clues for
reformers. Second-generation reforms, which may need ten years or a generation to take

62
hold, have no choice but to withstand political tides. But the bottom line is that further
politicization (whether among political appointees or public employees unions) has little
chance to improve accountability (performance or otherwise). For these systems,
professionalization seems a safer first step.56
Second, administrative systems are products of history. In this way,
administrative culturesnormal beliefs, identities, habitsform, evolve and persevere
(Olsen 1988:239-242). In Western countries two classic categorizationsthe continental
European Rechtsstaat model versus the Anglo public interest modelremain a useful
reference point. Rechtsstaat systems reflect the states role as the central integrating force
in society and carry out that role in a highly legalistic manner (Pollitt and Bouckaert
2000:53-54). Argentina resembles the continental European model. Argentinas colonial
legacy set the stage for the states subsequent dominance in public affairs. Civil servants,
particularly on the national level, commonly have backgrounds in law. Policymaking and
management in this context often works from the assumption that citizens have system-
defined rather than individual-defined rights and duties. Public sector reform has to be
mindful of how, when and where change can be accommodated so as to avoid costly
mistakes.
Last, administrative systems can be defined by the diversity of sources of advice
on managerial reform (Baker 1994, Pollitt and Bouckaert 2000:42). The basic point in
question is the extent to which reforms are defined by insiders, civil servants, or
outsidersacademics, consultants, and development organizations. On this continuum,
the United States and the Anglo countries are unique in the pronounced diversity of this
kind of policy input, which increases the likelihood that new ideas about public sector

63
reform are favorably received. European public managers, in contrast, draw far more
exclusively on advice rooted in the experiences of their professional peers. In general,
Argentinas policy process remains relatively closed to non-governmental actors.
However, at least on the national level, the reform process has been more open. In
particular, private-sector and World Bank consultants have played a major role, while to
a lesser extent academics and think tanks have influenced the process.^7
The influences of the political and administrative systems include structural,
functional and cultural elements. The expectation that provincial public sector reform
varies in its scope and points of emphasis gives this project an opportunity to assess the
predictive powers of the variables discussed so far. To summarize, the federal system
limits the ability of central authorities to enact wholesale reform on the provincial level.
Hence, public sector reform becomes largely a subnational phenomenon. From there, the
nature of the provincial executive, party and administrative systems shape reform
packages along with more fluid factors such as socio-demographic change and new ideas
about public sector reform. Next, in an effort to clarify what public sector reform looks
like, it is best to categorize the content of public sector reform.
2.6 The Content of Reform Packages
Professionalization
Based on the first year or two of reform in the provinces, three clusters of
initiatives have emerged. Efforts in the provincial ministries and agencies concentrate on
pushing a reform agenda that includes, together or separately, professionalizing,
marketizing and democratizing the public sector (Figure 2-2. p.65).58 Professionalization
deals mainly with civil service reform. Steps thus are taken to ensure positions are

64
advertised, merit-based, and subject to clear and regular evaluations. Steps are also taken
to define job descriptions. The extent to which a reform package needs to concentrate on
such measures depends in part on the existence of legislation and administrative
procedures (World Bank 2000). But it also clearly depends on the level of compliance
with the formal civil service framework.59
The attraction of a professional civil service is obvious. A poorly managed public
sector is never a positive factor for stability and development (Delpre 1997:83-85).
Almost without exception, modernization and industrialization coincided with the
development of professional bureaucracy.60 Today there are debates about how the
bureaucratic state can reinvent itself to be more efficient and performance-driven, but the
basics of professionalization remain central to making the state work better (Turner and
Hulme 1997). Public sector reform implies purposeful change. And the logic behind
interviews and surveys in provincial government ministries is to better diagnose the
problems and tailor responses in kind.
An often-overlooked component of professionalization is education and training.
Public managers in Argentina are well educated, though a significant educational gap
exists between the national and provincial levels.61 On both levels managing public
resources for a more complex society cannot be the exclusive domain of lawyers.
Administrative law backgrounds are useful, but a less state-centered and more solution-
centered public sector requires technical and managerial skills too. University curriculum,
program development and, finally, recruitment all play a role in rounding out the
educational-training element of professionalizing the public sector. Training is a crucial
capacity building issue facing provincial governments. While many ministries in the

65
central government have a good track record in this regard, information management and
other technical competencies are inadequate on the provincial level.
Marketization62
Marketization implies a more mixed bag of measures. First, and most
significantly, the role of the statewhat the public sector should docontinues to be
debated. In this way, second-generation institutional reforms share the first-generations
concern for placing resource allocation in the hands of the market. The World Bank
speaks of introducing competitive pressures in the delivery of traditionally public
services (2000:24). Privatization and contracting out are among marketizations most
recognizable forms.64 Making resource allocation functions more efficient has thus
commonly entailed reducing the size of the state. Downsizing (i.e. cutting functions and

personnel from the public sector) fits under the marketizing heading because there
exists at least an implicit assumption the market, or perhaps the so-called third sector,
66
fills the void.
Another element of this type of market-oriented reform applies competitive
pressure across or within public organizations. In this case, the objective is frequently to
streamline functions and efforts so as to minimize duplication. This may require merging
agencies (thereby reducing the administrative overhead necessary to deliver a service) or
bringing related policy issues (for example, environment) under a single organizational
roof. In fact, for the policy areas I chose to follow closely, this aspect of marketizing
proves crucial to the public sector reform story. Provincial reformers, like their national
level counterparts, are encountering situations where the state cannot simply be relieved
of its responsibilities. Instead, the hope is to achieve market-like coordination and
efficiency in public organizations.
The final set of marketizing measures involves finance, performance evaluation
and agent incentive issues. Finance issues in the provinces include intergovernmental
(i.e. political) negotiations on revenue-sharing, but also included are less visible questions
of budget reforms and auditing. The thrust of such reforms is to link the budgeting
process to planning, operational management and performance measurement (Turner and
Hulme 1997, Pollitt and Bouckaert 2000:64-66). Provincial governments are following
this trend, which was popularized in the private sector and adopted by central
governments in most OECD countries (Lpez Murphy and Moskovits 1999). Under
favorable circumstances, linking budget reform to processes that improve long-term
public sector performance would be a bottom-up process. Unfortunately, pressures to

67
reduce public expenditures appear poised to lead provincial finance ministries to cut
programs from the top-down. Few deny the urgency of reigning in waste. The challenge
is to make performance measures credible by taking agreed-upon performance targets
seriously.
Performance evaluation is certainly an issue in budget reform but it also resonates
as a managerial tool in its own right. Since the days of Woodrow Wilson and Frederick
Taylor, performance measurement has always been a concern of public administration.
Nonetheless, there has been a recent proliferation of interest in measuring public sector
performance.6^ Latin America is not an exception in this regard. Performance
Measurement Systems come in many different shapes and sizes, but they all confront the
questions of how extensive performance measurement should be and who uses the
information (Pollitt and Bouckaert 2000:87-90).
On the first count, it is interesting to see which public organizations fall into the
orbit of performance measurement. Not surprisingly, measuring inputs, processes and
compliance is often times seen as inadequate. Ambitious reforms broaden the scope of
measurement to account for efficiency and effectiveness. However, obvious dilemmas
arise when outputs are detached from outcomes and/or when outcomes are products of
complex, multiple causes. Performance measurement has not progressed far on the
provincial level in Argentina. Rechtsstaat systems are conceivably less comfortable with
experiments in expanded discretion and seemingly ambiguous performance targets.
The second dimension rests on the questions of who exactly are privy to
performance results and how those results play out for public employees. The trend in
public interest systems has been to accommodate external calls for more and better

68
information on public sector activity.6' The interested audience includes elected officials,
media and private stakeholders. To varying degrees, then, performance measurement is
potentially more than an internal managerial tool. In Argentina, at all levels of
government, policymaking and implementation generally lack transparency. This may
point to momentum for the introduction of greater outside scrutiny (not only
Congressional committees but also, for instance, consumer or other advocacy groups) of
how the public sector is doing its job. This aspect of marketizing reform actually reaches
over into the concerns of democratizing reform. The danger is that public sector
organizations already under duress may respond poorly, if at all, to unfamiliar sources of
validation.
Last, though on a related note, reformers around the world have been forced to
think seriously about agent incentive issues. Agency theory warns that principal-agent
relationships are ubiquitous in the public sector and represent a serious impediment to
improved accountability or performance (Acua and Tommasi 2000). The source of the
problem is partially structural in the sense that hierarchical organizations provide good
cover for agents to run amok. But the problems root is primarily identified as one of self-
interested behavior. Those doing the publics business simply lack the incentives to be
more productive and client oriented.
Public sector reform seeking to ameliorate shirking has taken a couple of
general forms. First, job tenure for government workers is a point of ideological
contention in many countries. Argentina is no exception in terms of this issues
contentious nature, but for now at least provincial and federal public employees enjoy
high levels legal protection.68 Second, building on the previous discussion, linking pay or

69
promotion-track incentives to performance holds some potential for improving the
motivation of public employees. This line of reasoning has been used on the national
level, but considerable resistance and budgetary hardships have coupled to hamper the
implementation of incentive programs.64 Indeed, in the midst of Argentinas current
crisis, a central issue regarding many aspects of marketizing reform is whether they can
be successfully implemented.
Democratization
The final type of public sector reform addresses the issue of accountability in
government. More specifically, the point is to reduce abuses of power, arbitrariness and
unresponsiveness by enhancing democratic control over public organizations.
Accountability is a multidimensional concept and goal (Turner and Hulme 1997:122-
125). Democratization reforms can emphasize control mechanisms through elected
officials or directly by citizens. Increasing political control (top-down) over public
organizations has been at the root of many efforts to make the bureaucratic state work
better. Of course, there are different institutions (the President, Congress, and Courts) that
may become involved in this process. For each institution, it is helpful to examine the
nature of the control exerted and point out what one would expect to see if that institution
is playing a role in democratizing the public sector.
Executive control over the state apparatus in Latin American varies considerably
from country to country (and even from province to province). The regions reputation
for presidentialism is somewhat misleading. It is true that presidents often make policy
by decree; and this pattern has appeared, though with varying degrees of effectiveness, in
this studys cases. However, Latin America has also appropriately been classified as

70
having weak regimes within a strong state (Loveman 1994, ODonnell 1973, 1994). This
implies the state exerts considerable control over society yet assorted crises have the
ability to undo governments or even regimes. Seen in this light, it is tempting to believe
that democratizing the public sector depends on increasing the power of elected officials
vis-a-vis the state.
Executive efforts to democratize the bureaucracy are measurable. First, a simple
analysis of executive decrees concerning public sector reform is a good starting place.
Next, it is also relatively easy to gauge trends in the number or positioning of political
appointees, as well as whether public managers see an improvement in the articulation of
policy from above. Additionally, the effectiveness and authenticity of democratizing
reform need to be considered. Executive control of the reform process or the bureaucracy
may not enhance accountability. In the Menem administration, state reform by decree
insulated reformers from opposition. Political control was, then, to some extent reasserted
over the bureaucracy but political appointees largely failed to coordinate their efforts or
answer to anyone except Menem. There was an appearance of getting things done,
which created a false sense of accomplishment and probably contributed to reduce public
confidence in additional reform.71
The national Congress in Argentina has generally taken a backseat to the
Executive on most policy fronts, including public sector reform. Provincial legislatures
are even worse in terms of lacking specialized committees to draft legislation. Overall,
legislation rarely includes much detail and combined with limited policy review, it is not
realistic to say legislators know how public organizations are doing on the job. However,
the paucity of congressional oversight and involvement is starting to be ameliorated, and

71
the congressional records in Entre Rios and San Luis show substantial activity. Moreover,
the present crisis in Argentinas provinces is forcing this institution to get more involved
in public sector reform issues, particularly in coparticipacin negotiations and fighting
against the IMFs recent suggestion that 375,000 provincial employees be dismissed.
The Courts have yet to play a significant role in checking provincial bureaucracies. The
judiciary generally limits itself to ruling on the constitutionality of particular laws rather
than taking up questions of bureaucratic discretion.
In the development community, the real thrust of democratizing reform is
purported to come from direct citizen involvement. The World Bank (2000:xiv-2, 23)
describes the need to emphasize voice and partnerships as a means for encouraging
community empowerment, demand-driven public sector activity, and legitimate
authority. This emphasis takes many forms, including efforts inside and outside public
organizations. From within, public organizations have the option of cultivating employee
and public participation. Employee participation fits the broad model of human resource
development aimed at tapping organizational talent, motivating workers and building
capacity (Turner and Hulme 1997:117-118). Public participation is also an important
component in public sector reform for the provincial ministries in this study. Public
participation can be sought out through surveys of citizens, providing a basis for priority
setting and policy evaluation. Considering the growing number of policy portfolios
managed primarily on the provincial level, ministries have to consider holding regular
face to face meetings with groups affected by their decisions.
The examples given above are not meant to suggest direct citizen involvement has
to be solicited or orchestrated by public organizations. In fact, voice and partnership

72
depends on people working on public affairs without prompting from a public manager or
organization. Concerns exist that grassroots projects have not proved sufficiently broad or
replicable in developing countries.74 But the voice and partnership focus in this study
relates to real and perceived changes in the openness of the policy process.
Democratizing the public sector has been on the table in Latin America since the process
of political democratization began two decades ago. Recalcitrance is still found in
political and administrative systems, though recently this type of reform has found
greater acceptance. Public organizations in Entre Ros and San Luis are wrestling with
these issues.
Notes
1 The fact is that Argentina was the darling of the Washington Consensus throughout the 1990s. The U.S.
Treasury, the IMF and development banks have subsequently jumped off the bandwagon; see Stiglitz
(2002). However, todays post facto excuse-making is certainly in contrast to the official and academic
records written on reform issues (including privatization and civil service reform) during the 1990s.
2 There has been growing consciousness of this dimension of Argentinas problems. Between October 2001
and March 2002, key figures from the IMF and World Bank have alluded to the dysfunctional nature of
Argentine federalism; see also Acua and Tommasi (2000), Lpez Murphy and Muskovits (1999),
Tommasi, et al. (2001). Even President Bush remarked that Argentina has some tough calls to make,
particularly with regard to the states [provinces] and how they operate, as reported in La Nacin (3-19-
02). The translation is my own.
5 The city of Buenos Aires is essentially a province because it is represented in both houses of congress,
and receives coparticipacin shares from the national government.
6 Members of Congress are rarely eager to vote for legislation that strips their provinces of power or
resources.
7 Unfortunately for the region, domestic and foreign economic interests opted not seize on the possibility of
a new economic pole based along the Paran River. Most of the region went on to languish in obscurity
until the turn of century when there was something of an agricultural boom, which coincided with planned
immigration from Europe.
8 By the latter decades of the 19* century, the provinces had lost most of the effective governing authority
they once aspired to; see Platt and di Telia (1985) for insights into this process. The bottom line is that,
without a strong incentive to sharpen their own state apparatuses, most provinces were content to public
sector employment to fall into a pattern of political patronage.
9 It is often believed that Pern initiated todays system of transfers to the provinces. In fact,
coparticipacin was launched during the 1930s in response to the Great Depression and an increased

73
awareness of the inequality between the Argentinas few rich pockets and its vast poor interior; see Sawers
(1996), Porto (1990), Rock (1987).
10 The entire national system of grants and loans for business development reinforced particularistic habits
of governance; see Mattos (1989). Resources flowed to individual corporations or projects rather than into
the supply of public goods. 1 argue this strategy of targeted resources within the federal-provincial
framework has served as an obstacle to development in the interior.
11 The bottom line is the provinces are authorized to spend a lot of money, but they are deprived of most
important revenue sources. Thus, expenditure decentralization is perhaps a good idea with poor execution.
12 In November 2001, De la Ras government altered coparticipacin, imposing smaller transfer receipts
on the provinces. The new rules of the game were not accorded institutional status by the provinces or most
Argentines in the sense that an issue of major constitutional importance had not been negotiated.
13 There is a consensus that provincial bureaucracies need to change their ways. However, public
organizations have to remain intelligible to the society they serve; failing to do so risks turning institutions
(durable frameworks and arrangements) into merely organizations (offices that may or may not command
respect).
14 The general thrust of this point has been well established in the U.S. context; see Kettl (2000) for a good
summary or Pollitt and Bouckaert (2000) for more detailed cases.
15 This should come as no surprise to students of American administration. In federal systems, students of
constitutional law and state (provincial) politics appreciate former bases of compromise to understand shifts
in the system; see Palacio (1965), Rock (1987).
16 The terms desirable and feasible and what they connote with regard to reform are used to great effect by
Pollitt and Bouckaert (2000), as well as by Peters and Savoie (1994).
17 By February 2002 serious doubts about the durability of the November 2001 agreement were apparent in
ongoing negotiations between Duhaldes administration and the provinces.
18 Former Santa Fe Governor Carlos Reutemann is major proponent of public sector reform on the
provincial level. However, he cautions against reform measures being imposed by Buenos Aires or the
multilateral development banks. Reutemann envisions public and private actors in each province finding
the proper comfort zone for feasible reforms.
19 Import substitution industrialization (IS1) worsened investment and resource allocation decisions. The
central government transferred significant resources to the poorer provinces yet it failed to significantly
close the standard of living gap across or within provinces in Argentina. Among the problems, failing to
develop institutional capacity stands out as a crucial one; see Porto (1990).
20 Turner and Hulme (1997) provide a good overview of the issues surrounding remaking the state. Their
discussion demonstrates historical depth and practical experience, which reminds us of the problems
associated with too much state and too little state positions.
21 CEPAL (2002) points out that even the regions less open economies like Brazil have, by and large,
embraced market reforms. Of course, it should be pointed out that most Latin American countries, much
like Western Europe, have not liberalized labor markets. The exception to this in some countries has been
the special rules governing maquiladoras or enterprise zones.
22 Heredia and Schneider (2000) make this point in reference to additional cases in Latin America and
Eastern Europe.

74
23 On the national level, there are fewer public employees in Argentina today than there were ten years ago;
see INDEC (2001).
24 The countries of the European Union would seem to be case in point: Maastricht Treaty targets for
advancement into the eurozone merely required fiscal deficits under 3 percent of GDP. More stringent
requirements would have made members deal hastily and likely improperly with the myriad issues of
public sector reform; see Pollitt and Bouckaert (2000. Appendix: Country Files).
25 This was the case with the Pendelton Act of 1883, which set the American civil service on a path to
professionalization: see Garvey (1997). Momentum for civil service reform gained strength over the course
of two decades, and the bills passage came during favorable economic times, well ahead of the global
downturn of 1890-91. In Argentina, the Menem administrations 1994 civil service reform took place at the
height of optimism concerning the countrys future.
26 Caballero and Dombush (2002) view Argentinas fiscal quandary as necessarily leading to a profound
rightsizing of the state. In fact, they believe the need for a balanced budget, dficit cero, is so great
Argentina should accept extranational approval of all fiscal and monetary policies until the current crisis is
safely averted.
27 Brazil passed a law in 1996 that prevents state government from running deficits.
28 Dire warnings on this count abound. As Governor Rozas of Chaco said recently, Aplicar el dficit cero
y matar a la gente bastante similar. The message being that the social cost of balancing the budget this
year is unacceptable. Likewise, President Duhalde made frequent reference to Argentine society as a
ticking bomb, una explosion social, in his exhortations for international patience and assistance.
29 See Acua and Tomassi (2000), Lpez Murphy and Muscovits (1999), Tommasi, et al. (2001) for
persuasive studies of the fiscal irrationalities built into the Argentinas revenue sharing system.
30 Provincial debt is presently climbing upward in the ranks of Argentinas economic problems. At present,
in February 2002, the question of provincial debt figures prominently in negotiations between the national
government and the governors. The governors are insisting that the national government accept full
responsibility for all debt in exchange for their acquiescence on reducing the monthly transfer amount
under coparticipacin. The IMF has also expressed grave concerns about provincial debts, which are
actually rising if one takes into the consideration that public employees in some provinces have been paid
in provincial bonds for months, if not years.
31 Comparing my interview transcripts from May-July 2000 to those from a year later, I note that reform
protagonists became increasingly wary of reform provoking social unrest. Impatient outsiders may despair
over the reform process being held hostage by piqueteros and saqueadores. Yet it seems only fair to
remember that the point- men in the provincial process live in the same communities as the people affected
by state reform.
33 See, in particular, World Bank (2000) for summaries and classifications of institutional development
programs in various regions. Indeed, Reforming Public Institutions and Strengthening Governance offers
more analysis and evaluation of programs that were far less numerous in the Banks 1992 report,
Governance and Development.
'4 Boyer and Drache (eds.) (1996), States Against Markets: the Limits of Globalization, offer a number of
good accounts regarding change in contemporary welfare states, see Brodies chapter in that volume for
discussion of embedded liberalism.
5 Knig (1996) paints a persuasive case regarding reduced financial policymaking latitude.

75
36 De la Ras resignation has not signaled an end to street protests against austerity measures, el ajuste.
When, in the next year or so, provincial reform gets around to trimming workers, politics in the street will
likely become an even more common occurrence in the provinces.
37 Overall, this point has many layers to it, depending on which part of the country one studies. For a good
starting place on this issue: see Quiroga, et al. (1995), as well as Ferrads (1998) and also Ribeiro (1994).
38 Perhaps oddly, this conclusion is drawn by the relatively conservative La Nacin (10-20-01). While
polls are certainly not ideal compasses for politicians, there is increasingly reason, in my estimation, to
worry about the short-term impossibility of simultaneously widening and deepening economic
liberalization. Public sector reform in the provinces raises similar questions-too much too soon has long
odds of being implemented (imposed), let alone sustained.
39 Since February 2002, if not before, the IMF is certainly attempting to link these issues, see La Nacin (2-
11-02) and Buenos Aires Herald (3-29-02).
40 See also Bonvin (1994) for a discussion of Latin Americas usefulness in testing governance models that
would simply not be applicable to low income countries that predominate in Africa or South Asia.
41 See, again, Sections 1.5 and 1.6 for highlights regarding the neglect of subnational analysis of public
sector reform.
42 Since the global trend toward bringing political power closer to people cuts across federal and unitary
systems, there has been a growing tendency to ignore the differences, reduced or not, between cases of each
type.
43 See also North (1990:94-96) for a good discussion of what he refers to as the increasing returns of
seemingly inefficient socioeconomic systems and Ostrom (1990).
44 This is not to say that bottom-up clamoring has not played a crucial role in the recent trend toward the
devolution of political power. But the political systems in countries such as Great Britain, France, and Italy
seem to have arrived at this conclusion without the prodding of massive popular movements. In other
words, the institutions of the political system (particularly, political parties) have preempted the bases for a
more bottom-up process.
45 Opinion polls in La Nacin (10-25-01) and Clarn (2-14-02) demonstrate that Argentines have a very low
opinion of politicians and the costs associated with maintaining the political system. However, the same
polls reflect uncertainty if not hostility about cutting public sector jobs, relying more on the private sector
for the provision of public services and accepting the recommendations of the IMF.
46 The case of Mexico is probably the most famous and perplexing. A string of pro-liberalization
presidents~De la Madrid, Salinas, Zedillo and now Foxhave failed to enact and/or implement significant
public sector reform; see Heredia and Schneider (2000), Golls (2000). This is despite the fact that De la
Madrid, Salinas, and Zedillo enjoyed considerable congressional majorities in a system that was famous for
rubber-stamping the Executives domestic policy priorities. In Costa Rica, Figueres administration (1994-
1998) was largely unsuccessful winning even minor concessions public employees unions. Meanwhile in
Paraguay, despite Colorado party control, the Executive and the Congress remain unable or unwilling to
reign in public sector corruption and inefficiency; see McCoy (1999:25).
47In the late 19th and early 20th centuries, there is evidence that supports the party-parity hypothesis in the
United States. However, the party-parity hypothesis does not hold up equally well in recent years in the
United States; see Kettl (2000) for a good summary of recent obstacles to reinventing government in the
two-party American system. Likewise, Europe also provides examples that beg the question how does
party-parity explain instances where party-parity exists yet no reform is forthcoming.

76
48 This research project offers an opportunity to test this hypothesis on the provincial level. Entre Rios has
seen power alternate between the UCR and PJ since 1983, while the PJ has ruled in San Luis since the
restoration of democracy.
49 This theory also resonates among Argentine writers; see Palacio (1965), Platt and di Telia (1985).
50 Despite uncertainties about determining who is middle class these days, polls continue to show that
middle class have great faith in democracy and stand firmly behind the principle of public sector reform;
see ROmer (2002) in La Nacin (3-31-02).
51 Two small parties did make continued state reform a central element in their campaigns: Alternativa para
una Repblica de Iguales (ARI) and Accin por la Repblica (ACCREP), founded by Elisa Carri and
Domingo Cavallo, respectively. The two major parties emphasized economy recovery and social issues
such as healthcare, education and unemployment insurance, which is not surprising since economic
recovery is what most Argentines rank as the countrys number one concern.
52 The midterm elections in October 2001 point out this trend, see La Nacins on-line summary at
www.elecciones2001 .gov.ar/
53 See, for instance. Kettl (2000), Peters (1996, Chapter 1).
54 This point is developed clearly in Abdala (2000), Saba (2000). While Menems tactics made resistance to
reform harder, mistakes made by unqualified loyalists have hurt the credibility of first generation reforms,
and make it harder now to keep second generation reformers insulated from critics today.
55 This has, with no disrespect intended, been described as the worst of both worlds, sharing the
politicization of administrative systems such as the United States without the strong congressional and
citizen oversight inherent in public interest systems. See Artana (1998), Hopkins (1995), Sloan (1984) for
interesting accounts of the unhealthy effects this dynamic exerts on policymaking. Based on my own
experiences in the region (Central America, in particular), I would say Argentina is not an isolated case.
56 In many cases, it is not possible to reinvent government before the basics like full professionalization are
in place. I relay this observation based, in part, on my own conversations with reform protagonists in San
Luis and Entre Ros. See Baker (1994) for an excellent look at the problems associated with the highly
politicized civil services of Eastern Europe during the democratic transitions in that region.
57 Heredia and Schneider (2000) also note this aspect of state reform on the national level in Argentina
during the first Menem administration. My expectation, approximately half-way into my fieldwork, is that
outside involvement in provincial reform processes remains limited, felt primarily through the advice from
the national government and already functioning World Bank and IDB public sector reform programs.
58 Figure 2-2 is adapted from World Bank (1997), and it owes a debt also to Heredia and Schneider (2000)
who likewise seem to have been influenced by the Banks categorization of reform elements.
59 As in most countries needing civil service reform, the issue tends not to be whether relevant laws and
regulations exist, it depends on whether standing measures are actually enforced.
60 The issue of what comes firstindustrialization or professional bureaucracyis hard to ascertain. In the
U.S., one may certainly argue that significant steps toward industrialization were taken well before the
passage of even the most rudimentary laws covering civil service reform. Many Western European
countries, however, clearly had a strong state tradition, which included professional bureaucracies.
61 Explanations for this gap vary. Buenos Aires attracts many highly educated Argentines, and public
management is not an exception to the rule. Also, the countrys best universities are in the greater Buenos

77
Aires metropolitan area. Provincial governments have not made recruitment a high priority, leaving aside
the issue of whether it would be easy to attract top quality people.
621 believe the word marketizing has become common in public management literature. Ascertaining
who coined the term is difficult; however Pollitt and Bouckaert (2000:93-96) utilize it as a trajectory of
reform, along with maintaining, modernizing, and minimizing. In my categorization, marketizing
includes, more or less, Pollitt and Bouckaerts marketizing and minimizing reform trajectories.
63 Francis Delpre (1997:84-86) poses the issue similarly; he points out that What kind of a State do we
want? is the first question we are asking, necessarily followed by What administration do we want to
give the State? I concur, and have argued that public sector reform is a process that includes action on
the ends and means of governance.
64 Argentina was somewhat exceptional in Latin America in terms of the speed with which privatization
was conducted; see Abdala (2000), Guasch and Spiller (1999), Saba (2000). The scope of privatization was
also impressive. In sum, the scope and pace of privatization represents one of the more defining features of
first generation reforms in Argentina.
65 The search for improved performance is welcomed but it has raised questions about how meaningful and
appropriate some of these measures are: see Kettl (2000), Peters (1994), Turner and Hulme (1997. Chapter
5).
67 Peters (1996) provides thoughtful analysis on the experiences of Anglo countries (drawing mostly on the
United States, Canada, Great Britain, Australia and New Zealand) in crafting modes of governance that are,
among many things, more transparent and democratic.
68 In Brazil, for example, federal and state employees no longer enjoy guarantees of job tenure. Again,
much like the legal framework for hiring procedures, it remains to be seen whether public organizations are
truly utilizing the new framework to weed out underperforming individuals.
69 In most of Argentinas provinces, public employees have not received regular paychecks since 1999-
2000. Instead, cash-strapped provincial governments have resorted to paying wages in provincial bonds
(IOUs of dubious value), much to the chagrin of public employees, the federal government and the IMF.
Naturally, in this environment, there is scarcely the financial stability to honor performance bonuses.
Indeed, provincial public sector reform programs have the unenviable task of motivating workers unable to
pay for home mortgages, prescription drugs, etc.
70 Menems perhaps rightly saw a need to act on economic and state reform quickly. However, he acted
opportunistically and, on balance, unwisely by handing privatization and regulatory portfolios to loyalists
who made state reform a highly secretive domain. See Abdala (2000) for a good analysis of the inscrutable,
uncoordinated and financially questionable infrastructure concessions made by the national government in
the early 1990s.
71 This is one of the main reasons second generation reform will be far more difficult to implement than
first generation ones; see Pastor and Wise (1999). The present crisis has led to widespread mistrust of
political institutions, and reformers have little room to maneuver. Lpez Murphy and others make the
argument that, despite the mistakes made in the early 1990s, it would have been far better to cajole the
provinces into serious public sector reform back then.
721 have not seen official IMF acknowledgment of their call for a 27 percent (375,000) reduction in
provincial public employees. However, government officials such as Vice-Minister of Economy Todesca
involved in the negotiations are speaking of it; see El Cronista (3-31-02).
The provinces of San Luis and Entre Rios, among others I presume, have used citizen surveys since 2000
as part of their public sector reform programs.

78
74 There are numerous well stated accounts of this problem; see Turner and Hulme (1997), World Bank
(2000). The basic argument is that authentic expressions of bottom-up development have been isolated to
small islands of success in seas of failure.

CHAPTER 3
GOVERNING THE PROVINCES: PAST AND PRESENT
3.1 Introduction
Exploring public sector reform on the subnational level in Argentina involves choices
about what aspects of administrative change to study and which cases lend themselves
well to comparison. This chapter deals with the second issue. It is an important one
because many dimensions of public sector reform become clearer when comparable cases
are utilized. Section 3.2 takes a general look at Argentinas federal-provincial history,
which sets the stage for understanding Entre Ros and San Luis. The following two
sections3.3 and 3.4explain where the provinces of Entre Rios and San Luis have been
and where they stand today. It becomes apparent why political leadership and a
reasonably well-managed state apparatus go a long way toward explaining the surprising
developmental trajectories of these two provinces. The final section of the chapter moves
the focus away from history and the stories of the two provinces. Instead, it introduces
the basic characteristics of survey respondents from the Ministry of Economy in each
province and leads into Chapters 4 and 5 where survey responses assist in the analysis of
specific reform issues.
3.2 The Federal-Provincial History
The history of Argentina has been described as the history of two Argentinas:
metropolitan Buenos Aires and the interior. Buenos Aires, legally designated Capital
Federal since 1880, became the political, economic and cultural center of the country by
79

80
1800. Independence from Spain was declared in 1816, and once the fight against the
Spanish was finished an almost immediate struggle began between two competing
visions for the new country. Business interests in Buenos Aires formed the backbone of a
Unitarian perspective, which believed Argentina could not prosper as a loose
confederation of provinces. Leaders from the interior, caudillos sharing a federalist
perspective, believed cosmopolitan interests in Buenos Aires had neither the right nor the
necessary might to impose a central government on them. Thus from its inception as a
republic, Argentinas unitarios an federalistas aggressively sought to define what kind
of relations would prevail between Buenos Aires and the provinces (Rock 1987:81, 88-
104).
Defining the relationship between Buenos Aires and the interior proved to be a
violent affair. Throughout the 1820s national governments made little headway in uniting
the United Provinces of the River Plate, let alone in exporting an administrative system to
the interior. A republican constitution was debated and ratified but too many caudillos
soon resisted the centralizing measures of the Constitution of 1826.2 In particular,
forfeiting provincial tariffs and disbanding personal militias for the mere promise of
revenue sharing sparked resistance and within three years key Unitarians were either
defeated or exiled (Rock 1987:104-107). The new Constitutional Confederation of
Argentina was dominated by the Governor of the province of Buenos Aires. Juan Manuel
de las Rosas. This Governors League had problems too. namely most provinces
wanted a truer federation where all members shared trade revenue equally, but Rosas
refused to grant the interior formal revenue sharing and thereby loosen his power over
provincial politics (Adelman 1999:118-120, Rock 1987:106). In time, however, disputes

81
with Brazil, France and many of the Confederations members sapped Rosas base of
support and precipitated a successful rebellion led by Justo Jos de Urquiza, a wealthy
caudillo from Entre Ros.
After Rosas fall from power in 1852, the project of national unification resumed
again. The fact is much of the interior was happy to move beyond the Confederation
arrangement because terrible economic stagnation had set in. On the other side (literally,
since much of the unitario exile community had resided across the River Plate in
Montevideo), there was greater pragmatism. Unitarians knew Argentina could not model
itself strictly on Napoleonic France or Great Britain. The new Argentine political
community had no choice but to uncouple liberalism from centralism and accept a
multi-layered system of governance (Adelman 1999:111). The Constitution of 1853
(which was not ratified by the province of Buenos Aires until 1860) settled on a federal
system that gave the central government control over foreign and interstate commerce but
otherwise most provincial matters were left in provinces own hands. Additionally, a
national senate provided the interior with a powerful institutional mechanism for making
Buenos Aires a reasonably responsive partner in the federal-provincial relationship.
Overall, then, the first modem constitution seemed to reflect enough of the
federalist vision to position the provinces nicely for determining the republics future or
at least protecting their interests in the political process. But the centralizing vision of the
unitarios found potential expression in Article 6 of the constitution, which states The
Federal Government intervenes in the territory of the Provinces to guarantee the
republican form of government or to repel foreign invasions.3 In the hands of a strong
Executive (the 1853 constitution made the president more powerful than Congress or the

82
Courts), intervencin federal became more common than Article 6 suggests on the
surface. The absence of a formal revenue sharing arrangement can also be seen as giving
the federal government considerable leverage in provincial politics. The first president in
the new Argentina. Bartolom Mitre, used subsidies to forge national consensus and
when that failed he sent federal authority to the province or locality where problems
persisted (Rock 1987:124-127).
Modem Argentina is said to start where the rift between Buenos Aires and the
interior ends. The new, modem state represented a liberal system in the sense that the
state was organized for a laissez faire economic order (Crassweller 1987:40-44). This
period (1870-1930) was also a time of organizational refinement for the states apparatus.
Mitre and liberals like Sarmiento, Avellaneda and Roca sought to develop a professional
bureaucracy along the lines of Europes finest4 Provincial administration was an entirely
other matter, left to the best judgment of the provinces own political institutions.
Porteos and foreign visitors to the provinces often noted the amateurish nature of
provincial administration, characterizing the functionaries they dealt with as corrupt and
incompetent (Lpori de Pithod 1998:11-13). Unified, modem Argentina certainly had its
share of national projectsimmigration and land colonization, the railroads, frontier
developmentbut administrative reform in the provinces was not one of them.
The Great Depression and Argentinas first military intervention of the 20th
century brought the liberal era to an end in 1930/ The liberal system had facilitated the
agricultural and infrastructural development of some parts of the country: while Buenos
Aires was considered one of the worlds greatest cities. But much of Argentina was
missing out on development. And there was increasingly worry that long-term economic

83
growth would be stunted by the puny domestic market in the countrys interior.6 For the
first time in Argentine history, the state went into the business of development
administration, taking on new responsibilities and growing in size. The shift had
immediate and lasting consequences for the federal-provincial relationship and this is the
focus of the remainder of the section.
Until the 1930s the provinces raised and spent their own revenues. Considering
many provinces were very poor places, provincial government did not have the means to
grow. Provincial bureaucracy was patronage based and generally not effective, but at
least it was small and counted on for very little. The first federal revenue sharing law, la
ley de la coparticipacin, was passed in 1935 and it quickly changed the old dynamic.
Provinces responded by hiring public employees and providing public goods and services
that had previously been nonexistent or scarce. The federal government also began to
have sizeable numbers of federal employees in the provinces. Next, Perns governments
expanded the states role in the economy and further institutionalized the new federal-
provincial relationship. The commitment to Argentines living in the interior was
commendable in many ways. However, even as coparticipacin was recalibrated many
times in subsequent years, two main problems persisted. First, the separation of revenue
collection (almost exclusively federal from the 1930s until the late 1990s) from
provincial spending made the fiscal side of the arrangement unmanageable. Second, the
quality of most provincial public sectors remained poor. In this sense, the new federal-
provincial relationship was a classic case of getting the cart before the horse.
For Perns political opponents, the 1960s and 70s were heralded as a time of
reform and national renewal. In reality, the federal-provincial relationship did not change

84
much at all. Most provinces made small strides towards civil service reform. But this
period of tragic upheaval did not translate into a focus and consensus necessary for public
sector reform. Moreover, the political and social forces involved in the democratic
transition provided no fresh impetus to solving the federal-provincial problem By the
1990s the federal government set out to privatize state assets and devolve most key policy
portfolios to the provinces, thereby trimming its own workforce and hoping the provinces
could do more with less. Menem held together provincial support for his neoliberal
economic plan, but only at the expense of tabling meaningful provincial public sector
reform.8 The recession that started in 1999 ultimately closed the old chapter and made
federal-provincial relations a political issue to an extent not seen in decades.
The federal-provincial relationship has been one of contestation, rapprochement,
unfulfilled promise and now uncertainty over what comes next. Rolling back the past
seven decades is not an option. Adjusting the vertical fiscal imbalance in the system is
virtually assured.9 But making the provincial state work better could get lost in the
shuffle like it has so many times in the past. This outcome has to be avoided. For the
provinces to get more out of the federal-provincial relationship, it has to function more as
a partnership where the strengths of each level complement the other. But one has to keep
in mind that speaking of the provinces can be misleading when it implies they are a
monolithic entity. The following sections illustrate two different development
experiences from the interior
3.3 Entre Ros: From Settler Paradise to Nowhere
Entre Ros is aptly named in Spanish as the land between rivers. Its southern and
western boundaries are defined by the mighty Paran River; the eastern boundary is the

85
Uruguay River. Rolling plains and forested valleys define the natural landscape of this
region, Mesopotamia, and the province is blessed with pampean soil and abundant
rainfall. Significant numbers of Spanish settlers recognized the lands potential and
crossed the rivers when the areas indigenous peoples were killed or forced to flee in the
latter half of the 18Ih century (Macchi and Masromn 1977:22-31). The other key to Entre
Rios promise was its close proximity to Buenos Aires. Commerce and investment were
strongly influenced by transportation costs and the proximity of key markets. Another
proximity-related issue was the lands strategic importance as Spanish authorities feared
Portuguese encroachment on the eastern bank of the Uruguay River. Spain and, then,
Argentina thus went out of their way to encourage settlement in the land between the
rivers (Macchi and Masromn 1977:23).
The period of national unification (1853-1862) had a profound impact on Entre
Ros. Entre Rios governor, Urquiza, had defeated Rosas, held a national assembly
(minus Buenos Aires) that passed the Constitution of 1853, and led the Argentine
Confederation for seven years (Bosch 1978:195-218). Paran was the capital of the
Confederation, and this period saw the construction of many stately buildings and public
spaces in the city. It was also a key moment in bringing outsiderslegislators, foreign
diplomats and investors, artists and intellectuals-to the province and cementing a liberal
optimism among Entrerrianos. Meanwhile, the province was taking good advantage of
the agricultural promise of its rich soil. According to the French geographer Martn de
Moussy, Entre Rios was the richest and most important province in the Argentine
Confederation [I]t is the example of the fastest growth that I know in the region.10
The provincial government was also making solid strategic decisions, among the

86
important firsts: founded a university (1857), signed contract with European firms to
incorporate new immigrants (1858) and established an agricultural colony and research
station (1853) (Bosch 1978:202-203, Carb 1893:360, Macchi and Masromn 1977:116-
118). Bigger and better days clearly lie ahead.
Immigration and modernization defined the golden years (1870-1930) of
Argentinas liberal system. And Entre Ros was, in many ways, the poster child for the
progressive forces defining the era. When the province first contracted in 1858 to attract
Europeans immigrants its population was approximately eighty-thousand. In 1869 Entre
Ros population stood at 135,000, then it more than doubled to 292,000 in 1895, and by
1914 it had grown to 425,000 (Macchi and Masromn 1977:169). The numbers tell only
part of the story, however. The settlers and the planned settlements, colonias, speak
volumes about Argentinas ideal immigrants and the type of settlement schema deemed
most likely to further the development of the province.
Entre Ros, like Argentina, Brazil or Canada, had certain ideas about what sort of
immigrants would contribute the most to development. Entre Ros attracted large
numbers of German, French, Italian, Swiss, Jewish and Spanish immigrants (Bourlot
1991:184-187). This process cemented the provinces European profile. A large
percentage of the immigrants settled in colonias that were essentially land grants from the
government or arrangements financed by private companies. A typical colonia had about
500 people working family farms in the 40 hectare range, with the trades and professions
mixed in, along with a school and a church (Carb 1893:371-455). The immigrants also
established numerous mutual-aid societies, widening and deepening the presence of
philanthropic organizations in the province. The entrerriano habit of community

87
involvement and organization impressed visitors of the era (Bosch 1978:266-267, 281,
Macchi and Masromn 1977:148). Overall, it has to be acknowledged these rural middle-
class enclaves were fairly unique in Argentina and downright extraordinary in Latin
America. It was the ideal settler pattern for development and Entre Rios had pulled off
the same historical coup as the United States, Canada or Australia.
The golden years were also characterized by clear signs of economic progress
and sound political stewardship. Agricultural production rose to new heights. The
numbers were astounding for a province of 75,457 km/sq., in 1892: 1,425 kilos of wheat
per hectare, 3 million cows, 5 million sheep; Entre Rios, on a per capita basis, ranked
among the top three Argentine provinces in each category (Carb 1893:24-28,464).
Agriculture was big business and the provinces export earnings were enhanced by the
completion of rail lines linking its primary cities to each other and Entre Rios to Buenos
Aires (Bourlot 1991:163,176). Governing the province was still a fairly modest affair,
though political leadership and administrative competence had already proved evident in
the Office of Colonization and General Council of Education (Carb 1893). Apparently,
Entre Rios government continued to go about its work capably and without much
appetite for national intrigues. According to the Argentine historian Beatriz Bosch, in the
late 1920s when most provincial governments were wracked with political division over
President Yrigoyen, Entre Ros (its political leaders and the bureaucracy) stayed centrist
and liberal, thereby avoiding federal intervention after the military coup removed
Yrigoyen in 1930.11
The seeds of the provinces eventual decline were probably cast in the 1930s. In
some ways, Entre Ros was inadvertently a victim of its own success relative to the

