By the mid-2000s, Indonesia had recovered from a devastating economic crisis and made significant progress in transitioning from a dictatorship to a democracy. However, the country's vast state bureaucracy continued to resist pressure to improve operations. In 2006, President Susilo Bambang Yudhoyono tapped economist Sri Mulyani Indrawati to transform Indonesia's massive Ministry of Finance, which was responsible not only for economic policy making but also for taxes and customs. During four years as minister, Mulyani introduced new standard operating procedures, raised civil servant salaries, created a new performance management system, and cracked down on malfeasance. Her reforms turned what had once been a dysfunctional institution into a high performer. But ongoing resistance illustrated the difficulties and perils of ambitious bureaucratic reform in Indonesia.

This case study was drafted by Gordon LaForge based on research by Rachel Jackson, Drew McDonald, Matt Devlin, and Andrew Schalkwyk and on interviews conducted by ISS staff members from 2009 to 2015. Case published May 2016. Other ISS case studies provide additional detail about certain aspects of the reforms discussed in this case or about related initiatives. For example, see Instilling Order and Accountability: Standard Operating Procedures at Indonesia's Ministry of Finance, 2006-2007.

This case study offers an account of civil service reform efforts in Vietnam between 1998 and 2009, which yielded substantial formal policy changes but produced only modest practical changes to Vietnam's public employment system.  Before 1998, the Vietnamese civil service lacked standardized competitive recruitment and promotion procedures, offered salaries that did not cover the cost of living, provided insufficient and often irrelevant training, and included ministries that duplicated functions.  By 2009, the Ministry of Home Affairs had standardized and then devolved recruitment and promotion exams to line ministries and provinces, doubled civil service wages while giving agencies autonomy to raise wages further, expanded the enrollment of the National Academy of Public Administration by a factor of 20, and merged six ministries.  Nonetheless, government and donor officials reported that recruitment continued to be driven often by corruption, that even doubled salaries often did not cover the cost of living, that training was rarely relevant to civil servants' work, and that tasks continued to be duplicated in most of the merged ministries.  In order to concentrate on human resource management reforms, this case study does not consider other aspects of the Public Administration Reform agenda, including, for example, the institution of so-called one-stop shops designed to simplify administrative procedures.  Because public sector reform remained a sensitive topic in Vietnam in 2009, many interviewees asked that their names be withheld.

David Hausman drafted this case study on the basis of interviews conducted in Hanoi, Vietnam, in August and September 2009. 

Associated Interview(s):  Clay Wescott

In 1996, Mongolia’s newly elected government, led by a group of market-oriented politicians, decided to reform civil service on the New Zealand New Public Management model, which required managers to sign contracts promising results in exchange for freedom to spend their budgets as they chose. The reforms were intended to modernize a civil service that, while legally changed since democratization in 1990, retained many of the characteristics, and staff, of the previous Soviet-modeled system. Reformers confronted a lack of robust accountability procedures, salary arrears and a lack of central control over local expenditures. The Democratic Coalition government, led by an economic team strongly committed to market-oriented reforms, settled on the contract-based New Public Management model as a way of preserving agency-level decentralization while making agencies’ managers directly accountable to the national government. When enacted, the system met with difficulty at every stage: in specifying outputs for agencies and individuals, in measuring performance, and in rewarding good performance. By 2009, thirteen years after the reforms started, officials reported that the contracts remained largely a formality.

David Hausman wrote this case study based on interviews conducted in Ulaanbaatar, Mongolia, in December 2009. 

Associated Interview(s):  Mendsaikhany Enkhsaikhan