88
grinding poverty of much of the interior. When the conservative nationalists of the 1930
coup and later Pern adopted the cause of the poor provinces, it brought along a new
institutional environmentcoparticipacinthat gradually changed politics and
administration in Entre Ros. The national decision to shift to a state-led development
strategy with centralized control over most policies and revenue sources was ultimately
bad for a province that had successfully been collecting taxes, providing education, and
providing public space for a vibrant non-state sector. There was no option to opt out and
retain the old incentive structure. In practical terms, Entre Rios public sector grew
rapidly to play its new role as junior partner in a developmental state with a mixed
economy (Bosch 1978:290). But worrisome trends appeared: vastly increased
opportunities for political patronage, state spending crowding out private investment and
the once vibrant philanthropic sector, and reduced accountability in a system that
separates responsibility for revenue collection from responsibility for spending.
The period between 1955 (Entre Rios first military governor in over eighty years)
and 1983 (its last military governor) failed to reverse the reality of centralized federalism.
Public administration had become the only consistent growth sector in the formal labor
market of most provinces. Attempts to reign in political patronage and make the civil
service more professional were not uncommon. From 1955-58 Governor Caldern
created a commission to look into irregularities in the public administration (Bourlot
1991:247). A new civil service code took effect in 1959-60, but political leadership
(civilian and military) for public sector reform was lacking in the years that followed.
Entrerrianos wanted to put the luster back on their provinces fading star but many of
them (especially the young and educated) voted with their feet-128,000 left between

89
1960-70 (Bourlot 1991:278, Bosch 1978:302-303). Even the finest accomplishment of
the period, the completion of the sub fluvial tunnel connecting Paran with Santa Fe, did
not serve as a catalyst for regional integration and manufacturing. In fact, when the
military assumed control for the last time in 1976, the provincial public sector was
treading water as socioeconomic and political crises swept the country. Yet bureaucratic
authoritarianism in Argentina was hardly defined by the technocrats. Plans to whip
provincial bureaucracies into shape or change the prevailing development model were
scarcely realized (Duarte 1999:2-4).
The period since 1983 (in particular, 1999-2003) was covered in some detail in
the previous chapter and it ties in often with the discussions on reform issues in
subsequent chapters. However, here, it seems important to make a general point about the
last twenty years and then clarify where Entre Ros stands now among Argentinas
provinces. First, civil servants fired during the Proceso Nacional were given the option of
returning to their former government positions and many surely accepted. But afterwards,
Entre Ros continued to do a poor job controlling the growth of the permanent
bureaucracy in the late 1980s and effectively managing the devolved policy portfolios
like education and health in the early 1990s. Governors Montiel and Busti, with two
terms each since 1983, deserve a fair share of the blame for dancing around these
problems (AR-ER 2002). Second, recent results are discouraging. The province ranks
near the middle of the countrys twenty-four provinces in per capita GDP and near the
bottom of Argentinas middle-third in terms of the quality of governance.14 This
represents a steep drop for a place that appeared favored by nature, its settlers and

90
settlement pattern, and the habits of good government that emerged during its formative
years.
Entre Rios decline has mostly been a solitary affair. Even in Argentina, few well-
educated people recognize the province went from one the countrys most successful to
merely a place trying to hold onto average. But sometimes arriving at nowhere can be
interrupted by unwanted attention. Argentinas recent economic crisis placed a few
provinces under the national microscope as they struggled to pay public employees and
creditors with provincial bonds or quasi-money. The popular 11 p.m. news program
Despus la Hora, favored by upscale porteos and anchored by the witty Antonio Laje,
began making light of Entre Rios tragicomic situation in April 2002. There was plenty of
thinly veiled humor focused on the provinces third or fourth printing of quasi-money,
bonos federales and the near impeachment of Governor Sergio Montiel. I felt bad for my
Entrerriano friends. I can imagine listening to Mr. Laje ridicule Entre Ros must have
been dispiriting. For the middle-aged and elderly, it no doubt hurts to see where the
province is today compared to where it was a few decades ago. And for the young it is
discouraging to come of age in a place widely reported to have seen its best days.
The transition from settler paradise to nowhere did not happen overnight.
Parana's unofficial historian, par excellence, Rubelinda Borghesse, told me that she did
not become acutely aware of her provinces governance problem until ten or fifteen years
ago.1:1 Many veteran civil servants made similar comments, noting how the obscurities of
intergovernmental relations in Argentina made it hard to know what was wrong and
whether provincial administrative practices were to blame. I often thought about the
settler paradise as I walked through the entrance hall into the open air courtyard of the

91
beautiful Casa del Gobierno. It seemed hard to believe a pacesetter in a country of
progress and promise had stumbledchipped paint and bonos federales, unheated offices
with dead phone lines and apprehension about the medicine required for this sick
patient. Sudden disasters are probably easier to recover from since individual and
collective know-how can step forward to reconstitute whatever was lost. In contrast,
gradual declines are harder to reverse because assets like political leadership, sound
administration, and public confidence are lost slowly and renewal depends on relearning
the habits that supported them in the first place.
3.4 San Luis: From Nowhere to the Puntano Miracle
San Luis has never occupied a prime piece of real estate in Argentinas birth as a
nation or its subsequent development. Sanluiseos, known also as Pntanos for the Punta
de los Venados mountains in the heart of the province, number about 380,000 on a
rectangular shaped 77,000 km/sq., bordering the western most reaches of the pampa to
the east and the eastern foothills of the Andes to the west. The land is mostly sierra, with
the south of province being harsh plains and the northern half defined by three mountain
ranges and their valleys. The capitol, San Luis, sits close to the provinces center. In the
colonial period, present-day San Luis was not ideally located to take advantage of the
mule trains and commerce that traveled between Buenos Aires and the silver mines of
Potos. Nor was San Luis blessed with wide tracts of fertile land to draw new immigrants
following the wars of independence.
The provinces early decades in the United Provinces and Argentine
Confederation seem to speak to the problems associated with lacking natural resources
and close proximity to Buenos Aires (Nufiez and Vacca 1967:Vol.II). San Luis fame was

92
limited to the large percentage of its population that fought alongside General San Martin
and its position as a stopover point for travelers heading from Buenos Aires to Mendoza
or over the Andes into Chile (Gutirrez 1998)." The provincial government, when
finances permitted, fought indigenous peoples on its southern frontier. But San Luis state
lacked resources to do much else; in fact, it was thought the province may have the
smallest administration in the Confederation (Nez and Vacca 1967:368-369). Thus, for
instance, Governor Lucero lamented in 1854 that the province had only two schools and
scarce hopes for more or better (Nez and Vacca 1967:488-492). The great Argentine
educator and president, Domingo Sarmiento, described 1830s San Luis as a place that
went ten years with a single priest, no schools and not a single person wore fine clothes
(Sarmiento 1988:117-119). The economy was simple, inward-looking and capital-poor,
comprised of ranchers, farmers and artisans. Scant evidence existed for an expectation of
bigger and better days.
The countrys liberal boom years affected San Luis like it did many lonely parts
of the interior. It brought more political stability, as well as a nascent middle class and a
system of public education in the few cities and towns. But in no way, shape or form did
San Luis resemble the Argentina defined by immigration and modernization. Full
unification meant the elimination of provincial tariffs against products from Buenos Aires
and abroad, and this hurt local producers. Moreover, the rail lines came later and
incompletely to San Luis, around 1890 (Rock 1987:170), which implies private
investment interests thought the province was marginal. In 1910, at a time when one in
three Argentines was foreign bom and 80 percent had roots no earlier than 1850,
immigrants accounted for only 10 percent of San Luis population (Rock 1987:167). San

93
Luis was part of the other Argentina, the economically insecure mestizo half (Sawers
1996). As a result, the province was also losing population to more prosperous places like
Mendoza. Crdoba and Buenos Aires. The combination of limited natural resources and
missing out on the ideal development pattern continued to raise doubts about the
provinces prospects for long-term improvement.
The politics and administration of the period may provide other clues. The small,
cash-strapped sanluiseo administration was generally undistinguished but it made
considerable efforts to modernize the administration according to the scientific principles
of the day (Pastor 1970:304-345, Nez and Vacca 1967:651-674). For example, Ortizs
government created a Department of Topography in the 1880s and also made sustained
inquiry into the water shortages facing the province. The politics of the province were
more complicated. The small urban middle class clamored for universal male suffrage
and in 1904 opponents of Governor Mendoza showed up at his home armed with
Winchesters, securing the governor and his ministers resignations (Nez and Vacca
1967:693-694). There were two federal interventions shortly afterwards and various
governments in the later stages of the liberal era complained that development had been
hampered by shortages of capital for private and public investment (Nez 1980:590-
596, Nez and Vacca 1967:707-716). It appeared, as Argentina stood on the cusp of
political change, that San Luis was at least running to catch up.
The modem coparticipacin era was probably the first real signal for a poor
province like San Luis that development on par with the countrys richer provinces was
possible. The progress proved modestmore secondary and technical education, a
university, a few hospitals and basic infrastructure-but the infusion of resources held the

94
potential to make a big difference in a province that had historically raised limited
revenue.18 Getting three pesos back from the national government for every two collected
in the province was a good prospect. This fits the idea of leveraging development, but
much would depend on what share of those three pesos went to creating human and
physical capital and what share to state salaries and graft. The size of the state probably
doubled between 1930 and 1970, and while waste and fraud rose the problem did not
reach the epidemic levels it had in Argentinas northwest provinces (Instituto Desarrollo
Industrial 1993). Moreover, the payoff from many of this eras investments could not yet
be evaluated. In sum, most of the post-1983 political leaders and public managers grew
up in this era and it convinced many of them that public investment was compatible with
private investment. What they would learn in the coming years was that their premise
held water provided political leadership and sound administration could be marshaled.
The 1970s represent a strange economic period for the province. On the one hand,
the kernel of the growth in industrial parks, parques industriales, was planted. Provincial
leaders had long saw value in the plan, and for various reasons the military junta of 1976-
1983 and then Alfonsins government lent support in terms of building and tax credits
(Sawers 1996:235-238). Yet on the other hand the decade was one of debilitating
macroeconomic instabilityrising public debt, inflation, exchange rate fluctuations and
high interest rates. These problems made it hard for anyone to predict which provinces
would rebound when the dust settled, though few experts would likely have pegged San
Luis for major improvement even at this point in time. Adolfo Rodriguez Sa won the
gubernatorial election in 1983 and worked energetically to widen and deepen the
manufacturing sector of San Luis economy.19 Rodriguez Sa, a young Peronist with deep

roots in the province, was also committed to public works and financing new home
purchases for the provinces working poor and middle class (Mazzarino 1999).
95
Since 1983 San Luis economy has grown at a rate of 5 percent per annum, which
is nearly twice Argentinas average for the period (INDEC 2001). Multinational
corporations like Kimberly Clark, Whirlpool, Fadeal, and Arcor have located large
manufacturing facilities in the province. Moreover, the manufacturing sectors growth
has had a positive effect on the service sector (Mazzarino 1999:24-25). On the public
sector side, sticking to balanced budgets was constructive for San Luis in an era when
many of the countrys provinces have run up unmanageable debts. Part of the answer was
keeping salaries of state employees at levels considerably lower than provinces like Entre
Ros, Crdoba or Buenos Aires. This not only holds down the provinces wage bill but it
also reduces distortions in the private sector labor market. Issues like these have truly
come to matter on the provincial level in Argentina, particularly since the 1990s when the
state divested itself of many economic responsibilities.
What can be said about how Sanluiseos see themselves? During ex-governor
Rodrguez Sas campaign for the presidency in 2002, he often made a point of how San
Luis had managed to get more out of less. The following is an excerpt from a Rodriguez
Sa speech:
Much has been accomplished in the last twenty yearsroads, housing, water
infrastructure, electric capacity, schools, hospitals, among others. Let me tell you
about where our success comes from. Is there oil? No. Are there navigable rivers?
No. Is the soil rich? No. Is there a mountain of gold? No. We succeeded because
of the investments we managed in San Luis and the hard work of Sanluiseos.20
Rhetorical flourish aside, I think the message echoes how many Sanluiseos see the
development of their province. It has been a story of beating the odds. This perception of

96
what it means to be a Puritano reflects a context where tangible things have been
accomplished in the last twenty years. And, of course, the accomplishments appear that
much more noteworthy from a comparative perspective. Among Argentina's provinces
San Luis presently ranks in the top four in both per capita GDP and the quality of
governance. Critics say the province merely played a good hand well in recent years,
while there is too little democratic debate over public policies. There is some truth to this
criticism and it gets a serious hearing in Chapters 5 and 6 when issues related to
democratization in the public sector are analyzed.
Today, Sanluiseos are fond of saying San Luis, Otro Pas (in English, literally,
San Luis: Another Country) because their province has defied the downward trend line in
Argentina and accomplished more than resource-advantaged provinces. I have to admit
there is an air of progress and optimism. On a late fall afternoon I drove thirty minutes
out of the capitol to take a few pictures of La Punta, a new town surrounded by sierra. It
looked modest to me, as it would to Argentines accustomed to living in the countrys
pockets of established prosperity. The houses are small and tightly spaced; the place felt
dusty; and there was a sort of strange newness to everything. However, this represents
real progress for many Sanluiseosbuying a house, having a school nearby, and
anticipating the next generation may find good opportunities in the province. People,
whose grandparents had been shepherds and sharecroppers, contratistas, see the glass as
more than half full. And the Puntano Miracle is as much about appreciating where San
Luis came from as it is affirming the latest GDP or employment figures.

97
3.5 Conclusion
Not all provincial comparisons make equal sense if the goal is to show the impact
of good government over time. For instance, comparing a province with historical
advantages in human and physical resources that continues to be at the head of the class
with a historically disadvantaged one that continues to languish near the bottom is far less
useful. After all, is todays level of development simply being driven by yesterdays
progress? One could make a convincing case for how good government has been integral
to success and absent in failure. But there are a great number of intervening variables
standing in the way of getting a good read of the impact of things like political leadership
or sound administration. The case seems more persuasive when it is possible to
simultaneously study a success story that has hit hard times and another without any such
historical pedigree that has beat the odds, to catch them when they have recently passed
each other heading in opposite directions.
Argentinas economy and polity have intrigued scholars for decades. Most of the
interest has centered on the national level: how a resource-rich country failed to sustain
economic growth and why political consensus proved elusive. The big riddles of 20th
century Argentina have not drawn much attention to the provincial level. In this chapter,
two of the fascinating stories left for our consideration are the unexpected developmental
success of San Luis and Entre Ros equally unforeseen decline. This chapter offered
background on the federal-provincial relationship and tried to explain where the
provinces stood at various stages of Argentinas history. The hope is historical context
will be an aid in understanding the empirical side of public sector reform. The argument
is also made that political leadership and quality administration have impacted the current

98
development trajectories of the two provinces, which appear to be well suited for
comparison in this regard. The remaining chapters are located in the present, analyzing
three sets of public sector reform issues through surveys and interviews and ascertaining
what the empirical account tells us about the composition and timing of reform.
3.6 Respondent Profiles
Thus far this chapter has sought to explain why Entre Ros and San Luis (two cases of a
potential twenty-four on the provincial level) are solid selections for comparison. The
next step is to describe the survey respondents that help us understand important sets of
reform issues in Chapters 4 and 5. The profile that follows tells us a few basic things
about the respondents. A full explanation of the survey respondent selection process in
the ministries can be found in Appendix A.
Age and gender. The initial questions relate to age and gender. The sample
population in Entre Ros is somewhat older than San Luis (see Table 3-1 below). In the
first two quintiles (employees under 40), San Luis has almost 42 percent while Entre Ros
stands at 27 percent. This suggests San Luis has had the financial wherewithal to tap into
more young prospects in the last ten years. It may also be suggestive a greater capacity to
adapt to change in the coming years. The greatest frequency of respondents is found in
the 40-49 range, which is not surprising since a spike in provincial hiring seems to have
taken place from 1983-91 (Martnez de Hoz 1991).
Table 3-1 Age
Distribution o
"Public Employees(Entre Ros N=63, San Luis N=91)
20-29
30-39
40-49
50-59
60+
Entre Ros
11.1
15.9
38.1
17.4
17.5
San Luis
18.7
23.1
31.8
22.0
4.4

99
Interestingly, Entre Ros has a wide advantage in 60+ year old employees. It
appears much of the explanation lies in the very generous pay steps that come with
seniority in Entre Ros within each position grade level (Empleado Pblico Estatuto,
1993). This appears to create a major incentive for longevity.
There is no difference between the provinces with regard to gender. In Entre Ros,
47.6 percent of the respondents are women; San Luis similarly shows 47.3 percent.
Women hold proportionally fewer managerial level positions in the ministries. There are
not significant differences in the responses of women across the two provinces. However,
women in both provinces are more critical of the lack of rewards for good work, the
effects of privatizations, and individual incentives. Although I do not choose to highlight
and analyze the role of gender in public sector reform, the apparent attitude gap between
women and men on many key issues is an interesting one. At the very least it should raise
the question of whether women are sufficiently represented among the leading reform
protagonists.
Seniority and intent to continue. The next pieces of the profile focus on
seniority issues and whether or not the respondent wants to continue in their position. In
this profile, seniority is expressed by the number of years worked for the provincial
government. In Entre Ros the average is 18.3 years, while San Luis figure stands at 10.6
years. Such a notable difference raises two main points. First, why is the average civil
servant more senior in Entre Ros? Entre Ros went on hiring binge that coincided with
the restoration of democracy in 1983. Many employees got their start in that period. Also,
it reflects longevity among managerial level individuals. Overall, the management class
in Entre Ros came up through the ranks, whereas San Luis has recruited more public

too
managers from the private sector or straight out of university. Second, will this have a
practical impact on reform? It depends on the issue. In terms of clearing out space for a
downsizing mandate, it is easier to design retirement inducements for the senior
employees than it is to float a politically testier plan. But. on the other hand, younger
managers may certainly be advantageous for adopting and sustaining changes such as
training and technology transfer, incentive-based contracts and increased public
participation.
Related to seniority, it is also useful to know how long an individual has occupied
their current position. Entrerrianos have been, on average, in their position for 11.25
years as opposed to 5.99 years for Sanluiseftos. This may suggest promotions and/or
organizational restructurings are more common in San Luis. The next related issue
concerns whether an individuals government service has been continuous or not.
Approximately 86 percent in Entre Ros classify their service as continuous while nearly
72 percent in San Luis count unbroken service. The last piece here looks at the
respondents preference to continue in their current position. The figures prove roughly
similar: 68.4 and 64.3 percent in San Luis and Entre Ros want to continue. This is not
necessarily easy to interpret, however. Many public employees dream of a better job,
whether inside the government or outside if but extremely few seem fed up enough to
willingly move on.
Education. Education is a key element in developing human capital, which in
turn plays a major role in the potential effectiveness of public organizations. Argentina
remains a well-educated country, although it does not enjoy the advantage it once did
over other middle-income countries (CEPAL 2002).22 Across Argentina, the quality of

101
education and educational attainment tend to be correlated to the prosperity of the
province; Argentinas interior is, on balance, less educated than Buenos Aires. As I
discussed in Section 3.3, Entre Ros was among the countrys more educated provinces
by 1900 and despite its recent problems the province a strong base of well educated
people. San Luis has made great strides in improving the availability and quality of
education since the 1950s, in particular since 1983. Increasingly, the province has a good
base of educated young people to draw on. In terms of the education levels among civil
servants, there is a fairly close correspondence across the two provinces. The majority of
civil servants have at least a college degree in both provinces. The education levels
expressed by samples means are nearly identical, with Entre Ros holding an edge at 6.73
compared to 6.63 for San Luis.
Table 3-2 Education Levels~(
ntre Ros N=63, San Luis N=91)
Entre Ros
San Luis
Primary
0.0
0.0
Primary Completed
1.6
1.1
Secondary
3.2
4.4
Secondary Completed
15.9
22.0
Tertiary/Technical
9.5
4.4
Tertiary/Tech Complete
7.9
7.7
University
7.9
9.9
University Grad
39.7
32.9
Post-Grad
14.3
17.6

102
Quality of life. Next, respondents were asked to assess their quality of life over
the past three years. The choices were limited to poor, acceptable, and good. The
distinguishing feature from these responses is the near perfect reversal of assessments
stating poor and good in the two provinces. The middle choice scored an easy
plurality in Entre Rios and San Luis, and the responses favoring acceptable are
comparable in the two provinces. On balance, I see a glass half full, glass half empty
dynamic. Civil servants are thankful they are working in a national context where
unemployment remains 20-25 percent. But strains and stresses are showing. Civil
servants in all provinces are worried about the future and, in the case of Entre Rios, they
have been dealing two additional headaches: wages are paid in provincial quasi-money,
bonos federales rather than Argentine pesos', and government work is less respected in a
context where fellow citizens see the state as corrupt and ineffective.
Union membership. Organized labor continues to play a significant role in
Argentine politics. On the national level, the highest profile unions are the Confederacin
General del Trabajo (CGT), Confederacin Trabajadores Argentinas (CTA) and
Corriente Clasista Combativa (CCC).24 All three were vociferous opponents of structural
adjustment policies during De la Ruas administration. Among public employees, Unin
Personal Civil de la Nacin (UPCN) and Asociacin Trabajadores del Estado (ATE) are
the important actors, while some smaller unions also have a presence. ATE is left-of-
center politically and remains adamant about fighting proposed revisions to national or
provincial civil service codes. UPCN has a more centrist orientation and while wanting to
protect jobs and benefits, the organization offers many professional development
seminars and courses.

103
In Entre Rios approximately 55 percent of the survey respondents claim union
membership, with UPCN and ATE holding similar shares. In contrast, only 40 percent of
sanluiseo respondents are union members. Here, UPCN holds a larger share than other
unions. Union members do not take a significantly less positive view of most aspects of
professionalization. Compared to non-union respondents, they do take a harsher view of
most elements related to the introduction of market mechanisms into public
organizations. Attitudes concerning democratization do not vary significantly among
union and non-union employees. In terms of the role unions will play in the reform
process, large ones like UPCN and ATE are going to negotiate and lobby hard against
agenda items that seek to remake provincial administrative systems. However, reformers
will encounter similar opposition from non-union civil servants. The importance of union
membership is real but it should not be overestimated.
Notes
1 Until the 18th century Buenos Aires was not more important than interior cities like Cdoba, Salta,
Tucumn and perhaps even Mendoza. Reorganizations in the colonial administrative structure helped pave
the way for the growth of Buenos Aires. This was because the Spanish bestowed no special commercial
advantage on Buenos Aires until 1776. Before the 18th century, the Spanish empire was inward looking,
strictly regulating trade between jurisdictions in the empire. Cdoba, Salta, and Tucumn were important in
the traditional trade routes that took mules and cattle to the silver mines of Potos (in present day Bolivia)
and then returned to the port in Buenos Aires with the silver bound for Spain. See Rock (1987).
2 See Rock (1987:101-104). Rivadavia probably underestimated the interiors suspicion of central
administration over commerce, provincial militias and some provincial lands. The United Provinces was
almost immediately thrust into turmoil as caudillos fought against what they perceived to be foreign-
controlled interests in the city of Buenos Aires.
3 See Linares Quintana (1960). See also Crasswellers (1987:40) discussion on the implications of Article
6.
4 See Rock (1987:125).
5 The cracks in the liberal system appeared before 1930growth in the size and scope of the national
government, often violent confrontations between the police and organized labor, and the dire economic
stagnation that was the norm over much of the countrys interior. However, the onset of the Great
Depression and the loss of export markets united opposition against President Yrigoyen. The traditional
liberals found themselves in common cause with nationalists and this formed the support for the military
coup led by General Jos F. Uriburu in September 1930.

104
6 The nationalists had a complicated set of reasons for wanting to reach out to the interior and promote
development there. One could see the logic as strictly political; in other words, the nationalists needed to
broaden its constituency to be a force in national politics. One could also see the move in economic terms.
By the time Pern became president in the mid-1940s, the emphasis on industrialization was predicated on
the expansion of Argentinas domestic market. In effect this meant Import Substitution Industrialization
(ISI) would not work without a process of modernization that reached the poor interior. Last, the
nationalists felt strongly about the protection of traditional Spanish values, la hispanidad, and genuinely
felt the plight of much of the countrys interior was a mark of shame for a great nation. Pern, for instance,
had in his army career spent many years in various parts of the country and he developed a respect for the
poor, honorable people he knew. To be sure, these experiences affected national policies in the 1940-50s.
See Crassweller (1987) and Rock (1987).
7 In Entre Rios and San Luis, for example, explicit, modem civil service statutes were drafted and passed in
the early 1960s. The extent to which they were subsequently minded is another matter.
8 Menem carried out an ambitious economic liberalization agenda, perhaps the most rapid privatization
program in all of Latin America. There was also a program for modernizing the national bureaucracy. On
all these fronts, however, Menem held together political support by sparing the interior the costs of reform.
See Heredia and Schneider (2000).
9The preponderance of literature on Argentinas vertical fiscal imbalance is impressive; see Artana (1998),
Lpez Murphy and Muskovits (1999), and Tommasi, et al. (2001). During the economic crisis of 1999-
2002, steps were taken to return some revenue sources to provincial control. This logic, of course, being
that provincial governments will have an incentive to crack down on tax evasion and also to act with
greater prudence in their expenditures. The problem, and hence the limitations of the steps taken, is that
poor provinces have poor revenue streams and thus coparticipacin remains indispensable if the
distribution of national resources is a policy objective.
l0See Bosch (1978:207). The translation is my own. De Moussy believed the province was favored by
nature and, starting in the 1850s, the industriousness of its government and growing citizenry.
"President Hiplito Yrigoyen was the long-time leader of the Unin Cvica Radical (UCR), which is
largely credited with bringing universal male suffrage to Argentina. Yrigoyen won the presidency in 1916,
thanks to the electoral reform passed in 1912, and governed until his term ended in 1922. See Rock
(1987:186-190). Yrigoyens second term started in 1928 and lasted until a military coup overthrew his
government in September 1930. It was a contentious two years as Yrigoyen faced bitter opposition from the
Conservatives and a split in the UCR. The UCR essentially divided into two camps: personalistas (those
who backed the president) and antipersonalistas who felt Yrigoyen had used political patronage to an
extent unbecoming an honest democrat. In many provinces in the months preceding September 1930,
personalistas tried to keep their home provinces in the presidents camp. Their efforts led the newly
installed military government to intervene in every province except Entre Ros and San Luis. See Bosch
(1978:286-287). Regarding Entre Rios, the implication was that the political community in the province
had centrist instincts and showed the steady governing hand that had served the province well since the
1850s.
12 Entre Ros industrial growth and productivity was already uneven and frequently falling the in the 1950-
60s (when many provinces were rising), see Roffman (1981:79-81). The arguments have not changed all
that much over the recent decades. See AR-ERs (2002:1-14) recent elaboration of what needs to be done.
In addition, I interviewed Fernando Caviglia, Director of the Consejo Empresario de Entre Ros (CEER), in
June 2002. CEER is basically a pro-business interest group that encourages market friendly government
policies. CEERs position is that provincial government needs to improve in the provision of public goods
like infrastructure, education and worker retraining. CEER envisions that Entre Ros should do much better
in terms of exports given its strategic location in the Mercosur zone.
13 See AR-ER (2002) and CEER (2001).

105
14 The per capita income figures are from the Consejo Federal de Inversiones (1998). CFI is a independent,
quasi-governmental research institute and it has a long-standing reputation for quality, non-partisan work.
CFI had nothing more recent than 1998, and INDEC surprisingly had no per capita GDP or income figures
for the provinces in any form. One can easily surmise, however, the devastating four year recession (1999-
2002), coupled with the steep devaluation (close to 300 percent, initially, in 2002) greatly reduced per
capita income figures for all provinces, particularly those that bottomed-out at the lowest levels of
productivity and investment, and public sector indebtedness. Hence, I would be confident San Luis held
onto its 3rd place position in per capita income, whereas I doubt Entre Ros holds anything higher than the
15th place it held in 1998. The other measure, quality of governance, is more complicated because it
includes classifications according to budgetary solvency and provincial indebtedness, yielding an overall
rating, a classification global. San Luis earned an A+ rating and Entre Ros received a B. However, the
economic crisis cracks in Entre Ros that were not clear in the period before 1998. By 2002, Entre Ros was
in extremely dire straights in terms of balancing the budget and provincial indebtedness, hence the need to
indulge in multiple issues of quasi-money, bonos federales, to pay public employees and nearly all state
creditors. I believe the province would be lucky to receive a D if FIEL updates this study. San Luis, on the
other hand, is proud to report not a single bono was printed during the crisis years; see Fundacin de
Investigaciones Econmicas Latinoamericanas (1998).
15 Rubelinda Borghesse is a lifelong Paran resident with extensive experience in government and the
public sector union Asociacin Trabajadores del Estado (ATE). I talked with her on many occasions in the
Austral fall and winter of 2002. More than once, she observed that few Entrerrianos, including herself, had
a tangible sense of the governance problem in the province until the early 1990s. This is when, according to
Borghesse, the absence of political leadership and sound administration became apparent.
16 It is said that over one-quarter of San Luis male population heeded the call to arms of General San
Martin when he passed through the province during the War of Independence against the Spanish. This is
apparently a very high level of commitment for the period and thus it is a source of great pride for
Sanluisefios today. 1 visited the monument to San Luis heroes, Monumento al Pueblo Puritano, in the hills
above the captol and it does provide physical and visual insights into the provinces psyche. Sanluisefios
see themselves as underdogs who came together to achieve great things. Gutirrez offers many interesting
stories from San Luis old, east-west road, el Camino Real, that was used by 19th travelers heading west
from Buenos Aires, over the Andes, and into Chile.
17The translation is my own. See Sarmiento (1988 [ 1845]: 117) for the discussion. Sarmiento remarks, En
San Luis, hace diez aos que slo hay un sacerdote, y que no hay escuela ni una persona que lleve frac.
The Spanish word frac posed a problem for translation because it refers to a type of coat worn by gentlemen
of the period and I cannot supply an ideal English equivalent, thus I have opted (and I think this reflects the
content of Sarmientos observation) to use fine clothes in the translation.
l8Rofmans (1981:80, 101-111) INDEC statistics from the 1950-60s show San Luis improving in areas like
infant mortality, doctors per capita, bank deposits per capita, primary school retention, and industrial
production. This shows progress was being made and while it does not mean another redistributive system
would not have worked as well or better than coparticipacin, it reminds us that coparticipacin helped
accomplish tangible things in poor provinces. See also Pastor (1970).
19The effort to industrialize and thereby reduce the provinces income-dependence on its agricultural sector
began before Rodrguez Sa became governor. However, growth in the industrial sector took off in the
mid-1980s when Alfonsins administration extended large industrial promotion benefits to San Luis
(Sawers 1996:237-238). From there, the growth was fairly swift and San Luis quickly outpaced most
provinces in terms of creating industrials parques, zonas and areas', see Porto (1996:167). The lesson,
however, that is often unappreciated relates to the role played by the provincial government. Development
of this type requires major investments in public goods that would not otherwise materializepublic health,
an educated workforce, and infrastructure like highways and electric grids. It is interesting to note most of
the other provinces that were dealt a good hand in the mid-1980s~La Rioja, Catamarca, Tucumn-
accomplished far less.

106
tlie other provinces that were dealt a good hand in the mid-1980s~La Rioja. Cata marca. Tucumn-
accomplished far less.
:"The translation is my own. The excerpt from Rodriguez Sa's speech (August 2002) is as follows:
Muchas han sido en estos 16 aos-en caminos, viviendas, infraestructura hdrica. energa elctrica,
establiecimientos hospitalarios, educacionales, entre otros. Djenme que les cuente sobre la prosperidad de
San Luis. Hay petrleo? No. Hay ros navegables? No. Hay tierra rica? No. Hay una montaa de oro?
No. San Luis es rico porque invertimos en donde debamos y porque los Sanlueos trabajaron
incansablemente.
21 Again the sources are: Consejo Federal de Inversiones (1998) and Fundacin de Investigaciones
Econmicas Latinoamericanas (1998). I would imagine that updated rankings would, if anything, have
solidified San Luis place whereas the 1999-2002 economic crisis brought Entre Rios government to a
much worse reckoning than most foresaw in 1998. particularly in the governance formula.
22 See CEPAL (2002). Argentina used to enjoy a wide advantage in Latin America in terms of education
levels (literacy, per capita spending on priman and secondary education) and the development of
professionals (scientists, doctors, engineers, etc ). That gap has narrowed and, in some cases, disappeared.
23Part of the reason for this gap has been the wealth differential betw een the city of Buenos Aires and most
of the interior. This provides the means for more and better educational opportunities. The other part of the
gap is the consistent brain drain from many pans of die interior to Buenos Aires. This reduces the pool of
quality candidates some provinces have for positions in provincial government while it increases the pool
of quality candidates die nadonal government and die private sector based in Buenos Aires have to pick
from.
4 The CCC is an unconventional union because its members are unemployed activists, piqueteros, who
take a hard line against neoliberal economic policies and any government policies that they see as
appeasement of neoliberal prescriptions. The major unions were strongly anti-Menem in the May 2003
presidential elections. Support for Kirchner was discemable but far from overwhelming; there was more
support for Rodrguez Sas candidacy.

CHAPTER 4
PROFESSIONALIZATION IN THE PUBLIC SECTOR
4.1 Introduction
Bureaucracies have served states and empires for thousands of years. In the late
19th century, political scientists such as Woodrow Wilson recognized professional
administration as a requisite for any civilized nation and argued strenuously against the
amateurish, patronage-based administrative system in the United States 1 Max Weber
found the logic and prevalence of professional bureaucracy to be the expression of
modernizing states whose authority rested on rationalist principles.2 Scholars of this era
opened a rich vein of conceptual development and established the fields tradition of
progressive advocacy. After World War II, development administration exported
Wilsonian and Weberian administrative principles to developing countries preparing for
economic takeoff. Since the late 1970s, the variety of approaches surveyed in Chapter 1
have diversified the institutional reform agendatoday, participatory and market-based
priorities easily rival the core concerns of professionalization.
While public sector reform has to accommodate multiple priorities, this study
takes every opportunity to ensure that issues related to professionalization are not lost in
the shuffle Based on the survey I administered in various departments of Ministry of
Economy in Entre Rios and San Luis, this chapter places often-generalized issues such as
merit-hiring, training, rewards and sanctions, political interference and corruption in
empirical perspective. Pinpointing the reality of where Argentinas provinces stand with
107

108
regard to professionalizing the public sector is crucial for providing well-informed advice
on what needs to be done. It also serves as a sounding board for the conceptual
refinement of well-known indicators of institutional quality like Evans and Rauchs
Weberian Comparative State Data Project.4 Overall, then, the goals of this chapter are to
assemble an accurate profile of professionalization in the two provinces and assess the
degree to which being more Weberian is advantageous, particularly since the changing
face of Argentine federalism places pressure on provincial governments.
4.2 Elements of Professionalization
4.2.1 Merit hiring
In the United States, the Pendleton Act of 1883 enshrined the principle of
appointment by merit for the federal bureaucracy. Under this principle, candidates
educational qualifications and prior experience serve as the basis for hiring decisions.
Most states adopted the appointment by merit principle within forty years of the passage
of the Pendleton Act (Cayer and Weschler 1988:37). In Argentina, appointment by merit
has been the law since 1957. Argentinas provinces generally codified the principle soon
thereafterin the case of Entre Ros, 1961; while in San Luis, 1962.5
The problem of incomplete compliance with civil service laws often undermines
the intentions of reformers. The responses from public employees regarding the scope of
merit-based hiring underscore this point. In Entre Ros it is estimated that only 35.1
percent of employees have been hired on the basis of merit, while in San Luis the figure
stands at 47.9 percent.6 Clearly, such figures fall well below what one expects to see in a
professional bureaucracy. The reasons for non-compliance are varied, but my experience
in the provinces encourages two main explanations.

109
First, the problem can be identified as one internal to the organization; in this
case, managers responsible for personnel decisions simply fail to hire qualified
candidates. There is evidence that personnel management often suffers from inadequate
information about the technical requisites for many positions, as well as from an
inadequate pool of applicants for demanding positions. San Luis Minister of Economy,
Claudio Poggi, told me that unqualified hires are indeed a problem in the provincial
government but the source of the problem is overwhelmingly internal to those public
organizations. In Entre Rios, Secretary of Public Works, Gustavo Menndez, similarly
explained that failings in this regard have generally resulted from managerial sloppiness
hasty decisions, lax evaluations during probationary periods and hesitancy to recruit
talent from outside the government.7
But the lack of success in institutionalizing merit hiring has external explanations
too. In fact, a lack of political commitment to merit hiring is probably an even greater
factor. Lack of political commitment, at a minimum, means that any or all branches of
government prove willing to tolerate cronyism in organizations hiring practices. In its
fuller form, a lack of political commitment reflects a clear disconnect between the law
and a patronage-based system of governance. According to Weber, legal-rational systems
of authority produce professional bureaucracy over time while norms of professional
bureaucracy like merit hiring struggle to develop in societies that cultivate extensive
o
patron-client networks. Patronage systems took considerable advantage of public sector
growth in Latin America throughout most of the 20th century. Argentina and its
provinces, despite following numerous elements of the continental European, Weberian-
style bureaucracy, have large numbers of employees hired for reasons other than merit.

110
Evidence from Entre Ros and San Luis offers at least a thumbnail sketch of the
influence of external factors on hiring practices. Table 4-1 summarizes responses to four
more questions related to merit hiring. The first question indicates that, among those non
merit hires, political connections are the most common cause, followed by family
connections and friends. This suggests non-compliance with appointment by merit is not
only a case of benign neglect on the part of elected officials. Instead, the lack of political
commitment appears to be at least partially related to the persistence of patronage
practices in personnel management.
Table 4-1 Hiring Practices
Of those employees who are not hired primarily on the basis of merit, would you say that they are hired
most often through:
Entre Ros
San Luis
Family connections or friends
27.0
36.3
Political connections
54.0
46.1
Special favors
6.3
5.5
Other
12.7
11.0
No bad hires
0.0
1.1
How did you find out about your current position?
Entre Ros
San Luis
Public bid
4.8
2.2
Relative
19.0
13.2
Friend
27.0
20.9
Boss
9.5
20.9
Someone in my organization
23.8
27.5
Someone in other org
15.9
16.5
Are positions like yours generally advertised to the public (e.g. through official bulletins, publications
and/or newspapers)?
Entre Ros
San Luis
Yes
23.8
25.3
No
76.2
74.7
Before you applied for the position, did you know that you would be hired?
Entre Ros
San Luis
Yes
23.8
23.1

Table 4-1. Continued
111
Before you applied for the position, did you know that you would be hired?
Entre Ros
San Luis
No
76.2
75.8
No response
0.0
1.1
(Entre Ros N=63, San Luis N=9f
. See Appendix B for the Professionalization survey in its
entirety.9
The second question draws immediate attention because few public employees
pursued their employment as a result of public notification or bid. This does not suggest
becoming aware of an employment opportunity through relatives, friends or other
contacts should disqualify otherwise qualified individuals. But it raises questions as to
why public organizations have not utilized a more transparent and potentially promising
means for attracting qualified candidates. The third and final questions also relate to
hiring practices. Again, public bids prove to be atypical, though increasing in use. Last,
between one in four and one in five employees in each province knew the position was
theirs before officially applying, which is too high if an application review process
intends to be meaningful.
4.2.2 Position Classification and Definition
Position classification serves to standardize important aspects of public
employment such as pay and specialization. In the case of Argentina and its provinces,
position classification has been widely institutionalized for decades. For instance, a junior
commercial officer writes export analysis reports on specified sectors of the economy for
the Director. Thus, classification proves a tool for achieving specialization. As in most
countries, including the new public management ones, public sector employees are
reluctant to tinker with standardization because it is also widely associated with fairness.
Fairness is not only a question of the individual having enough familiarity with her tasks
to do them well, but also being recognized on par with employees doing the same job

within the organization or government. More will be said on this subject in Chapter 5
when the introduction of market-based reforms such as performance incentives is
discussed.
112
There are also the essential issues of how public organizations define and
communicate an employees role. Table 4-2 presents my findings from Entre Rios and
San Luis. The paucity of written job (tasks, responsibilities, etc.) descriptions runs
counter to the formal, legalistic orientation of Weberian bureaucracies. Newer employees
(less than 8 years of service) more often reported that they had been given a written job
description40 percent in Entre Rios, 65 percent in San Luis. While written job
descriptions are hard-pressed to capture the complexity of on-the-job reality, more than
three-fifths of Sanluiseos who received one indicate that it was indeed very accurate. In
contrast, one-third of Entrerrianos judge their written job description to be not at all
accurate and not a single respondent felt it was very accurate.
Table 4-2 Position Definition
When hired, were you provided with a written job description?
Entre Ros
San Luis
Yes
23.8
30.8
No
76.2
69.2
If you were provided one, how well did the written job description reflect your functions and
responsibilities?
Entre Ros
San Luis
Very accurate
0.0
60.7
More or less accurate
66.7
35.7
Not accurate at all
33.3
3.6
How does your organization primarily communicate expectations and standards to its employees?
Entre Ros
San Luis
In writing
4.8
11.0
How does your organization primarily communicate expectations and standards to its employees?

Table 4-2. Continued
113
How does your organization primarily communicate expectations and standards to its employees?
Entre Rios
San Luis
Managers explains them to an
employee or a group of
39.7
58.2
Veteran employees explain
things to the newer ones
25.4
18.7
Other
6.3
9.9
Not communicated at all
23.8
1.1
Of the following factors, mark those that help and/or those that hurt you in your position?
Entre Rios
San Luis
Helps: My role is clearly defined
19.1
44.0
Hurts: My role is not clear
44.4
23.1
(Entre Ros N=63, San Luis N=91; Question 2: Entre Ros N=15, San Luis N=28). See Appendix
B for the Professionalization survey in its entirety.10
The accuracy of written job descriptions in San Luis can be attributed to a couple
of factors. First, as discussed in the last chapter, San Luis ministries and managers have
made professionalization a priority. Experience has shown them that major
developmental objectives set by the provinces elected officials are attainable when
organizations and employees receive clear marching orders. As Minister Poggi said, We
try to simplify what is asked of each employee and control those activities. Second,
success creates environments where employees are more likely to accept directives,
written or otherwise, from above as logical and adequate. On the other hand, failure and
reduced expectations in Entre Rios have invited public employees to suspect the validity
of even a written job description.
The third question, which focuses on the primary means of communicating
standards and expectations, is telling in one or perhaps two respects. Obviously, the
absence of communication, according to nearly one-quarter of the respondents
(particularly since this response was a write-in choice) in Entre Ros, is a dangerous

114
trend. The other significant finding is that public managers in San Luis are playing a
more active role in conveying standards and expectations to employees in their charge
than managers in Entre Ros. The last question, which is actually one part of a broader
question involving multiple factors that may help or hurt employee performance, is also
significant. Public employees in San Luis cited a clearly defined role as a notable asset in
helping their performance far more frequently than their peers in Entre Ros, while their
Entrerriano counterparts are twice as likely to see inadequate role definition as a
hindrance.
4.2.3 Tenure
Tenure, the third traditional aspect of civil service reform, is not part of the
professionalization survey because it is the law in both provinces and virtual full
compliance with the letter of the law has been the norm for years.11 In Entre Rios, for
example, a senior building inspector makes a salary three times greater than a new one
with equal authority. Clearly, there exists a strong incentive for employees to hang on and
realize built-in pay steps that greatly reward longevity, but create larger pay differentials
within a given position than one commonly sees in Western European or North American
public organizations.12 The question of tenure is taken up again in Chapter 5 when I
analyze the survey on market-based reforms, which includes such issues as downsizing
and performance-based contracts.
4.2.4 Training
Continuing with personnel management issues, the development of employees so
they can perform better has always been a priority for public organizations. During the
Wests modernization era, Weberian-styled bureaucracies typically emphasized training

115
when an employee was new to a position. In the 1960-70s, public organizations began to
see training as a continuous process. On the micro or behavioral level, this represented a
change in thinking on how to motivate individuals. Instead of relying on material benefits
like money or pulling rank on employees, it was thought that opening lines of
13
communication and creating an environment of belonging were preferable.
The change also relates to a shift away from understanding bureaucratic tasks as
being narrowly specialized. Many tasks are, of course, routine and specialization
improves efficiency. But many other tasks, particularly in the managerial ranks, are not
routine and require considerable interpersonal skills, interorganizational and
intergovernmental collaboration, tradeoffs and interpretations, and planning for an
always-uncertain future. In this regard, training becomes one of the primary means for
capacity building in public organizations. And even routine tasks like using software
programs for budgeting, tax collection or mapping vital characteristics of a particular area
require training. Keeping up with the technological curve is impossible without regular
training.
As I indicated in Chapter 2, all levels of government in Argentina are going
through a difficult period of reduced resources. Training and employee development
programs are certainly in jeopardy. In Entre Ros, Secretary Menndez said employee
development has been inadequate in the province and plans to remedy this situation were
put on hold by the economic crisis that hit in 1999. The Director of Commercial
Development. Sebastin Gonzlez, was less diplomatic about this state of affairs, stating
that the provinces poor personnel hiring practices are magnified by the absence of any
commitment to training and development. The evidence from the surveys matches the

116
pictures of employee development that emerged from my interviews. Public employees in
Entre Rios believe, overall, there is training gap that has yet to be filled.
Table 4-3 Training
Overall, do you feel that you were given adequate instruction/training for the position that you currently
hold?
Entre Ros
San Luis
Yes
38.1
51.6
No
61.9
49.4
Of the following factors, mark those that help and/or those that hurt you in your position?
Entre Ros
San Luis
Helps: Training provided by org
25.4
28.6
Hurts: Inadequate training
33.3
31.9
(Entre Ros N=63, San Luis N=91). See Appendix B for the Professionalization survey in its
entirety.14
The situation in San Luis is better. The provincial governments financial woes
are mild compared to Entre Ros and one sees signs that San Luis is maintaining a greater
commitment to training. Slightly more than 50 percent consider they have received the
necessary training for their position. Multiple conversations with Minister Poggi and
former Minister Sergnese offered a clear sense of the growth and evolution of employee
development efforts. The Ministry describes professional training as the key to making
their parallel efforts to define roles and control for results feasible. Setting concrete goals
and holding employees accountable are essential, but adequate training is crucial for
meeting high expectations. Another significant benefit which Ministers Poggi and
Sergnese understandably did not point out, is the corrective effect training can have on
political or friendship-based, amigismo, hires.13 In other words, bad hires can often be
made into productive employees if there is commitment to doing so. This lesson should

not be lost on Entre Ros or other provinces in Argentina and governments around the
world.
117
It should be noted, however, that large disparities in the adequacy of training exist
between the Environmental Agency in the Ministry of Social Action and respondents
from the Ministry of Economyonly 20 percent in Environment rate their training as
adequate while the figure is between 50 and 60 percent in all other direcciones
surveyed.16 This may reflect weakness in the technical aspects of environmental positions
or perhaps it reflects the relatively low prioritization of the states role in the
environment. I think it is both and more will be said about the latter in Chapters 5 and 6
when we have analyzed more evidence that suggests San Luis is still working through its
modernization phase, which means post-modern values are not yet a priority for the
state.
4.2.5 Discretion
Discretion is another issue related to the general theme of professionalization or
personnel management. Much of the debate around how much decision-making or
problem-solving flexibility public employees should have is naturally dependent on
context. Yet there is typically room for an organization to develop its own signature on
this front: to place considerable discretion in the hands of its managers and employees or
to remain more classically hierarchical and cautious about distributing freedom of action
downward. In general, the new public management movement favors creativity and
innovation, the hoped for products of higher levels of discretion. Based on the first
survey, what we find in Entre Ros and San Luis does not answer whether public

118
organizations grant high or low levels of discretion because there is no easy way to
establish what the present baseline is. Nonetheless, there are interesting findings.
In particular, the first question gives an indication that most employees are
content with the level of discretion they currently have, though a greater number would
prefer more rather than less (see Table 4-4, p. 119). But the importance of this finding is
likely that few employees in either province are pining for more discretion. Because I
established from interviews with managers and employees that the present discretion
baseline is relatively low, it is probably fair to say the lack of enthusiasm for greater
discretion runs counter to new public management precepts.17 There is no simple or
single answer for why public employees who have low levels of discretion consider those
present levels appropriate. My reading of this can be broken down into three points.
First, despite not fitting the Weberian model in many respects, deference to
authority is a defining feature of organizational life in Argentinas provinces. Second,
since there is comfort with hierarchy, public employees in Entre Rios and San Luis are
wary of saying I know best, and if I turn out to be wrong you can hold me accountable.
As I first suggested in Chapter 2, Argentina conforms more closely to the continental
Rechtsstaat model of administration than the Anglo public interest one where new public
management ideas have been popularized and more readily accepted. Last, the responses
to the first question can be interpreted in prescriptive terms: namely, expanded discretion
is not a high reform priority.
Responses to the second question show a significant difference between Entre
Rios and San Luis regarding whether other employees have too much discretion. The
difference may be explained by the poorer controls on employees in Entre Ros causing

119
resentment among those working harder. In other words, a substantial minority is calling
for a return to hierarchical basics. A veteran personnel manager in one of medium-sized
direcciones in Public Works reflected this mood, stating You see, for many years we
havent been running a tight ship. It comes from the top down. Comparing responses
from the second question back to those of the first, the overall trend in each province is
for individuals to estimate that others enjoy unwarranted discretion at rates far greater
than they do.
Table 4-4 Discretion
Overall, how much discretion do you have in the performance of your duties?
Entre Rios
San Luis
Too much discretion
6.3
2.2
Appropriate amount of discretion
79.4
80.2
Too little discretion
14.3
17.6
Considering other employees in your organization, how would you characterize their level of discretion?
Entre Rios
San Luis
Too much discretion
28.6
13.2
Appropriate amount of discretion
60.3
73.6
Too little discretion
11.1
13.2
(Entre Ros N63, San Luis N91). See Appendix B for the Professionalization survey in its
entirety.19
In sum, the issue of more or less discretion is first and foremost position
dependent. Organizations can reorient their discretion philosophy but only within certain
parameters. Attractive cases have certainly been made for promoting flexibility, provided
there is accountability, in public sectors around the world. But it seems fair to admit there
is not a right or wrong answer as to whether higher levels of discretion are associated
with higher levels of professionalization.20 In fact, historically, professionalizing the
bureaucracy had little or nothing to do with promoting flexibility. Thus while discretion
is advantageous for dealing more effectively with complexity and uncertainty in policy

120
management, its acceptance may be low in organizational contexts where entrepreneurial
exploits are more feared and resented than admired.
4.2.6 Evaluations, Rewards and Sanctions
The next element of professionalization is a broad one. but the issues here are
linked so it helps to look at them together. The evaluation of employees is a standard,
often legally mandated, feature of professional bureaucracies, regardless of whether
evaluations are accurate or functional. Evaluations, in this respect, represent a piece of
the formal record, an element of control. Therefore, one expects to find clear signs to this
effect.
The figures from Entre Rios are disappointingfive of every nine employees have
never been evaluated. San Luis is betterapproximately 42 percent have never been
evaluatedbut still below expectations (see Table 4-5, p. 121). When I asked Secretary
Menndez (Entre Ros) about the situation, he acknowledged the problem, showed me the
directive requiring evaluations and affirmed that the crisis and low employee morale were
the biggest factors in getting evaluations off track. Minister Poggi (San Luis) told me that
annual, comprehensive employees evaluations are becoming the norm in his ministry;
however daily evaluations have been standard for years and managers are constantly
reporting to him on the performance of employees in their charge. The idea that daily
evaluations exist is plausible enough; actually, a number of employees mentioned such a
regimen. Yet having an official or formal evaluation process that leaves a paper trail is
one of the bases forjudging professional bureaucracies.
The next barometer, among those who have been evaluated, is when the
evaluations occurred. Compared to the modest standards set in these cases, the last two

121
years in San Luis appear promising-nearly one in five employees have been evaluated
recently. Entre Rios, on the other hand, has witnessed a breakdown in the evaluation
process in the same period. The most intriguing finding, in terms of when, appears to be
the 11.1 percent of Entrerrianos whose last evaluation took place pre-1983. This is
significant because 1983 was the restoration of democracy in Argentina and one may
surmise the governors and functionaries appointed by the military junta (1976-1983)
insisted on employee evaluations to an extent that subsequent civilian governments in
Entre Ros have not.
Table 4-5 Employee Evaluation
When was your last performance evaluation?
Entre Rios
San Luis
Never
55.5
41.8
2002
0.0
11.0
2001
0.0
7.7
2000
6.3
9.9
1999
11.1
6.6
1996-98
1.6
3.3
1992-95
1.6
6.6
1987-91
1.6
3.3
Pre-1983
11.1
1.1
Do not remember
0.0
2.2
No response
11.1
5.5
Who last evaluated your performance?
Entre Rios
San Luis
Immediate supervisor
21.4
28.3
Higher level manager
32.2
39.6
Director or higher
25.0
18.9
Do not know
0.0
3.8
No response
21.4
9.4
Do you feel that you were evaluated fairly?
Entre Ros
San Luis
Yes
32.1
62.3
More or less
21.5
19.0

Table 4-5. Continued
122
Do you feel that you were evaluated fairly?
Entre Ros
San Luis
No
25.0
9.3
N/A
21.4
9.4
(Question 1 :Entre Ros N=63, San Luis N=91; Questions 2 and 3: Entre Ros N=28. San Luis
N=58 because responses of never to the first question are excluded). See Appendix B for the
Professionalization survey in its entirety.21
The second question in Table 4-5 is not highly significant in terms of the
difference between the two provinces. Who evaluates employees may. however, be
important. An argument can. for instance, be made that the manager or supervisor with
the best understanding of an employees performance should evaluate them. It appears
San Luis is somewhat more comfortable placing evaluation responsibilities with
managers who have closer proximity to employees. Ascertaining whether or not
evaluations are fair or accurate poses significant problems for this survey because I did
not have access to identifiable evaluations. Yet twice as many Sanluiseftos consider their
evaluations fair and I offer two explanations for this trend. First, consistent with what we
know about the success of the public sector in the province, employees show confidence
in a formula that is working, including the evaluation process. Second, it is possible
evaluations are cosmetic or contrived for a reward system that serves political or
particularistic ends. I believe it is more of the former explanation than the latter, and we
ought not to underestimate the organizational trust created by higher levels of
professionalism.
The next issue regards how rewards (e.g. promotions, bonuses, or recognition) are
handled by public organizations in the provinces. Given the severity of the economic
crisis, which has led to reduced coparticipacin revenues from the national government,
reward plans have come under stress and that fact has to be kept in mind here. The first

123
question looks at how often a few typical meritorious actions are rewarded. Positive
signals in Entre Rios are indeed few and far between~less then 5 percent noted rewards
for taking prompt action on citizens concerns or doing outstanding work, and not a
single respondent recalls any tangible appreciation for saving the provincial government
money or resources. San Luis shows better results for rewarding outstanding service and
saving money or resources, but no improvement in terms of responding promptly to
citizens concerns. The choice of other was, in Entre Ros, most often explained by
making reference to undeserving rewards; while in San Luis other split evenly between
undeserving rewards and specific descriptions of deserving cases.
Table 4-6 Employee Rewards
In the past five years, have employees in your organization been recognized, rewarded or promoted for
any of the following reasons? (You may mark all that apply)
Entre Ros
San Luis
Taking prompt action on citizen
reauests or comolaints
4.8
4.4
Providing outstanding service
4.8
17.6
Saving money or resources
0.0
5.5
Other
33.3
30.7
There have not been rewards or
58.7
44.0
How many employees with excellent performance from your organization have not received rewards,
promotions or recognition?
Entre Ros
San Luis
Many
49.2
33.0
Some
27.0
46.1
Few
19.0
17.6
No one
3.2
1.1
Do not know
1.6
2.2
Why do believe such employees have been overlooked?
Entre Ros
San Luis
Lack of money
15.9
28.6
Good work is not generally
38.1
37.3
Personal or political differences
19.0
15.4
Other
25.4
15.4
AH good work has been rewarded
&0
2^

Table 4-6 Continued
124
Why do believe such employees have been overlooked?
Entre Rios
San Luis
Do not know
1.6
1.1
Overall, how often do you think that these rewards were justified?
Entre Rios
San Luis
Frequently
17.7
30.3
Occasionally
38.2
50.0
Rarely
32.4
14.5
Never
8.8
3.9
Do not know
2.9
1.3
(Entre Ros N=63, San Luis N=91; Question 4:Entre Ros N=34, San Luis N=76). See Appendix
22
B for the Professionalization survey in its entirety.
Unfortunately there does not appear to be a solid reward system in place in either
province. Majorities, 58.7 percent, and large minorities, 44 percent, are attesting to the
absence of such a system. The second and third questions provide insights into the
provincial civil servants view of their own organizations reward practices or
philosophy. Here, one finds a strong expression that not having a system to positively
differentiate between high quality work and low quality work affects many deserving
employees. Moreover, the dominant reason for overlooking high quality employees
appears not to be a lack of resources. This runs counter to the conventional excuse
offered by governors and ministers during Argentinas economic crisis. Instead,
provincial governments have made a habit of not recognizing, rewarding or promoting
high quality personnel.
Taking concrete steps against employee nonperformance belongs among the core
elements of professionalization. There is no significant difference between the two
provinces when it comes to disciplining poor work performance or misuse of public
funds. However, the percentage that responded yes does not tell us whether these
problems are common or rare, so public managers in San Luis, for example, may be

125
responding to a higher percentage of the total incidences. My additional sources
interviews, news items, as well as evidence of higher levels of professionalizationlend
credence to this interpretation. Public employees in San Luis were twice as likely to
report sanctions for failing to comply with orders, while strikes and mobilizations against
the Montiel government in Entre Rios have led to sanctions against some employees. The
category other included descriptions of various problems such as negligence and stories
of arbitrary charges.
The next issue is whether employees perceive sanctions to be fair or justified (see
Table 4-7, p. 126). Among the respondents that reported at least one type of sanction,
public employees in San Luis are far more likely to consider them justifiable than their
Entrerriano counterparts43.5 to 9.5 percent. Inversely, Entre Ros public employees
express significant misgivings35.3 percent to 17.4 in San Luis when rarely and
never are combined-about the fairness of sanctions. The implications probably fall into
one of two categories, which are different though not incompatible. First, dissension or
grumbling about sanctions is a product of the immediate climate in Entre Roslate pay,
job insecurity and low morale stemming from a crisis of confidence in government
institutions and the public sector. Fortunately for San Luis, these pull effects are less
pronounced. Second and I think tellingly, less dissension reflects cohesion and steady
expectations in a professionally managed environment. The immediacy of problems plays
a role but the steadying influence of professionalism keeps employees on board during
tough times.

126
Table 4-7 Employee Sanctions
In the past three years, have emplo
reasons? (You may mark all that a
yees in your organization been disciplined for any of the following
ply)
Entre Rios
San Luis
Poor work performance
7.9
7.7
Misuse of public funds
3.2
5.5
Failure to comply with orders
7.5
14.3
Participation in strikes or
33.3
3.3
Other
28.6
17.6
Do not know
7.9
7.7
If there have been employees who were penalized or disciplined, how often do you think those sanctions
were justified?
Entre Rios
San Luis
Frequently
9.5
43.5
Occasionally
33.3
19.6
Rarely
33.3
10.9
Never
12.0
6.5
Do not know
11.9
15.2
No response
0.0
4.3
Can employees appeal penalties or dismissal?
Entre Rios
San Luis
Yes
87.3
76.9
No
3.2
7.7
Do not know
9.5
5.5
No response
0.0
9.9
(Entre Ros N=63, San Luis N=91; Question 2: Entre Ros N=42, San Luis N=46). See Appendix
B for the Professionalization survey in its entirety.23
The final piece of Table 4-7 relates to the appeal of penalties. The vast majority in
both provinces understands their legal right to appeal. Considering it is, after all, a black
and white question, the relatively low proportion of Sanluiseos answering yes may
suggest hesitation to challenge authority that enjoys legitimacy. In general, there seems to
be a positive relationship between regularizing evaluations and offering deserved rewards
and sanctions. The issue of trusting authority arises again in the following two sections
when we look at political influences on the public sector and corruption.

127
4.2.7 Detachment from Politics
Wilson and proponents of developing a science of administration believed in the
separation of administration and politics. This subject has been a central theme in public
administration since the fields early years. In the 1960s, the pendulum swung away from
a position of separation with many American scholars seeing the separation as a false
dichotomy that stunted the fields conceptual growth and contradicted democratic
values.24 The separation question was by and large settled, but the debates over how
much political oversight is needed and the most appropriate means for exercising that
control remain important in the field. In the Argentine provincial context, the core of this
issue is not whether American or French norms of oversight and bureaucratic
independence are most effective. The first question has to be to what extent improper
political interference stands in the way of professionalism.
Responses to the first question point to a considerable level of political
interference in both provinces, though the problem appears more aggravated in Entre
Ros (see Table 4-8, p. 128). The problem is not per se that politicians lean on public
organizations when they want something done. To a greater (e.g. United States) or lesser
(e.g. Germany, France) degree, elected officials everywhere seek to minimize
bureaucratic independence. Improper political interference is defined, I think, by two
characteristics. First, there is a tendency to use informal or extra-legal channels of
influence rather than formal ones. This propensity to use, in effect, the back and side
doors rather than front door complicates efforts to improve the public sectors level of
professionalism. Second, unsettling political points of entry into the policy processoften

128
during implementation or after official approval of budgetsdiscourage professional
public management.
Next, the frequency of improper political interference is significantly higher in
Entre Ros compared to San Luis18.4 to 1.6 percent or, when the top two quintiles are
combined, 55.1 to 23.5 percent. On the other hand, a significant portion of the
interference in San Luis falls into the bottom two quintiles, which is not the case for
Entre Rios. Overall, the distribution of responses may suggest selectivity on the part of
politicians in San Luis as to when they cross the line and interfere improperly with public
sector organizations. Yet Minister Poggi reflected on the issue and estimates there has
been extremely little political interference in San Luis over the last two decades. But he
concedes the can-do mentality of elected officials in the province sometimes makes them
eager to micromanage, speed things up, or remind public managers that results come
before process. In Entre Rios, the frequency of this problem is more pronounced and I
heard a different set of explanations for it. Secretary Menndez said the state is struggling
to rediscover its progressive, middle-class values that used to define the civil service. He
believes that a less honest and less educated political culture since the mid-twentieth
century has caused much of the deterioration in professionalism.
Table 4-8 Political Interference
In the past three years, have elected officials or political party officials exerted improper influence or
pressure on decisions in your organization?
Entre Ros
San Luis
Yes
76.2
69.2
No
20.6
29.7
Do not know
3.2
1.1

Table 4-8. Continued
129
If you answered yes to the previous question, indicate how frequent these influences and pressures have
been?
Entre Rios
San Luis
Very frequent
18.4
1.6
Often
36.7
21.9
Moderate
34.7
42.2
Rare
10.2
23.4
Very infrequent
0.0
10.9
In general, to what extent has your organization been tangibly influenced by such interference?
Entre Ros
San Luis
Highly influenced
14.3
3.1
Considerably influenced
34.7
34.3
Somewhat influenced
32.7
43.8
Not much influenced
16.3
12.5
Negligible
2.0
6.3
(Question 1: Entre Ros N=63, San Luis N=91; Questions 2 and 3: Entre Ros N=49, San Luis
N=64). See Appendix B for the Professionalization survey in its entirety.26
The last question focuses on the tangible effect of these pressures on public
organizations. For the most part, the two provinces are equally successful (or
unsuccessful, depending how one interprets the results) warding off improper demands
and overtures from politiciansabout 50 and 60 percent in Entre Ros and San Luis,
respectively, classify these pressures as no more than somewhat influential. Thus the
trend (real or perceived) is that public organizations deflect the full, intended impact of
improper pressures. And my general impression is that most public employees in
Argentina would welcome less extra-legal political interference. Can public sector
professionalization correct extra-legal norms of political interference or does the political
community and society have to first reject norms of extra-legal interference?
Wilson and turn of the century progressives in the United States saw the tide of
public opinion supporting their ideas and a window of opportunity to enact
professionalizing reforms. But they also believed a professional, politically independent

130
civil service would frustrate remaining pockets of cronyism, thereby acting on the root of
the problem. The cause and effect proves difficult to sort out. Nonetheless, the necessary,
initial conditions (a disgusted, educated public) appear ripe in Entre Rios (citizens in San
Luis are more satisfied). From there, bureaucracies with higher levels of professionalism
can force improper political interference into fuller retreat.
4.2.8 Corruption
Few issues presently eclipse corruption as a major concern for citizens in
developing countries and multilateral development organizations and lenders. The World
Bank (2000:8, 13-14) has increasingly turned to institutional reform because, in part, it
recognizes that corruption easily beats market fixes (freer trade, solid monetary, fiscal
and currency policies) without addressing the long-term fit and impact of institutions.
Corruption is also a preoccupation for international powerbrokers like the IMF and U.S.
Treasury Department that often take a shorter-term perspective on how to handle
corruption problems in developing economies. Corruption can take many forms
soliciting or taking bribes, misusing public resources or decision-making authority, or
even covering the tracks of colleagues or influential persons involved in inappropriate
activities. High incidences of corruption are often correlated with low levels of
professionalization.29 For this study, questions about this relationship have to be posed
and at least tentatively answered in the context of Argentinas provinces, most of which
are eyed with great suspicion by the IMF and their own national government.
During Argentinas severe economic crisis, public opinion has turned strongly
against politicians and governing institutions.30 Meanwhile, conventional wisdom says
the political class, big business and the state itself have plundered a once rich country.

131
There is certainly no dodging the issue of corruption in the context of public sector
reform in Argentinas provinces. The first and perhaps even the second question in Table
4-9 have been asked before in public opinion polls around Argentina. But public
employees may well have a more unique, insiders perspective on the corruption
problem. In these samples, public employees see the countrys corruption problem every
bit as if not more grave than the average man or woman on the streetnearly 70 percent
classify the problem as very serious in Entre Rios and just over 80 percent do so in San
Luis.
The second question, focusing on the provinces themselves, is less readily
interpreted. Here, Entrerrianos clearly identify corruption as a more serious problem than
Sanluiseos77.7 percent as opposed to 26.4, respectively, when the top two quintiles are
combined. Looking closer at the frequencies in each range, the figures from San Luis are
remarkable by Argentine crisis standards. Over 30 percent of respondents are basically
saying San Luis has either solved or never developed the corruption problem that plagues
Argentina. This sizable minority is perhaps simplifying reality or seeing the cup as half
full, but additional evidence from my interviews substantiates the basic picture on
corruption emerging from the professionalization survey. Therefore, I do not believe the
difference between the provinces is primarily a reflection of economic growth holding
critics at bay while economic decline brings out an array of unfair detractors.
Table 4-9 Corruption
To what extent is corruption a problem in Argentina?
Entre Rios
San Luis
Very serious
68.2
82.4
Considerable
25.4
15.4
Somewhat
4.8
2.2
Small
1.6
0.0

Table 4-9. Continued
132
To what extent is corruption a problem in Argentina?
Entre Rios
San Luis
Negligible
0.0
0.0
To what extent would you say that corruption is a problem in your province?
Entre Rios
San Luis
Very serious
46.0
8.8
Considerable
31.7
17.6
Somewhat
23.8
42.8
Small
1.6
23.1
Negligible
0.0
7.7
To what extent would you say that corruption is a problem in your ministry?
Entre Ros
San Luis
Very serious
19.0
4.4
Considerable
30.2
7.7
Somewhat
27.0
20.9
Small
14.3
33.0
Negligible
7.9
34.1
Do not know
1.6
1.1
In general, how often is corruption in your province reported?
Entre Ros
San Luis
Frequently
3.2
5.5
Often
12.7
9.9
At times
33.3
35.1
Rarely
23.8
29.7
Very rarely
27.0
19.8
(Entre Ros N63, San Luis N-91). See Appendix B for the Professionalization survey in
its entirety.31
The third question reflects, not unlike the first two, a proportionately lower
identification of corruption in San Luis. Overall, this appears consistent with the line of
explanation proposed above. Yet estimates of corruption for the Ministry of Economy in
Entre Rios and the Ministries of Economy and Social Action in San Luis are certainly
lower than those offered for the national or respective provincial governments. The
reasoning for this is unclear. In concrete terms, I found no corroborating evidence that
suggests these ministries are less vulnerable to corruption than the rest of the provincial

133
government. In fact, organizations charged with public works and building-zoning codes,
for example, are often vulnerable to corruption. Weighing alternative explanations, it is
plausible that respondents are straining to believe their own turf is somewhat better on the
issue of corruption.
The question of blowing the whistle on corruption does not vary significantly
across provinces. But the 50.8 and 49.5 percent figures when one collapses the bottom
two quintiles are worrisome. There is no doubt public employees see unreported
corruption, though high levels of corruption (real or even perceived) tend to make people
believe that undiscovered wrongdoing is common, not unlike the effect of corporate
accounting scandals in the United States. The other point that deserves mention relates to
the role of the media and citizen watchdog groups in Argentina. For the most part,
Argentines trust the media more than governing institutions and media sources,
particularly national ones, have played a constructive role in raising the potential costs of
corruption. Likewise, citizens groups, whether inspired by maverick politicians like Alisa
Carri of ARI or without party affiliation, are voicing their displeasure with the countrys
seemingly endemic corruption. In August 2002, notably, hundreds of thousands of
porteos crowded the Plaza de Mayo, under the banner of Que Vayan Todos,"
demanding the resignation of all members of Congress.32
In the feudal provinces, though, there are fewer media outlets and journalists
and citizens remain hesitant to air a corruption expos against prominent politicians. It is
fair to ask how Entre Ros and San Luis stack up in this regard? Based on my year in
Paran (Entre Ros) and San Luis, I would characterize the media in Entre Ros as more
aggressive and politically independent than its counterpart in San Luis. This has to be

134
qualified in a couple of respects, however. First, since the late 1990s when the reality of
Entre Rios profligacy and mismanagement came to light, bad news has been the norm
and the public has a steady appetite for assigning blame; while the Puritano miracle has
deservedly earned considerable praise from the media in San Luis. Second, since the
return of democracy to Argentina in 1983, the Partido Justialista (in particular, former
four-term governor Adolfo Rodrguez Sa) has become inseparable from the provinces
reversal of fortune and the media, for better or worse, is not outside the gravitational pull
of one of Argentinas most successful political dynasties.
Is there a chance the questions posed in Table 4-9 misunderstand the meaning of
corruption in Entre Ros and San Luis? After all, this is possible when we expect too
much from legal-rational authority and understand too little about informal institutions.
My bottom-line answer: Argentina is a Western country and I am not inclined to give a
cultural pass on corruption. Plenty of well-intentioned state reform (not to mention
economic reform) has been hurt by ignoring corruption on cultural grounds, which
obfuscates its obvious harm (Turner and Hulme 1997:102-103). Admitting or guarding
against the problem is different from finding a comprehensive remedy for it. As I
suggested at the end of the previous section on political interference, professionalism and
corruption have a less than predictable cause and effect relationship. Yet if reformers can
create or link up with substantial anti-corruption sentiment within the political
community and society, then fielding a more professional public sector will likely prove
to be an important defense against corruption.

135
4.3 The Changing Face of Argentine Federalism
The issues associated with professionalizing the public sector are even more
vital today because Argentinas provinces can no longer hide behind the old centralized
federalism that effectively accepted provincial incompetence so long as it acquiesced to
national authority. Whether by default or design provincial governments have no choice
but to embark on the road to public sector reform. Despite 2002-03 proving to be a period
of upheaval for the federal republic of Argentina, it is useful to take a snapshot picture of
how parallel sets of public employees in Entre Ros and San Luis understand the
relationship between their province and the national government. Namely, to what extent
the relationship is viewed as unequal, to what extent coordination and communication
exist, to what extent national policymakers design appropriate solutions to the provinces
problems and what best describes the provincial role in terms of dimensions like
policymaking and funding.
For the first question in Table 4-10, some and few are most often used to
estimate the proportion of the provinces goals and functions dictated by the national
government. There is not a significant difference between the provinces through those
two preferred choices. Moving towards the poles of the continuum, Sanluiseos are more
likely to believe many goals and functions are dictated by Buenos Aires, whereas
approximately 20 percent Entrerrianos respond almost none. The truth is, since the
early 1990s, the national government has handed over a number of key policy portfolios
to the provinces. The provinces actually have considerable discretion (and inadequate
funding) over how to manage policies. Therefore, 1 estimate the distribution of responses
from Entre Ros appears more accurate or objective.

Table 4-10 Federalism
What proportion of your goals and functions are dictated by the national government?
136
Entre Rios
San Luis
Almost all
3.2
4.4
Many
7.9
16.5
Some
31.7
26.3
Few
23.8
24.2
Almost none
20.6
13.2
None
11.1
15.4
How often does your organization discuss policies and performance with representatives of the national
government?
Entre Ros
San Luis
Daily
0.0
5.5
Weekly
3.2
5.5
Monthly
15.9
18.7
Yearly
12.7
13.2
Almost never
28.6
31.8
Never
38.1
25.3
To what extent are policies designed by the national government appropriate for your province?
Entre Ros
San Luis
Completely
6.4
0.0
Considerably
22.2
11.0
Moderately
42.9
44.0
Minimally
19.0
28.5
Not at all
7.9
16.5
Do not know
1.6
0.0
Which of the following sentences best describes the role of the province (your ministry, in particular) in
Argentinas federal system?
Entre Ros
San Luis
The national government decides
on policy questions
4.8
1.1
The national government proposes
policy options and we select the one that
is most appropriate for our particular
needs!
7.9
5.5
The provincial government
adapts national policies and
programs to our particular needs
25.4
28.6
The provincial government defines the
final content of policies and programs
and the national government supplies
fhnriinp
23.8
15.4

Table 4-10 Continued
137
Which of the following sentences best describes the role of the province (your ministry, in particular) in
Argentinas federal system?
Entre Ros
San Luis
The provincial government
decides and funds policies and
programs
31.7
48.3
Other
6.4
1.1
(Entre Ros N=63, San Luis N=91). See Appendix B for the Professionalization survey in its
. ^
entirety.
Communicating and coordinating policies and performance across levels of
government is a key element for public sector success in any political system, but this is
particularly the case in federal systems. Public employees in Argentinas provinces are
not painting a picture of diligent cooperation. When the choices almost never and
never are combined. 66.7 percent and 57.1 percent in Entre Rios and San Luis,
respectively, are accounted for. Entrerrianos may believe there is less active cooperation
because their provinces crisis has been worse and the national government has not
stepped in to reduce the uncertainty facing provincial civil servants. But. overall, one
would not expect to find substantial differences between the provinces and indeed the
variations are relatively small.
In question three, significantly more Entrerrianos estimate that policies designed
by the national government could work fine for their province. When things are not
working well, it is natural to think alternatives may be better. On the other hand, a sizable
minority45 percentin San Luis consider such policies minimally or not at all
appropriate for their province. Again, the explanation relates to employee and public
confidence in the public sector. Senator Sergnese summed it up this way, We work
harder and smarter than the national government. Whether entirely true or not, his point

138
reflects the attitude of many public employees in San Luis. However, approximately two-
fifths in each province view policies designed by the national government as
moderately appropriate. Thus, there is an emerging consensus or expectation to work
towards as federalism changes.
Responses to the last question reveal, I believe, a gap in understanding. In San
Luis, the top choice by a considerable margin was the provincial government decides
and funds policies and programs, followed by adapting national policies and national
government pays, province defines content. Respondents from Entre Ros, likewise,
chose the provincial government decides and funds policies and programs option more
than any other. This perspective on federalism shows a lack of understanding about how
it has been working for the last seven decades. Since the 1930s coparticipacin has
defined Argentine federalism. The coparticipacin regime consolidated central control
over most revenue sources while funds flowed back to the provinces in larger numbers
than they came in the first place. Technically, then, the provinces are not funding policies
and programs, though they have considerable control over policy decisions.
4.4 Conclusion: Professional or Amateur Public Sectors
The pictures that emerge from Entre Ros and San Luis are not satisfying on a
number of fronts. Among the problems, personnel management issues, intergovernmental
coordination, extra-legal political control and corruption stand out. And the fact remains
that accumulated mistakes, such as hiring unqualified personnel in a tenure-based system
or failing to define and monitor an employees role, cannot be undone at once. However,
even modest improvements in key facets of professionalization are positively correlated
with public sector performance. San Luis demonstrates that getting better at the basics

139
goes a long way to inspiring confidence (in public employees and the public at-large) and
improving organizational capacities to solve problems. Entre Rios is by no means the
polar opposite of San Luis but it shows that, no matter the extenuating circumstances,
sliding backwards in professionalization has the effect of lowering employee morale and
public confidence, and compromising public organizations capacities to solve problems.
At this point in time, neither province is solidly professional. The findings from
the professionalization survey provide us ideas about aspects of professionalization
needing improvement. More will be said in Chapter 6 about how plenty of these concerns
can and should be included in public sector packages for the provinces. For now, though,
my strongest impression relates to the choice between having a professional and an
amateur public sector. In both provinces, amateur means continuing with 6 hour
workdays for career public employees. It also means coming up too short in merit hiring,
role definition, training, evaluations and corruption. The provincial face of federalism is
exposed and the provinces need a fully professional civil service in the same way Florida,
Bavaria and British Colombia do.
Notes
'Woodrow Wilson greatly admired the administrative systems of Great Britain, Germany and France. He
firmly believed that patronage-based administration was holding America back as it went into the new
industrialization era. Wilson and the Progressives correctly anticipated that governing a modem country
would require greater administrative competence.
2See Weber (1978).
3See Esman (1988) for an excellent account of where development administration went in the postwar
period and why it could not fulfill many of the expectations it had set for itself.
4Peter Evans and Robert Rauchs Weberian Comparative State Data Project has created indexes for the
following issues: meritocratic hiring, career stability, compensation, as well as an overaching Weberian
State Scale. There appears to be a strong correlation between bureaucratic quality or stateness and
economic growth.
5See Pastor (1970:214-216).

140
6In the professionalization survey respondents were asked to indicate what percentage of public employees
were hired based on merit. It is, of course, impossible to say for sure if employees have overestimated or
underestimated the percentage hired on merit. I believe the numbers are reasonably accurate since other
questions in the survey identify the prevalence of major stumbling blocks to merit hiring: political
patronage and the absence of public bids for many jobs.
In this regard, interview data with high level appointees largely backs up the survey data from public
managers and employees. However, political appointees such as Poggi or Menndez stress the steps being
taken to correct non-systemic problems; whereas civil servants are more likely to characterize the problem
of non-merit hiring as systemic and mostly untreated by reform thus far.
8This remains an interesting question because economic development in Latin America has not made
patronage a marginal practice. Therefore, many social scientists continue to look at the institutional and
historical dimensions, among others, of the problem.
9ln Table 4-1, the questions are adapted from Part II (questions 16, 9.1, 11 and 12) of the World Banks
(2001) questionnaire on administrative and civil service reform.
10 In Table 4-2, the first and second questions are adapted from Part II (questions 17 and 18) of the World
Banks (2001) questionnaire on administrative and civil service reform.
1 'Menndez and Poggi both indicated that, while they had recalled tenured civil servants being terminated
in the past, the process was a long, difficult one. When I asked if they believed tenure was serving its
intended purpose of fostering stability and keeping professionals free from political retribution, they
answered affirmatively, estimating that on balance the benefits of tenure outweighed the costs.
l2The point is best illustrated by example. In Entre Ros two engineers working in identical positions yet
separated by 15 years of service will have a 100 percent pay differential. In the United States, for instance,
these two individuals sharing the pay grade classification could not achieve such a pay differential even
with a 30 year service differential. In the course of my interviews in the provinces, quite a few veteran civil
servants suggested the real problem was that government employment was undercompensating their more
junior colleagues. Well, this may or may not be true (I think it is not) but the point is the system
discourages movement out of government service and it creates a situation where the provincial
government is essentially bidding against itself for the services of public employees. This creates a
profound distortion in provincial labor markets.
' This general line of insight first comes from the so-called human relations approach; see Douglas
McGregor (1960).
14 In Table 4-3, the first question is adapted from Part II (question 19) of the World Banks (2001)
questionnaire on administrative and civil service reform.
i5As I have argued, amigismo is clearly a less than desirable foundation for building organizational
capacity. And, indeed, the two provinces share this problem, though the Entrerrianos experience it more
acutely. However, the issue of training lies at the heart of what we can do about the hand we have been
dealt. San Luis has significantly outpaced Entre Rios in this regard. My judgment of the situation in
Argentinas provinces is that the razing the house option and starting anew with a leaner, efficient state is
neither realistic nor advisable. Instead, fixing the house entails getting more out of individuals even if
they were originally an amigismo hire. San Luis experience supports the value of this lesson.
16In this case, I am referring only to San Luis.
l7The new public management, on balance, favors making the public sector less rule-bound and more apt to
innovate. As I discuss in Chapter 4, there is generally not a managerial maverick just waiting to break out

141
of her administrative herd. Moreover, the time to be surprised by this is now and not after major changes
have been made and high expectations been dashed.
l8This particular direccin is called Catastro (which is equivalent to a zoning and building codes type of
department).
19 In Table 4-4, the questions are adapted from Part II (questions 28 and 29) of the World Banks (2001)
questionnaire on administrative and civil service reform.
20One of the continued, pressing concerns for public sector reform in developing countries relates to rooting
out corruption and the informal networks of power that often attempt to obstruct professionalization. To the
extent that discretion can be abused, it seems persuasive that professionalism is a necessary condition for
minimizing potential problems associated with greater discretion.
21 In Table 4-5, the second and third questions are adapted from Part II (questions 23 and 24) of the World
Banks (2001) questionnaire on administrative and civil service reform.
22 In Table 4-6, the questions are adapted from Part IV (questions 67-70) of the World Banks (2001)
questionnaire on administrative and civil service reform.
23 In Table 4-7, the questions are adapted from Part IV (questions 64-66) of the World Banks (2001)
questionnaire on administrative and civil service reform.
24On the one hand, it was increasingly recognized that politicians do not stand aside when they believe
administrative plans are likely to harm their constituencies. On the other hand, the generation of public and
development administration scholars coming of age in the 1960s became convinced the blind following of
political orders can lead to folly, possibly even unethical actions.
25On July 22,2002 Secretary Menndez provided me with a long and earnest explanation of what went
wrong with public sector stewardship. According to Menndez, public organizations became politicized
during the Pern era when the state turned against the universities. This was not the first time I heard such
an interpretation; many UCR supporters and non-UCR, anti-Peronists suggest the same. It does not,
however, seem to explain the shoddy stewardship of provincial government since the restoration of
democracy in 1983, since the PJ has governed less than the UCR in Entre Rios since then.
26 In Table 4-8, the questions are adapted from Part IV (questions 58-60) of the World Banks (2001)
questionnaire on administrative and civil service reform.
27In my opinion, the World Bank is now placing the proper emphasis on strengthening institutions for a
longer-term defense against corruption. The United Nations is also focusing on the problem. Experience
shows that economic liberalization, alone, was never capable of curbing (nor should it have been presumed
able to do so) the corruption problem.
28After months of discussing public sector reform with politicians, political appointees, civil servants and
everyday Argentines, my view is that the IMF and the United States Department of Treasury are
misunderstanding the corruption issue in two respects. First, the problem is implicitly being oversimplified
when the IMF and the United States tie short-term incentives like loan approvals to demonstrable progress
against a long-term problem like corruption. How can there actually be demonstrable progress in a few
months against a problem with deep roots in the social and political fabric of the country? Second, the
benefits and cost that accrue to the outside actors are truly miniscule in comparison to those facing
Argentines themselves with respect to this problem. Thus it is naive to think outside pressure can create
more incentives or sanctions than already exist for the people of Argentina.
29See World Bank (2000).

142
30See Latinobarmetro (2002).
31 In Table 4-9, the first question is adapted from Part V (questions 71 and 72) of the World Banks (2001)
questionnaire on administrative and civil service reform.
32After the economic collapse and street protests that forced President Fernando de la Rua to resign in late
December 2001, the public mood continued to run strong against the countrys politicians. By the winter
of 2002 there were huge manifestations in Buenos Aires and other cities demanding the resignation of all
members of Congress. This did not happen and many members of Congress remain popular with their
constituents; however, the institution of Congress is not held in high esteem by many Argentines because
they believe it is corrupt and out of touch with their lives; see Latinobarmetro (2002).
33 In Table 4-10, the first question is adapted from Part IV (questions 49-52) of the World Banks (2001)
questionnaire on administrative and civil service reform.

CHAPTER 5
MARKETIZATION AND DEMOCRATIZATION IN THE PUBLIC SECTOR
5.1 Introduction
Professionalization is an old and enduring concern for bureaucracies in developed
and developing countries. Over time, however, additional issues have also defined the
reform agenda. In particular, the drive to introduce market mechanisms and make public
organizations accountable through democratic oversight and public participation is
indicative of a more crowded change agenda. Reform protagonists, no doubt, have to
move in multiple directions at once. I discussed earlier why and to what extent elements
of marketization and democratization have made their way on to the reform agenda. I
also offered a general or preliminary analysis of the tradeoffs involved between the
different elements commonly included in reform plans. This chapter goes into more detail
on both sets of issues. The objectives, therein, are threefold. First, it is to focus on the
characteristics of key elements related to marketization and democratization. Second, the
goal remains to analyze the experiences and attitudes of civil servants in the provinces on
these fronts. These two objectives are handled in concert. And last, it is to relate what
these aspects of the public sector reform agenda mean for a system of administration that
is rather unlike those in the new public management countries.
5.2 Elements of Marketization
Latin Americans have considerable experience with market-based reforms as the
state sought to reduce its role in the economy during the last two decades. The shift has
impacted the public sector at all levels of government. This section focuses on the
143

144
following issues: privatization and contracting-out, downsizing, competition and
restructuring, budgeting, and performance incentives. These are important issues for the
second-generation of state reform in the region. However, there is serious opposition to
further introducing market mechanisms in the public sector. Reformers have to know this
terrain and worry first about consolidating first-generation gains before front-loading
second-generation reforms with agenda items that will need time to gain acceptance.
5.2.1 Privatizations and Contracting-Out
The first dimension in this section includes privatizing state assets or functions
and contracting-out goods and services previously provided by the public sector. The sale
of a state-owned bank to private investors is a common example of privatization in
Argentinas provinces, while hiring private firms to provide school lunches or garbage
collection are among the numerous, seemingly mundane contracting-out examples that
impact ministries and secretariats like the ones I had access to in Entre Ros and San
Luis. The reasons for privatizing or contracting-out often vary from case to case, but the
overriding explanation is that markets allocate resources more efficiently than states and
competition tends to adjust prices and wages more nimbly than government controlled
economic activity. The IMF, the multilateral development banks, and many of the
hemispheres leading economists have all lent considerable weight to starting and
sustaining processes that reduce the states role in the economy.1
Many of these same voices now attribute a major share of Argentinas economic
problems to the provincial level of government where an incomplete introduction of the
market and market-mechanisms caused large deficits and crowded-out the productive
economy.2 As I pointed out in Chapters 2 and 3, this is both true and false. Menems

145
ambitious agenda for rationalizing the country's economy was pressed less vigorously on
the provincial level. It seems political logrolling in a federal political structure had an
impact on where Menem insisted on scaling back the state (Heredia and Schneider 2000).
But it is not accurate to say privatizations, contracting-out, deregulation and the like have
been small or negligible in the provinces' reform experiences since 1990. The fact is
everything from banks, electricity, public works and education have been substantially
impacted by liberalization efforts.
Among public employees in the provinces, approximately 35-40 percent estimate
privatizations and contracting-out have been not important or negligible for their
ministry, secretariat or direccin. However, this leaves 60-65 percent with considerable
first-hand experience with one or both processes. Table 5-1 offers insights into how
public employees rate the effectiveness of privatization and contracting-out. In terms of
helping or hurting the organization perform its mission, a small but sizeable minority
15.9 percentin Entre Ros says these developments have clearly harmed the
organization, while only 3.3 in San Luis report the same level of harm. Approximately
one-quarter of the respondents in both provinces consider privatizations and contracting-
out to have worsened things slightly for the organization; and a plurality in each case says
it neither helped nor hurt. According to Latinobarmetro (2002) only 14 percent of
Argentines agree that privatization has been beneficial for the country.3 This lends
credence to my view that public employees are not exaggerating the problems, nor are
they uniquely obstructionist toward this portion of the reform agenda.

Table 5-1 Privatizations and Contracting-Out
To what extent has privatization and contracting-out been extensive in your organization?
146
Entre Rios
San Luis
Very important
15.9
6.6
Somewhat important
28.6
20.9
Average for Province
20.6
35.1
Not important
23.8
24.2
Negligible
11.1
13.2
To what extent has privatization and contracting-out affected your organizations ability to perform its
mission?
Entre Ros
San Luis
Worsened
15.9
3.3
Worsened slightly
27.0
22.0
Made no difference
34.9
35.2
Helped slightly
22.2
26.3
Helped
0.0
12.1
Dont know
0.0
1.1
To what extent would another round of privatization or other market-oriented reforms remedy the
economic problems facing the province?
Entre Ros
San Luis
Not at all
49.2
20.9
Marginally
27.0
38.4
Somewhat
22.2
24.2
Considerably
1.6
16.5
A great deal
0.0
0.0
To what extent have privatizations or other market-oriented reforms increased the publics confidence in
the state?
Entre Ros
San Luis
Not at all
50.8
23.1
Marginally
25.4
36.2
Somewhat
20.6
24.2
Considerably
3.2
15.4
A great deal
0.0
1.1
(Entre Rios N-63, San Luis N=91). See Appendix B for the Marketization survey in its
entirety.4
Next, pro-market reformers need to convince unconvinced stakeholders in the
process that getting the state out of the economy will solve economic problems. This does
not shape up to be an easy sell. In Entre Ros nearly half judge that another round of
market-oriented reforms would not at all remedy the provinces economic problems;

! 47
and in San Luis 20.9 percent take that position while another 38.4 estimate only marginal
benefits. Optimism for a further turn to the market is scarce in the provinces. Optimism
about market solutions in the country at-large is also in short supply, with fewer than 5
percent expressing satisfaction with the market economy (Latinobarmetro 2002).5 There
is also the question of how these changes have affected the publics confidence in the
state. Here again, pro-market reformers have their work cut out for them, particularly in
Entre Ros. Even when the most favorable three quintiles are combined, a mere 23.8 and
40.7 percent in Entre Rios and San Luis, respectively, suggest pro-market reforms have
increased public confidence in the state to any meaningful extent.
5.2.2 Downsizing
The issue of downsizing or reducing the number of public employees is not
detached from the previous discussion on privatizations and contracting-out. With some
exceptions, significant privatizations and contracting-out has led to reductions in public
sector employment or at least signaled that the state can no longer be a growth sector
within the labor market.6 However. I estimate that the downsizing issue deserves separate
attention because in most of Argentinas provinces it has become the flashpoint for
opposition to public sector reform. And. moreover, pressures to shed personnel exist in
many provincial ministries quite apart from a privatization or contracting-out cause. In
other words, provinces are expected to reduce their payrolls to face new coparticipacin
targets.7
The questions and responses in Table 5-2 provide a sense of how public
employees assess the role of downsizing in the public sector reform process. Entrerrianos
clearly see more turbulent waters ahead than their counterparts in San Luis. In fact.

148
almost 30 percent in Entre Ros believe downsizing is very likely in the next two years
while scarcely one in twenty sanluiseo respondents see a similar scenario. Even when
the top two quintiles are collapsed, public employees in Entre Rios are far more
convinced that downsizing is at least likely by 2004. Second, perhaps contrary to the
expectations of observers outside the provinces, one finds public employees have a
balanced view of how various factors should be weighed in any reduction-in-force
formula. In both provinces there appears to be a solid preference for a criteria that
includes seniority, technical qualifications and performance evaluations. This is not at all
unlike what is considered fair criteria for public sector downsizing in the U.S. or other
developed countries.8
Table 5-2 Downsizing
Assess the probability for downsizing the public sector in the next two years?
Entre Ros
San Luis
Very likely
28.6
5.5
Likely
27.0
16.5
More or less likely
27.0
38.4
Unlikely
15.8
38.5
No chance at all
1.6
1.1
In the event that downsizing occurs, which of the following should be the primary criteria for deciding
who stays and who goes?
Entre Ros
San Luis
Seniority
4.8
3.3
Technical qualifications
4.8
6.6
Performance evaluations
12.7
20.9
Combination of three
44.4
42.8
Seniority + Performance
9.5
7.7
Tech. qual. + Performance
7.9
11.0
Seniority + Tech. qual.
7.9
1.1
Other
7.9
5.5
Dont know
0.0
1.1
To what extent has downsizing been studied, planned, and debated?
Entre Ros
San Luis
TNiot at all
Hrl
HE7

Table 5-2. Continued
149
Minimal ly
34.9
31.8
Somewhat
30.2
24.2
Considerably
7.9
18.7
Thoroughly
9.5
3.3
Dont know
6.3
3.3
Compared to the influence held by the national government or international organizations, to what extent
is the downsizing process in your provinces hands?
Entre Ros
San Luis
Not at all
25.4
11.0
Minimally
41.3
28.6
Somewhat
23.8
27.5
Considerably
6.3
23.0
Completely
3.2
8.8
Dont know
0.0
1.1
Which of the following sentences best describes your assessment of attempts to rationalize the public
service?
Entre Ros
San Luis
The changes are not needed/we
must oppose
14.3
20.9
The changes are not needed/we
cant oppose
31.7
6.6
The changes are neither positive
nor negative
7.9
11.0
The changes have merit but
timing is bad
39.7
43.9
The changes are needed/ not
good to delay them
6.3
17.6
(Entre Ros N=63, San Luis N=91). See Appendix B for the Marketization survey in its
entirety.9
Next, it is vital to ask to what extent downsizing has been studied, planned and
debated. Neither Entrerrianos nor Sanluiseos appear convinced reformers have done an
adequate job on these fronts. And based on my interviews with reform protagonists in the
provinces I discern worrisome shortfalls in research, planning and transparency, though
not to the extent identified by the most pessimistic respondents in each province. In Entre
Ros, where personnel reductions are necessary in some form, close to half of the
provinces public employees consider the issue to be at best minimally studied, planned

150
and debated. In San Luis, slightly more than half attest to a similar lack of preparedness.
However, in this case, the seeming lack of preparation is plausibly explained by the
provinces relatively strong fiscal condition, which implies avoiding the tough,
downsizing medicine being prescribed is possible and likely even warranted. 10
Nonetheless, the issue of quality preparation for personnel reductions cannot be
underestimated and, as I suggest frequently, the salience of this issue covers multiple
agenda items.
Beyond the question of whether reformers are adequately preparing for
complicated agenda items like downsizing, public sector reform on the provincial level
continues to be defined by the extent to which the reform process is controlled by
provincial governments. The responses in the two provinces vary significantly. Two-
thirds of Entrerrianos do not believe the process is in the hands of the province itself; and
in San Luis, despite facing less severe budgetary constraints, almost 40 percent suspect
Buenos Aires or the IMF are calling the shots. Upper level decision-makers in the
respective ministries tried by and large to paint a more collaborative picture. In San Luis,
Minister Poggi indicated that the province listens to ideas from the outside but decides in-
house what is best. Secretary Menndez, in Entre Ros, admitted substantial outside
pressure exists but he cautioned it is counterproductive to speculate about reductions in
force, let alone to assign bottom-line influence for decisions yet to be taken.
Presently there are no concrete determinations about personnel cuts on the
provincial level; though there are plenty of hiring freezes in effect and challenging
budgetary targets are in place in most provinces.11 The overall level of concern reflected
in these responses does not strike me as greatly exaggerated. Entre Ros is no doubt in a

tougher spot, and the suspicion and skepticism found on an issue like this reflects low
organizational morale. San Luis has managed its affairs better. Consequently, public
151
employees see considerable latitude for the province to decline any one size fits all
approach to public sector reform on the provincial level. The final question in Table 5-2
is instructive. Sanluiseos express significantly more confidence the provinces ability to
resist unwarranted changes than their counterparts in Entre Ros. Likewise, in San Luis,
successful reform experiences have made public employees more favorably disposed to
future plans to modernize the public sector.
5.2.3 Competition and Restructuring
Attempts to make the public sector more efficient go beyond high-profile issues
such as privatization, contracting-out and downsizing. In fact, much of the effort to make
the state work better relates to competition and restructuring. Competition describes, on
the one hand, the drive between public employees and organizations to control activities
and resources. But it also connotes here a general issue of efficiency and flexibility,
including the relationship between efficiency and flexibility. Restructuring is
organizational change in the form of altered combinations of personnel, resources and
responsibilities, lines of authority and channels of communication.
The first three questions in Table 5-3 begin a line of inquiry into the complicated
terrain of efficiency and flexibility. Provincial public organizations have been asked to do
more since the early 1990s. Important policy portfolios devolved from Buenos Aires to
the provinces. But revenues have fallen off since the mid-1990s, and the reality is thus
that provincial governments are being asked to do more with less.12 Meeting this
challenge is a question of efficiency, in some form or another. The intergovernmental

152
drama of 2002 centered on the provinces agreeing to the Pacto Fiscal, which demands
the provinces hold to lower spending targets. Not surprisingly, public employees in both
provinces (though more so in Entre Ros) estimate the drive to get more out of less will
intensify. The real issue, then, is whether public organizations and mangers can cope with
the environment or, better yet, develop innovative solutions to problems.
There is considerable conceptual willingness to equate the push for greater
efficiency with greater flexibility in management. In this way, it is thought an efficiency
mandate empowers managers to implement market-inspired reforms with the blessing of
policymakers. The evidence here, unfortunately, raises doubts about this virtuous cycle.
Nearly two-thirds in Entre Ros and three-quarters in San Luis assess there is at best a
minimal relationship between efficiency and flexibility. This may, of course, sound like
the kind of bureaucratic resistance to change that occurs regularly in any reform process.
But experience tells us things are probably more complicated. First, when efficiency
comes on the heels of 50 percent budget cuts, public managers often have less flexibility
on the program level regardless of whether managerial discretion has been enhanced.
Second, the idea that flexibility follows efficiency presupposes that it should do so
despite the fact managers who are products of Rechtsstaat administrative systems are
generally not inclined to bog down their organization with a radically new managerial
approach.
Next, responses are mixed about the purported benefits of greater flexibility for
the delivery of public goods and services. A significantly larger number in San Luis see
more flexibility as at best only somewhat likely to improve performance. One-third and
9.5 percent of Entrerrianos consider it likely and highly likely, respectively, that

153
flexibility can help the Ministry of Economy. Maybe it is curious to see a significant
difference since administrative systems in Argentina are all cut from the same continental
European cloth. The explanation, in my opinion, has two parts. First, well-managed
outfits that have the respect of the provinces citizens are less inclined to believe greater
flexibility adds much to a stable picture. On the other hand, public managers facing
unstable circumstances and an unsatisfied clientele seek to externalize their
organizations problems by blaming the failed top-down approach and asking for more
discretion, more flexibility.
Table 5-3 Competition and Restructuring
To what extent do you think signing and implementing the Pacto Fiscal agreements with the federal
government would increase pressures for greater efficiency?
Entre Ros
San Luis
Far more pressure
34.9
18.7
Somewhat more pressure
31.7
39.5
Neither more nor less press
30.2
33.0
Somewhat less pressure
0.0
5.5
Far less pressure
0.0
0.0
Dont know
3.2
3.3
To what extent is the push for greater efficiency actually creating conditions for greater flexibility in your
day-to-day decision-making and policy implementation?
Entre Ros
San Luis
Flighty
4.7
5.5
Somewhat
28.6
22.0
Minimally
41.3
57.1
Not at all
23.8
15.4
Dont know
1.6
0.0
To what extent do you estimate that greater flexibility would be beneficial for the delivery of services and
goods to the public?
Entre Ros
San Luis
Not at all likely
3.2
7.7
Quite unlikely
20.6
27.5
Somewhat Likely
31.7
48.3
Likely
33.3
14.3
Highly likely
9.5
2.2
Dont know
1.6
0.0

Table 5-3. Continued
154
To what extent is duplication of tasks and efforts a serious problem in your organization and the
provinces public sector?
Entre Rios
San Luis
Not at all
4.7
32
Minimal
30.2
45.0
Somewhat serious
33.3
26.4
Serious
20.6
19.8
Very serious
11.1
52
In the last few years, has there been a significant restructuring in your organization?
Entre Ros
San Luis
Yes
15.9
56.0
No
80.9
41.8
Dont know
32
22
To what extent is there competition between secretariats or departments within your organization for
resources and programs?
Entre Rios
San Luis
Not at all
17.5
6.6
Very little
27.0
29.7
Somewhat
25.4
40.6
Considerably
22.2
16.5
A lot
4.7
32
Dont know
32
32
To what extent do you believe competition between employees in the organization can lead to greater
efficiency and effectiveness?
Entre Ros
San Luis
Not at all
17.5
15.4
Very little
27.0
25.3
Somewhat
25.4
40.6
Considerably
222
15.4
A lot
6.3
32
Dont know
1.6
0
To what extent do you believe competition between different organizations within the government can
lead to greater efficiency and effectiveness?
Entre Ros
San Luis
Not at all
23.8
7.7
Very little
33.3
25.3
Somewhat
19.1
37.9
Considerably
19.0
23.1
A lot
32
5.5
Dont know
1.6
1.1
(Entre Ros N-63. San Luis N91). See Appendix B for the Marketization survey in its entirety.13

Bureaucracies are often criticized for the duplication of tasks in a single
organization or across the public sector. Examples include the maintenance of separate
155
direcciones for water resources and the environment or repetitive budgeting and
accounting practices due to the maintenance of many small ministries. Public employees,
in particular higher level managers, can speak accurately to this issue of duplication in
ways that most politicians, media pundits, academics or citizens cannot. Overall, the
duplication of tasks and resources is estimated to be somewhat serious in Entre Rios
and minimal in San Luis. Managers in Entre Ros gave varied explanations for the
origin and persistence of this problem, but Secretary Menndez summed up the
observations of many in the ministry when he characterized the situation as primarily one
of shared expertise that should invite better communication and more collaboration
between units. The provinces Director of Environment, Pedro Tonioso, expressed
somewhat more frustration about the countervailing tendency for units to cloud the
programmatic level with a fragmentation of public policy.14 In San Luis, where there are
more (albeit smaller) ministries, the message is that duplication remains, as always, a
problem but political leadership (on an inter-ministerial level) has tried to minimise its
severity.
Issues like the duplication of tasks frequently prompt efforts to restructure public
organizations. In the secretariats and direcciones I surveyed and met with in 2002, it is
apparent that restructuring has been a more common feature of the organizational
landscape in San Luis than Entre Ros over the last few years. But in Entre Ros defense,
the onset and deepening of the economic crisis made it considerably harder to push
restructuring plans as internal suspicion and opposition grew and legislative resolve

156
melted away as election cycles respond to anti-adjustment sentiment. Related to
restructuring efforts, competition in the public sector is another set of issues that animate
reform discussions. To effectively assess how much internal competition should be a
priority for reform plans it seems helpful to think about competition between
organizations and competition between individuals
Competition between public organizations or units within an organization for
resources and policy portfolios is commonplace. As academics and practitioners have
illustrated, the causes range from power or self-preservation to political calculation or
institutional inertia 15 There are also plusses and minuses therein. So long as costly
duplications of resources and responsibility are avoided, competition may encourage
beneficial synergies such as following up on good, untested ideas for fear another unit
may do so and then be poised to take on new work. The downside is duplication, low
capacities for working effectively with related units and a preoccupation with the
organizational implications of a given role rather than unbroken policy or outcome focus.
In the provinces, the extent of competition is not clear from the responses in Table 5-3.
Rather than finding a disposition for or against competition, I found the greatest
determinant to be the relationship between directors within a ministry
The next assessment is whether civil servants in the provinces believe competition
between public organizations leads to greater efficiency and effectiveness. In Entre Rios,
most respondents are very skeptical of this purported link; and fewer than one in four
hold unambiguously positive expectations for the idea Meanwhile, approximately one in
three Sanluiseos would not expect to see appreciable gains in efficiency and
effectiveness from the promotion of such competition. The difference here may be more

157
circumstantial than substantive since, as the previous question pointed out. there is little
difference in the extent of intra or inter-organizational competition between the
provinces. Perhaps, of course, it is substantive in the sense that respondents in Entre Rios
are judging that existing competition has been poorly conceived and has diminished
effectiveness. Yet it seems likely based on what 1 know about the anxiety level felt by
many public employees in the captol, Paran, that some Entrerrianos rejected the link
between competition and effectiveness more harshly than they otherwise might because
they saw a connection between this form of competition and downsizing.16
The final point of analysis in Table 5-3 is how competition between employees in
the organization is perceived by the public employees themselves. In both provinces
more than 40 percent see little or no value in employee competition. And large numbers--
25.4 and 40.6 percent in Entre Rios and San Luis, respectivelyare no better than
ambivalent about the idea. The shared perception here is probably important for would-
reformers to consider. By and large it appears accurate to say these administrative
systems cast individuals in a somewhat different role than administrative systems in. for
example, the United States or Great Britain Individuals are less inclined to stick their
necks out and say I know best, and if it turns out Im wrong you can hold me
accountable. To put it another way, professionalism is admired, as are technical
expertise and leadership, but making others look bad in the course of competing is not
admired So, then, there is a real wariness about coming out on the winning or losing end
of competition. As previously discussed, the continental Rechtsstaat model accords the
state a more extensive or dominant role within society (Pollitt and Bouckaert 2000:52-
54). Thus, inside the state, the fact is public employees relate to a more conformist or

158
egalitarian administrative culture than competition-based reforms typically plan for.
Reform discussants need not learn the language of Rechtsstaat ox public interest
typologies, but this studys message matters if the objective is to set in motion feasible
administrative change.
5.2.4 Budgeting Issues
Budgeting is another issue relevant to this discussion. To be sure, this is one that
is not strictly market related. However, it relates because finance and budgeting have to
be performance conscious and interactive in the same way the management of programs,
projects or personnel must be. The first question in Table 5-4 looks at whether the
budgeting process is carefully integrated with organizational tasks such as planning,
performance management and operational management. The connection between
budgeting and planning varies significantly in the provinces; roughly 60 percent and 40
percent in Entre Rios and San Luis, respectively, estimate budgeting is disconnected from
the organizations planning functions. There are probably two plausible explanations for
the difference. First, the crisis and the fluid situation regarding revenue-sharing have
taken a toll on the provinces ability to set program targets in the 1-3 year window. This
dynamic is more acutely felt in Entre Rios. Second, effective planning does not take place
in a technocratic vacuum. Quality finance and budgeting people running modem systems
of financial control cannot make policy from scratch. Political leadership is indispensable
for coherent series of decisions to actually come together in policy management. Without
such political leadership, budgeting can only incompletely fulfill its planning function.
Performance evaluation in terms of programs and personnel is clearly
underrepresented in the budgeting process-19 percent answered affirmatively in Entre

159
Ros while 36.3 percent did so in San Luis. In the previous chapter the lack of formalized,
systematic personnel evaluations was documented and discussed at length. It reasons that
many of the non-yes responses here simply reflect the absence of evaluations. But it is
also true the budgeting process is more or less detached from policy or program
evaluations even when they do exist. The provinces have plenty of reasons to bridge this
disconnect, perhaps through zero-base budgeting and the establishment of performance
targets. The reason for getting ambitious about this linkage is not to insist performance
evaluation drive budgeting the way it can in the private sector; instead the point is better
financial accountability.
Table 5-4 Budgeting in Relation to other Activities
Is the budgeting process expressly linked to any of the following organizational tasks? (percentage that
answers yes for each option)
Entre Rios
San Luis
Planning
39.7
60.4
Evaluation
19.0
36.3
Operational exigencies
68.3
62.7
Other
11.1
5.5
Don't know
3.2
3.3
Given the severity of the current economic crisis, to what extent has your organization resorted to making
budget cuts without consulting employees?
Entre Ros
San Luis
Completely
38.1
16.5
Mostly
27.0
22.0
Somewhat
15.9
41.8
Not much
6.3
14.3
Not at all
12.7
5.4
(Entre Rios N-63, San Luis N-91).See Appendix B for the Marketization survey in its entirety.18
The next issue is whether the budgeting process proves responsive to operational
exigencies. Operational exigencies refer to positioning people and other resources in
response to emergent need assessments in policy or program management. Therefore, it
is a question of flexibility or discretionary power in the hands of managers responsible

160
for the majority of day to day decisions. This does not imply anything about the process
for seeking additional funds or the adjustment process in cases where units exceed their
budget. The figures here are fairly positive, and they are consistent with information I
received from managers at the level of Director and Jefe del Departamento, which are
the relevant managerial levels in this case. Moreover, the yes responses may be slightly
understated because it appears a few respondents were hesitant to mark the third item if
they had already marked the first two.14
The other question in Table 5-4 addresses the issue of consultation on budget cuts.
There is no way to prevent budget cuts from becoming an acrimonious process for
organizations and a sometimes alienating one for employees. However, there is reason to
believe priority setting, programmatic coherence and trust within the organization are
better safeguarded by a consultative process. Responses on how this process is playing
out are notably varied. Certainly, a sizeable minority in Entre Ros charge that budget
cuts are made entirely without employee consultation. But at the same time, one in eight
Entrerrianos seem delighted by a thorough consulting process. Interview data from the
Ministry also proves mixed, but on the whole dissatisfaction is thought to be the product
of a hard process that leaves a bad taste in the mouths of many. In San Luis, the balance
of experience appears to indicate consultation has more or less been the norm. But
written comments and conversations on this subject provide a sense that budgetary
decisions remain top-down, which fits the provinces organizational profile.
5.2.5 Performance Evaluations and Incentives.
The last table in this section focuses on performance evaluation, an issue that was
introduced in Chapter 4, and the use of incentives in the public sector. Public

161
organizations in Entre Rios, again, are not systematically engaged in evaluating
employees and programs. In fact, two-thirds assess that little if any evaluation occurs.
The situation in San Luis is better and approximately 44 percent of employees cite at
least a considerable regimen of program and personnel evaluation. Though not included
in Table 5-5,1 similarly asked Does your organization measure work outcomes and
performance for employees and the entire organization? Entrerrianos said yes in 27
percent of the cases, while 49.5 percent of Sanluisefios answered affirmatively. This is
consistent with the responses to the first question in Table 5-5, although it prompted
employees and managers to make an up or down judgment about the effective presence
of personnel and program evaluation in their organization.
Clearly, public sector reform needs to establish working mechanisms for
evaluation. There is also concern that evaluation processes and performance measures
can be more show than substance (Pollitt and Bouckaert 2000, Turner and Hulme 1997).
In the provincial context, the target audience is frequently the federal government but it
may also include multilateral development banks and provincial political or media critics.
In general, public employees in Entre Ros express skepticism about the extent to which
performance measures serve effective internal purposes. Their peers in San Luis are
significantly more confident that measuring performance is not an attempt to placate
outside interests or provide a smokescreen against prying eyes. In this question, needless
to say, many respondents who do not presently have performance measures first-hand in
their positions expressed either confidence or skepticism about circumstances they might
encounter sometime in the future.

162
Table 5-5 Performance Evaluations and Incentives
To what extent does your organization evaluate programs and personnel?
Entre Rios
San Luis
Thoroughly
4.8
14.3
Considerably
9.5
29.7
Somewhat
19.0
31.8
Marginally
36.5
16.5
Not at all
30.2
7.7
To what extent are performance measures designed and implemented for political expediency (i.e. to
satisfy critics) rather than effective internal purposes?
Entre Ros
San Luis
Completely
11.1
6.6
Considerably
25.4
4.4
Somewhat
34.9
39.6
Not much
14.3
34.1
Not at all
9.5
15.4
No evaluations
4.8
0.0
Compared to five years ago, to what extent has your organization taken steps to create incentives for
employees to improve their performance?
Entre Ros
San Luis
A great deal
0.0
3.3
Significantly
3.2
12.1
Somewhat
9.5
35.1
Very little
20.6
25.3
Not at all
63.5
20.9
Dont know
3.2
3.3
With regard to managers in your organization, would management contracts on premise of performance
incentives be desirable?
Entre Ros
San Luis
Ideal
20.6
11.0
Good idea
38.1
38.4
More or less a good idea
27.0
30.8
Not a good idea
11.1
12.1
Not a good idea at all
3.2
7.7
Dont know
0.0
0.0
To what extent do you think incentives are or would be positive for your organization?
Entre Ros
San Luis
Ideal
22.2
12.1
Good idea
31.7
36.2
More or less a good idea
30.1
37.4
Not a good idea
17.5
13.2
Not a good idea at all
0.0
1.1

Table 5-5. Continued'
163
To what extent do vou think incentives are or would be positive for your organization?
Entre Rios
San Luis
Dont know
0.0
0.0
. 22
(Entre Ros N=63, San Luis N=91 ).See Appendix B for the Marketization survey in its entirety.22
The third question in Table 5-5 tries to assess where public organizations in the
provinces stand with regard to performance incentives compared to five years before.
Nearly all of the managers I consulted with spoke coherently about plans to create more
incentives for exemplary work.23 However, as the numbers from this survey question
suggest, the economic crisis has put a damper on these plans. Most public employees in
Entre Rios are seeing little or no evidence that performance incentives are catching on. In
San Luis the report is at best mixed but there are signs, at least in promotions patterns and
community recognition, things have improved. Thus it seems whether or not monetary
incentives can come on line in the near future or not, progress on this front is possible and
certainly advisable.
A generation ago, public managers and performance contracts had almost no
conceptual or practical connection. Yet in the 1980s the connection was made both
intellectually and, in some cases, empirically. Since then, public sector reform in
developing countries has often accepted the premise that performance contracts are
needed for the states managers. Entrerrianos are marginally more convinced than
Sanluiseos about the efficacy of performance-based contracts, though the differential is
entirely located in the polar quintiles. As for explaining the 20.6 percent in Entre Rios
first quintile, months of listening to public employees in Paran leads me to believe it is
predominately an expression of anti-management rather than pro-market sentiment. In
other words, the perception is that managers are doing more wrong than right and
performance contracts would thus be a mechanism to pay them closer to what they

164
deserve. In San Luis, a wide majority-almost 70 percent-accept the premise though
without great conviction. This is consistent with the overall picture of a bureaucracy that
is performing fairly well with the incentives currently in place.
The last question also concerns the issue of incentives in public organizations.
The responses are likewise similar. Most public employees and managers concede
incentives are a good idea or at least more or less a good idea. In the space for
comments underneath this survey question as well as in semi-structured interviews, many
people spoke about the difficulties in quantifying what public organizations do and how
poorly conceived incentives have the potential to reduce morale. These are by no means
idle criticisms. Indeed, there is always a real danger people will spend more time solving
the incentives than solving the problems. Overall, there seems to be enough receptivity or
open-mindedness to this particular bundle of market-based mechanisms. As San Luis
Minister Poggi remarked, We study the ideas out there, but who can blame us for
declining the less suitable ones?24 Subsecretary Gonzlez in Entre Rios notes that the
context for business-inspired alternatives has to be appraised realistically. He also
mentions how working examples from the national level in Argentina or from countries
like Italy or Spain would do more to inspire confidence in his own province than
examples from the mostly Anglo new public management countries.
5.3 Elements of Democratization
The countries of the Western Hemisphere are overwhelmingly governed by
democratic regimes. This represents a major departure from political life in Latin
America a generation earlier. Political scientists have properly devoted energy to the
study of democratic transitions and consolidations. Politicians in the region have rightly

165
reminded outside observers that democracy is the only game in town. Considerably less
attention, however, has been focused on how public organizations relate to political
institutions and citizens who have a stake in what they are doing. And when academics
and practitioners have paid attention to these issues, there is often an uncritical
acceptance that participation is good.261 agree public participation is good but I also see a
need to rummage around on the organizational level so we have harder evidence to
inform if more participation now is realistic or advisable. This section is meant to be an
initial step in that direction.
5.3.1 Legislative Oversight
An old question in government is who if anyone is watching the bureaucracy. In
Latin America, where states have proved sturdier than regimes, the answer has
historically been powerful individuals rather than institutions (Rock 1987). In Argentina,
formal institutions are catching up to informal networks as the number one control
mechanism over public organizations, though this progress is less pronounced in some of
the countrys provinces.27 Table 5-6 includes questions related to institutional, in
particular legislative, oversight. Civil servants are likely better positioned to answer these
questions than most provincial citizens or outside stakeholders in the reform process
since they see institutional and/or personalistic oversight up-close, on the job.
The nature of legislative oversight is characterized by a steepened learning curve
for legislators as societies have grown more complex and governments responsibilities
more variegated. In the opinion of public employees in Entre Rios, the provinces
legislators are not up to the task. More than one in three give the provinces legislators
failing marks for awareness and/or understanding of their organizations activities, and

166
41.3 percent describe the capacity as low. Legislators in San Luis are apparently doing
better. Nearly half of the respondents rate the awareness/understanding of these elected
officials as moderate, though almost as many rate them as either low or very low.
It is probably wise, however, not to make too much out of these figures. Adversarial
relationships between state bureaucracies and elected officials exist to varying degrees in
all governments. Agents always know more than their principals. On the provincial level,
concern rightly exists about the number and quality of legislators. Chapter 4 exposed
plenty of agent shortcomings and, in fairness, the lack of professionalization among
some legislators (e.g. full-time pay for putting in part-time hours) is a serious problem.
It remains necessary to further explore to what extent political institutions can
better complement democratizing reforms on the organizational level. In Latin America,
legislative and executive weakness in policy management has become a major issue as
democratic regimes mature. For the Executive, some countries have tried to lighten the
presidential load through the formation of a jefe del gabinete, a pseudo-prime minister
(Sartori 1994:92-97). For the Congress, there is some interest in developing legislative
committees to improve the institutions oversight capacity. On the national level in
on
Argentina this process is advanced (Mustapic 2000:587-588). On the provincial level,
however, legislative committees with oversight responsibilities for specific public
organizations or policy portfolios are not the norm (see responses in Table 5-6). Another
issue is whether those legislative committees with oversight responsibilities actually
function well. According to the public employees surveyed in Entre Ros, the majority
rate the effectiveness of such committees as poor or totally ineffective, and a sizeable
minority admit they do not know if this oversight proves effective or not. In San Luis, the

167
distribution of responses is fairly standard with most respondents rating the effectiveness
of legislative committees as average. While it is admittedly hard to gauge committee
effectiveness, there appears to be genuine concern for this political dimension of public
sector reform. At the very least there is recognition the provinces can no more afford to
have amateur legislators than they can an amateur civil service.
Table 5-6 Legislative Oversight
In your opinion, to what extent do legislators demonstrate an awareness and/or understanding of your
organizations activities?
Entre Ros
San Luis
Very high
0.0
2.2
High
4.8
6.6
Moderate
19.0
47.2
Low
41.3
24.2
Very low
34.9
19.8
More specifically, is there a legislative committee with oversight responsibilities for your organization?
Entre Ros
San Luis
Yes
15.9
34.1
No
63.5
56.0
Other
9.5
9.9
Dont know
11.1
0.0
If there is such oversight, please evaluate its effectiveness?
Entre Ros
San Luis
Excellent
0.0
1.1
Good
0.0
3.3
Average
3.2
23.1
Poor
12.7
8.8
Totallv ineffective
11.1
0.0
Dont know
9.5
3.3
There is no oversight
63.5
60.4
A number of factors can impede effective legislative control. Please rank the following factors from 4 to 1
[more important to least] (average ranking for each factor)
Entre Ros
San Luis
Legislators lack specialized
knowledge for effective oversight
2.26
3.01
Oversight can cause significant
delays in orgs operations
1.67
2.96

Table 5-6. Continued
168
A number of factors can impede effective legislative control. Please rank the following factors from 4 to 1
Tmore important to leastl (average ranking for each factor)
Entre Ros
San Luis
Legislators can scapegoat public
managers in order to deflect
public criticism
3.10
1.81
Oversight would open the door
for lobbying by powerful
interests
3.02
1.88
To what extent, overall, do you believe the legislatures role in policymaking limits the discretionary
power of the Executive?
Entre Ros
San Luis
Thoroughly
1.6
2.2
More than enough
6.3
7.7
Just enough
34.9
47.2
Scarcely
47.6
26.4
Not at all
7.9
14.3
Dont know
1.6
2.2
To what extent does the provincial legislature guard against inappropriate political appointments?
Entre Ros
San Luis
Thoroughly
0.0
2.2
More than enough
9.5
8.8
Just enough
25.4
11.0
Scarcely
42.9
47.2
Not at all
20.6
23.1
Dont know
1.6
7.7
(Entre Ros N=63, San Luis N=91). See Appendix B for the Democratization survey in its
entirety.30
Reformers cannot afford to assume oversight issues on the democratization
agenda are province-neutral, let alone country-neutral. The fourth question in Table 5-6
examines how the permanent bureaucracy perceives four possible side-effects of
enhanced legislative control: (i) legislators lack specialized knowledge for effective
oversight; (ii) oversight can cause significant delays in my organizations operations; (iii)
legislators can scapegoat public managers to deflect public criticism; (iv) oversight
(particularly committees) would open another door for lobbying by powerful interests. In

169
Entre Ros, the main worry is the permanent bureaucracy will be blamed by legislators
for the provinces problems. The other major concern is making Congress a more
attractive venue for backroom dealing between legislative committees and powerful
interests. In San Luis, the primary concern relates to non-experts getting more involved in
organizational operations. The second, related preoccupation is that legislative oversight
can easily reach burdensome levels, which causes more paper shuffling and delays.
The four side-effects considered here are not meant to be an exhaustive list of the
factors that can impede effective legislative control. Nor should it be implied the costs
associated with these problems are greater than the democratic benefits of legislative
oversight. Argentinas provincial governments clearly need substantive improvements in
democratic oversight. But the problems identified by public employees are worth
thinking about because public sector reform is primarily based on the organizational
level. Moreover, on this front, the foremost preoccupations of the two permanent
bureaucracies are strikingly different. Entrerrianos are most worried about corruption and
political maneuvering to deflect and assign blame for the states decay. For them,
problems like additional paperwork and closer consultation with non-experts seem
relatively minor. Sanluiseos prioritize avoiding obstacles to the modernizing state; in
other words, the technocrats are respectfully declining what they see as potentially too
much help in doing their jobs. The lesson is twofold: first, reformers should intimately
know the permanent bureaucracy because even positives like legislative oversight carry
consequences; and second, even in a single federal system the bureaucratic terrain can
vary significantly across governments.

While the consensus for democracy in the hemisphere has been welcomed,
questions have emerged about presidential abuses of discretionary power (Mustapic
170
2000, ODonnell 1994). In particular, policymaking by decree,por decreto, is perceived
as a sign of institutional weakness in the legislature. The second to last question in Table
5-6 addresses the issue in the provincial context. In the case of Entre Ros, the legislature
does not appear to be a robust check on the Executives discretionary power.
Approximately half estimate the limits are at least adequate, though a plurality classify
existing limits as scarcely enough. In San Luis, more respondents evaluated legislative
limits on discretionary power as just enough, but the distribution is also reflective of a
similar skepticism about the adequacy of control26.4 and 14.3 percent said the
Congress scarcely or does not at all limit the Executives power over policymaking.
This is not to say public employees favor redrawing the balance of power in
policymaking, though I see Entre Ros permanent bureaucracy as more receptive to
limiting the Executives discretionary power/1
Finally, legislatures also have a role to play in checking inappropriate political
appointments. Governors fill the upper-level positions (ministros, secretarios,
subsecretarios and perhaps even directores) with people they can trust and who can
forward the governments policy objectives. The issue of appointees becomes murkier
when qualifications or ideology enter the picture. Public employees in the provinces are
not at all convinced the legislature is prepared to utilize this oversight mechanism to
block inappropriate appointees. In Entre Ros, there have been recent instances where
Congress prevented appointees with dubious credentials. The Vice-President of the
Senate, Jorge Campos, told me such fights have become more common since 1999.32

171
Perhaps this oversight mechanism is developing, but it should be noted Entre Rios is a
case of divided government (UCR governor and PJ majority in Congress). In San Luis,
the situation is considerably different. Many respondents who marked scarcely or not
at all wrote comments explaining the vast majority of appointees have proved capable,
yet they do not believe the legislature is a serious oversight body if a mistake were in the
making. The other difference is the constancy of unified government (PJ governors and
majorities in Congress since 1983).
5.3.2 Citizen Participation
Todays democratization and development mainstreams are strongly committed to
participation (IDB 2002). Two basic arguments support this position. First, consolidating
democracy in the region depends on people being involved in public affairs (Daneri
2001). Second, development failures are reduced when people are active stakeholders in
managing public affairs (Ribeiro 1994, Cernea 1991). However, moving from principle to
practice or from good advice to well used advice remains the challenge for governments
such as those in Argentinas provinces. One of the primary issues for these governments
is finding a willing and able partner in the permanent bureaucracy.
The first question in Table 5-7 looks at the issue of participation from the
organizational side of the equation. Overall, seeking out input or feedback from the
public is a rare occurrence in provincial management. Few respondents in Entre Ros and
San Luis estimate public organizations solicit outside participation with great regularity.
On the other hand, approximately 80 and 65 percent in Entre Ros and San Luis,
respectively, classify the frequency of solicitation as rarely or never. Next, regardless
of to what extent seeking public input has been the norm, it is valuable to review

172
information about the mechanisms for participation that have been used. Interviews and
focus groups are the most widely used mechanisms in Entre Ros. Likewise, focus groups
and interviews are the leading participatory techniques in San Luis, though town hall
meetings, cabildos abiertos, are also an important source of participation. Higher
numbers likely suggest mechanisms that can be built on easily whereas lower numbers
indicate techniques that may take longer to learn. Last, the preferred mechanisms depend
on the type of program or project under discussion, as well as on the demographics (e.g.
socioeconomic, spatial) of the people involved.
The opposite of solicited or regularized input/feedback is independent
participation. Independent participation is more common in Entre Rios, where
approximately one in four respondents estimate high levels of it. Fewer respondents in
San Luis cite high levels of unsolicited participation and 9.9 percent assert it never
happens. On the whole, independent participation appears moderate but seemingly more
common than state initiated participation. In addition, lifelong residents (many outside of
government) of both provinces often remarked on the noticeable increase in unsolicited
participation over the last few years. As for Entre Rios edge in this regard, it is one part
crisis related and one part social. A declining standard of living has placed the state on
the defensive in terms of when and how people participate. And the provinces middle
class profile had already made participation more of a two-way street than in some of
the federal republics more feudal provinces.,4
It is also useful to obtain an overall sense of how unsolicited forms of
participation actually take place in the provinces. In the fourth question included in Table
5-7 respondents provide a sense of the most prevalent forms of participation in their

173
province. NGOs and civic associations appear to be more important in Entre Rios, though
this form of participation has become central in San Luis too. Issue-based groups of like-
minded neighbors or citizens are typically less formal and perhaps even temporary in
nature. The economic crisis has raised the profile of this form of participation in many
provinces, including Entre Rios where almost 70 percent of public employees note its
prevalence in public affairs. Participation through political parties (overwhelmingly the
Partido Justialista) continues to be a primary source of citizen mobilization in San Luis.
While party identification remains exceptionally high among Pntanos, it has declined
sharply in Entre Ros.35 Finally, for Entrerrianos, the choice of other generally made
mention of recent strikes by unionized workers in the province. The overall balance
between these forms of participation illustrates why public organizations have to prepare
for different situations.
Table 5-7 Citizen Participation
How often does your organization solicit input/feedback from the public?
Entre Rios
San Luis
Very frequently
0.0
3.3
Often
4.8
7.7
At times
14.3
29.7
Rarely
42.8
35.1
Never
38.1
24.2
If so, indicate the mechanisms for feedback that have been used
Entre Ros
San Luis
Interviews
42.9
28.6
Focus groups
25.4
31.9
Surveys
19.0
24.2
Cabildos abiertos
11.1
27.5
Assemblies
12.7
20.9
How often have the citizens of your province pursued independent (unsolicited) participation?
Entre Ros
San Luis
iri +*
Very frequently

Table 5-7. Continued
174
How often have the citizens of your province pursued independent (unsolicited) participation?
Entre Rios
San Luis
Often
19.0
12.1
At times
36.5
36.2
Rarelv
36.5
37.4
Never
1.6
9.9
If there is participation, which of the following sentences best describes its form based on your experience
in government (You may mark up to two options)?
Entre Rios
San Luis
Participation through NGOs
50.8
45.0
Participation through like-
minded citizens
68.3
39.6
Participation through political
parties
34.9
46.2
Other
25.4
5.5
To what extent have you experienced citizens contacting elected officials regarding your organizations
activities or performance?
Entre Rios
San Luis
Very frequently
1.6
0.0
Often
4.7
11.0
At times
20.6
22.0
Rarelv
42.8
41.7
Never
27.0
25.3
Dont know
3.2
0.0
On balance, how would more citizen participation affect your job and organization?
Entre Rios
San Luis
Would detract
14.3
22.0
Would help
65.1
46.1
Would make no difference
20.6
31.9
(Entre Ros N=63, San Luis N=91). See Appendix B for the Democratization survey in its
entirety.36
Next, individuals or groups do not always contact public managers directly to
express opinions or make demands. Citizens may instead contact elected officials
regarding public organizations activities or performance. The structure and norms of
representative democracy in a country such as the United States makes this a common
occurrence at all levels of government. It is less common in Argentina. Provincial public

175
employees indicate they have rarely or never experienced citizens contacting elected
officials about their organization. This does not mean elected officials do not lean on the
permanent bureaucracy or call favors from time to time. On the contrary, it implies public
organizations tend only to hear from people with strong informal or party-based
connections. There is not much a reform plan can do in the short-term about this
dynamic. Not unlike changes in legislative oversight, the shift here relates to moving
from an informal or party-based process for checking up on public organizations to one
that identifies formal political institutions as logical mechanisms for ensuring
bureaucratic responsiveness.
The last question in Table 5-7 hopes to clarify the general perception about how
greater participation would affect public organizations. In absolute terms, the would
help choice clears the other two by a comfortable margin in both provinces. This is
potentially good news, and many public employees made a point of saying that
participation improves outcomes and builds mutual trust. Yet considering would help
probably stands out as the right (or politically correct) answer, the responses are
actually surprising. In San Luis, for example, nearly a quarter assert more participation
would be a bad thing and almost one-third treat it with cool indifference. This reflects, in
my estimation, two factors. First, classical bureaucracies are normally reticent about
sacrificing authority to outsiders, particularly ones without expert standing. As the
responses to an earlier question on legislative oversight illustrated, San Luis Weberian
bureaucracy worries that additional levels (or forms) of outside oversight will produce
unnecessary delays and impede sound management. Second, there is basic skepticism
about fooling around with a winning formula. As one Assistant Secretary commented,

176
We have the flexibility to accommodate more citizen participation, but doing this or
doing that just for the sake of it is not our style. In the case of San Luis, then, there
appears to be support for incremental or as needed increases in public participation.
Sentiment favoring greater public participation more clearly exists in Entre Ros.
On one level, this means public employees have experiences that define their preference
for more participation. One engineer in Public Works told me popular opposition in the
mid-1990s to the construction of dams on the Paran and Uruguay Rivers convinced him
participation has to be more than an afterthought in the policy process. Secretary
Menndez suggested that reform should include the development of enhanced
participatory mechanisms in all of the direcciones under his prevue. In general, there
appears to be less preoccupation with loss of control issues that often dissuade permanent
bureaucracies from acting on promises of greater public participation. But, on another
level, uncritical enthusiasm for more participation raises questions about whether
provincial governments in tough spots are simply grasping for straws. I think there is
some truth to that, though it seems fairer to say public employees are keen to get the
public on their side for whatever battles lie ahead against the next governor, the federal
government and other outside actors.
5.3.3 Accountability and Bureaucratic Discretion
Few issues in the post-Cold War era have attracted as much attention as
accountability. Multilateral development organizations make steady reference to
improving accountability and at times even threaten to withhold support from
institutional cultures of non-accountability.37 Accountability includes organizations and
individuals giving a full account of their activities to the prescribed authorities.

177
Increasingly it also relates to performance accountability (Turner and Hulme 1997:123-
24), although I do not add here to the discussion on public sector performance pursued in
the first half of this chapter. Bureaucratic discretion is often times a related issue for
reformers to grapple with. Decision-makers need enough latitude to work efficiently and
expeditiously on the publics business, but concerns always surface about to what extent
the (non-elected) permanent bureaucracy is actually making public policy. In Argentinas
provinces, public sector reform would do well to gauge the supposed accountability
deficit and discretion surplus, and appraise the relationship between the two before
assuming both issues can be rectified simultaneously.
The first question in Table 5-8 simply asks to what extent provincial civil servants
are accountable for their actions. The responses are interesting but considerably
dispersed. In Entre Ros, 41.3 percent estimate civil servants are sufficiently
accountable while one-third see the situation in more dire straights and approximately
one in four judge the current level of accountability to be more than acceptable. More
than 70 percent in San Luis consider accountability to be more than enough or
sufficient and criticism reflected in the bottom two quintiles stands at 15.4 percent.
Interpreting these responses is difficult because the meaning of accountability to whom
may vary from place to place. Public employees in San Luis focus primarily, I think, on
their organizations chain of command up through the Executive. Accountability is
related to democracy but it relates foremost to responsibility and honesty. In Entre Ros,
the dominant perception is that the public sector (in particular, political institutions) has
let down the provinces citizens. Accountability thus carries more democratic content
along with responsibility and honesty.

178
All administrative systems exert some measure of control over policy design.
Even political systems that produce more detailed legislation, such as the United States,
inevitably leave many important issues of policy development in the hands of public
organizations. Continental European and Latin American systems typically defer a
greater share of operational aspects to the permanent bureaucracy.38 There is nothing
inherently right or wrong with either starting point. In Entre Ros, more than 25 percent
consider the permanent bureaucracy highly influential in the design of policies, while
the figure in San Luis stands at 11 percent. Public employees in San Luis are nearly three
times as likely as their Entrerriano counterparts to rate career civil servants as not very
influential. What accounts for this difference?
The basic explanation for this finding is political leadership. It is not attributable
to explicit differences in the delegation of decision-making authority. Sanluisefios have
clearer signals from their political masters regarding what needs to be done. Upper-level
managers are not out of sight, out of mind for the people who put them in their
position. Top managers are driven hard and they take most of the influential policy
design decisions. Career public managers also play a key role but the system of control
does not typically leave them to improvise or solve major design issues alone. The
presence of political leadership and control is less palpable in Entre Ros. Top managers
would benefit from the political articulation of governing objectives and clear resolve to
push hard for results. Career civil servants complain they are not trying to exercise power
and would be content to have somewhat less.39

179
Table 5-8 Accountability and Bureaucratic Discretion
To what extent are civil servants accountable for their actions?
Entre Rios
San Luis
Highly accountable
12.7
14.3
More than enough
12.7
32.9
Sufficiently accountable
41.3
37.4
Not very accountable
31.7
11.0
Not accountable at all
1.6
4.4
To what extent is the permanent bureaucracy influential in the design of policies?
Entre Rios
San Luis
Highly influential
25.4
11.0
Considerably influential
17.5
20.9
Somewhat influential
44.4
39.6
Not very influential
9.5
26.4
Not influential at all
3.2
2.2
How would you characterize the medias role in making the provincial government more accountable?
Entre Rios
San Luis
Highly effective
9.5
4.4
Considerably effective
34.9
22.0
Somewhat effective
31.7
41.7
Not very effective
22.2
30.8
Not at all effective
1.6
1.1
Overall, to what extent do your organizations policies reflect public preferences?
Entre Rios
San Luis
Very closely
0.0
7.7
More than enough
9.5
29.7
Somewhat
38.1
45.0
Verv little
50.8
15.4
Not at all
1.6
2.2
(Entre Ros N=63, San Luis N=91). See Appendix B for the Democratization survey in its
entirety.40
Next it is useful to consider the medias role in making the provincial government
more accountable. Media outletsprint, radio, television, internetcan play a major role
in keeping government honest by reporting what politicians and other public servants are
doing with the resources and responsibilities entrusted to them. The relationship between

180
the media and government differs from province to province, though as a general rule it
can be said there are fewer media sources in the provinces compared to those outlets
based in metropolitan Buenos Aires and dedicated to coverage of the federal government.
Moreover, there tends to be less confrontational or expos style coverage and, in some
provinces, a culture of deference to powerful individuals. Entrerrianos believe the media
has played a constructive role in making government more accountable. This reflects, on
the one hand, appreciation for coverage that is mostly frank and open. On the other hand,
it is possible public employees are observing that corruption and breaches of the publics
confidence would be indeterminably worse without the existing coverage. A number of
respondents wrote comments to this effect.41 In San Luis, 41.7 percent describe the media
as somewhat effective in making government more accountable. It is fair to say the
puritano provincial media are less concerned with maintaining an objective distance from
the government. But it also seems sanluiseo respondents have more reason to believe
accountability is being ensured by internal or popularly-based standards because, after
all, the state has delivered on many of its development promises since 1983.42
The last question in Table 5-8 attempts to ascertain whether organizations are able
or willing to manage policies in a manner reflective of public preferences. San Luis
clearly holds an edge in terms of doing more of what the public wantsmore than one-
third feel confident their organizations policy management reflects public preferences
and 45 percent make the more modest assessment that policies somewhat reflect
preferences, which is not bad for the business of governing. Entre Ros public employees
lack a similar confidence in the precision of their organizations actions. Slightly more
than half see policies and their subsequent administration adrift from popular opinion.

181
One explanation for why policies are out of step with public preferences goes back to the
earlier responses related to participation: not enough public participation to properly
design, implement and adjust policies. There is little doubt that major shortfalls in public
participation produce conditions where accountability, no matter how capable and honest
the bureaucracy, remains elusive. Another level of explanation is unmistakably political.
In Entre Ros, for example, public employees are well aware public satisfaction with
provincial government is at an all-time low and thus many are resigned to conceding their
organizations policies reflect public preferences very little.
5.3.4 Transparency and Openness in the Policy Process
The case for transparency in markets has long been established. The case for
transparency in governance has likewise become an article of faith in state reform
discussions over the past two decades (World Bank 2000). Transparency issues are not
isolated to political institutions like the Executive, Congress or the Courts. The states
administrative apparatus also makes numerous determinations about the degree to which
aspects of policy management are concealed from interested parties. For instance,
transparency can be as mundane as hiring decisions or contract bids and as vital as the
methodology for estimating the effects of river dredging. The extent to which the policy
process is inclusive or exclusive often mirrors the question of transparency. In Latin
America, and notably in Argentina, the policy process has remained relatively closed
despite two decades of democracy (Hopkins 1995).43 The issue is relevant at all levels of
government and public employees have a unique vantage point on where things actually
stand. This section completes the survey of democratization issues facing public

organizations on the provincial level and looks further into the rationale for embracing
(whether enthusiastically or mildly) this set of reforms.
182
The first question in Table 5-9 asks respondents to what extent their
organizations business is made transparent for public understanding. I have to admit I
am surprised by the difference that emerges between Entre Ros and San Luis. Based on
the similar legal bases for administrative actions in the two provinces, as well as my
discussions on this issue with public managers, politicians and NGOs, there did not
appear to be much of a gap.44 In Entre Ros, the high concentration of responses in the
bottom two quintiles-46 and 12.7 percent-possibly suggests higher expectations for
transparency in the province. This may be nothing more than popular backlash against the
politicians and policies that ruined the province.4^ But it likely also means civil society
is uncomfortable lacking the means for independent oversight. In San Luis, the
distribution of responses appears fairly accurate for a record of governance that is
admittedly more result-oriented than process-oriented.
Whether or not greater transparency in government should be a priority for the
reform agenda may seem self-evident since virtually all voices in the development
community embrace it. But in reality it tends not to be an easy choice for public
organizations, particularly in countries where the political institutions operate in a serious
transparency deficit. Even when political institutions set the tone and lead by example,
state bureaucracies often struggle with transparency mandates. The reasons are varied:
multiple and overlapping levels of control, organizational inertia, distaste for intrusions
and delays from non-experts and outsiders, as well as the fear of being scapegoated for
decisions made by politicians and their appointees. The problems associated with moving

183
this agenda item forward notwithstanding, public employees in the provinces have
different views on how important transparency is to the debate at hand. Transparency is a
very high priority in the estimation of 31.7 percent of public employees in Entre Rios,
while only 8.8 percent of San Luis civil servants attach such critical importance to it.
And significantly more Sanluiseos assess that transparency belongs in the moderate to
low priority range.
In San Luis, there is recognition that transparency is good for investment and
growth. Carlos Sergnese, former Minister of Economy and current Senate President,
explained that his province internalized this lesson as soon as democracy was restored in
1983. The government also makes the case for transparency being the norm in policy
management or administration. As Secretary Castillo explained on one of our drives from
the provincial capital to La Punta, a new city blooming on the sierra, People get good
information about projects and programs from all of the ministries. No one is left
wondering where are the things we were promised.46 A key explanation, in Entre Rios,
for public employees prioritizing transparency is their strong desire to win back the
respect of the provinces citizens. Many civil servants I spoke with felt the public unfairly
lump them in with the politicians and political parties when assigning blame for the
provinces decline. The case for greater transparency is thus to open the shudders so
people understand public employees are acting in good faith. But the issue is not only
about winning back the respect of their neighbors. Respondents often used the space for
comments in this section of the survey to express how transparency is crucial for
democracy and why this issue figures prominently in the countrys recent political crisis.

184
Table 5-9 Transparency and Openness in the Policy Process
To what extent are the activities and decisions in your organization structured in a transparent manner for
public understanding?
Entre Ros
San Luis
Very high
0.0
5.5
High
7.9
18.7
Moderate
33.3
50.5
Low
46.0
24.2
Very low
12.7
1.1
Given the many hardships faced by public employees in your province, to what extent do you consider
greater transparency in government a priority for the reform agenda?
Entre Ros
San Luis
Very high
31.7
8.8
High
28.6
29.7
Moderate
19.0
34.0
Low
15.9
26.4
Very low
4.8
1.1
Compared to 5 or 10 years ago, to what extent is the policy process open to more actors?
Entre Ros
San Luis
Significantly more open
0.0
16.5
Somewhat more open
12.7
42.8
Unchanged
49.2
33.0
Somewhat less open
20.6
4.4
Significantly less open
14.3
2.2
Dont know
3.2
1.1
How would you characterize your organizations approach to citizen inquiries?
Entre Ros
San Luis
Open and helpful
15.9
35.2
Reasonably accommodating
27.0
29.7
Adequate
31.7
30.7
Slow and incomplete
23.8
3.3
Completely inadequate
1.6
0.0
Again, considering the many issues involved in public sector reform, to what extent do you consider
greater openness in the policy process a priority for the reform agenda?
Entre Ros
San Luis
Very high
46.0
15.4
High
27.0
36.2
Moderate
22.2
29.7
Low
4.8
17.6
Very low
0.0
1.1
(Entre Ros N-63, San Luis N=91). See Appendix B for the Democratization survey in its entirety.47

185
In the earlier section on public participation there were indications NGOs and
other forms of associational life have become important in the two provinces. The next
question looks at whether the policy process is now open to more stakeholders than it was
5 or 10 years ago. Public employees in Entre Ros appear to be saying their province has
perhaps taken a step backwards in this regard. On the other hand, public employees in
San Luis view the policy process as more inclusive than it used to be. Unfortunately,
there is no precise way to know the respective starting points in 1993 or 1998. My
sense, drawn mostly from interviews and the study of river development projects in each
province, is that Entre Ros was more inclusive than San Luis.48 And Entre Ros is likely
still more inclusive from the standpoint that its constellation of stakeholders is more
diversified and independent than is the case in San Luis. So while Entrerrianos may not
see the state keeping up with demands for inclusion, it seems unlikely San Luis would be
more able to successfully manage the socio-political environment in Entre Rios.
Policymakers and managers in San Luis are, however, expanding the circle of
participants as the provinces social profile moves from modernizing to something more
post-modern.49
Public organizations around the world have been trying hard to improve the point
of contact experience for citizens. For starters, clients have to be treated with courtesy
and inquiries have to be handled capably and expeditiously, no matter the ultimate
answer to an inquiry. The fourth question in Table 5-9 considers how well public
organizations in Argentinas provinces respond to citizen inquiries. In general, the
numbers are far from ideal in the provinces. San Luis is performing bettermore than
one-third describing their organizations approach as open and helpful and a mere 3.3

186
percent raise warnings about serious deficiencies. In my view, the norm of open and
helpful or at least reasonably accommodating responses to inquiries owes much to active
management. The fact is managers spend considerable time paying impromptu visits to
their charges, which satisfies the classical bureaucratic concern for control and lets
everyone know that smart organizations do not become complacent about how the public
perceives them. In Entre Rios, the numbers in the second and third quintiles resemble
those in San Luis but approximately one in four estimates the organizational response to
inquiries is not adequate. Training employees in customer service and insisting managers
control for this are among the steps that can be taken to make the administrative system
more accessible for the public. Unfortunately, the fiscal crisis in the province has caused
some secretariats to operate without the means for placing out-going phone calls or using
intemet/email, which certainly makes it harder to get back to someone about their
problem or question.
The issue of openness in the policy process is perceived differently in the two
provinces. In Entre Ros there is significantly more support for placing greater openness
in the policy process among the reform agendas top priorities. Public employees in San
Luis have a positive disposition toward this concern, but it probably does not rate as a top
priority. Moreover, in Entre Ros, the incidences on the other end of the spectrum, low
and very low, are minimal (4.8 percent), whereas in San Luis they are small but
significant (18.7 percent). Again, the message seems to be that Entrerrianos are looking
for answers, almost to the point where democratization is thought of as a silver bullet for
the public sectors problems. Sanluiseos are more ambivalent about some aspects of

187
democratization because they overwhelmingly believe the provinces governance formula
is balanced and, above all, successful.
5.4 Conclusion
It is impossible to exclude market and participation-based reforms from the
working agenda, and even if it were possible it would not be desirable to do so. Instead,
what needs to be researched, debated and planned for is when and to what extent these
elements should come on line in the reform process. The overall picture in this chapter is
not satisfying in many ways. Public organizations have a spotted record in terms of
promoting efficiency and facilitating public participation. Similarities and differences
emerge on closer examination. First, the two provinces share considerable skepticism
about many elements of marketization in the public sector. New public management
ideas such as managerial flexibility or performance incentives have some room for
acceptance but this space appears limited. As for democratization, there is generally more
enthusiasm for this line of reform in Entre Rios, while San Luis modernizing state is
more or less indifferent to ideas that seem process-oriented rather than result-oriented.
In the previous chapter, professionalization presented a less ambiguous and
contentious side of public sector reform. Market and participation-based reforms are
clearly more problematic. This means Pollitt and Bouckaerts reminder to think in terms
oiwhat is feasible? again speaks to the situation at hand. Moving forward, the next
chapter draws together the factors shaping public sector reform (Chapter 2) and the
empirical record we now have from Entre Ros and San Luis (Chapters 4 and 5). The goal
is to locate and understand similarities and differences on the provincial level. This seems
the most responsible way to get the composition and timing of reform right and emerge

from the crisis and post-crisis landscape with a public sector that is both viable and
legible for Argentines.
188
Notes
1 The shift started in the late 1970s and a consensus in favor of economic liberalization consolidated in the
1980s. In Argentina, for example, the states role in the economy decreased decisively during the 1990s--
state enterprises were privatized, employment on the national level decreased, and the volume of trade and
foreign direct investment increased dramatically; see Pastor and Wise (1999).
2See La Nacin (2-21 -02).
3See Latinobarmetro (2002).
4The questions in Table 5-1 are located in Section 2, Part 1 of my survey entitled Provincial Public Sector
Reform.
5See Latinobarmetro (2002).
6The national government did reduce the number of public employees in the early 1990s, but the reduction
was largely ephemeral since many of those federal civil servants became provincial civil servants as policy
portfolios like education and healthcare devolved to the provinces during the first Menem administration.
Critics of provincial profligacy point out that government employment in most provinces is a form of
disguised (and excessively expensive) unemployment insurance; see La Nacin (2-21-02) and Buenos Aires
Herald (11-7-01 and 11-8-01).
7The IMF favors a provincial reduction in force; see La Nacin (9-6-01), Catn (2001). Province-specific
plans have been slow to materialize, however. And, indeed, Entre Rios and San Luis have never officially
suggested planning for cuts in tenured personnel.
Virtually all civil service systems maintain some bias in favor of seniority. However, because of the
importance of specialized skills and the utilization of performance evaluations, most reduction in force
decisions are based on a mixed criteria; see Garvey (1997:48-67) for a good example. The responses I
received from public employees in Argentinas provinces seems to reflect an acceptance of mixed criteria,
though the vast majority of these same respondents are strenuously opposed to any reduction in force.
9The questions in Table 5-2 are located in Section 2, Part I of my survey entitled Provincial Public Sector
Reform.
l0San Luis has mainained a sound fiscal position through the 1990s and into the present decade; see
Fundacin de Investigaciones Econmicas Latinoamericanas (1998). In my discussions with Minister
Poggi, he indicated that his ministry had no expectations of downsizing. Senator Carlos Sergnese told me
that he expected provincial revenues to weather the economic crisis, yet he also said the government would
have to be flexible since no one could anticipate how the post-crisis revenue sharing, la nueva ley de la
coparticipacin, would affect provincial spending.
"Entre Ros and San Luis had hiring freezes in place during 2000 and 2002, when I conducted the research
there. The freezes are still in effect now, late in 2003. Entre Ros, like many other provinces, set
challenging budgetary targets, cutting some programs and services in an effort to avoid deficit spending
while the federal government fell behind in coparticipacin transfers. However, Entre Ros financed deficit
spending through the circulation of quasi-money, bonos federales, during 2001 and 2002. At least twelve
other provinces followed a similar course because revenue dropped faster than spending, even in provinces
that tried harder than Entre Ros to restrain spending.

189
12This is simply a case of provincial expenditures necessarily rising when important policy portfolios like
education and healthcare devolved to the provinces in the early and mid-1990s. Not surprisingly, then,
provincial spending rose, on average between 1995-2000, by 25 percent; see Barraclough (2002). To be
sure, todays problems could have been headed off, at least somewhat, if provincial governments had
developed the capacity and mustered the commitment to collecting local taxes. But, on the other hand, the
economic crisis could hardly have come at a worse time because most provincial governments were already
reeling under the strain of the added responsibilities thrust on them earlier in the decade.
l3The questions in Table 5-3 are located in Section 2, Part II of my survey entitled Provincial Public
Sector Reform.
l4When I first met Pedro Tonioso in May 2002, he had only been heading up Entre Ros Environmental
Division for about six months. He expressed considerable surprise and frustration about the duplication of
efforts and general lack coordination between his division and two othersHydraulics and Sanitation-with
environmental jurisdictions.
l5The situation in Entre Rios strikes me as a combination of intense competition over declining resources,
new division heads versus old ones, poor dispute resolution at the top of the secretariat, absent leadership at
the top of the ministry, as well as a public organization struggling to win back the publics respect in the
midst of crisis.
l6The responses to questions in Table 5-3 clearly show public employees are skeptical of the link between
competition and effectiveness. On one level, I believe this is a reflection of a different organizational
culture than one would likely find in the mostly Anglo new public management countries. On another level,
this skepticism conforms to what the majority of Argentines were saying in the depths of the economic
crisis; see La Nacin (8-12-02).
l7The uncertainty regarding the near-term future of revenue-sharing is taking its toll on policy and program
management. In conversations and in the comments sections on the survey, numerous public managers
expressed grave concerns about planning without anything resembling firm numbers on monthly basis, let
alone for the next fiscal year.
l8The questions in Table 5-4 are located in Section 2, Part III of my survey entitled Provincial Public
Sector Reform.
l9This observation is speculative on my part. The question (see Section 2, Part III in Appendix II) indicated
to the respondent that he/she may mark all that apply; however, very few respondents marked more than
two.
20The qualitative data from written comments and interviews suggest that Entre Rios is not demonstrably
less consultative than San Luis when it comes to budget cuts. The difference appears to be that higher
incidences of cuts in Entre Ros leave civil servants with an impression that no one listens and no one cares.
2ISee question 97 in Section 2, Part III of my survey entitled Provincial Public Sector Reform.
22The questions in Table 5-5 are located in Section 2, Part III of my survey entitled Provincial Public
Sector Reform.
23Secretary Menndez spoke of establishing a review board to examine how the ministry might go about
emphasizing incentives. Minister Poggi had a similar take on the issue, but he pointed out that his charges-
directores and jefes de departemento~ha\e notified of deserving employees and those individuals have
received awards; however, Poggi admits the process is not altogether formalized at this point in time and
drawing up a clear criteria for incentives will be necessary for the more systematic use of them.

190
24Poggis remarks can be taken in couple of different ways. One may infer San Luis is trying to put the
most flexible face possible on an active government approach to doing business. On the other hand, one can
take this at face value: San Luis weighs all of its options and the approach it follows is nothing more than
pragmatic. I believe the truth lies somewhere in between but the balanced budget and development success
enjoyed there lead me to place more stock in the latter interpretation.
^Gonzlez is a relatively recent appointee who came over from the private sector. He is quite critical of the
way the provincial government operates, particularly the lack of professionalism and efficiency. However,
the thrust of his perspective is that public sector reform should not be a debate about big versus small
government. Gonzlez further places the direction of reform in comparative perspective by saying the
experiences of Spain and Italy probably have greater applicability to Entrerrianos than would the
experience of Great Britain and the United States.
26 In the 1980s and early 1990s, the World Bank was criticized for failing to sufficiently involve people
affected by development projects in the design, implementation and review processes. See Cernea (1991).
However, the pendulum has swung in the other direction. In Reforming Public Institutions and
Strengthening Governance (2000), the Bank is enthusiastically endorsing voice and partnerships and
making little or no distinction about which governments are poised to accommodate significant increases in
participation and which governments will have their hands full merely trying to professionalize the civil
service.
27The somewhat more active t role played by the legislatures in Entre Ros and San Luis speaks to this
trend. The national congress is also showing greater activity despite the conventional wisdom that assumes
Latin American executives rule by degree; see Mustapic (2000).
28Regarding the sheer number of provincial legislators, critics argue many of Argentinas provinces are too
small to justify having two houses of congress; see Nielson (2002), Buenos Aires Herald, El Litoral, La
Nacin. A number of provinces, including Buenos Aires, have gotten the message and began debating the
merits of moving to a unicameral legislature; see La Nacin (8-24-01).
290n the national level, this is one of the real successes since the restoration of democracy in 1983. As
Mustapic (2000) points out, though, this seems to be largely unrecognized by many observers of the
Argentine political process.
30The questions in Table 5-6 are located in Section 3, Part I of my survey entitled Provincial Public Sector
Reform.
'Having analyzed the written comments and talked at length with dozens of Entrerrianos about the issue, I
believe there is solid support for limiting the Executives discretionary power. Part of this sentiment is no
doubt attributable to the widespread dissatisfaction with the Montiel administration while I was in
Argentina. Montiel only narrowly avoided impeachment in 2002, and the amount of bad press he received
in metropolitan Buenos Aires is testament to poor Executive leadership in Paran, which is 500 kilometers
from Buenos Aires.
32Senator Campos is a veteran UCR legislator; and indeed he has seen economic crises and military
governors in the course of four decades. Thus while Campos regrets that his Peronist colleagues are
frequently at odds with his own partys plans, he accepts that scrutiny over political appointments is a
positive development. Campos observes that public organizations in the province are suffering from a
decline in public confidence and that the only way to help restore respect and legitimacy is for the
institutions (like the Congress) of government to provide people with more reason to believe the individuals
managing policy portfolios have been properly vetted by their elected officials.
33I did not imagine there were inherently preferable forms of participation. As I suggest, the real question is
whether public organizations are carefully identifying and refining methods that make sense for the
stakeholders and the type of dialogue that needs to take place within some constraints on time and

191
resources. In this regard, I do not see the responses as suggestive of employing the right methods versus
relying on the wrong ones.
34The discussion of Entre Rios history in Chapter 3 clarifies the middle class profile of Entre Rios in
great detail. The more general distinction about the existence of quite a few feudal provinces is not a new
one; see, for example, Barraclough (2002), Buenos Aires Herald (10-17-01,11-15-01). Typically, this
unwelcome adjective is reserved for the poorer provinces of the countrys northwest and northeast.
35Since the restoration of Argentine democracy in 1983, San Luis has been governed by the Peronists, most
notably by Adolfo Rodrguez Sa as a four-term governor. There is no denying that maintaining political
power makes the task of affiliation and mobilization easier than they would otherwise be. Yet I believe it is
equally important to remember that maintaining a strong party affiliation also depends on delivering
tangible developmental benefits to people in the province. In this regard, party loyalty should not come as a
big surprise because there is no province that has leapfrogged so many others in terms of development over
the last twenty years. There are, of course, provinces with strong party affiliation. Santiago del Estero, for
instance, has been controlled by the PJ for fifty years but this political dynasty can hardly claim robust
economic growth and human development as its primary source of party loyalty.
36The questions in Table 5-7 are located in Section 3, Part II of my survey entitled Provincial Public
Sector Reform.
37There is an increased recognition among multilateral development and financial organizations that
institutional development is crucial for economic and human development; see World Bank (2000), Inter-
American Development Bank (2002) and the International Monetary Fund (1997).
^Fundamentally this is a reflection of the statist tradition of countries like France, Germany and Spain.
Even if this is only part of the stoiy, it nonetheless underscores why governance in countries like Argentina
can scarcely afford to do make do with a less than professional bureaucracy.
39I think this one of the real ironies of the situation in Entre Ros. Civil servants are not looking for ways to
keep the public away from policy management. On the contrary, a considerable majority appear to see an
exclusionary form of governance as least likely to win back the public. The attitude seems to be, let the
public come inside and see we are trying even when things are going wrong. In short, legitimacy holds far
more appeal than control and exclusivity.
40The questions in Table 5-8 are located in Section 3, Part III of my survey entitled Provincial Public
Sector Reform.
41This may well be emblematic of the classic conundrum: is the glass half-full or half-empty. Despite the
fact the media in many provinces are considerably more deferential than the national media, the comments
coming from Entre Rios deserve notice. Public employees believe the media has played a useful watchdog
role in terms of scrutinizing corruption and mismanagement. Moreover, a few of these public employees
noted that they have certainly lived through periods of time where governance became considerably less
accountable when media outlets were silenced.
42My point here is that accountability does not come packaged in a single form. It can, of course, have a
great deal to do with the transparency of a given process. But accountability can also center more firmly on
outcomes (i.e. promises kept).
43Hopkins, a veteran of Southern Cone geography, economics and politics, is making this point specifically
with regard to environmental policymaking in the region. But it is more generally true across the range of
policy portfolios. The experiences of Entre Ros and San Luis attest to this dynamic.
44Gaps in participation are frequently hard to discern from the study of legislation and administrative
rulemaking. Often defacto organizational practices owe more to the attitudes and social expectations than

192
anything else. This is why 1 estimate Entrerrianos want to conduct business in a markedly different way.
Simply enough, they want to do things differently because their neighbors expect something more
participatory, something better.
45A lawyer who has worked for the province since the early 1970s wore the pain and frustration on her
sleeve when she said, Los polticos y sus polticas se destruyeron mi provincia.
46Jernimo Castillo explained to me on our many drives around the province that Sanluisefios ask
themselves whether they see things like schools, health clinics and paved roads.
47The questions in Table 5-9 are located in Section 3, Part IV of my survey entitled Provincial Public
Sector Reform.
48As the responses to the questions on participation related, participation independent of political parties is
significantly more frequent in Entre Rios.
49San Luis critics consider the post-dictatorship period to be long on development and short on democracy.
The basic charge is that Rodrguez Sa and his governing clique are generally not tolerant of political
opposition; see La Nacin (6-3-03). The corollary is that policymaking in the province is somewhat less
participatory than it is in Entre Rios and perhaps other provinces.

CHAPTER 6
TAKING STOCK OF REFORM: SIMILARITIES, DIFFERENCES AND
LESSONS LEARNED
6.1 Introduction
Chapters 4 and 5 analyzed over thirty particular reform issues, interspersing
survey results and interviews with practitioner and academic-based perspectives. This
chapter brings together insights and lessons learned from my experience with public
employees and organizations, elected officials and reform protagonists in both provinces.
The point here is not to provide a detailed plan for public sector reform in Entre Ros and
San Luis. That is a job for the provinces themselves. Instead, taking stock of key issues
appears the best way to tie together the road to reform. The first step is thinking
realistically about the factors moving the reform process. The situation on most fronts
remains fluid and it pays to review where politics, the economy and coparticipacin are
moving the process. Second, it is clear that similarities and differences emerge in Entre
Rios and San Luis. Summarizing those experiences goes a long way to understanding
what can be done. From there, it is possible to get an unobstructed view of the
composition and timing issues that make public sector reform more art than science.
Towards the end it makes sense to draw out and reflect on the lessons learned from the
provinces. I believe there is solid value in relating on the ground accounts from places
that face these tough choices.
193

194
6.2 Factors Moving the Process
Chapter 2 focused on the sets of factors that influence reform. There are
economic, political and administrative factors that have to be considered. And I have
explained why the federal-provincial relationship, coparticipacin in particular, frames
public sector reform in Argentina. These sets of factors are too broad and dynamic to
allow general statements like the economic situation is pushing reform forward or
politicians are holding reform back. Subsets of factors (e.g. politics breaks down into
parties, participation, reform leadership and so on) are the norm and the most influential
variables can vary over time. For this reason, it seems helpful to look through them again
to appreciate which variables are poised to have the greatest impact on the road to reform.
Starting at the top, economic considerations like fiscal deficits and Argentinas
suspended debt repayments, are keeping the provinces squarely in the sights of the
national government and multilateral lending organizations. Argentina and most of its
provinces did not produce balanced budgets last year. Since the late 1990s there has been
enormous pressure to fix the revenue-expenditure imbalance and comply with the much
talked about dficit cero policy. The IMF is presently optimistic the national economy is
buoyant enough to close the budget gap even as it brings some unknown level of debt
repayment back on line. The IMF is, however, pessimistic about the red ink it sees on the
provincial level (Castro 2003).1 The national government has had little choice but to bail
out insolvent provincial banks, change worthless quasi-money for full value pesos and
ultimately absorb provincial debts. This is an ugly laundry list and it places real pressure
on the provinces. But it gets worse when one considers, on average, 53 percent provincial

195
budgets go to pay salaries (La Nacin 7-15-03). To say a number like that one has the
attention of the IMF is an understatement.
Argentinas debt is the other economic factor pushing an imposed mandate for
provincial reform. The fact remains Argentina suspended debt repayments in January
2002 and there is no credit available until this issue gets resolved. Striking a deal with the
IMF is the only way to open the door for a settlement with private creditors. Obviously,
the national debt situation puts the provinces in a tough spot vis--vis the national
government when it comes to influencing the terms of their own reform packages. Thus
important pieces of the economic puzzle stand strongly behind ambitious public sector
reform in the provinces, focusing foremost on cutting provincial spending and building a
business-like state (see Chapter 5). Yet other economic factors provide a counter-current.
Exports have recovered nicely in Argentina since the devaluation of early 2002. Even the
persistently uncompetitive industrial sector shows signs of life. Growth for 2003 should
be in the 6-8 percent range.2 These factors actually provide the national government with
more leeway regarding the provincial public sector reform question. Along with signs of
growth, unemployment remains high (16 percent) and underemployment is probably
double that (La Nacin 8-1-03). The employment angle is an important one because
political institutions in a recovering economy with high unemployment may see the need
to prevent the loss of public sector jobs. After all, how many national senators will vote
for a cut in coparticipacin transfers in 2004 when the national government has more
revenue now than it did in 2002?
Politically, current developments also pose a mixed bag. As discussed in Chapter
2, the presence of a two-party parity arrangement does not prove a reliable predictor of

196
3
provinces willingness to forgo political patronage and professionalize the public sector.
Entre Ros has had one Argentinas most competitive two-party (UCR/Alianza and PJ)
systems in the 20th century, yet it has not proved to be a catalyst for reform. By contrast,
Peronistas have dominated in San Luis since 1983 and the state arguably works
somewhat better there. On the national level, too, it is hard to envision the share of the
electorate enjoyed by the governing party compared to its nearest follower being a
reliable predictor of commitment to reform. First of all, in a centralized federal system
with strongly downward redistributive mechanisms, coalitions tend to be built around
maintaining access to resources rather than party affiliation.4 Secondly, reform ideas and
the people that cultivate them need to link up with political leaders that can sell change
without getting bogged down in the technocratic rationale for why it needs to be done
(Graham 1999:32-35).
Citizen participation in Argentina is far less party-oriented than it was a
generation or two ago, which makes it a hard to read political variable in the post-crisis
reform environment. During the 1999-2002 crisis, there were many extra-party
mobilizations-piqueteros, ahorristas, carpas blancas, and assorted cacerolazosthat
were defined by the fact no political party had earned the right to claim their indignation.'^
In terms of supporting or opposing public sector reform, it is hard to generalize about
how the publics in Argentinas provinces will respond. There are signs of support for
measures that mean to professionalize the public sector and make it less complicit in the
countrys endemic corruption. Likewise, many provinces have populations keen to
democratize the public sector to give people more participation in the policy process. But
provincial economies are generally hanging by shoestrings and there is no way would-be

197
reformers can mobilize support for cuts in personnel and public goods and services. On
the contrary, there have been and will be plenty more large-scale mobilizations against
provincial structural adjustment. Overall, key political factors appear to be cutting both
ways. My sense from Entre Ros and San Luis is that well researched, practical reform
can gamer political support, whereas poorly researched and overambitious dictates from
Buenos Aires or Washington can expect energetic political opposition.
In many ways, the provincial administrative system is the factor I know best up
close. Again, though, this is a factor that sends conflicting signals about the effect it may
have on the reform process. One the one hand, the relationship between ministers and
career civil servants is more separate than it is integrated (Pierre 1995). Ministers
typically come from the outside with political connections and this disconnect from the
professionals can be a problem if career public managers do not invest in a reform
process driven by political appointees. This suggests comprehensive, long-term reform
will be difficult without the support of the permanent bureaucracy. But it also suggests
the point men (ministers and appointees) in the process may push reform measures more
energetically than one would expect to see integrated systems.6
On the other hand, the administrative system in Argentinas provinces resembles
the continental European Rechtsstaat model insofar as the state is a central integrating
force in society and management reflects the assumption that citizens have system-
defined rather than individual-defined rights and duties (Pollitt and Bouckaert 2000:52-
54). This tells us something about which parts of a reform package are likely to be
impeded by the administrative system. Moving fast and far in the direction of a business
model (e.g. individual incentives) will be difficult. Likewise, democratizing the public

198
sector will be easier if reformers respect the intermediary role administration plays
between state and society. The main point about the administrative systems impact on
reform is simple: the permanent bureaucracy in the provinces is not being adequately
consulted and because of this it is less likely the administrative system will play a
constructive role in the process.
The federal-provincial relationship has sort of already crossed over into the
unknown. The monthly floor on funds transferred to the provinces has recovered a little
in 2003, but it is below the legal minimum.7 A new coparticipacin law will have to be
passed in 2004. The economic parameters of the relationship have changed and this gives
a boost to the pro-reform camp in Buenos Aires. The federal-provincial relationship,
however, is more complicated than money alone. Significant reform (more than cost
savings) requires political commitments to making the provincial state work better. A
federal relationship that looks more like Spain or Canada sounds good but it will only
make a difference if the provincial level improves its capacity to manage public policies.
Based on my experience in Entre Ros and San Luis, I would say such commitments can
be secured if balanced reform proposals emerge in 2004 along with the new
coparticipacin law.
On the national level it is perhaps harder to tell which way the wind is blowing.
President Nstor Kirchner fits the reformer profileserious almost the point of blandness,
passion for details, and a social democrat who believes the state can work better without
giving up what it stands for. But his governing record in the oil-rich province of Santa
Cruz is mixed: balanced books and a functioning welfare state seems like paradise in
Argentina but half the provinces adult population works for the provincial state and

199
critics claim political patronage has flourished during Kirchners three terms (Scrutton
o
2003). One of three scenarios will likely define Kirchners impact on provincial public
sector reform in 2004. First, proponents of a strong structural adjustment policy on the
provincial level leave no room for compromise on the timetable for cost savings and
thereby torpedo a broader-based reform agenda. Second, Kirchner proves a skilled leader
(and reformer) and neutralizes one-track adjustment by securing overwhelming
provincial commitment for broad-based, realistic reform. Last, opponents of reform find
Kirchner to be a willing participant in obstructionism, both of cost-savings and the
broader public sector reform agenda. In my view, the worst scenario is a sequence that
starts with #1 and ends with #3 or one that starts with #3 and ends with #1. In other
words, the temptation to make bad choices would win out over the necessity for making
provincial states work better.
6.3 Professionalization Revisited
The first set of issues dealt with professionalization in the provincial public sector
merit hiring, position classification and definition, tenure, training, discretion,
evaluations, rewards and sanctions, political interference, and corruption. These concerns
are the most pressing if the goal is to place public organizations on solid footing long
term. Therefore, most elements of professionalization should be included from the onset
in any reform package in the provinces. The good news is twofold. First, there appears to
be little disagreement among public employees and politicians about the necessity of
having a fully professionalized civil service. Second, many elements of marketization and
democratization require professionalization as a platform for their own successful

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implementation. The bad news is improvements in key elements such as merit hiring and
corruption will probably take 10-20 years to have a big impact.
The following three points offer a synthesis of key similarities and differences in
Entre Rios and San Luis:
1. San Luis demonstrates an overall higher level of professionalization than Entre Ros.
In terms of merit hiring, San Luis presently has a significant though not overwhelming
edge. San Luis holds a similar advantage in position definition, training, and personnel
evaluation. These examples have shown formal mechanisms for control and personnel
development are somewhat weaker in Entre Ros. Granted much of the deterioration has
appeared since the 1990s, but it is an important gap nonetheless. It is also noteworthy that
sanluiseo political appointees exert more informal control over the permanent
bureaucracy than is the case in Entre Ros. This dynamic appears in the speed with which
decisions are taken and then acted on. It is, in my view, the product of a more result-
oriented approach to policy management. Whether or not the informal side of this
approach can translate easily into higher levels of formalization (and thus greater
transparency) remains to be seen. In general the advantage (even though it is not a huge
one) we see in San Luis underscores the value of Weberian bureaucracy compared to
forms of organization that lack control and professionalism.9
2. For both provinces, the gap between a semi-professional public sector and a fully
professional public sector has to be narrowed. The numbers from Chapter 4 illustrate that
neither province has squared the historical circle of sub-par administration on the
provincial level. Merit hiring, position definition, training, and systematic evaluation are
at levels below where they should be. And, overall, public employees are saying that

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political patronage and inadequate investment in organizational capacity have hurt
performance. The issue is not that no one knows the difference between quality and
amateur administration. Entre Ros and San Luis civil service statutes need to be
observed more than they need to be rewritten. The logic of professional bureaucracy is
already on the books so to speak. But closing the professionalization gap depends on
working in earnest on the basics. It strikes me as accurate to say provincial public sectors
need to fully invent (i.e. professionalize) government before worrying about reinventing
it.
3. San Luis does not have an edge in human capital but the province is getting more out
of what it has. Professionalizing the public sector will take years to realize. Thus it is
important to make the many provincial employees who lack something in terms of merit-
-skills or specializationplay as constructive a role as possible for the organization. The
average public employee in Entre Rios is not much different than her counterpart in San
Luis, yet experience in San Luis demonstrates that public managers can accomplish
tangible things with less than ideal personnel. This make the best out of what Ive got
philosophy is sometimes hard to buy into. As one director in the Ministry of Economy in
Entre Ros told me with some exasperation, you cant squeeze blood out of a turnip;
meaning, I presume, that people without the right skills and specialization are a major
obstacle.10 He was not entirely wrong. The purpose of professionalizing is to improve the
capacity of public organizations to accomplish their goals. But waiting for some magical
threshold of professionalization before insisting on better work from public employees
seems wrongheaded. Full professionalization will take time and patience but certainly

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there is room for progress in many of its elements while we work to change the overall
product.
The idea that the professionalization plank in the reform agenda should take
second place to any other concern in the overall reform process is disputed by the
evidence from Entre Rios and San Luis. Even the thorniest problems in the provinces like
corruption could use the presence of a more professional permanent bureaucracy.
Professionalism and corruption may have a less than predictable cause and effect
relationship, but if reformers and anti-corruption sentiment within the political
community and society insist on professionalization then one of the prime swamps (the
permanent bureaucracy) for corruption would be significantly dried up.11 There is no
perfect defense against corruption but fielding a more professional public sector would be
a big help.
6.4 Marketization Revisited
The introduction of market-based mechanisms is certainly the most contentious of
the three sets of reform issues. It spans from privatizations, contracting out, and
downsizing to flexibility, competition, and incentive-based contracts. There is no denying
the relevance of this part of the agenda if reform is destined to make the state work better.
Also, cost savings is a big topic in the federal-provincial relationship. But large portions
of the market model for public sector reform simply do not resonate with public
employees, elected officials or the public at large in Entre Ros or San Luis. Thus it
would be rash to insist marketization occupy the central position in a reform plan.
Believing the time is right to make market-based reforms the centerpiece of public sector
reform shows a lack of understanding of the administrative, political and social

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environments one operates in. The fact is many elements of marketization would have to
be tried in pilot form where the disruption and possible failure would not interfere too
much with the everyday work of public organizations. The following two points offer a
synthesis of key similarities and differences in Entre Ros and San Luis:
1. San Luis shows less outright hostility to another round of market-based reforms, but
the two provinces are equally unimpressed by a business model for the state.
Entrerrianos rate their provinces experience with economic liberalization as generally
poor. Sanluiseflos estimate their province managed that era somewhat better. However,
neither province expresses enthusiasm for an emphasis on individual initiative and
incentives. This indicates a low level of social acceptance for key new public
management precepts in provincial public organizations. Flexibility is another objective
that does not resonate much in the provinces (particularly in San Luis), where civil
servants do not see greater flexibility as beneficial for the delivery of services and good
to the public. This may not seem logical to public managers in Florida but public
organizations in places like San Luis are seeing tasks and methods in a more Weberian
manner. As I reiterate in Section 6.6, it is often unrealistic to try to have it both ways:
control and flexibility or efficiency and accountability. Moreover, the good preferred in
these tradeoff situations is usually defined by the values of the political and
administrative systems.
2. Marketization is not favored because San Luis is not experiencing major difficulties
managing the public sector and Entre Ros sees a further turn to the market exacerbating
the present difficulties. San Luis rejects the centrality of market-based reforms because
the province has followed its own governing model and sees no reason to radically alter

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it. In other words, where is the margin in changing a winning formula? Entre Ros is not
eager to import a business model that will be unintelligible to public employees and
Entrerrianos. Situations of state and administrative decay have to be handled cautiously.
Creative thinking is nice but no one can afford, least of all the people living in these
environments, for the state to stop working altogether.
There are areas where marketization helps provincial reformers identify and
hopefully resolve problems. For instance, the survey responses about budgeting point to a
real need for connecting budgeting more thoroughly to the organizations planning
functions. Minister Poggi and Secretary Menndez confirmed that developing this
connection is a priority. And there is also room to manage programs in Entre Rios Public
Works and San Luis Social Action more efficiently by reducing duplication of tasks and
efforts. But the overall skepticism about importing a business model is not without
reason. To ignore the evidence for limiting the centrality and front-loaded
implementation of marketization in provincial public sector reform would be a setback.
6.5 Democratization Revisited
The last set of issues related to democratization in the public sector. Since 1983
Argentina has had its share of economic crises and political upheaval. Throughout it all,
though, the policy process has remained relatively closed and participation difficult
(Hopkins 1995). However, there has been considerably more discussion about changing
the states traditionally secretive modus operandi. For the public sector, democratization
includes legislative oversight, various forms and methods of public participation,
accountability, as well as transparency and openness in the policy process. Clearly, this is
an ambitious plank in the reform agenda. The evidence from Entre Ros and San Luis

shows important differences as well as a few points of similarity. The two points that
follow review and summarize the outlook for democratization issues:
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1. Entre Ros is more favorably disposed to changing the status quo and accommodating
greater public participation, whereas San Luis seems indifferent to the idea. There are
two main reasons for this difference. First of all, there is more unsolicited citizen
participation in public affairs in Entre Ros and people in the province are accustomed to
it and see this as one of the few positives in recent years. In San Luis public organizations
solicit feedback more often than their counterparts in Entre Rios and managing
participation is part of the formula that has been solid on results and less deliberative
when it comes to process. Secondly, the states institutions in Entre Ros are presently
held in low esteem by the public at large and it is not surprising that public employees see
enhanced participation and transparency as a way to win back the respect of their
neighbors. San Luis public organizations are skeptical of what they see as process for the
sake of process.12
2. Both provinces are in the process of placing power in the hands of formal institutions
vis-a-vis informal ones; however Sanluiseos are less convinced the legislative branch
needs to further check Executive discretion. The numbers regarding formal oversight and
control of the permanent bureaucracy and political appointees are disappointing at face
value. But there has been progress on the provincial level, following a discemable trend
on the national level. This shift reflects that formal institutions are catching up to
informal networks as the leading control mechanism over public organizations. On the
checking Executive discretion issue, Entrerrianos are enthusiastic about a more
consultative approach to policymaking. They envision a change may choke off the four-

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year patronage cycles that improperly checked governors have tended to indulge in.
Sanluiseftos, by contrast, are significantly less attracted to the idea. According to San
Luis bureaucracy, it makes little sense to impede an administrative system that functions
effectively.
How democratization issues fit into the reform process differs from either
professionalization or marketization. Professionalization is absolutely crucial for
correcting the provinces historically inadequate administrative capacity and support can
be found for most of its key elements. Marketization has the weakest case (at least
initially) because there are big questions marks about its prospects in the implementation
phase. Likewise, economic liberalization already left a majority of Argentines sour on
market-inspired solutions to their problems, which means support is hard to come by.
Public sector reform with a strong democratizing thrust will have a supportive
constituency in Entre Rios and there is no good reason why some elements of
democratization cannot be included from the early stages of a reform package onward. It
may well do some real good in terms of repairing the publics confidence in how the state
operates. In San Luis, a solid case can be made for why citizens have the right to greater
participation and a less controlling Executive. It is not priority item now, but I anticipate
governance there will change (and perhaps in less than a decade) to accommodate an
ii
evolving social profile.
6.6 Composition and Tradeoffs
Reviewing the sets of issues in the three preceding sections provides some
perspective on the similarities and differences that exist in Entre Ros and San Luis across
the range of reform issues. The next step is to think realistically about the tradeoffs that

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appear within and between the three sets of issues. Appreciating the tradeoffs helps
immensely in getting a handle on what the composition of a realistic reform package
might look like. Ignoring them is detrimental because it invites impossible expectations
and delays real priority-setting. As the cases of Entre Rios and San Luis have illustrated,
some sets of issues are not desirable much less feasible in a given context. Sections 6.6
and 6.7 attempt to go beyond the rhetoric of reform and complete an accurate picture of
public sector reform, its composition and timing.
Marketization and democratization issues have been described in this study as
relatively less important than the core of professionalization. But aspects of marketization
and democratization are on the reform agenda and close examination reveals
incompatibilities between these objectives. First, the new public management advocates
freeing managers from rules and regulations to improve organizational efficiency. This
would make Public Works in Entre Rios or Social Action in San Luis more nimble and
innovative organizations as managers took advantage of greater discretion in marshaling
their units resources. Unfortunately, two problems crop up. The first is where do these
public managers come from and how will they turn the tide in these administrative
systems. Most administrators in the provinces are bright and hard-working, but they are
not wired in their education and professional socialization to embrace risk-taking.14 So
any mandate for efficiency runs up against basic personnel issues. And even when an
organization has a few administrators ready to think outside the box they will have a hard
time changing the entire administrative system around them. In fact the presence a
mixed (part new public managers, part old school administrators) organization will
likely make it hard for civil servants working every day with a foot in each reality.

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The other problem is that accountability, whether in the form of political
oversight, transparency or citizen participation, may seriously be compromised by private
sector management models. In an ideal world public managers could be judged by elected
officials and the public on their results and left alone in the course of getting the job done.
But results in the public sector tend to be fuzzy because contradictory objectives drive
policies and programs and widely agreed on performance measures have not become the
norm.15 We know political oversight in, for example, the U.S. has not been reduced,
despite the fact that nearly all politicians embrace the principle of freeing managers to
manage (Kettl 2000). And wider participation (in particular in the early stages when
public employees are learning new methods) surely slows decisions and raises costs. It
appears simplistic to assume managers, politicians and the public can simultaneously be
empowered by freeing managers to manage (Pollitt and Bouckaert 2000:156-157).
Furthermore, transparency in the policy process and public administration is not
something most publics will knowingly sacrifice. Public sector reform in Argentinas
provinces should be particularly mindful of the transparency issue because the political
and administrative systems there have historically graded out poorly in that respect.16 For
this reason, I would be hesitant to give the state a fresh, cutting-edge excuse for falling
short on accountability.
The next tradeoff also involves marketization and democratization as it relates to
state legitimacy. Marketizing reforms embrace the transformative power of innovation.
Specifically, technological (e.g. automation of services), economic (e.g. consumer
choice) and evaluation innovations are sought. The problem is that sizeable portions of
the public may feel ill at ease with changes. Particularly in a context where the public

209
feels betrayed by politicians, the introduction of innovations that, say, promise market-
based private pension accounts is unlikely to be well received.17 In this type of a reform
environment, there is something to be said for searching out ways to enhance stability
(Turner and Hulme 1997, Caiden 1994). For all their faults, bureaucracies have served
modem states fairly well in terms of providing predictability and continuity. Innovations
are not necessarily anathema to trust and stability. But the further introduction of market-
based mechanisms has to handled cautiously and perhaps seen as a viable option when
the provinces administrative and political systems are on more solid footing.
There is also a central, recurrent tradeoff within marketization. The discussions
about the federal-provincial relationship in Argentina have made it clear that cost savings
is crucial. For many reformers (mostly those residing outside the provinces), near-term
cost savings is thought to be the big prize in public sector reform Second generation
structural adjustments are also part of a long-term project aimed at relieving the financial
burden on the welfare state. But many elements of marketization are likewise insistent on
managers improving organizational performance (Makn 2000). There is of course a
contradiction or at least a tradeoff here since the majority of provincial budgets are spent
on education and social services and cost cutting does not lead to improved performance.
The public organizations responsible in those sectors may not perform better with more
spending but there is no reason to believe cost cutting will produce improved
performance. Few deny public sector reform in Argentinas provinces has to rein in
expenditures but it seems prudent to rein in unrealistic promises about improved
performance.

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In addition to the where will these new public managers come from issue,
marketization and professionalization cross paths again in the world of tradeoffs.
Downsizing, the most contentious element of the marketization plank, greatly
complicates most aspects related to professionalization. In terms of why it complicates
matters, the first problem concerns winning support for a balanced reform plan.
Significant reductions in force (like the ones the IMF floated in 2002) can be a starting
point in negotiations but holding the line on that issue jeopardizes professionalization,
which should be the centerpiece.19 If all sides want to strike a deal on meaningful reform,
then one has to give up something to get something. The other problem is that front-
loading downsizing virtually assures that it will be harder to move easier marketization
issues through the administrative system. For example, modifying tenure rights and
instituting incentive-based pay would likely gather support over time as the benefits of
merit hiring and training accrue.20 But without a commitment to balanced reform it is
easy to envision to how marketization, if it is poorly conceived, will inadvertently hurt
the prospects for professionalization.
Next, there is a potential discrepancy between efforts to professionalize and those
designed to democratize. Provincial administrative systems, fitting the Rechtsstaat model,
have good odds of implementing professionalization measures. This means the
permanent bureaucracy would improve its administrative capacity through better
personnel management and tighter control. But public organizations accustomed to
seeing policy management in terms of system-defined rights (rather individual-defined
rights) are usually hesitant to share power with outsiders by way of the democratization
measures discussed in the previous chapter and reviewed again here in Section 6.5. The

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first question, then, is how does public participation become the norm? It is possible a
pivotal, watershed event can be a triggering mechanism for popular involvement in
policymaking.21 But experience in Entre Ros and San Luis also suggests levels of
participation are products of habits of association developed over time. The second
related question concerns whether professional bureaucracies in Argentinas provinces
will resist active participation by outsiders. I do not see this being the case. If anything
the answer to the question depends more on how soon political decision-makers will
grow accustomed to unsolicited feedback and high expectations for taking multiple
viewpoints into consideration. But administrative systems (based on how Weberian
they are) will demonstrate varying degrees of willingness to accommodate more
participation of and we sometimes have to accept those limits on their own terms.
Tradeoffs within and between sets of reform issues are commonplace and the
discussion here was far from being an exhaustive one. Since provincial reform in
Argentina is being discussed and debated by multilateral development organizations, it is
useful to see how tradeoffs are understood by these actors. There is evidence that reform
sponsors such as the United Nations and the World Bank have learned from past reform
efforts. In The State in a Changing World, the Bank (1997:7-11) downplayed or failed to
address tradeoffs between various parts of its own institutional reform agenda.
Subsequently, the World Bank (2000) pays more attention to consolidating feasible
reforms before introducing additional ones.22 However, the logic of avoiding
comprehensive reform in a difficult context still seems to be lost on the IMF. Speaking
after a meeting with the World Banks James Wolfensohn and the IDBs Enrique
Iglesias, Horst Koehler, Managing Director at the IMF, stated, During the past decade

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there were important reforms and achievements. But reforms were not pursued
consistently or comprehensively.23 There are two main, worrisome dimensions
regarding the IMFs outlook on what Argentina needs at this juncture. For starters, the
IMF does not appear to be providing a full and accurate appraisal of its own position on
Argentinas reform measures during the early 1990s (Pastor and Wise 1999, Pearlstein
2002, Stiglitz 2002). Secondly, insisting on comprehensive reform at this juncture ignores
the whole question of what is feasible versus what may be theoretically (or ideologically)
desirable.
6.7 Timing
Comprehensive public sector reform is impossible in the sense that all good things
cannot be realized simultaneously. For instance, you can have cost savings if that is the
priority but it is naive to think you can have improved performance on the same plate.
But even when reform choices are not beset by contradictions and tradeoffs, there are real
organizational limits on how much change can be introduced at once. One can imagine,
for example, a project manager in a provinces environmental direccin being overloaded
if the following items came on line in the first three months: professional training in
hydrology, preparations for performance budgeting, and the creation of a citizen feedback
database. It is not impossible to imagine because those are modest, feasible pieces of a
reform package. The problem is that timing issues expose the physical and organizational
limits of change.24 The timing itself makes pieces of the reform agenda mutually
exclusive (though only temporarily) even though planners may have properly vetted
those pieces for strategic tradeoffs.

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The solution is for public organizations in Entre Ros and San Luis to take
account of each employees reform regimen (which changes affect them and how much
time is being spent on those), watching for signs of overload (regular work not getting
done). This seems a responsible approach to managing change. It would be irresponsible
to create an environment where people are learning or relearning too many things
simultaneously. Regardless of whether a provinces administration is mediocre,
somewhat better or somewhat worse, provincial publics cannot afford major disruptions
in the state. Consequently, important decisions have to be made about when to bring
different elements of professionalization, marketization and democratization on line. The
second half of this section offers a hypothetical review of how a few key reform issues
may be organized in terms of their general timing.
In Entre Ros the first phase (years 1-2) requires a professionalization emphasis,
focusing on such elements as merit hiring, training and strengthening mechanisms for
control (evaluations, rewards and sanctions) in the permanent bureaucracy. Progress can
also be made in connecting the budget to other organizational functions like planning and
evaluation. Personnel reductions will be hard but the initial step should be cutting the
hundreds of well-paid interns, pasantes, and absent employees, oquis, which public
organizations could easily live without.25 Since Entrerrianos (including civil servants)
expect greater openness in policymaking and administration, this post-crisis period needs
to secretarios and direcciones develop participatory mechanisms. By the end of the first
phase, the legislature needs to do its part by overhauling the Empleado Pblico Estatuto
(Ley 3.289, 1993), correcting the imbalance between rights and responsibilities, as well

214
as closing much of the hyper-seniority pay steps in the civil services functional
grades.26
The emphasis remains on professionalization in the second phase (years 3-5).
Here, it is important to verify that enhanced control and personnel development is
translating into meaningful role definition and technical competence. For democratizing
the public sector, the agenda includes solidifying and improving on the mechanisms for
participation. It also includes seeing further fruition in developing the formal,
institutional oversight mechanisms like those discussed for the legislature. The last phase
(years 6-10) has to maintain the emphasis placed on professionalization and
democratization, while exploring ways to make a stronger public sector more incentive-
driven. The overall reform composition and timeline in San Luis varies somewhat from
the one envisioned for Entre Ros. The first phase also requires an emphasis on
professionalization. Because the provinces public sector is getting good results without
red ink, it is unlikely the first phase needs to culminate with an overhauled civil service
code. The second and, more likely, third phase will lead to significant developments in
democratization. As in Entre Rios, pieces of the marketization agenda have to fit the
political and administrative context. But is probable a strong modernizing public sector
like San Luis will transition naturally through each phase into a more incentive-driven
model on its own terms. Of course, this is a brief, hypothetical and general assessment of
how reform issues may play out in the next few years. The important thing to remember
is that tradeoffs and timing are a crucial part of the road to reform.

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6.8 Reform Fatigue?
The first-generation of economic and political reforms in Latin America
accomplished many of its objectives. Democratic governments are the norm in nearly all
Western Hemisphere countries. Markets are, likewise, freer. But large numbers
(majorities in many countries) of people did not see many tangible benefits from the
changes.27 Particularly in Argentinas middle and lower classes, declining standards of
living, economic insecurity and limited opportunity define the times. Politicians have
little choice but to notice public opinion running against additional rounds of reform. The
problem, even if reform is handled well, is the classic one: public sector reform tends to
front-load costs and requires patience to realize mid to long-term benefits. How much
patience can be expected in Entre Ros, San Luis or elsewhere? Is reform fatigue really an
issue?
One way to look at reform fatigue is to see first and second-generation reforms as
part of the same process. For many Argentines, privatizations, corruption and high
unemployment are visible reminders of what they got for going along with economic
liberalization. Impressions of how the first round of reform went influence how people
feel about the second round. This is true despite the fact that the sets of issues we are
talking about here are quite different than the ones from the early 1990s. Therefore, the
issue of whether or not Entrerrianos or Sanluiseflos are ready to endorse the introduction
of incentive-based contracts is not separate from the privatization of utilities ten years
ago. One does affect the other. This dynamic underscores why reformers have to
recognize the non-neutral side of their own proposals. Provincial politicians, public

216
employees, the media and the public at large are going to give proposals a hearing but the
perceived merits of a plan will be affected by the last fifteen years.
6.9 Lessons Learned
6.9.1 The Impact of Government
The stories from the heart of this study (Chapters 3-5) are cautionary tales. Entre
Ros appeared to be a very good bet for lasting developmental success and yet it managed
to lose its comparative advantage in human and physical resources. San Luis seemed
unlikely to measure up to Argentinas historically successful provincesCapital Federal,
Buenos Aires, Mendoza, Santa Fe, Entre Ros, Crdoba, La Pampa and the Patagonian
Southand yet it went on to surpass all expectations. Sections 3.3 and 3.4 in Chapter 3
gave an overview of what happened, providing facts about where the provinces have been
and where they are today along with my impressions of how Entrerrianos and
Sanluiseos see themselves. This section explains more directly why it happened. I argue
the impact of government can be vitally important over time.
For starters, appreciating what government has meant in these two cases requires
thinking in terms of a political dimension and an administrative one. First, political
leadership is crucial for development. Elected officials, foremost the governor, need to
define tangible goals and then control appointed officials and the permanent bureaucracy
so desirable results occur. Unfortunately, this is by no means automatic. Things like free
elections and checks on Executive power tell us little about whether elected officials are
able to use their powers to manage public organizations (Riggs 1996:2). Free elections
and the like are, of course, political but they speak to the type of constitutional order or
regime in effect rather than the quality of political leadership.

217
Political leadership has certainly played a role in the trajectories of Entre Ros and
San Luis in recent decades. Part of the reason Governors Montiel and Busti oversaw
disappointing economies is because they failed to put a serious face on the public sector.
For instance, Entre Ros was unconvincing when it came to targeting industrial
development, despite the fact it is ideally located to take advantage of the Mercosur
common market (Caviglia 2002, CEER 2001).28 By contrast, take the example of San
Luis. Rodrguez Sa has taken a different approach. San Luis rides its appointed officials
hard and ministers and directors run tighter ships than they probably otherwise would in
the absence of strong control. At first glance, it may seem paradoxical why an active
provincial government has won the confidence of domestic and international business.
But we have to keep in mind the things that chase business away are neglected
infrastructure, insufficient investment in human capital and a rent-seeking state with
intransigent public organizations (Unin Industrial Argentina 2003, Instituto Desarrollo
Industrial 1994).29
Second, high quality administration is vital for effective governance. High quality
administration starts with merit-based hiring and also includes the necessary investments
in training and technology (Costin 1999:170). Managing human and other budgetary
resources effectively is another important aspect of the administrative dimension. This
requires not only political leadership and first-rate appointees in the highest level of
public organizations; it likewise requires good managers in the permanent bureaucracy.
For Argentinas provinces, the onus on quality administration has become more
pronounced twice in the last twenty years-primary education and hospitals reverted to
provincial control in the late 1970s and Menems government further devolved education,

218
healthcare and economic development initiatives to the provinces. Aside from funding
issues, the major disappointment has been that most provincial governments were not
poised to excel in their new responsibilities.
Political leadership and quality administration are complementary qualities in
effective governance. In the case of San Luis, ambitious development was pushed
through with well-conceived control over public organizations. In this sense, political
leadership came first and the quality of the permanent bureaucracy improved gradually.
In some ways the permanent bureaucracy remains less professionalized than one might
imagine, but it is a generally motivated outfit that derives satisfaction from the provinces
unlikely success. For Entre Ros it is not far-fetched to describe the opposite dynamic at
work. The absence of political leadership has pushed a respectable permanent
bureaucracy, which was at least the equal of San Luis thirty or twenty years ago, into
bad disrepair.
6.9.2 One Size Cannot Fit All Provinces
It seems as though making this point should be easy, even without extensive
research on the provincial level. For starters, there is plenty of evidence on the national
level in North America and Western Europe regarding why a one size fits all approach to
public management has neither been validated nor adopted (Pollitt and Bouckaert 2000).
And in Latin America, too, there appears to be considerable national diversity (Fleredia
and Schneider 2000). However, the Latin American region has also seen the application
of cookie-cutter structural adjustment recipes, which have generally fared poorly and
hardened opinion against reform (Stiglitz 2002). The question, then, is whether or not
provincial reform will be defined by diagnosed needs or a single formula like, say, 22

219
public employees per 1000 provincial inhabitants. It is hard to say which way the
pendulum is swinging in this regard. I was far from alarmed by the views expressed by
ministers, directors, and legislators in the provinces. They said the right things about the
need to build administrative capacity and the danger in jumping to conclusions regarding
how to proceed. But as I said in Section 6.2, there is also reason to worry that important
actors such as the IMF and Kirchners government may do a deal that precludes balanced
reform based on serious research.
The contrast between Entre Ros and San Luis is not striking across the entire
range of issues. In fact there are points of commonality, and this is why I have suggested
both should pay particular attention to professionalization issues. And there is little doubt
the administrative systems of the two provinces are not favorably disposed to
management models dominated by individual initiative and incentives. But clearly
significant differences appear in the comparison. For instance, Entre Ros lacks the strong
managerial control that one expects to see in hierarchical organizations. San Luis
ministries, by contrast, are tightly run organizations and managers squeeze results out of
their units despite having human resources on par with Entre Rios. Democratization
related issues are another area where significant differences can be found. The more
Weberian organizational profile in San Luis is lukewarm about accommodating greater
public participation. Likewise, there is relatively little clamoring in sanluiseo society for
changing a winning formula. In Entre Ros, however, there is wide scale popular
dissatisfaction with politics and administration as usual. And public employees show
strong backing for accommodating greater participation. These are just a couple of the
many examples that illustrate why one size does not fit all provinces. The problem is that

220
if no one goes to the organizational level and studies how government works in places
like Entre Ros and San Luis then most of the valuable information will slip through the
cracks.
The one size fits all approach to public sector reform is variously attributable to
bad working assumptions, inadequate research and assorted actors pressing different
interests and values. I think it may also help to take a step back and see where the one
size fits all logic is coming from now. Before the late 1970s, Keynesian and communist
states followed much of the cookie cutter logic when it came to advising developing
countries on how to organize their state apparatus. In the past twenty-five or so years
neoliberal economists in the multilateral banks and the U.S. Treasury have often been
guilty of a similarly flawed thinking about reform. Too often it has become an obsession
with big government or the size and scope of public sector. In effect the one size cannot
fit all provinces lesson can be rephrased as another lesson: the problem isnt big
government, its bad government. The reason one size cannot fit all provinces is
ultimately obvious. As we have seen in Entre Rios and San Luis, the features of good or
bad administration vary and sensible public sector reform has to account for this.
Asking ourselves Francis Delpres (1997:83-93) apt questions What kind of
State do we want? and What kind of administration do we want to give the State?
reminds us what the road to reform is truly about. Answers to the first question vary,
which should not come as a surprise since it concerns the values or objectives that a
political society hopes to promote. How this is answered helps define the public sectors
scope. Answers to the second question also vary because even political societies that

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define roughly similar goals may try alternative means to serve those goals. With no
single right answer, public sector reform varies across and within countries.
6.10 Conclusion
Drawing together a complete picture of public sector reform in Argentinas
provinces is difficult because there are many factors impacting the process and a large
number of issues on the agenda. Moreover, the road to reform is overwhelmingly in front
of us and this adds to the difficulty of providing a complete picture. It would surely be
easier if more of the reform process was in the rearview mirror. Accepting these
difficulties for what they are, my strategy in this study has been to clarify real sets of
issues facing public organizations in the provinces. This took me to the organizational
level in Entre Rios and San Luis, and I hope the on the ground perspective has clarified
what might work and what might not work. If it has accomplished this, then it points out
the value in making serious, empirically-based diagnoses of what provincial
administrations need and what they can successfully implement. Also, comparing cases
adds perspective to the study of public sector reform. In my view, Entre Ros and San
Luis have been powerful tools for seeing both the impact of government and the potential
dangers of a one size fits all approach to provincial reform.
One of the reasons I decided to investigate public sector reform in the provinces
was its currency in crisis and post-crisis Argentina. Reform, however, is not new in
Argentina or Latin America. Governments and plenty of other reform players have grown
accustomed to public sector reform since the drying up of easy credit (early 1980s) and
the end of the Cold War. In Latin America, many politicians gifted in reform-speak
Carlos Salinas, Alberto Fujimori and, of course, Carlos Menemhave come and gone.

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Argentina has been battered by the worst economic crisis in its history and the most
serious political vacuum in a generation. And now, summer 2003, the IMF sees
provincial governance as the single biggest obstacle to reaching a deal with Argentina.
Doing nothing is not an option and doing reform badly is perhaps the worst possible
outcome. Such are the contextual layers for public sector reform in Argentinas
provinces. Chapter 7 peers briefly into provincial public sector reforms wider context.
Notes
1 Castro covers federal-provincial relations for La Nacin, Argentinas second leading newspaper. The
coverage is comprehensive and generally on the mark regarding the direction where negotiations between
Buenos Aires and the provinces are heading. Here, Castro is pointing out that the IMF has identified
provincial deficits and debt as the most worrisome that persists in post-crisis Argentina. See La Nacin (7-
15-03).
2See INDEC for the Ministerio de Economa forecast for 2003 at www.indec.gov.ar
See Geddes (1994). Clearly, two-party parity in the United States at the end of the 19th century
contributed to building consensus for walking away (culminating with the Pendleton Act of 1883) from the
distressing levels of political patronage that had defined the American bureaucracy for its first one-hundred
years. However, two-party parity is not a full-proof predictor of where and when meaningful civil service
reform will occur. In Argentina, it is debatable to what extent periods of two-party parity contributed to the
construction of a sturdy, professional bureaucracy. On the provincial level the record is questionable too. In
my cases, San Luis has taken more tangible steps to professionalize public organizations than Entre Ros,
which means the inherent advantage for the two-party parity system cannot be taken for granted.
4See Tommasi, et al. (2001). The Argentine case illustrates why reform often finds congresswomen and
senators united by the type (advanced or poor) of province they present rather than their party affiliation.
The early 1990s was a case in point: Menem found a bi-partisan consensus for his economic
liberalization in the interior so long as he piled the costs of the transition on Buenos Aires.
5 Piqueteros are groups of unemployed and discouraged Argentines (usually men) that block roads and
highways in an effort to pressure the government to meet demands for jobs or at least more generous
unemployment compensation. Carpas blancas are literally white tents set up by teachers, normally close
to the national or provincial house of government, to voice their displeasure at working conditions (pay,
layoffs, pensions, etc.). In Paran, throughout 2002,1 passed two carpas blancasone on Avenida Santa Fe
and one in Plaza el Primer de Mayoon my way to the Casa del Gobierno every day. Ahorristas are
Argentines protesting outside of banks around the country, demanding access to their deposits that were
frozen by the national government in 2001 when De la Ruas had no other solution to an inevitable run
on the banks when all signs pointed to a steep devaluation of the peso. The ahorristas were largely middle
class Argentines that felt betrayed by their own elected officials and foreign banks. Cacerolazos are groups,
sometimes highly organized and sometimes very much less so, of neighbors or farer flung citizens that
come together for protests outside the homes of politicians, in the streets or merely hands outside their own
windows banging on their pots and pans. This form of protest is not a new part of the Argentine political
landscape but it played a major role in De la Ruas resignation in December 2001 and in the persistent
opposition to Carlos Menem as he unsuccessfully ran for president in early 2003.

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6 The general problem with integrated systems is the professional closeness of public administrators and
ministers. This often leads to ministers to see the problems associated with change from the career track
administrators point of view, which may lead reform to be less visionary and challenging of the status quo
than it otherwise might. By contrast, in separate systems the ministers owe greater allegiance to their
political sponsors and this usually has the effect of making the reformers more determined to push a plan
regardless of opposition from the permanent bureaucracy. See Jon Pierre (1995) and Pollitt and Bouckaert
(2000).
7 See Silvera (2001). By 2001 the national government resorted to a pay as it can afford basis rather than
complying strictly by the legal mnimums.
8 Scrutton (2003) rightly raises questions about what sort of government Kirchner may reside over. On the
one hand, there are signs the man from Patagonia values quality administration as a means to accomplish
his social democratic values. But, on the other hand, the evidence from Kirchners three terms as governor
of Santa Cruz leaves room for doubt. Scruttons article appeared in the Buenos Aires Herald (5-12-03) and
he is also a frequent contributor to Reuters.
9 Again, the point I made initially in Chapter 4 is relevant here. Administrative systems that lack vertical
control and professionalism cannot measure up to those that do. The question of how well bureaucracies
use professionalism as a successful platform for future development is beside the point. Public
organizations that are adrift, without control are not going to make a successful transition to being more
market-friendly or democratic.
10 The meaning is clear enough. In Castellano, No pedirle peras al olmo. In other words, dont expect
pears from an elm tree.
11 This is an argument I presented toward the end of Chapter 4 regarding the distressing corruption figures
and the role public sector reform can play in the correcting the problem. It is not by any means simple (i.e.
getting a straight, honest bureaucracy is greatly aided by politicians and citizens prepared to work by the
rationale of non-patronage-based system). However, a professional bureaucracy is a good fire-wall against
rampant political abuse. Civil servants with a professional identity and sense of their own merit are not the
easiest candidates for buying into extra-legal abuses of power. No degree of professionalization is full
proof, but higher levels do go a long way to drying up the potential swamp.
12 Democratizing the policy process is not one San Luis highest priorities. See Chapter 5 for the results of a
range of related survey questions. However, there is a context for understanding this vantage point. The
public widely believes public organizations are acting responsibly and effectively. And as I indicated in
Chapter 5, Minister Poggi and Senator Sergnese express little considerable skepticism for changing
process for the sake of process (In Spanish, cambio meramente de crotizo).
13 My sense is that as sanluisefio society evolves there will be significantly more openness in the policy
process and civil servants will adapt to their new marching orders. This change happens as societies move
out of their modernization era and into a more post-modern one where values evolve.
14 In Argentina, students are evaluated but they are not ranked to the extent they are in the Anglo systems.
Being a good fellow in ones class is better than being the smartest or the most daring. These habits have
deep roots in the educational system and socialization process that young people experience. The
educational system in early 20th century made a conscious decision to go back to its Spanish roots, placing
nobility and teamwork ahead of the perceived material and individualistic values that predominated in the
Anglo world.
l5See Kettl (2000), Turner and Hulme (1997) and Pollitt and Bouckaert (2000).

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16 See Sloan (1984), Hopkins (1995), Ribeiro (1994) and ODonnell (1994). These accounts point to
problems in the lack of openness in Argentina. The situation is actually much worse in many if not most of
the Argentinas provinces.
17 Surprisingly there are suggestions to this effect in Argentina. For example, considering millions of savers
have watched the federal government seize their private bank accounts, there would seem to be little faith
in the present pension system and even less in privatization plans.
18 Pollitt and Bouckaert (2000:159-161) basically take this position as well. They argue the only instances
where cost cutting causes performance enhancement are technological breakthrough. The authors also point
out that extremely inefficient organizations may seemingly be able to simultaneously accomplish cost
savings and improved performance as they reform. We may see Argentinas provinces as having
dysfunctional public sectors that could realize both objectives. Theoretically, this has appeal but
empirically it probably will not hold up. The provincial governments in this study have not paid public
employees in many months, so in a sense considerable cost savings were already achieved.
l9The IMF made one suggestion that 472,000 provincial civil servants may need to be dismissed. See La
Nacin (1-28-02). I have no idea what the formula for this suggestion was. But it would amount to
something like a 27 percent reduction in force, so there is little doubt most governors would have large-
scale social mobilizations on their hands. In fact this type of proposal is precisely the kind of starting point
that if it becomes a sticking point would seriously jeopardize other, less controversial parts of the reform
agenda.
20In principle it is reasonable to believe that meritorious public employees with good training and clearly
defined roles will be less likely to see moves to raise the bar for tenure or to institute some form of
incentive-based pay as attacks on their personal security.
21 The issue of hydroelectric development along the Paran River was, I think, a pivotal moment in setting a
norm of public involvement in environmental and infrastructure issues in Entre Ros, while there has not
yet been a similar watershed event in San Luis.
22 The World Bank (2000:xiv-xv) discusses best fit in a way that implies a greater awareness of tradeoffs
in the reform process. See also Turner and Hulme (1997:230-236) offer an overview, along with thoughtful
analysis, of the development mainstreams thinking on public management.
23See Clarn (3-22-02).
24 See Caiden (1994).
25 Pasantes are usually paid interns that arrived in their position through political connections. In an ideal
world there would not be anything terribly wrong with paid interns learning useful skills and fostering an
appreciation for public service. But in reality it is an indulgence most provincial governments cannot
afford. From my experience in the Ministry of Economy in Entre Ros and San Luis, there were plenty of
pasantes with little or nothing to do.oquis are basically employees collecting a paycheck for little or no
work rendered. These individuals can be absent permanent employees or, more likely, they are individuals
hired on a limited contract or consulting basis. This is a much-abused avenue for getting friends and
political connections salaries (often, good ones) for little or no justifiable reason. The reason for calling
them oquis is interesting. In Italian culture, it is good luck to eat oquis on the 29th of every month, which
brought a payday in the next day or two. Public employees traditionally have been paid between the 1st and
5l of every month. Hence, the good folks getting paid for doing little were christened oquis by Argentines
since they would, at least figuratively, only show up for work close to payday.
6 See Decreto No. 158/00 (January 2000). Seniority is richly rewarded in Entre Ros, far more so than in
most administrative systems. For instance, individuals with equal responsibility can find themselves
receiving far greater differentials in pay than most systems allow for: ten years seniority gets you 42

225
percent more salary than your newly hired equivalent and twenty-five years seniority is worth 100 percent
more than a new hire with equal qualifications and responsibility.
27 See World Bank (2000).
28 The roots of the decline go back further than the 1990s or even the post-1983 era. Roffman (1981:80-87)
shows that industrial productivity in Entre Ros was declining in the 1950-60s. By the 1990s, Porto
(1996:157-167) demonstrates that Entre Ros was well behind many provinces, including San Luis, in
terms the development of industrial parks, zones and areas.
29 Eduardo Cepeda, an analyst from the IDI (1994) study, said that Argentina needs to keep clientalism
away from public organizations in the provinces.
30 I think the 1990s has left a bad taste in many provincial public managers mouths. Being asked to work
miracles on a shoestring budget is never an envious position to be in. But to be expected to do so after
decades of neglect in the basics of professionalization is entirely unrealistic and probably inappropriate.
However, now (the first decade of the 21st century) is the time to start mending these fences and getting the
basics right.
3'The lessons learned do not seem to be lost on the people that matter in the provinces. Legislators like
Sergnese (San Luis), the President of the Senate, Campos (Entre Rios) Vice-President of the Senate,
Allende (Entre Ros), among others are keen to explore the issues researched here and make the process a
well-reasoned and controlled one.

CHAPTER 7
PLACING PUBLIC SECTOR REFORM IN CONTEXT
7.1 Introduction
I first went to Argentina in 2000 when Argentina was mired in a recession that
threatened to change the lives of millions of Argentines and plunge the federal-provincial
relationship into the unknown. Unfortunately, by 2002, when I returned, the economic
crisis hit bottom far below where even pessimistic projections had estimated in 2000. Not
only were 60 percent of Argentines living in poverty, 22-25 percent of the workforce was
unemployed; and perhaps more alarmingly, political stability had unraveled on the
national level and in many provinces.1 The business of public sector reform was clearly
being outpaced by political events. And now (July 2003), the more tranquil political
environment is somewhat misleading because a record number of Argentines remain
impoverished, unhappy with government and skeptical about freer markets. However,
the relative break from crisis management has made the business of public sector reform
a priority in most provinces. The objective of this study has thus been to compile a
comprehensive, empirical record about the road to public sector reform in Entre Rios and
San Luis to better inform the debate about what factors affect reform, what is needed and
what is feasible.
For this reason, my project has tried foremost to clarify the provincial context for
reform. In particular, this has meant working on the organizational level to recognize the
reform landscape and to determine how important sets of issues (professionalization,
226

227
marketization and democratization) will likely play out. But following the road to public
sector reform has also meant foregoing opportunities to decipher some of the background
noise-Menems legacy, De la Ruas demise or the record of neoliberalism in the
hemisphere. These are fascinating subjects; yet they are probably detours from the job at
hand. In this concluding chapter, however, I want to look briefly at the bigger picture and
connect what have largely been treated here as organizational processes to wider political
processes. Public sector reform in the provinces has a wider context that includes
Argentina, Latin America, and the global expectation of good governance.
7.2 Argentina
The federal-provincial relationship has long been a vexing one for would-be
reformers. Much of the 19th century was defined by the struggles between Buenos Aires
and the vast interior. Reformers who wanted to civilize the interior had to wait years
for the federal government to begin dispensing its national vision through education,
trade and capital investments. Much of the 20th century was defined by a rapprochement
between the two Argentinas with coparticipacin as the centerpiece of centralized
federalism. Reformers paid little attention to the provincial state because national
development was thought to be dependent on federal planning and control. Since the
1980s, reformers have changed their minds about the benefits of federal planning and
control, but they are still waiting for provincial governance to be a viable alternative.
Why has reform proved so elusive and why does it matter vitally for Argentina?
Provincial governments have proved a difficult target for varied reasons. First, as
I explained in Chapter 2, provinces have plenty of constitutionally guaranteed leeway
when it comes to organizing their own state apparatus. Second, national politicians

228
(particularly senators) have little incentive to upset the local power structures that helped
propel them to national prominence. Clearly, then, the fundamental context for reform
remains the provincial one. Throughout, I have tried to emphasize its importance on the
organizational level as well as its importance to the provincial governments of these civil
servants. Notwithstanding the difficulties associated with outside intervention, provincial
public sector reform shapes up to be a pivotal issue for Argentina. It seems easiest to
reiterate the Argentine context of provincial public sector reform by framing the issue
from the national and provincial perspectives.
From the national perspective, public sector reform in the provinces is long
overdue. Argentina is not new to economic cycles of boom and bust, and cycles of state
reform appear almost as frequently. Various governments since the 1970s have sought to
change the way provinces do business.3 It is fair to ask whether the national context in
2003 is substantively different than it was in, say, 1977 or 1992.1 believe the answer is
yes. Unlike 1977, Argentina presently has no source of credit aside from what can be
secured through negotiations with the IMF and the Funds point man for Argentina, John
Thornton, considers the provinces the main threat to reaching a three year agreement
(Castro 2003).4 In contrast to the early 1990s, it is now obvious that devolving major
policy portfolios like education, health, and environment to the provincial level while
ignoring the capacity of public organizations was a mistake. Ten years later few
observers on the national level venture to say Argentina is better educated or healthier.5
In fact, most indicators in post-crisis Argentina suggest long-term problems if provincial
public sector reform remains unfinished business.

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Reform is also long overdue from the provincial perspective. Contrary to what a
vocal minority in Buenos Aires suggest, the federal-provincial relationship is not a
sweetheart deal for the provinces. Yes, poorer provinces have been net recipients of
resources while richer ones export revenue on a per capita basis. But the wholly lopsided
federal-provincial relationship has also stunted the development of its weaker partners.
As we have seen in Entre Ros and San Luis, the quality of the states bureaucracy does
matter: Entre Rios decline strongly suggests poor governance helped squander the
favorable development trajectory once enjoyed by the province; while San Luis gradual
ascent from near the bottom of the table owes quite a lot to improving the provinces
public organizations. The fact remains that few poles of investment and growth have ever
taken shape outside of greater Buenos Aires. This means on average most provinces are
capital-starved places that send their best and brightest in search of opportunities to
Buenos Aires or beyond. Squaring this circle is not going to be easy, but the provinces
have to take serious decisions about issues like quality administration instead of being
paralyzed by factors beyond their control.
More than a few times during 2002 I found myself asking where would the
provinces be today if they had been equipped with modem bureaucracies forty or eighty
years ago? Counterfactuals never provide indisputable answers but experience suggests
a professional and otherwise modem bureaucracy is indispensable for effective
governance in contemporary societies. As Francis Delpre (1997:83) puts it, [PJoor
management... is never a factor of stability and development. On the contrary, it sets the
scene for economic and social regression. Many Argentines have seen this happen in
their lifetime. Improving management requires serious inquiry on the organizational level

230
and long-term commitment on the political level in the provinces. And, of course, the
process has to be understood in the context of Argentina. Post-crisis Argentina would
seem to be an easier place to push a reform agenda than it was in 2000-02. This is good
news because provincial public sector reform ultimately serves the interests of both the
nation and the provinces.
7.3 Latin America
Latin America has been moving in the direction of freer markets and more
democratic governance for two decades. As observers both inside and outside the region
point out, the accomplishments on these fronts are considerable.6 For example,
democratically elected governments are the norm; real trade and foreign investment
levels outpace figures from the ISI era; freedom of expression is easier for most citizens;
and inflation is being successfully contained. Success is one side of the story, but the
region has a spotted record in other respects: education levels have stagnated or fallen
slightly; poverty, on balance, is higher; unemployment and underemployment are high
and surprisingly persistent even in periods of economic growth; crime and personal
insecurity, la inseguridad, have grown exponentially; and corruption remains rife in both
the private and public sectors. Moreover, since 2001, there has been significant social
unrest in South American countries such as Argentina, Paraguay, Venezuela, Bolivia,
Ecuador and Per. The question, then, is what part(s) of the democracy and market
formula needs fine-tuning?
I would argue a number of elements need corrections: from free trade including
agricultural products to the judiciary safeguarding the rights of all citizens equally, from
debt relief to investments in education, health and the environment. This would be an

231
ambitious (though limited) agenda and these corrections share a common denominator:
they fall under the heading of policy changes. To make policy changes have their
intended consequences, quality public organizations are essential. In Latin America,
while the progress toward democracy and markets is impressive, progress toward quality
governance and administration has been disappointing. This is why I have stressed that
public sector reform (as opposed to meta-level political-constitutional reform or narrow
fiscal reform) is the most appropriate conceptual and practical level for solving the
problems facing Argentinas provinces and Latin America today. For the region, it is
perhaps instructive to think in terms of two general scenarios that could play out over the
next 5-10 years.
The first scenario is that public sector reform is done well. In other words, there is
inside (e.g. actors within the province) and outside (e.g. national government, World
Bank, etc.) support for plans that are well conceived. Public goods and services such as
education or health, for instance, are provided more efficiently or at least at a higher level
of quality than they are now. For all of the doubts associated with reliance on
instrumental support for institutions, delivering tangible benefits for peoples lives is the
only sure way to arrest the obvious slide in public confidence in government and the
market. Politicians (and constitutions) promises and platitudes cannot be expected to
substitute for real improvements in public organizations. In contrast, doing the job well is
the way to head off potential backsliding on democracy and markets.
The other scenario is that we either opt not to start down the road to public sector
reform or put plans in motion that are inadequately researched and supported. In either
case, the effect would be deleterious at what appears to be a critical juncture in the

232
region. Confidence in free market policies and politicians remains near record lows
(Latinobarmetro 2002, Gallup Argentina 2002).7 Electorates are looking for alternatives,
and center-left candidates are faring better than their competitors. Recent elections in
Argentina or Brazil attest to this trend. While there is absolutely no reason to believe
these governments will be less democratic or drastically less market-friendly than their
predecessors, there is reason to worry about democratic governments saddled with
ineffective bureaucracy. In Latin America, poor administration is a genuine threat to the
sustainability or consolidation of democracy and the market. Consolidating gains from
first generation reforms depends on working, in earnest, on the nuts and bolts issues (see,
again, Chapters 4 and 5) associated with effectively managing policy portfolios. I feel
more strongly now than I did in 2000 that the success or failure of public sector reform in
Argentinas provinces or elsewhere will have a major impact on wider political processes
in the region.
The final point to make regarding the place of public sector reform across the
region relates to subnational governance. Most Latin Americans live in federal systems
and even those residing in unitary systems have experienced a significant devolution of
policy control to subnational jurisdictions. Unfortunately, the managerial capacities of
public organizations in the regions provinces, municipalities and other localities have
generally not kept up with the responsibilities placed on them. Therefore, making the
state work better on these levels is certainly among the most important frontiers for
public sector reform in Latin America. Based on my work in Entre Ros and San Luis, as
well as work sponsored by the multilateral development banks, I believe recognition of
this fact is materializing. It is less clear, however, that any or all parties with a hand in the

233
game are doing the necessary on the ground reconnaissance to facilitate the right public
sector reform for particular times and places. Considering the mixed legacy of first-
generation reforms in Latin America, there is probably less margin for error now.
7.4 The Global Trend
It is likewise possible to frame the set of issues facing Argentinas provinces in
the diverse, global context. Most governments (even subnational ones) in all regions of
the world have either a near permanent reform agenda or face pressures to get one in
place. The reasons for this vary. On the one hand, reforms intend to accomplish specific
objectives like personnel development, cost savings or enhanced responsiveness to public
input and inquiries. Minister Poggi told me public sector reform, its complete raison
detre, has to be a results-driven process and it should thus not involve doing things for
the sake of appearances. I agree with this straightforward sentiment. But, on the other
hand, reforms often possess symbolic and legitimacy benefits that make them desirable
for their supporters (Pollitt and Bouckaert 2000:6). It would be naive to discount this
rationale, whether in the U.S. context or in the context of a poor Latin American country
scrambling to maintain credit from multilateral lenders. The reality is most reform
contexts have both motivations in the mix. Public sector reform in Argentinas provinces
is no exception.
Another way to look at the provincial public sector reform issues analyzed in this
study is through the prism of good governance. According to the World Bank (1994,
2000), governance is the way in which power is exercised in managing economic and
social resources for development. Common characteristics of good governance are
identified as responsiveness, efficiency, flexibility, transparency, predictability, and

234
accountability (World Bank 2000:22). Though my study has focused more on the
organizational level than the institutional one (governance encompasses both), we can see
Argentinas provinces need improvements up and down the Banks governance checklist.
In the previous chapter I made suggestions about how Entre Ros and San Luis might
manage the reform process. Governments around the world face similar choices. In other
words, the global context invites us to think briefly about the main approaches available
to governments. For simplicity sake and because Argentines often framed the main
alternatives this way, it is convenient to see the road to good governance resembling
either the Anglo, new public management model or the European one.
The first option is to follow the new public management model. The centerpiece
is managerial flexibility and efficiency, which implies a business-like approach to public
sector work. The upside is clearly that managers with the right instincts are empowered to
change things on the fly and get more out of less. This holds considerable appeal in
contexts of fiscal crisis where pressure (often from the outside) exists to present a reform
plan in short order that will be well received. For most countries outside of the Anglo
ones, taking the new public management path represents a real departure from the status
quo. This means a long-term commitment to a new administrative logic. The downside is
administrative systems like the ones found in Argentina cannot be changed on the fly; in
fact, comprehensive reform raises the real prospect that little or no work will get done for
an indeterminate period of time. Gerald Caiden, for example, has long explained that the
countries least able to enact wholesale reform are the ones encouraged to do so.8
The other major alternative is to follow the European model. Here, fiscal reform
is also part and parcel to what the state seeks to accomplish. The states social

235
commitments, as well as its own administrative apparatus, have to be affordable.
However, administration plays a more expansive intermediary role between state and
society. There is pressure for improved public sector performance but reform tends not to
gather steam without the permanent bureaucracys agreement on fundamental points.
Reform on the whole is more cautious and less visionary than its new public management
counterpart. In fact, it could be said the European model amounts to revitalizing the
public sector as opposed to reforming it (Caiden 1994:115-116).
Of course, across the entire range of issues (professionalization, marketization,
and democratization in this study) it would be misleading to expect such a definitive fork
in the road to public sector reform, as if the Anglo model went in one direction while the
European one headed off in another. The fact is these paths generally run parallel and in
some instances they come together. In addition, there are non-Anglo, non-European
approaches to governance. For instance, many Asian bureaucracies are highly
professionalized and selective in their adoption of managerial innovations. I am
persuaded public sector reform in Argentinas provinces has good reason to look more
like continental European approaches than the new public management. But as my
experience in Entre Rios and San Luis suggests there is not a one size fits all answer on
the provincial level in Argentina, let alone across far greater ranges of political and social
diversity. As we try to understand global trends and reformers choices, it is important to
remember the question what form of administration is related to the more fixed
question for what state. It takes considerably longer (5-10 years) to iron out issues
related to the former question than reform plans typically estimate; and the latter

236
question, for what state, is dicier still, if one has in mind to trade in the old state for a
newer make.
7.5 Conclusion
Nstor Kirchners government is fond of saying (in television and radio spots)
ArgentinaUn Pas En Serio or, in English, Argentina: A Serious Country. I suppose
the message is obvious enough: the government is touting itself as the antidote to decades
of mismanagement and encouraging Argentines to feel reassured by President Kirchners
understated style. The message is also suggestive in the sense that it encourages
Argentines to work hard and insist on better governance. Well, time will tell if post-crisis
Argentina dedicates itself to making the state work better. It has been said Argentine
society and its governments have preferred to look at the distant stars and not at their
more earthly and necessary work, moving from fad to failure, from elation to regret,
without much regard for the responsibility in each stage (Buenos Aires Herald 3-29-02).
Expressions of societal-reproach and pessimism are not recent phenomena. In the famous
tango Cambalache by E.S. Discpolo (1934), the protagonist feels disillusioned by a
society where bad guys and cheats, chorros, win and decent people go unrewarded.9
Times change but people in many walks of life (teachers, taxi drivers, recent university
grads, etc.) echo these frustrations now. Among the questions to ask is how can
Entrerrianos, Sanluiseos and the rest of the Argentines make government work more
effectively?
After months of pursuing public sector reform in Argentina and months of writing
about the experience, this question remains a difficult one. My expectations of what I
would find when I went to Entre Ros and San Luis are at least partially unfulfilled. I

237
expected reformers-the politicians and appointee-level managers-to be overconfident
and rigid regarding the road forward. They were not. In fact, whatever they lacked in
terms of plan preparedness was normally made up for by curiosity about composition and
timing issues. I also expected civil servants to struggle with the scope of the issues I put
on the table and to think primarily in terms of their own position. Generally they did not.
On the contrary, the public employees and managers do see the forest from the trees. I
anticipate if the reform process stays in the hands of Argentines then the permanent
bureaucracy will play a constructive role in setting reform priorities and seeing those
changes through. Last, I did not expect to find as strong a base of human capital as
Buenos Aires and while this proved true I came away impressed with the education and
skill levels of Entrerrianos and Sanluisefios. None of this is to say the road to public
sector reform will be easy. But there are reasons to be hopeful.
Notes
The poverty and unemployment figures come from the national governments statistics for 2002, see
INDECs website at www.indec.gov.ar
2 Latinobarmetros surveys from 2002 reflect scant confidence in free market policies14 percent say
privatizations were beneficial. Gallup Argentinas July 2002 surveys show public institutions like the
judiciary and the police enjoy confidence levels of 19 and 30 percent, respectively.
3 The military junta of 1976-1983 gave the provinces responsibility for primary education and hospitals,
and likewise tried to exert stronger oversight of the provinces permanent bureaucracy; see Duarte (1999).
See Gordillo (1974) for the period between 1953-1973, which was characterized mostly by administrative
reforms on the national level. For the post-1983 period; see Bonifacio (1995) and Bonifacio, Casanova, and
Lpez (1995).
4 Maria Giselle Castros reporting on the issue has highlighted the problems provincial fiscal deficits pose
for Argentinas negotiations with the IMF. The Funds Director, Horst Koehler, said provincial spending is
unsettling, particularly since 53 percent of it goes to paying salaries. For this reason, it is widely expected
the IMF will insist on the provinces trimming personnel costs; see La Nacin, (7-8-03 and 7-15-03) for the
most recent analysis).
5 The governments own statistics on education and health appear to bear out of these facts (see 1NDEC).
6 See World Banks The Long March (1997), Acua and Tommasi (2000) and Costin (1999), among others.

238
7 Gallup Argentinas July 2002 survey shows only 8 percent of Argentines express confidence in political
parties. Latinobarmetros 2002 survey indicates 96 percent of Argentines have little or no confidence in
political parties. Also, Gallup Argentina (June 2001) asked Argentines which was the bigger problem for
the country: bad public administration or political corruption stemming from the lack of transparency. 60
percent said it was the politicians while 27 percent said lack of efficiency. Regarding attitudes about the
market economy in Argentina, only 2 percent expressed satisfaction with the way the market works in the
country and, perhaps more surprisingly, 57 percent do not believe the market economy is best for Argentina
(see Latinobarmetro 2002).
8 See, for example, Caiden (1999). He argues that even in developed countries one rarely finds full-scale
reform being undertaken. Instead, it is typical to see revitalization, which incremental and stresses doing
things that are realistic. I have not adopted the term revitalization, but I agree with Caidens analysis and
the cautionary message it carries.
9 Cambalaches are stores that sell various second-hand objects, typically broken and filthy. Apparently,
Discpolo felt the 20th century resembled a cambalache. The sad images in the song, where con men
succeed and ignorant people can pass off as wise men, are typical of tangos.

APPENDIX A
RESEARCH METHODS
Case Selection
Studying provincial public sector reform in a country with two dozen provinces
and the means only to sample a small cross-section makes the selection of cases an
important issue. My perspective was that it is better to compare similarly sized provinces
(which also facilitated conducting the study in similarly sized ministries). Entre Rios and
San Luis qualify in this regard; they are among the smaller provinces in Argentina. I also
believe that not all provincial comparisons make equal sense if the goal is to show the
impact of good government over time. For instance, comparing a province with historical
advantages in human and physical resources that continues to be at the head of the class
with a historically disadvantaged one that continues to languish near the bottom is far less
useful. After all, is todays level of development simply being driven by yesterdays
progress? One could make a convincing case for how good government has been integral
to success and absent in failure. But there are a great number of intervening variables
standing in the way of getting a good read of the impact of things like political leadership
or sound administration. The case seems more persuasive when it is possible to
simultaneously study a success story that has hit hard times (Entre Rios) and another (San
Luis) without any such historical pedigree that has beat the odds, to catch them when they
have recently passed each other heading in opposite directions.
239

240
Surveys of Civil Servants
Entre Ros and San Luis agreed to host my study at the beginning of 2002.1
elected to accept access to the Ministry of Economy in each province (the precise
secretarios and direcciones vary slightly therein). Entre Ros and San Luis Ministry of
Economy are comparably sizedapproximately 330 employees. With the help of the
personnel specialists I randomly selected 120 employees from each province. In Entre
Ros I collected sixty-three completed surveys; while in San Luis I recovered ninety-one.
Interviews with Civil Servants, Political Appointees and Legislators
Public sector reform is a complicated and undeniably human process. To
complement the survey instrument that I used, I also relied heavily on interviews with
civil servants, political appointees and legislators. I spoke personally with more than one-
hundred civil servants, as well as many upper-level public managers and legislators in the
provinces. The interviews were generally semi-structured because I was checking on
specific issues while also attempting to gain a fuller picture of those issues. I most often
referred to my interview transcripts when there was a need to further clarify and explain
survey responses.
Analysis of Legislation, Executive Decrees and Ministerial Directives
I examined legislation, executive decrees and ministerial directives related to
public sector reform in each province. In a federal system the provinces play the primary
role in managing the states apparatus. For this reason, it is necessary to evaluate what
each province has officially done on the matters related to professionalization, the
introduction of market mechanisms, and participation and accountability.

APPENDIX B
PROVINCIAL PUBLIC SECTOR REFORM
My name is John Bolus and I am a doctoral candidate in political science at the
University of Florida. The questions that follow are for my dissertation on public sector
reform in Argentinas provinces. The information that you provide will only be used for
my dissertation and you can access the conclusions if it interests you. The survey is
completely optional and confidential; thus you do not need to worry about revealing your
observations and opinions. I can also assure you that my only institutional affiliation is
with the University of Florida. Please answer all of the questions. If you do not the
answer to a question, you may write I dont know beside the choices. If you have any
questions or doubts concerning my project, you can reach me telephone (in Paran 423-
0333) or email (jbolus@ufl.edu). Thank you very much for your collaboration.
Profile of Respondent
1. Gender Age
Female Male 20-29 30-39 40-49 50-59 60+
2. How long have you worked for the provincial government?
3.How long have been in your current position?
4. In five years, do you expect to be in the same organization in which you are currently
employed?
Yes No
5. Is this your first government position?
Yes No
6. If you worked for the provincial government before, when did you begin working for
the government?
Month Year
7. What is the highest educational level you attained?
Incomplete primary
Complete primary
Incomplete secondary
Complete secondary
Incomplete technical or vocational
241

242
Complete technical or vocational
Incomplete university
Complete university
Postgraduate
8. How would you assess the quality of your life over the past year?
Poor
Acceptable
Good
9. Are you a member of a provincial or national union?
Yes, please indicate which one(s)
No
Section 1. Professionalization in the Public Sector
Part I: Personnel Management Practices
10. How directly involved are you in issues of personnel management such as
recruitment, performance evaluation, training decisions, and disciplinary actions?
Not at all involved
Somewhat involved
Very involved
11. How did you find out about your current position?
From a public notice
From a relative
From a friend
From my current boss
From an employee of this organization
From a government employee
12. Are positions like yours generally advertised to the public (e.g. through official
bulletins, publications and/or newspapers?
Yes No
13. Before you applied for this position, did you know that you would be hired?
Yes No
14. Among those factors that influenced your decision to pursue a government job, please
indicate which factors had the strongest influence (1 least important, 2 slightly more
important, etc., 10 being the most important).
Job security
Good salary
Benefits
Flexible hours

243
Reasonable work load
Advancement potential
Social status
Power
Limited opportunities elsewhere
Personal satisfaction in work / commitment to organization mission
Other
Within an organization, different people are hired for different reasons. We are interested
in learning about these general hiring trends. Please think about the employees in your
organization. Of those employees:
15. What percentage of employees do you think were hired primarily on the basis of
merit?
16. Of those employees who are not hired primarily on the basis of merit, would you say
that they are hired most often through:
Family connections or friends
Political connections
Special favors
Other, please explain:
17. When hired, were you provided with a written job description?
Yes No
18. If you were provided one, how well did the written job description reflect your
current functions and responsibilities?
Very accurate
More or less accurate
Not accurate at all
19. Overall, do you feel that you were given adequate instruction/training for the position
that you currently hold?
Yes No
20. In the past year, approximately how many times did you receive wages late?
21.In the past year, what percentage of your salary was paid in bonds?
22.When was your last performance evaluation?

244
23.Who last evaluated your performance?
24. Do you feel that you were evaluated fairly?
Yes
No
More or less
If you do not mind, please indicate the evaluation you received:
25. How does your organization primarily communicate standards and expectations to its
employees?
In writing
Managers explain them to an employee or to a group of employees
Veteran employees explain things to the newer ones
Other, please explain:
26.Over time these standards have:
Remained the same
Changed somewhat
Changed significantly
27.Of the following factors, mark those that help
position?
Helps performance
High level of discretion
Availability of resources
Training provided by organization
Culture of creativity and innovation
Education
Information
My boss guides me
My role is clearly defined
and/or those that hurt you in your
Hurts performance
Strict rules & regulations
Lack of resources
Inadequate training
Fear of change & innovation
Insufficient education
Lack of information
My boss does not guide me
My role is not clear
28.Overall, how much discretion do you have in the performance of your duties?
Too much discretion
Appropriate amount of discretion
Too little discretion
29.Considering other employees in your organization, how would you characterize their
level of discretion?
Too much discretion
Appropriate amount of discretion
Too little discretion

245
30.Does your organization have financial records from the last five years?
Yes No
31.How difficult is it to obtain information from those records?
Very difficult
Difficult
Easy
Very easy
Part II: Budget Management
32. How involved are you in budget preparation?
Not at all involved
Somewhat involved
Very involved
33. How involved are you in budget implementation
Not at all involved
Somewhat involved
Very involved
34. How involved are you in budget evaluation?
Not at all involved
Somewhat involved
Very involved
35. Do you expect that actual funds for your organization will differ from budgeted funds
this year?
Yes No
36. Will budgeted funds compared to actual funds be:
Equal
Greater
Smaller
37. If you answered greater than or less than to the previous question, to what extent do
you expect that actual funds will differ from budgeted funds?
A large amount
A moderate amount
A small amount
38. How common is it, in your experience, for actual funds to differ from budgeted
funds?
Very common
Common

246
U ncommon
Very rare
Never occurs
39.When budget cuts are made, where are they most likely to be made first?
40. How much discretion does your organization have in deciding where to apply budget
cuts?
Absolute
A lot
A little
Very little
None
41. In any of the past three years, has your organization exceeded its total budget
authorization?
Yes No
42. In how many of those past three years did your organization exceed its authorized
budget?
1 year
2 year
3 year
43. On those occasions when your organization exceeded its authorized budget, did it
incur any penalties?
Yes No
44. If you answered yes, what penalty or penalties were imposed (mark all those that
apply)?
Externally imposed by government
Internally imposed by organization leadership
External and internal
Dismissals
Demotions
Fines against the organization
Fines against employees
Salary cuts/benefit cuts
Public rebuke/official sanction
Reduction in budgeted funds for next fiscal period
Other, please explain:

247
45.If your organization was not penalized for exceeding the budget, do you know what
penalties your are officially specified for this situation?
Yes, please explain:
No
Part III: Organizational Goals and Discretion in Argentinas Federal System
46.Describe briefly the mission and functions of your organization:
47. In your opinion, how successful has your organization been in fulfilling its goals and
functions?
Very successful
Somewhat successful
Not successful
Wholly unsuccessful
48. How compatible and consistent are the various objectives and policies of your
organization?
Very compatible and consistent
More compatible and consistent than inconsistent
More incompatible and inconsistent than consistent
Very incompatible and inconsistent
49. How many of the goals or functions are determined by the national government?
Almost all
Many
Some
Few
Almost none
None
50. How often does your organization discuss policies and performance with
representatives of the national government?
Daily
Weekly
Monthly
Yearly
Almost never
Never

248
51. To what extent are policies designed by the national government appropriate for your
province?
Completely
Considerably
Moderately
Minimally
Not at all
52. Which of the following sentences best describes the role of the province (your
ministry, in particular) in Argentinas federal system:
The national government decides on policy questions
The federal government proposes policy options and we select the one that is most
appropriate for our particular needs
The provincial government adapts national policies and programs to our particular
needs
The provincial government defines the final content of policies and programs and
the federal government supplies funding
The provincial government are determined and funded by the province
Other, please explain:
53. How often do you discuss policies and ideas about how to improve the design or
implementation of policies with coworkers in your ministry?
Daily
Weekly
Monthly
Yearly
Almost never
Never
54. What factors account for the compatibility or incompatibility between different
policies or goals (e.g. balancing economic growth with environmental protection)?
55. How often do you disagree with the decisions and policies of your organization?
Frequently
Occasionally
Almost never
Never
56. What do you do when you disagree with decisions or policies in your organization?

249
57. In the past three years, have elected officials or political party officials exerted
improper influence or pressure on decisions in your organization?
Yes No
58. If you answered yes to the previous question, indicate how frequent these influences
and pressures have been?
Very frequent
Often
Moderate
Rare
Very infrequent
Comments:
59. In general, to what extent has your organization been tangibly influenced by such
interference?
Highly influenced
Considerably influenced
Somewhat influenced
Not much influenced
Very marginally influenced
60. To what do you attribute the organizations response to these pressures?
61.Overall, how would you say that employees with political or personal connections are
treated compared to other employees?
Much better
A little better
Equal
Worse

250
62. Overall, how would you say that high quality employees (i.e. hard working and
capacity for achievement) are treated compared to other employees?
Much better
A little better
Equal
Worse
63. In the past three years, have employees in your organization been disciplined for any
of the following reasons? (You may mark all that apply)
Poor work performance
Misuse of public funds
Failure to comply with orders
Participation in strikes or mobilizations
Other, please explain
64. If there have been employees who were penalized or disciplined, how often do you
think that these sanctions were justified?
F requently
Occasionally
Almost never
Never
65. Can employees appeal penalties or dismissal?
Yes No
66. In the past three years, have employees in your organization been recognized,
rewarded or promoted for any of the following reasons? (You may mark all that apply)
Taking prompt action on citizen requests or complaints
Providing outstanding service
Saving money or resources
Other, please explain
There have not been rewards or promotions
67. How many employees with excellent performance from your organization have not
received rewards or promotions?
Many
Some
Few
No one
68. Why do you think some employees with outstanding performance have not received
rewards/recognition?
Lack of money

251
Good work is not generally recognized or rewarded
Personal or political differences with management and politicians
Other, please explain:
69.Overall, how often do you think that these rewards were justified?
Frequently
Occasionally
Almost never
Never
Part IV: Corruption
70. To what extent would you say that corruption is a problem in Argentina?
Very serious problem
Considerable problem
Somewhat of a problem
Small problem
Negligible
71. To what extent would you say that corruption is a problem in your province?
Very serious problem
Considerable problem
Somewhat of a problem
Small problem
Negligible
72. To what extent would you say that corruption is a problem in your ministry?
Very serious problem
Considerable problem
Somewhat of a problem
Small problem
Negligible
73. In general, how often is corruption in your province reported?
Frequently
Often
At times
Rarely
Very rarely
Section 2. Market-based Reforms in the Provincial Public Sector
Part I: General Issues Confronting the Public Sector

252
74. To what extent has privatization and contracting-out been extensive in your
organization's domain?
Very important
Somewhat important
Average for Entre Ros
Not important
Negligible
75. To what extent has privatization and contracting-out affected your organization's
ability to fulfill its mission?
W orsened
Worsened slightly
Made no difference
Helped slightly
Helped
Comments:
76.To what extent will another round of privatization or other market-oriented reforms
remedy the economic pressures facing the province?
Not at all
Marginally
Somewhat
Considerably
A great deal
Comments:
77.To what extent have privatizations or other market-oriented reforms increased the
publics confidence in the state?
Not at all
Marginally
Somewhat
Considerably
A great deal
Comments:

253
Privatization, contracting-out, and other market-oriented reforms seek to make resource
allocation functions more efficient. Often, then, reducing the size of the state becomes a
major issue in public sector reform. The following questions relate to downsizing (i.e.
cutting functions and/or personnel from the public sector).
78. Assess the probability for downsizing the public sector in the next two years:
Certain
Likely
More or less likely
Unlikely
No chance at all
79. In the event that downsizing occurs, which of the following should be the primary
criteria for deciding who stays and who goes?
Seniority
Technical qualifications
Performance evaluations
A formula that weighs in each of the above factors
Seniority and performance evaluations
Technical qualifications and performance evaluations
Seniority and technical qualifications
Other, please explain:
80.To what extent has the process been studied, planned, and debated?
Not at all
Minimally
More or less
Considerably
Thoroughly
Comments:
81.Compared to the influence held by the national government or international
organizations, assess to what extent the process is in the hands of Entrerrianos?
Not at all
Minimally
More or less

254
Considerably
Completely
Comments:
82.Which of the following sentences best describes your assessment of attempts to
"rationalize" the public sector?
The changes are not needed and resisting them is an appropriate option
The changes are an example of bad public policy, but there is little room to resist
The changes are, on balance, neither positive nor negative
The changes have considerable merit, but the timing is wrong
The changes are clearly needed and delays only make the matter worse
Comments:
Part II. Competition and Restructuring
There are, of course, numerous situations where the market cannot relieve the state of its
responsibilities. Instead, the hope is to achieve improved coordination and efficiency in
public organizations.
83.Please explain the pressures or motivations for greater efficiency that your
organization is now facing:
84.To what extent do you think signing and implementing the Pacto Fiscal or Acuerdo
de Catorce Puntos agreements with the federal government would increase those
pressures?
Yes, there would be far more pressure
Yes, there would be somewhat more pressure
Neither more nor less pressure
No, there would be somewhat less pressure

255
No, there would be far less pressure
Comments:
85.To what extent is the push for greater efficiency actually creating conditions for
greater flexibility in your day-to-day decision-making and policy implementation?
Highly
Somewhat
Minimally
Not at all
Comments:
86.To what extent do you estimate that greater flexibility would be beneficial for the
delivery of services and goods to the public?
Highly likely
Likely
Somewhat likely
Unlikely
Not at all
Comments:
87.To what extent is duplication of tasks and efforts a problem in your organization and
the province's public sector?
Very serious
Serious
Somewhat serious
Minimal
Not at all

256
Comments:
88.In the last few years, has there been a significant restructuring in your organization?
Yes, please explain:
No
Comments:
89.To what extent is there competition between secretariats or departments in your
ministry for resources and programs?
Not at all
Very little
Some
Considerable
A great deal
Comments:
90.To what extent do you believe competition between employees in the organization
can lead to greater efficiency and effectiveness?
Not at all
Very little
Somewhat
Considerably
Very significantly
Comments:

257
91.To what extent do you believe competition between different governmental
organizations can lead to greater efficiency and effectiveness?
Not at all
Very little
Somewhat
Considerably
Very significantly
Comments:
Part III. Finance, Performance Evaluation and Incentive Issues
92.To what extent has your organization been consulted on intergovernmental
negotiations regarding coparticipacin and deficit reduction?
Daily or weekly
Monthly
Once in the past 3-6 months
Once in the past year
Never
Comments:
93.Is the budgeting process expressly linked to any of the following organizational
tasks? (You may mark all that apply)
Planning
Operational management
Performance management
Other, please explain:
Comments:

258
94.Under favorable circumstances, linking budget reform to processes that improve
long-term public sector performance would be a bottom-up process. Given the severity of
the current economic crisis, to what extent has your organization resorted to making
budget cuts without consulting employees?
Completely
Mostly
Somewhat
Not much
Not at all
Comments:
95.To what extent does your organization evaluate programs and personnel?
Thoroughly
Considerably
Somewhat
Marginally
Not at all
Comments:
96.To what extent are performance measures designed and implemented for political
expediency (i.e. to satisfy critics) rather than effective internal purposes?
Completely
Considerably
Somewhat
Not much
Not at all
Comments:

259
97.Does your organization measure work outcomes and performance for employees and
the entire organization?
Yes, please explain
No
Comments (please explain if you agree with the measures and why):
98.Compared to five years ago, to what extent has your organization taken steps to create
incentives for employees to improve their performance?
A great deal
Significantly
Somewhat
Very little
Not at all
Comments:
99.With regard to managers in your organization, would management contracts built on
premise of performance incentives be desirable?
Ideal
Good idea
More or less a good idea
Not a good idea
Not a good idea at all
Comments:

260
100.To what extent do you believe that performance measures and incentives are or
would be positive for your organization?
Ideal
Good idea
More or less good idea
Not a good idea
Not a good idea at all
Comments:
Section 3. Democratization in the Public Sector
Part I: Legislative Oversight
101.In your opinion, to what extent do legislators demonstrate an awareness and/or
understanding of your organization's activities?
Very High
High
Moderate
Low
Very Low
Comments:
102.More specifically, is there a legislative committee with oversight responsibilities
for your organization?
Yes
No
Other, please explain:
103.If there is such an oversight body, please evaluate its effectiveness?
Excellent
Good
Average
Poor
Totally ineffective

261
Comments (in particular, to what do you attribute this performance):
104.If there is not such an oversight body, what do you believe would be its level of
effectiveness?
Excellent
Good
Average
Poor
Totally ineffective
Comments:
105.A number of factors may impede the effective functioning of legislative control,
please rank the following factors (4 being most likely to erode effectiveness, 1 being least
likely):
Legislators lack specialized knowledge for effective oversight
The desire for greater oversight will cause significant delays and inefficiencies in
my organization's operations
Legislators in such oversight roles will use their increased power to scapegoat
public managers in order to deflect public criticism from themselves
Oversight committee would open the door to lobbying by powerful interests and
corruption
Comments:
106.To what extent does the provincial legislature guard against inappropriate political
appointments?
Thoroughly
More than enough
Just enough
Scarcely
Not at all
Comments:

262
107.To what extent, overall, do you believe the legislature's role in policymaking
limits the discretionary power of the Executive branch (in particular, the Governor)?
Thoroughly
More than enough
Just enough
Scarcely
Not at all
Comments:
Part II: Citizen Participation
108.How often does your organization regularly solicit input/feedback from the
public?
Very frequently
Often
At times
Rarely
Never
Comments:
109.If so, indicate which mechanisms for input/feedback have been used (please mark
all that apply to your organization)?
Interviews
Focus groups
Surveys
Cabildos abiertos
Assemblies
Comments:
110.How often have citizens in Entre Ros pursued independent (unsolicited)
participation?

263
Very frequently
Often
At times
Rarely
Never
Comments:
111.If there is participation, which of following sentences best describes its form
based on your experience in government? (You may mark up to two options)
Participation takes the form of NGOs and/or civic associations, which are relatively
permanent in nature
Participation takes the form of like-minded citizens acting on specific problems or
issues, which implies that such groups are not necessarily permanent
Participation is primarily directed through political parties in your province
Other, please explain
Comments:
112.To what extent have you experienced citizens contacting elected officials
regarding your organizations activities or performance?
Very frequently
Often
At times
Rarely
Never
Comments:
113.On balance, how would more citizen participation affect your job and
organization?
More participation would detract
More participation would help

264
More participation would have no effect
Comments:
Part III: Accountability
114.To what extent are civil servants accountable for their actions?
Highly accountable
More than enough
Sufficiently accountable
Not very accountable
Not accountable at all
Comments:
115.To what extent is the permanent bureaucracy influential in the design of policies
(For example, deciding on the organizations priorities and how to deliver them)?
Highly influential
Considerably Influential
Somewhat influential
Not very influential
Not influential at all
Comments:
116.How would you characterize the media's role in making the provincial government
more accountable to the public?
Highly effective
Considerably Effective
Somewhat effective
Not very effective
Not effective at all
Comments:

265
117.Overall, to what extent do your organizations policies reflect public preferences?
Very closely
More than enough
Somewhat
Very little
Not at all
Comments:
Part IV: Transparency and the Openness of Policy Process
118.To what extent are the activities and decisions of your organization structured in a
transparent manner for public understanding?
Very high
High
Moderate
Low
Very low
Comments:
119.Given the many hardships faced by public employees in Entre Ros, to what extent
do you consider greater transparency in government a priority for the reform agenda?
Very high
High
Moderate
Low
Very low
Comments:
120.Compared to 5 or 10 years ago, to what extent is the policy process open to more
actors?
Significantly more open
Somewhat more open

266
U nchanged
Somewhat less open
Significantly less open
Comments:
121. How would you characterize your organization's approach to citizen inquiries?
Open and very helpful
Reasonably accommodating
Adequate
Slow and incomplete
Completely inadequate
Comments:
122. Again, considering the many tough issues involved in public sector reform, to what
extent do you consider greater openness in the policy process a priority for the reform
agenda?
Very high
High
Moderate
Low
Very low
Comments:

APPENDIX C
REFORMA DEL SECTOR PUBLICO PROVINCIAL
Mi nombre es John Bolus y soy alumno del doctorado en ciencias polticas de la Universidad
de Florida, E.E.U.U. Las preguntas que le hago a continuacin son para mi tesis que versa
sobre la reforma del sector pblico provincial. La informacin suministrada ser usada
solamente para mi tesis y puede usted acceder a las conclusiones de mi investigacin si le
interesa. Agradecer que sea sincero en las respuestas. Ya que los cuestionarios son annimos
no debera preocuparle revelar sus opiniones. Tambin es importante que conteste todas las
preguntas. Si en algn caso, no conoce la respuesta a la pregunta puede agregar un no s en
las opciones. Si deseara comunicarse conmigo por cualquier duda o consulta, lo puede hacer
por email ajbolus@ufI.edu Muchsimas gracias por su colaboracin.
Ministerio o Secretara: Direccin o rea:
Perfil del Entrevistado
1. Sexo Edad:
Femenino Masculino 20-29 30-39 40-49 50-59 60 o
ms_
2. Cunto hace que trabaja en este organismo?
3.Cunto hace que ocupa su posicin actual?
4. Dentro de cinco aos, espera Ud. estar trabajando para este mismo organismo?
S No
5. Es esta la primera vez que trabaja Ud. para el gobierno de la provincia?
S No
6. Si trabajo para el gobierno provincial antes, en qu fecha lo hizo?
Desde mes ao hasta mes ao
7. Cul es el mximo grado de educacin alcanzado?
primario incompleto
primario completo
secundario incompleta
secundario completo
terciario incompleto
terciario completo
universitario incompleto
universitario completo
posgrado
267

268
Mximo ttulo alcanzado
8. Cmo describira su calidad de vida en los ltimos cinco aos?
Pobre
Aceptable
Buena
9. Est afiliado a algn gremio?
S, por favor, indicar cul/cules
No
Seccin 1. Profesionalizacin del Sector Pblico Provincial
Parte I: Prcticas en la Administracin de Recursos Humanos
10. Qu participacin tiene usted en su puesto de trabajo en cuestiones de
administracin de personal como contrataciones, evaluacin, entrenamiento o
sanciones disciplinarias?
Ninguna participacin
Un poco de participacin
Mucha participacin
11. Cmo se enter usted sobre la vacante del puesto que usted ocupa hoy?
A travs de un aviso de difusin pblica (diario o boletn oficial)
A travs de un pariente
A travs de un amigo
A travs de mi actual jefe
A travs de un empleado o funcionario de este organismo
A travs de un empleado o funcionario de otro organismo del gobierno
provincial
12. Los puesto de trabajo como el suyo, son dados a conocer al pblico en general?
(Por ejemplo, a travs de boletines o publicaciones oficiales y/o diarios)
S No
13. Antes de solicitar su actual puesto de trabajo, saba que obtendra el puesto?
S No
14. Por favor, indique cul o cules (puede elegir uno o varios) de los siguientes
motivos influenciaron su decisin de trabajar para el gobierno provincial: (Use
nmeros que indiquen la prioridad dada a cada factor, siendo 1 el menos
importante, 2 un poco ms importante, etc.)
Estabilidad y seguridad del trabajo
Buen Sueldo
Obra social u otros beneficios
Flexibilidad horaria
Moderacin de la carga de trabajo

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Posibilidades de progresar
Prestigio
Poder
Limitacin de las fuentes de trabajo en otros lugares
Satisfaccin personal/ Inters particular en trabajar en este organismo
Otro
En las organizaciones, diferentes personas contratan cierta gente por diferentes
motivos. Estoy interesado en conocer las tendencias generales respecto a la
contratacin en su organismo. De los empleados en su organismo y en cmo son
contratadas las personas en l.
15.Cuntos empleados cree usted que fueron contratados en base a sus capacidades,
mrito, o experiencia? (De ser posible, indique porcentaje)
16.De los empleados contratados por razones que no tienen que ver con sus
capacidades, mrito o experiencia, por cules razones dira usted que son
contratados:
Contactos de familiares y amigos
Contactos polticos
Favores especiales
Otro, por favor, explique
17. Cundo usted fue contratado, le dieron una descripcin de sus tareas y
responsabilidades por escrito?
S No
18. S la respuesta a la pregunta anterior es "s", dira usted que esa descripcin por
escrito hasta qu punto refleja sus actuales funciones?
Muy fielmente
Un poco
Para nada
19. En general, cree usted que le fue dado un entrenamiento adecuado para las
funciones que cumple actualmente?
S No
20. En el ltimo ao, cuntas veces recibi su sueldo en forma tarda?
21.Durante el ltimo ao, qu porcentaje de su salario fue pagado en bonos?
22.Cundo fue la ltima evaluacin de su desempeo como empleado de este
organismo?

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23.Qu persona lo evalu ltima vez?
24. Usted cree que fue evaluado justamente?
S
No
Ms o menos
Si no le molesta, indique la evaluacin que
recibi
25. Cmo comunica su organismo a los empleados las expectativas o estndares de
desempeo o rendimiento?
Por escrito
El jefe inmediato le explica a cada empleado o a un grupo
Los empleados con mayor antigedad le explican a los nuevos
Otro, por favor, explique
26. Esos estndares, a lo largo del tiempo, tienden a:
Mantenerse igual
Cambiar un poco
Cambiar significativamente
27. De los siguientes factores, marque aquellos que ayudan a mejorar su desempeo o
lo empeoran:
Ayudan a mejorar desempeo: Empeoran desempeo:
Libertad de accin Regulaciones y reglas estrictas
Disponibilidad de recursos Falta de recursos
Entrenamiento provisto por su Entrenamiento provisto por su
organismo (adecuado) organismo (inadecuado)
Cultura de creatividad/innovacin Miedo al cambio en innovacin
Educacin (apropiada) Educacin (insuficiente para funcin)
Informacin (adecuada) Falta de informacin
Mi jefe o supervisor me gua Mi jefe o supervisor no me gua
Mi rol est claramente definido Mi rol no es claro
28. En general, cunta discrecin o libertad tiene en el desempeo de sus funciones?
Demasiada libertad
Una cantidad apropiada de libertad
Muy poca libertad
29. Los otros empleados de su organismo tienen en el desempeo de sus funciones, a
su criterio:
Demasiada libertad
Una cantidad apropiada de libertad
Muy poca libertad

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30.Tiene su organismo registros financieros o contables de los ltimos cinco?
S No
31.Qu tan difcil es obtener informacin sobre esos registros?
Muy difcil
Difcil
Fcil
Muy fcil
Parte II: Administracin del Presupuesto
32. Qu participacin tiene usted en la confeccin del presupuesto de su organismo?
Ninguna participacin
Un poco de participacin
Mucha participacin
Atencin! Si su respuesta es ninguna, pase a la Parte III, pregunta 46.
33. Qu participacin tiene usted en la ejecucin del presupuesto?
Ninguna participacin
Un poco de participacin
Mucha participacin
34. Qu participacin tiene usted en la evaluacin del presupuesto?
Ninguna participacin
Un poco de participacin
Mucha participacin
35. Usted cree que el presupuesto para el ao siguiente va a ser diferente de lo
solicitado en el presupuesto por su organismo?
S No
36. Cree que dicho presupuesto, comparado con el corriente, ser:
Igual
Superior
Inferior
37. Si su respuesta a la pregunta anterior es superior o inferior, cree que dicha
diferencia en el monto del presupuesto ser:
Importante
Moderada
Pequea
38. Qu tan comn es que el presupuesto otorgado difiera del presupuesto solicitado?
Muy comn
Bastante comn

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No es comn
Es muy raro
Nunca ocurre
39.Cundo se realizan ajustes o cortes al presupuesto solicitado, cules son los rubros
ms comnmente afectados?
40. Qu tanta libertad tiene su organismo para decidir en dnde aplicar los cortes o
ajustes?
Absoluta
Mucha
Un poca
Muy poca
Nada
41. Su organismo ha excedido el monto presupuestado durante los ltimos 3 aos?
S No
42. Si su respuesta a la pregunta anterior es afirmativa, indique en cuntas ocasiones:
1
2
3
43. Si su organismo excedi su presupuesto, incurri en sanciones por dicha accin?
S No
44. Si su respuesta a la pregunta anterior es afirmativa, la sancin recibida fue
(marque las que crea que se aplican )
Impuesta por otro organismo
Impuesta por la autoridad superior del ministerio o secretara a la que pertenece
Ambas de las opciones anteriores
Despidos
Degradacin
Multas al organismo
Multas a los empleados
Recorte en el sueldo o beneficios del funcionario responsable
Reduccin del presupuesto para el ao siguiente
Otra, explique
45.Si su organismo no incurri en sanciones por exceder el presupuesto, sabe usted
qu sancin o sanciones hubieran correspondido en caso de hacerlo?
S. Por favor, explique

273
No
Parte III: Misiones y Funciones del Organismo
46.Describa brevemente las misiones y funciones de su organismo:
47. En su opinin, qu tan exitoso ha sido su organismo en cumplir con sus misiones
y funciones?
Muy exitoso
Algo exitoso
Poco exitoso
Nada exitoso
48. Qu tan compatibles o incompatibles son las distintas funciones atribuidas a su
organismo?
Muy compatibles
Ms compatibles que incompatibles
Ms incompatibles que compatibles
Muy incompatibles
49. Qu proporcin de las misiones y funciones de su organismo son dictadas por el
gobiernos nacional?
Casi todas
Bastantes
Algunas
Pocas
Casi ninguna
Ninguna
50. Con qu frecuencia discute usted u otra persona de su organismo las polticas y
programas con representantes del gobierno nacional?
A diario
Semanalmente
Mensualmente
Anualmente
Casi Nunca
Nunca
51. En su opinin, en qu medida las polticas dictadas por la nacin sern aplicables
a su provincia?
Muy Alta
Alta
Moderada

274
Baja
Muy Baja
52.Cul o cules de las siguientes oraciones describe mejor el rol del ministerio de la
provincia en la definicin de polticas y su relacin con el gobierno nacional:
El gobierno nacional decide las polticas a aplicar
El gobierno nacional propone las polticas y el ministerio provincial decide
El gobierno provincial adapta polticas o programas nacionales a sus propias
necesidades
El gobierno provincial define las polticas y programas y el gobierno nacional
provee los fondos necesarios
Los programas y polticas en el organismo dnde trabajo son decididos y
financiados por el gobierno provincial
Otro, por favor, explique
53. Con qu frecuencia discute usted polticas e ideas sobre cmo mejorarlas o
implementarlas con colegas de su organismo?
A diario
Semanalmente
Mensualmente
Anualmente
Casi Nunca
Nunca
54. En general, qu factores influyen la incompatibilidad o compatibilidad entre las
diferentes polticas? (ejemplo, cmo balancear crecimiento econmico con
preservacin del medio ambiente)
55.Con qu frecuencia est usted en desacuerdo con las polticas de su organismo?
Frecuentemente
Ocasionalmente
Casi Nunca
Nunca
56.Qu hace cundo est en desacuerdo con una decisin o poltica de su organismo?

275
57.En los ltimos 3 aos, los funcionarios electivos o miembros de partidos polticos
han interferido o perjudicado las decisiones de su organismo?
S No
Comentarios:
58.Si su respuesta a la pregunta anterior es afirmativa, indique la frecuencia con la
que ha ocurrido:
Muy Alta
Alta
Moderada
Baja
Muy Baja
Comentarios:
59. En general, en qu medida ha respondido su organismo a esas interferencias?
Muy Alta
Alta
Moderada
Baja
Muy Baja
60. A qu atribuye usted la respuesta de su organismo a esas interferencias?
61.En general, cmo dira usted que los empleados con contactos polticos o
personales son tratados con respecto al resto de los empleados?
Mucho mejor
Un poco mejor
Igual
Peor
Comentarios:

276
62. En general, cmo dira usted que los mejores empleados (ms trabajadores) son
tratados con respecto al resto de los empleados?
Mucho mejor
Un poco mejor
Igual
Peor
63. En los ltimos 3 aos, ha habido sanciones disciplinarias en su organismo por
alguna de las siguientes razones?
Desempeo pobre
Malversacin de caudales pblicos
Desobediencia
Adhesin a huelgas o paros
Otro, por favor, explique
64. Si han habido sanciones disciplinarias en su organismo, con qu frecuencia
considera que han sido justas?
Frecuentemente
Ocasionalmente
Casi Nunca
Nunca
65. Pueden los empleados apelar las sanciones o despidos?
S No
66. En los ltimos 3 aos, algn empleado de su organismo ha sido premiado o
promovido por alguna de las siguientes razones?
Tomar medidas inmediatas ante reclamos del pblico
Proveer sobresalientes servicios
Ahorrar dinero al gobierno
Otro
No he sabido de premios o promociones
67. Cuntos empleados de su organismo con buen o excelente desempeo no han
recibido promociones o premios?
Muchos
Algunos
Casi ninguno
Ninguno
68. Por qu cree usted que empleados con buen o excelente desempeo no han
recibido promociones o premios?
Falta de dinero
El buen trabajo no es generalmente premiado
Por diferencias personales o polticas con autoridades
Otra, por favor, explique

277
69. En general, con qu frecuencia cree usted que esos premios fueron justificados?
Frecuentemente
Ocasionalmente
Casi Nunca
Nunca
Parte IV: Corrupcin
70. En qu medida cree usted que la corrupcin es un problema en Argentina?
Muy Alta
Alta
Moderada
Baja
Muy Baja
71. En qu medida cree usted que la corrupcin es un problema en su provincia?
Muy Alta
Alta
Moderada
Baja
Muy Baja
72. En qu medida cree usted que la corrupcin es un problema en su ministerio?
Muy Alta
Alta
Moderada
Baja
Muy Baja
73. En general, los casos de corrupcin en su provincia son denunciados con qu
frecuencia?
Muy Alta
Alta
Moderada
Baja
Muy Baja
Seccin 2. Reformas de Mercado en el Sector Pblico Provincial
Parte I. Temas Generales sobre el Sector Pblico
74. Hasta qu punto las privatizaciones y contrataciones de terceros han sido
importantes en su organismo?
Muy importantes
Bastante importantes
Importantes
Poco importantes
Insignificantes

278
75.Las privatizaciones y contrataciones de terceros en su organismo han afectado el
funcionamiento del mismo:
Empeorndolo
Empeorndolo un poco
No ha afectado
Ha ayudado un poco
Ha ayudado mucho
Comentarios:
76.Hasta qu punto privatizaciones y otras reformas que imiten al sector privado
remediaran los problemas econmicos de su provincia?
Muy poco
Algo
No haran diferencia
Bastante
Mucho
Comentarios:
77.Hasta qu punto privatizaciones y otras reformas que imiten al sector privado
aumentaran la confianza del pblico en el gobierno?
Muy poco
Algo
No haran diferencia
Bastante
Mucho
Comentarios:
Privatizaciones, contratacin de terceros y otras reformas de mercado buscan
facilitar una asignacin de recursos ms eficiente (hacer lo mismo o ms con menos
recursos). Muchas veces, reducir o achicar el estado constituye un tema importante

279
en la reforma del sector pblico. Las siguientes preguntas se relacionan con la
reduccin o achicamiento del estado (recorte de funciones o personal del estado).
78. Evale las probabilidades de que el estado provincial se reduzca o achique en los
prximos aos:
Muy probable
Bastante probable
Probable
Poco probable
Muy improbable
79. Si el estado se achica, cul debera ser el criterio para decidir quin se queda y
quin se va?
Antigedad
Calificacin tcnica
Evaluaciones de desempeo
Una frmula que combine los factores citados arriba
Otra, por favor, explique
80.Hasta qu punto la idea de achicar se ha estudiado, planeado, o conversado?
Nada
Muy poco
Algo
Bastante
Mucho
Comentarios:
81.Pensando en el gobierno nacional u organismos internacionales, hasta qu punto
usted dira que el proceso de achicamiento estara en manos de los San Luiseos?
Nada
Muy poco
Algo
Bastante
Mucho
Comentarios:

280
82.Cul de las siguientes oraciones describe mejor la utilidad de las reformas del
sector pblico (privatizaciones, contratacin de terceros y reduccin)?
Estos cambios no son necesarios y resistirlos es la mejor opcin
Estos cambios no son necesarios pero no tenemos margen para resistirlos
Los cambios no haran ninguna diferencia
Los cambios seran tiles pero ahora no es un buen momento para
implementarlos
Los cambios son claramente necesarios y retardarlos slo empeorara las cosas
Comentarios:
Parte II. Competencia y Reestructuracin
Hay numerosas situaciones en las que el mercado no puede liberar al estado de sus
responsabilidades. En cambio, la meta es lograr mayor coordinacin y eficiencia en
los organismos pblicos.
83.Por favor, explique las presiones o motivaciones para alcanzar mayor eficiencia
que su organismo enfrenta hoy da:
84.Hasta qu punto cree usted que la firma e implementacin del Pacto Fiscal o
Acuerdo Catorce Puntos con el gobierno nacional aumentara dichas presiones?
S, habra mucha ms presin
S, habra un poco ms de presin
No cambiara el nivel de presin
No, el nivel de presin disminuira un poco
No, el nivel de presin disminuira mucho
Comentarios:

281
85.Hasta qu punto la presin por mayor eficiencia crea mayor flexibilidad (menos
apego a las reglas y ms libertad de accin) en el cumplimiento diario de sus
funciones (decisiones de poltica e implementacin)?
Alto
Bastante
Un poco
Nada
Comentarios:
86.Hasta qu punto usted estima que una mayor flexibilidad sera beneficiosa para la
provisin de bienes y servicios por parte del estado?
Muy probable
Bastante probable
Probable
Poco probable
Muy improbable
Comentarios:
87.Hasta qu punto la duplicacin de tareas o esfuerzos es un problema en su
organismo y en el sector pblico de la provincia?
Muy serio
Serio
Algo serio
Mnimo
Para nada
Comentarios:
88.Ha habido reestructuracin significativa en su organismo en los ltimos aos?
S, por favor, explique
No

282
Comentarios:
89.Hasta qu punto hay competencia entre las secretaras o reas de su ministerio, tal
vez para controlar recursos o programas?
Nada
Muy poco
Algo
Bastante
Mucho
Comentarios:
90.Hasta qu punto estima usted que la competencia (para sobresalir o ser el mejor)
entre los empleados dentro de la organizacin puede contribuir a mayor eficiencia
y efectividad?
Nada
Muy poco
Algo
Bastante
Mucho
Comentarios:
91.Hasta qu punto estima usted que la competencia (para hacer las cosas mejor, de
forma ms barata, etc.) entre los diferentes organismos de gobierno puede
contribuir a mayor eficiencia y efectividad?
Nada
Muy poco
Algo
Bastante
Mucho

283
Comentarios:
Parte III. Finanzas, Evaluacin e Incentivos
92.Qu nivel de participacin ha tenido su organizacin en las charlas con el
gobierno nacional respecto de la coparticipacin y reduccin de dficit?
A diario o semanalmente
Mensualmente
Una vez en los ltimos seis meses
Una vez en el ltimo ao
Nunca
Comentarios:
93.Qu actividades se relacionan con la elaboracin del presupuesto en su
organismo?
Planificacin
Necesidades operativas
Evaluacin de resultados
Otro, por favor explique
Comentarios:
94.En condiciones favorables, la reforma de la elaboracin de presupuesto se hara en
consulta con los empleados. Dada la severidad de la situacin econmica, hasta
qu punto su organizacin ha impuesto las reformas en la elaboracin de
presupuesto sin consultar con los empleados?
Completamente
Mayormente

284
Parcialmente
No mucho
Para nada
Comentarios:
95.Hasta qu punto su organizacin evala programas y personas?
Mucho
Bastante
Algo
Muy poco
Nada
Comentarios:
96.Hasta qu punto las evaluaciones se hacen ms por quedar bien para afuera que
por motivaciones internas?
Mucho
Bastante
Algo
Muy poco
Nada
Comentarios:
97.Su organismo pone metas de desempeo y rendimiento para el personal en
general y para todo el organismo?
No
S, por favor explique

285
Comentarios (por favor, explique si est de acuerdo con las metas y por qu):
98.Comparado con cinco aos atrs, hasta qu punto su organizacin ha creado
incentivos para que los empleados mejoren su redimiendo?
Mucho
Bastante
Algo
Muy poco
Nada
Comentarios:
99.Con respecto de los directivos de su organismo, sera bueno que tengan incentivos
de acuerdo al rendimiento?
Ideal
Buenos idea
Ms o menos buena idea
No muy buena idea
Para nada buena idea
Comentarios:
100.Hasta qu punto cree usted que las metas de rendimiento e incentivos seran o
son buenas para su organismo.
Ideales
Buenos idea
Ms o menos buena idea
No muy buena idea
Para nada buena idea

286
Comentarios:
Seccin 3. Democratizando el Sector Pblico Provincial
Parte I. Supervisin por Parte de la Legislatura Provincial
101.En su opinin, cul es el grado de conocimiento que tienen los legisladores
provinciales acerca de las actividades de su organismo?
Muy alto
Alto
Moderado
Bajo
Muy Bajo
Comentarios:
102.Ms especficamente, hay alguna comisin en la legislatura encargada de
supervisar el organismo para el que Ud. trabaja?
S
No
Otro, por favor, explique
103.Si existe tal comisin, por favor evale su nivel de efectividad:
Muy Alta
Alta
Moderada
Baja
Muy Baja
Comentarios (en particular, a qu atribuye Ud. el nivel de efectividad):
104.Si no existe una comisin de la legislatura encargada de supervisar su
organismo, cul cree usted que sera el nivel de efectividad si sta existiera?
Muy Alta
Alta
Moderada

287
Baja
Muy Baja
Comentarios
105.Diversos factores pueden disminuir la efectividad de la supervisin por parte
de la legislatura. Por favor ordene dichos factores de acuerdo a su importancia:
(siendo 4 los factores que ms influyen dicha disminucin de efectividad y 1
aquellos que menos influyen):
Falta de conocimiento especializado por parte de los legisladores
El mayor control por parte de la legislatura podra causar ms retraso en las
funciones normales del organismo
Los legisladores podran aprovechar su mayor poder para culpar a los
funcionarios y evitar as ser criticados por los errores
La existencia de comisiones especializadas en la legislatura podra abrir la
puerta para que los grupos poderosos traten de influenciarlas
Comentarios:
106.Hasta qu punto la legislatura tiene poder para evitar los nombramientos
polticos en los diferentes ministerios?
Alto
Ms que suficiente
Suficiente
Muy poco
Nada
Comentarios:
107.Hasta qu punto cree usted que la legislatura tiene poder para evitar el uso
discrecional de poder por parte del gobierno provincial (o del gobernador) en las
decisiones sobre polticas pblicas? (Por ejemplo, el uso de decretos de necesidad
y urgencia o poderes especiales)
Alto
Ms que suficiente
Suficiente
Muy poco
Nada

288
Comentarios:
Parte II. Participacin Ciudadana
108.Cun frecuentemente su organismo solicita la participacin del pblico en las
decisiones de gobierno?
Muy frecuentemente
Frecuentemente
A veces
Raramente
Nunca
Comentarios:
109.Si el gobierno solicita participacin por parte del pblico, por qu
mecanismo/s lo realiza? (por favor marque todas las opciones que sean aplicables)
Entrevistas
Grupos de Discusin
Encuestas
Cabildos abiertos
Asambleas (de presupuesto participativo u otras)
Comentarios:
110.Cun frecuentemente los ciudadanos de San Luis participan cundo el
gobierno no los convoca?
Muy frecuentemente
Frecuentemente
A veces
Raramente
Nunca
Comentarios:

289
111.Si tal participacin existe, cul/les de las siguientes oraciones describe dicha
participacin de manera ms acertada? (Puede marcar hasta dos opciones)
Participacin a travs de ONGs o asociaciones civiles o fundaciones
Participacin de grupos de ciudadanos que se unen para defender ciertas causas
Participacin a travs de partidos polticos
Otro, por favor, explique
Comentarios
112.En su experiencia, con qu frecuencia ha sabido de quejas del pblico que
hayan sido trasmitidas a su organismo a travs de los legisladores provinciales?
Muy frecuentemente
Frecuentemente
A veces
Raramente
Nunca
Comentarios:
113.Cmo cree usted que una mayor participacin ciudadana afectara el
funcionamiento de su organismo y/o su trabajo?
Ms participacin obstaculizara
Ms participacin ayudara
Ms participacin no tendra ningn efecto
Comentarios:
Parte III. Responsabilidad de Los Funcionarios Pblicos:
114.En qu medida los empleados pblicos (de carrera) son responsables por sus
acciones?
Alta
Ms que suficiente
Suficiente
Muy poca

290
Nada
Comentarios:
115.En qu medida la burocracia influencia el diseo de polticas? (Por ejemplo,
decidir qu programas implementar, cules son las prioridades del organismo,
etc.)
Alta
Ms que suficiente
Suficiente
Muy poca
Nada
Comentarios:
116.Cmo caracterizara el rol de los medios en aumentar el nivel de
responsabilidad de los funcionarios de gobierno? (y, por ejemplo, bajar la
corrupcin)
Muy Efectivo
Efectivo
Moderadamente efectivo
Poco efectivo
Inexistente
Comentarios:
117.En general, en qu medida cree usted que las polticas pblicas de su
organismo reflejan las preferencias del pblico?
Alta
Ms que suficiente
Suficiente
Muy poca
Nada
Comentarios:
Parte IV. Transparencia y Apertura de las Decisiones sobre Polticas Pblicas

291
118.En qu medida los procesos de decisin y dems actividades de su organismo
son realizadas de manera transparente de manera de facilitar su conocimiento y
comprensin por parte del pblico?
Alta
Ms que suficiente
Suficiente
Muy poca
Nada
Comentarios:
119.Dadas las dificultades que los empleados del gobierno de Entre Ros
enfrentan, en qu medida cree usted que alcanzar mayor transparencia representa
una prioridad para el gobierno?
Alta
Ms que suficiente
Suficiente
Muy poca
Nada
Comentarios:
120.Cmo caracterizara usted el proceso de decisin de polticas pblicas en
comparacin con aqul de 5 o 10 aos atrs?
Significativamente ms participativo y transparente
Un poco ms participativo y transparente
No ha cambiado
Un poco menos participativo y transparente
Significativamente menos participativo y transparente
Comentarios:
121.Cmo describira a la respuesta de su organismo respecto de las consultas o
pedidos del pblico?
Abierta y con buena disposicin
Razonablemente de buena disposicin
Adecuada
Lenta e incompleta
Absolutamente inadecuada

292
Comentarios:
122. Considerando todas las cuestiones relativas a la reforma del sector pblico,
hasta qu punto cree usted que mayor transparencia y apertura en los procesos de
decisin poltica deberan ser una prioridad?
Alto
Ms que suficiente
Suficiente
Muy poco
Nada
Comentarios:

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RegionsIssues and Contrasts. Public Administration and Development, Vol. 16,
No. 4, pp. 397-412.
Saba, Roberto Pablo. 2000. Regulatory Policy in an Unstable Legal Environment: The
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Editorial.

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Governance as Development Paradigm, in Schmitz (ed.) Debating Development
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Scrutton, Alistair. 2003. Sundays Runoff, Buenos Aires Herald, 5-12-03.
Selznick, Philip. 1957. Leadership and Administration. Berkeley, CA: University of
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Siffin, William J. 1991. The Problem of Development Administration, in Ali
Farazmand (ed.) Handbook of Comparative and Development Administration. New
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Siffin, William J. 1976. Two Decades of Public Administration in Developing
Countries, Public Administration Review, Vol. 36, No. 1, pp. 61-71.
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Stiglitz, Joseph. 2002. Argentina, Shortchanged: Why the Nation that Followed the
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Tommasi, Mariano, Sebastin Saiegh and Pablo Sanguinetti. 2001. Fiscal Federalism in
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306
Ukeles, Jacob B. 1982. Doing More with Less: Turning Public Management Around.
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01.
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Newspapers
Buenos Aires Herald
The Christian Science Monitor
Clarn

307
El Cronista
El Diario
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Financial Times
La Nacin
Los Andes
Reuters
The Washington Post

BIOGRAPHICAL SKETCH
In 1998 John M. Bolus began his doctoral studies at the University of Florida in
the Department of Political Science. Before coming to UF, Bolus worked professionally
with the State Teachers Retirement System of Ohio and the Foreign Commercial Service
(U.S. Department of Commerce). Bolus earned a BA in economics from Miami
University, as well as an MPA from Indiana Universitys School of Public and
Environmental Affairs. John is currently teaching at the University of Minnesota Duluth.
John continues to work on research related to public sector reform in Latin America.
308

I certify that I have read this study and that in/ny'topinion it conforms to
acceptable standards of scholarly presentation and i&rully)adequate, i
as a dissertation for the degree of Doctor of Philosoph
Goran S. Hyden, Chai
Distinguished Profes
d quality,
of Political Science
I certify that I have read this study and that in my opinion it conforms to
acceptable standards of scholarly presentation and is fully adequate, in scope and quality,
as a dissertation for the degree of Doctor of Philosophy.
j.TH'-k,
.. McCov
Terry L. McCoy
Professor of Political Science
I certify that I have read this study and that in my opinion it conforms to
acceptable standards of scholarly presentation and is fully adequate, in scope and quality,
as a dissertation for the degree of Doctor of Philosophy.
Renee J. Johns
Assistant Professor of Political Science
I certify that I have read this study and that in my opinion it conforms to
acceptable standards of scholarly presentation and is fully adequate, in scope and quality,
as a dissertation for the degree of Doctor of Philosophy.
Walter A. Rosenbaum
Professor Emeritus of Political Science
I certify that I have read this study and that in my opinion it conforms to
acceptable standards of scholarly presentation and is fully adequate, in scope and quality,
as a dissertation for the degree of Doctor of Philosophy. j
Dolores Albarracin
Associate Professor of Psychology

This dissertation was submitted to the Graduate Faculty of the Department of
Political Science in the College of Liberal Arts and Sciences and to the Graduate School
and was accepted as partial fulfillment of the requirements for the degree of Doctor of
Philosophy.
May 2004
Dean, Graduate School



287
Baja
Muy Baja
Comentarios
105.Diversos factores pueden disminuir la efectividad de la supervisin por parte
de la legislatura. Por favor ordene dichos factores de acuerdo a su importancia:
(siendo 4 los factores que ms influyen dicha disminucin de efectividad y 1
aquellos que menos influyen):
Falta de conocimiento especializado por parte de los legisladores
El mayor control por parte de la legislatura podra causar ms retraso en las
funciones normales del organismo
Los legisladores podran aprovechar su mayor poder para culpar a los
funcionarios y evitar as ser criticados por los errores
La existencia de comisiones especializadas en la legislatura podra abrir la
puerta para que los grupos poderosos traten de influenciarlas
Comentarios:
106.Hasta qu punto la legislatura tiene poder para evitar los nombramientos
polticos en los diferentes ministerios?
Alto
Ms que suficiente
Suficiente
Muy poco
Nada
Comentarios:
107.Hasta qu punto cree usted que la legislatura tiene poder para evitar el uso
discrecional de poder por parte del gobierno provincial (o del gobernador) en las
decisiones sobre polticas pblicas? (Por ejemplo, el uso de decretos de necesidad
y urgencia o poderes especiales)
Alto
Ms que suficiente
Suficiente
Muy poco
Nada


152
drama of 2002 centered on the provinces agreeing to the Pacto Fiscal, which demands
the provinces hold to lower spending targets. Not surprisingly, public employees in both
provinces (though more so in Entre Ros) estimate the drive to get more out of less will
intensify. The real issue, then, is whether public organizations and mangers can cope with
the environment or, better yet, develop innovative solutions to problems.
There is considerable conceptual willingness to equate the push for greater
efficiency with greater flexibility in management. In this way, it is thought an efficiency
mandate empowers managers to implement market-inspired reforms with the blessing of
policymakers. The evidence here, unfortunately, raises doubts about this virtuous cycle.
Nearly two-thirds in Entre Ros and three-quarters in San Luis assess there is at best a
minimal relationship between efficiency and flexibility. This may, of course, sound like
the kind of bureaucratic resistance to change that occurs regularly in any reform process.
But experience tells us things are probably more complicated. First, when efficiency
comes on the heels of 50 percent budget cuts, public managers often have less flexibility
on the program level regardless of whether managerial discretion has been enhanced.
Second, the idea that flexibility follows efficiency presupposes that it should do so
despite the fact managers who are products of Rechtsstaat administrative systems are
generally not inclined to bog down their organization with a radically new managerial
approach.
Next, responses are mixed about the purported benefits of greater flexibility for
the delivery of public goods and services. A significantly larger number in San Luis see
more flexibility as at best only somewhat likely to improve performance. One-third and
9.5 percent of Entrerrianos consider it likely and highly likely, respectively, that


CHAPTER 3
GOVERNING THE PROVINCES: PAST AND PRESENT
3.1 Introduction
Exploring public sector reform on the subnational level in Argentina involves choices
about what aspects of administrative change to study and which cases lend themselves
well to comparison. This chapter deals with the second issue. It is an important one
because many dimensions of public sector reform become clearer when comparable cases
are utilized. Section 3.2 takes a general look at Argentinas federal-provincial history,
which sets the stage for understanding Entre Ros and San Luis. The following two
sections3.3 and 3.4explain where the provinces of Entre Rios and San Luis have been
and where they stand today. It becomes apparent why political leadership and a
reasonably well-managed state apparatus go a long way toward explaining the surprising
developmental trajectories of these two provinces. The final section of the chapter moves
the focus away from history and the stories of the two provinces. Instead, it introduces
the basic characteristics of survey respondents from the Ministry of Economy in each
province and leads into Chapters 4 and 5 where survey responses assist in the analysis of
specific reform issues.
3.2 The Federal-Provincial History
The history of Argentina has been described as the history of two Argentinas:
metropolitan Buenos Aires and the interior. Buenos Aires, legally designated Capital
Federal since 1880, became the political, economic and cultural center of the country by
79


98
development trajectories of the two provinces, which appear to be well suited for
comparison in this regard. The remaining chapters are located in the present, analyzing
three sets of public sector reform issues through surveys and interviews and ascertaining
what the empirical account tells us about the composition and timing of reform.
3.6 Respondent Profiles
Thus far this chapter has sought to explain why Entre Ros and San Luis (two cases of a
potential twenty-four on the provincial level) are solid selections for comparison. The
next step is to describe the survey respondents that help us understand important sets of
reform issues in Chapters 4 and 5. The profile that follows tells us a few basic things
about the respondents. A full explanation of the survey respondent selection process in
the ministries can be found in Appendix A.
Age and gender. The initial questions relate to age and gender. The sample
population in Entre Ros is somewhat older than San Luis (see Table 3-1 below). In the
first two quintiles (employees under 40), San Luis has almost 42 percent while Entre Ros
stands at 27 percent. This suggests San Luis has had the financial wherewithal to tap into
more young prospects in the last ten years. It may also be suggestive a greater capacity to
adapt to change in the coming years. The greatest frequency of respondents is found in
the 40-49 range, which is not surprising since a spike in provincial hiring seems to have
taken place from 1983-91 (Martnez de Hoz 1991).
Table 3-1 Age
Distribution o
"Public Employees(Entre Ros N=63, San Luis N=91)
20-29
30-39
40-49
50-59
60+
Entre Ros
11.1
15.9
38.1
17.4
17.5
San Luis
18.7
23.1
31.8
22.0
4.4


297
Evans, Peter B. 1995. Government Action, Social Capital and Development, in Peter
Evans (ed.) Embedded Autonomy: States and Industrial Transformation. Princeton,
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Analysis of the Effects ofWeberian State Structures on Economic Growth,
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Ferrads, Carmen A. 1998. Power in the Southern Cone Borderlands: An Anthropology
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FIEL.
Gallup Argentina. 2002. Nuestra Nacional. www.gallup.com.ar, 11-13-03.
Garvey, Gerald. 1997. Public Administration: The Profession and the Practice: A Case
Study Approach. New York: St. Martins Press.
Geddes, Barbara. 1994. Politicians Dilemma: Building State Capacity in Latin America.
Berkeley, CA: University of California Press.
Gobierno de la Provincia de Entre Ros, www.entrerios.gov.ar, 3-15-03.
Gobierno de la Provincia de San Luis, www.sanluis.gov.ar, 2-11-04.
Golls, Manuel. 2000. The Government and the Social Sector, (pp. 183-238) in
Institutional Reforms, Growth and Human Development in Latin America: A
Conference at the Yale Center for International and Area Studies (April 16-17, 1999).
New Haven, CT: Yale University Press.
Goodin, Robert E (ed.). 1996. The Theory of Institutional Design. Cambridge University
Press.


167
distribution of responses is fairly standard with most respondents rating the effectiveness
of legislative committees as average. While it is admittedly hard to gauge committee
effectiveness, there appears to be genuine concern for this political dimension of public
sector reform. At the very least there is recognition the provinces can no more afford to
have amateur legislators than they can an amateur civil service.
Table 5-6 Legislative Oversight
In your opinion, to what extent do legislators demonstrate an awareness and/or understanding of your
organizations activities?
Entre Ros
San Luis
Very high
0.0
2.2
High
4.8
6.6
Moderate
19.0
47.2
Low
41.3
24.2
Very low
34.9
19.8
More specifically, is there a legislative committee with oversight responsibilities for your organization?
Entre Ros
San Luis
Yes
15.9
34.1
No
63.5
56.0
Other
9.5
9.9
Dont know
11.1
0.0
If there is such oversight, please evaluate its effectiveness?
Entre Ros
San Luis
Excellent
0.0
1.1
Good
0.0
3.3
Average
3.2
23.1
Poor
12.7
8.8
Totallv ineffective
11.1
0.0
Dont know
9.5
3.3
There is no oversight
63.5
60.4
A number of factors can impede effective legislative control. Please rank the following factors from 4 to 1
[more important to least] (average ranking for each factor)
Entre Ros
San Luis
Legislators lack specialized
knowledge for effective oversight
2.26
3.01
Oversight can cause significant
delays in orgs operations
1.67
2.96


87
involvement and organization impressed visitors of the era (Bosch 1978:266-267, 281,
Macchi and Masromn 1977:148). Overall, it has to be acknowledged these rural middle-
class enclaves were fairly unique in Argentina and downright extraordinary in Latin
America. It was the ideal settler pattern for development and Entre Rios had pulled off
the same historical coup as the United States, Canada or Australia.
The golden years were also characterized by clear signs of economic progress
and sound political stewardship. Agricultural production rose to new heights. The
numbers were astounding for a province of 75,457 km/sq., in 1892: 1,425 kilos of wheat
per hectare, 3 million cows, 5 million sheep; Entre Rios, on a per capita basis, ranked
among the top three Argentine provinces in each category (Carb 1893:24-28,464).
Agriculture was big business and the provinces export earnings were enhanced by the
completion of rail lines linking its primary cities to each other and Entre Rios to Buenos
Aires (Bourlot 1991:163,176). Governing the province was still a fairly modest affair,
though political leadership and administrative competence had already proved evident in
the Office of Colonization and General Council of Education (Carb 1893). Apparently,
Entre Rios government continued to go about its work capably and without much
appetite for national intrigues. According to the Argentine historian Beatriz Bosch, in the
late 1920s when most provincial governments were wracked with political division over
President Yrigoyen, Entre Ros (its political leaders and the bureaucracy) stayed centrist
and liberal, thereby avoiding federal intervention after the military coup removed
Yrigoyen in 1930.11
The seeds of the provinces eventual decline were probably cast in the 1930s. In
some ways, Entre Ros was inadvertently a victim of its own success relative to the


212
there were important reforms and achievements. But reforms were not pursued
consistently or comprehensively.23 There are two main, worrisome dimensions
regarding the IMFs outlook on what Argentina needs at this juncture. For starters, the
IMF does not appear to be providing a full and accurate appraisal of its own position on
Argentinas reform measures during the early 1990s (Pastor and Wise 1999, Pearlstein
2002, Stiglitz 2002). Secondly, insisting on comprehensive reform at this juncture ignores
the whole question of what is feasible versus what may be theoretically (or ideologically)
desirable.
6.7 Timing
Comprehensive public sector reform is impossible in the sense that all good things
cannot be realized simultaneously. For instance, you can have cost savings if that is the
priority but it is naive to think you can have improved performance on the same plate.
But even when reform choices are not beset by contradictions and tradeoffs, there are real
organizational limits on how much change can be introduced at once. One can imagine,
for example, a project manager in a provinces environmental direccin being overloaded
if the following items came on line in the first three months: professional training in
hydrology, preparations for performance budgeting, and the creation of a citizen feedback
database. It is not impossible to imagine because those are modest, feasible pieces of a
reform package. The problem is that timing issues expose the physical and organizational
limits of change.24 The timing itself makes pieces of the reform agenda mutually
exclusive (though only temporarily) even though planners may have properly vetted
those pieces for strategic tradeoffs.


48
The irony, then, is that arguments for and against too much state and too little
state each relied too heavily on the influence of economic factors over the reform
process. Hindsight tells us these explanations are incomplete. Moreover, they are
precisely the wrong frame of reference by which to inform second-generation reform,
particularly as it applies to subnational levels of government. When we ask the question
whats next? it seems safer to treat economic factors as sets of signals or thresholds that
constrain choices than as telltale signs with incontrovertible meanings for the people and
organizations involved in the process of institutional change.
Among economic factors, fiscal deficits are a logical starting place. Fiscal crises
have been recognized as a triggering mechanism for public sector reform (Heredia and
Schneider 2000, World Bank 1997). And with most of the easy budget balancing options
like selling state assets already tapped out, it reasons that rightsizing (i.e., layoffs) and
retooling the civil service is inevitable. For better or worse, the answer is yes and no.
Recent developments in Argentinas national government support seemingly support the
hypothesis that pressure to balance the books ensures rightsizing the civil service. But if
one examines the relationship between fiscal deficits and civil service restructuring
across OECD countries, there is little correlation either in terms of action or timing
(Pollitt and Bouckaert 2000). Fiscal deficits in the 1 -4 percent of GDP range have not
prompted major structural changes in most OECD countries civil service.24 Likewise,
fiscal deficits often exist for years and then suddenly at a moment of budgetary calm
substantive public sector reform finds acceptance.2:1
Latin America may possibly represent a less well-insulated set of cases. Fiscal
deficits are a luxury available only to those states that print money or have the confidence


290
Nada
Comentarios:
115.En qu medida la burocracia influencia el diseo de polticas? (Por ejemplo,
decidir qu programas implementar, cules son las prioridades del organismo,
etc.)
Alta
Ms que suficiente
Suficiente
Muy poca
Nada
Comentarios:
116.Cmo caracterizara el rol de los medios en aumentar el nivel de
responsabilidad de los funcionarios de gobierno? (y, por ejemplo, bajar la
corrupcin)
Muy Efectivo
Efectivo
Moderadamente efectivo
Poco efectivo
Inexistente
Comentarios:
117.En general, en qu medida cree usted que las polticas pblicas de su
organismo reflejan las preferencias del pblico?
Alta
Ms que suficiente
Suficiente
Muy poca
Nada
Comentarios:
Parte IV. Transparencia y Apertura de las Decisiones sobre Polticas Pblicas


238
7 Gallup Argentinas July 2002 survey shows only 8 percent of Argentines express confidence in political
parties. Latinobarmetros 2002 survey indicates 96 percent of Argentines have little or no confidence in
political parties. Also, Gallup Argentina (June 2001) asked Argentines which was the bigger problem for
the country: bad public administration or political corruption stemming from the lack of transparency. 60
percent said it was the politicians while 27 percent said lack of efficiency. Regarding attitudes about the
market economy in Argentina, only 2 percent expressed satisfaction with the way the market works in the
country and, perhaps more surprisingly, 57 percent do not believe the market economy is best for Argentina
(see Latinobarmetro 2002).
8 See, for example, Caiden (1999). He argues that even in developed countries one rarely finds full-scale
reform being undertaken. Instead, it is typical to see revitalization, which incremental and stresses doing
things that are realistic. I have not adopted the term revitalization, but I agree with Caidens analysis and
the cautionary message it carries.
9 Cambalaches are stores that sell various second-hand objects, typically broken and filthy. Apparently,
Discpolo felt the 20th century resembled a cambalache. The sad images in the song, where con men
succeed and ignorant people can pass off as wise men, are typical of tangos.


24
(Schmitz 1995:75-76).40 Governance is faulted for being flexible insofar as it proves
compatible with multiple regime types and economic systems.41 The primary complaint
with the governance framework, then, seems to be its perceived lack of transformative
power on the world system level.
Another important conceptualization of governance comes to us from Western
European public administration and policy studies but introducing it here, in the section
on comparative politics, is more useful for the purpose of comparison. In Modern
Governance, Jan Kooiman (1993) emphasizes that we are building conceptual
frameworks in an environment that is dynamic, complex and diverse. In this
environment, modes of social-political governing emerge and evolve in response to social
context. Governing is seen as the whole range of interactions crisscrossing the public
realm. Kooiman refers to the actions and interactions of public and private entities that
steer or manage parts of society (1993:2). Thus, governance is essentially the dominant or
recurrent patterns of governing in the public realm.
Informed by Western experience, the authors in this volume dwell less on the role
of political legitimacy in development than on accounting for how and why new modes
of governing emerge and affect policy outcomes. The objectives of the welfare state are
not indicted, yet the needs and capacities of political and social actors are clearly
reexamined. This particular governance approach addresses the crisis of the welfare state
(Mayntz 1993). It is encouraged that we keep in mind that the crisis of the welfare state
has been a product of financial strains and new ideas.42 This approach momentarily sets
aside the costs and capacities for state action, and explains that the distance between state
and society seemed to preclude the sort of cooperation and coordination necessary for


65
central government have a good track record in this regard, information management and
other technical competencies are inadequate on the provincial level.
Marketization62
Marketization implies a more mixed bag of measures. First, and most
significantly, the role of the statewhat the public sector should docontinues to be
debated. In this way, second-generation institutional reforms share the first-generations
concern for placing resource allocation in the hands of the market. The World Bank
speaks of introducing competitive pressures in the delivery of traditionally public
services (2000:24). Privatization and contracting out are among marketizations most
recognizable forms.64 Making resource allocation functions more efficient has thus
commonly entailed reducing the size of the state. Downsizing (i.e. cutting functions and


CHAPTER 6
TAKING STOCK OF REFORM: SIMILARITIES, DIFFERENCES AND
LESSONS LEARNED
6.1 Introduction
Chapters 4 and 5 analyzed over thirty particular reform issues, interspersing
survey results and interviews with practitioner and academic-based perspectives. This
chapter brings together insights and lessons learned from my experience with public
employees and organizations, elected officials and reform protagonists in both provinces.
The point here is not to provide a detailed plan for public sector reform in Entre Ros and
San Luis. That is a job for the provinces themselves. Instead, taking stock of key issues
appears the best way to tie together the road to reform. The first step is thinking
realistically about the factors moving the reform process. The situation on most fronts
remains fluid and it pays to review where politics, the economy and coparticipacin are
moving the process. Second, it is clear that similarities and differences emerge in Entre
Rios and San Luis. Summarizing those experiences goes a long way to understanding
what can be done. From there, it is possible to get an unobstructed view of the
composition and timing issues that make public sector reform more art than science.
Towards the end it makes sense to draw out and reflect on the lessons learned from the
provinces. I believe there is solid value in relating on the ground accounts from places
that face these tough choices.
193


150
and debated. In San Luis, slightly more than half attest to a similar lack of preparedness.
However, in this case, the seeming lack of preparation is plausibly explained by the
provinces relatively strong fiscal condition, which implies avoiding the tough,
downsizing medicine being prescribed is possible and likely even warranted. 10
Nonetheless, the issue of quality preparation for personnel reductions cannot be
underestimated and, as I suggest frequently, the salience of this issue covers multiple
agenda items.
Beyond the question of whether reformers are adequately preparing for
complicated agenda items like downsizing, public sector reform on the provincial level
continues to be defined by the extent to which the reform process is controlled by
provincial governments. The responses in the two provinces vary significantly. Two-
thirds of Entrerrianos do not believe the process is in the hands of the province itself; and
in San Luis, despite facing less severe budgetary constraints, almost 40 percent suspect
Buenos Aires or the IMF are calling the shots. Upper level decision-makers in the
respective ministries tried by and large to paint a more collaborative picture. In San Luis,
Minister Poggi indicated that the province listens to ideas from the outside but decides in-
house what is best. Secretary Menndez, in Entre Ros, admitted substantial outside
pressure exists but he cautioned it is counterproductive to speculate about reductions in
force, let alone to assign bottom-line influence for decisions yet to be taken.
Presently there are no concrete determinations about personnel cuts on the
provincial level; though there are plenty of hiring freezes in effect and challenging
budgetary targets are in place in most provinces.11 The overall level of concern reflected
in these responses does not strike me as greatly exaggerated. Entre Ros is no doubt in a


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Bureaucracies are often criticized for the duplication of tasks in a single
organization or across the public sector. Examples include the maintenance of separate
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direcciones for water resources and the environment or repetitive budgeting and
accounting practices due to the maintenance of many small ministries. Public employees,
in particular higher level managers, can speak accurately to this issue of duplication in
ways that most politicians, media pundits, academics or citizens cannot. Overall, the
duplication of tasks and resources is estimated to be somewhat serious in Entre Rios
and minimal in San Luis. Managers in Entre Ros gave varied explanations for the
origin and persistence of this problem, but Secretary Menndez summed up the
observations of many in the ministry when he characterized the situation as primarily one
of shared expertise that should invite better communication and more collaboration
between units. The provinces Director of Environment, Pedro Tonioso, expressed
somewhat more frustration about the countervailing tendency for units to cloud the
programmatic level with a fragmentation of public policy.14 In San Luis, where there are
more (albeit smaller) ministries, the message is that duplication remains, as always, a
problem but political leadership (on an inter-ministerial level) has tried to minimise its
severity.
Issues like the duplication of tasks frequently prompt efforts to restructure public
organizations. In the secretariats and direcciones I surveyed and met with in 2002, it is
apparent that restructuring has been a more common feature of the organizational
landscape in San Luis than Entre Ros over the last few years. But in Entre Ros defense,
the onset and deepening of the economic crisis made it considerably harder to push
restructuring plans as internal suspicion and opposition grew and legislative resolve


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much at all. Most provinces made small strides towards civil service reform. But this
period of tragic upheaval did not translate into a focus and consensus necessary for public
sector reform. Moreover, the political and social forces involved in the democratic
transition provided no fresh impetus to solving the federal-provincial problem By the
1990s the federal government set out to privatize state assets and devolve most key policy
portfolios to the provinces, thereby trimming its own workforce and hoping the provinces
could do more with less. Menem held together provincial support for his neoliberal
economic plan, but only at the expense of tabling meaningful provincial public sector
reform.8 The recession that started in 1999 ultimately closed the old chapter and made
federal-provincial relations a political issue to an extent not seen in decades.
The federal-provincial relationship has been one of contestation, rapprochement,
unfulfilled promise and now uncertainty over what comes next. Rolling back the past
seven decades is not an option. Adjusting the vertical fiscal imbalance in the system is
virtually assured.9 But making the provincial state work better could get lost in the
shuffle like it has so many times in the past. This outcome has to be avoided. For the
provinces to get more out of the federal-provincial relationship, it has to function more as
a partnership where the strengths of each level complement the other. But one has to keep
in mind that speaking of the provinces can be misleading when it implies they are a
monolithic entity. The following sections illustrate two different development
experiences from the interior
3.3 Entre Ros: From Settler Paradise to Nowhere
Entre Ros is aptly named in Spanish as the land between rivers. Its southern and
western boundaries are defined by the mighty Paran River; the eastern boundary is the


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91.To what extent do you believe competition between different governmental
organizations can lead to greater efficiency and effectiveness?
Not at all
Very little
Somewhat
Considerably
Very significantly
Comments:
Part III. Finance, Performance Evaluation and Incentive Issues
92.To what extent has your organization been consulted on intergovernmental
negotiations regarding coparticipacin and deficit reduction?
Daily or weekly
Monthly
Once in the past 3-6 months
Once in the past year
Never
Comments:
93.Is the budgeting process expressly linked to any of the following organizational
tasks? (You may mark all that apply)
Pla