Public Workforce Performance and Prosperity

This report is about how to make the world’s 400 million public sector workers more effective in performing their core government functions. Achieving better development outcomes—more and better-paid jobs, improved education and health service delivery, climate mitigation and adaptation, peace and security, fiscal sustainability, and restored citizen trust in government—requires a capable state. This state capacity largely depends on the skills and motivations of the government workforce, both the service providers who interact daily with citizens and the administrators responsible for financing, monitoring, and supervising these frontline workers.

The report is anchored in a conceptual framework in which workforce performance depends on a combination of inputs and organizational practices to convert those inputs into outputs. The main inputs are the wage bill, or the quantity and quality of public sector employees and their compensation. Organizational practices consist of management practices and the use of digital technology in the workplace. Management practices include performance management, training, collaboration, community engagement, and integrity and transparency, all of which affect the motivation and productivity of the workforce. Digital technologies have significantly impacted the productivity of private sector firms and have been similarly transformative in the public sector. The report concentrates on the interaction between digital technologies and the workforce—particularly how digital technologies influence workforce management and how the skills of workers and managers in turn impact the adoption of these technologies in the workplace.

The report draws on a large body of rigorous academic research and original micro-level data, much of it produced by the Bureaucracy Lab of the World Bank. These datasets are as follows:

• Worldwide Bureaucracy Indicators (WWBI). The WWBI is a cross-national dataset on public sector employment and compensation, drawing on 67 million observations from household and labor force surveys, covering 151 countries from 2000 to 2022.
• Surveys of public sector employees. The Lab has conducted surveys of public sector workers in 30 countries, with over 200,000 respondents. This dataset is one of the largest survey repositories of its kind in the world.

The report is structured with chapters dedicated to each of the three key drivers of workforce performance. These are the wage bill, decomposed into employment and compensation practices; management practices; and digital technologies.

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This chapter explores how governments can more effectively manage their wage bills to balance the objectives of delivering core services, maintaining fiscal discipline, and ensuring that public sector jobs do not crowd out private sector jobs. The chapter has four main findings.

First, and contrary to popular belief, most low‑ and middle‑income countries have too few public sector workers for core functions. High‑income countries typically employ 50–140 workers per 1,000 people, while low-income countries often have only 10–20. Shortages are acute in health, education, public safety, forest management, and tax administration. These shortages can only partially be addressed by better functional and territorial distribution of staff.

Second, the problem of understaffing is exacerbated by the poor skills of the public sector workforce due, in part, to a lack of merit and transparency in recruitment. Cross-nationally, significant proportions of public workers are hired without going through an open competition. Even when hiring is competitive, written examinations that test for job-related competencies are inconsistently used.

Third, the public sector is the largest source of formal sector jobs in low-income countries, especially for women. Understaffing in low- and middle-income coexists with the fact that the public sector is often the largest source of formal sector jobs given the underdeveloped private sector in these countries. The public sector globally accounts for 38 percent of formal employment, and 59 percent of formal employment in states impacted by fragility, conflict or violence (FCV). The public sector is also a more a more gender-equal employer, with women constituting 46 percent of the public workforce, as compared to 33 percent in the private sector) and experience a narrower gender wage gap. Yet, women remain underrepresented in leadership roles.

Fourth, governments generally pay more than the private sector for comparable workers, with public sector workers earning 21 percent more than paid private sector workers, and 9 percent more than formal private sector workers.  This public sector wage premium can lead to queuing for public sector jobs and extended periods of voluntary unemployment, hurting overall labor market outcomes. In Bosnia and Herzegovina, for example, a Bureaucracy Lab labor force survey designed to measure workers’ preferences for public versus private employment revealed that 48 percent of job seekers prefer public sector employment, compared to 28 percent who favor private sector jobs. Individuals who prefer public sector employment remain unemployed for 31 more weeks on average than those who prefer private sector employment.  At the same time, pay progression is more limited in the public sector, making it difficult to attract high-demand skills. Public sector pay can also be inequitable due to pay grades not being anchored in job evaluations, and a preponderance of allowances, and this pay inequity can be demotivating to workers.

Governments often need to reduce the wage bill to achieve fiscal consolidation. This report argues for prioritizing compensation reform and not reductions in staffing. Governments should closely monitor the wage premium to guide salary policies, while ensuring that the public sector pays a living wage at the lower pay grades. Downsizing often harm service delivery and can disproportionately affect women, who rely more heavily on public sector jobs.

Another priority should be workforce reforms in revenue authorities to increase domestic revenue mobilization. Tax administrations are highly labor‑intensive and are often understaffed and lacking in specialized skills. Increasing staffing, improving recruitment, strengthening performance management, and adopting digital tools can significantly boost domestic revenue mobilization.

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This chapter investigates the pivotal role of management practices in motivating public servants, promoting integrity, and encouraging collaboration. It argues for a balanced approach that combines accountability with empowerment, recognizing the intrinsic motivation of public sector workers to serve the public good.

These management practices include the annual performance evaluation process, which is traditionally the main mechanism for accountability and rewards; community engagement, which can be effective in increasing accountability to citizens and fostering public service motivation; practices that promotes integrity and trust among public sector workers; continuous learning to develop technical and behavioral competencies; and collaboration, particularly across organizational boundaries.

Performance evaluations are not well implemented in public administrations. The Bureaucracy Lab surveys in several countries revealed that large proportions of staff—87 percent for Croatia’s health workers, 56 percent of Madagascar’s teachers, and nearly 20 percent of civil servants in Armenia and Uruguay—do not have any formal performance evaluation. Even when conducted, performance evaluations tend to be perfunctory as they are often not complemented by regular informal performance conversations between managers and staff, as evidenced in Ethiopia, Philippines, and Romania. Women face bias in performance evaluations and are underrepresented in leadership positions in public administrations.

Community engagement can be an effective way of fostering public service motivation, but bureaucrats often have limited connections, spatially and socially, to the communities they serve. Community engagement is especially important in building trust with citizens in areas such as policing, where the state has a potentially adversarial relationship, and where there is a higher risk of conflict between public sector workers and citizens. Community engagement can be fostered through making public administrations more representative of the communities they serve, ensuring that community engagement is a key competency of civil servants, and using digital tools for increasing interactions between public workers and citizens.

Self-reports from public servants confirm that corruption is disturbingly commonplace in public administrations. In Brazil, 33 percent of civil servants stated that they had witnessed some unethical practices within the past three years, with a similar proportion stating that they themselves had faced pressure to act unethically. In Ethiopia, the number of public sector workers witnessing an unethical practice was even higher, at 47 percent. Empowering public servants to be ethical and to be able to safely report observed unethical behavior is one approach to combating corruption.

However, civil servants are often hesitant to report observed unethical acts because of fears of retaliation. The Bureaucracy Lab surveys reveal that large percentages of civil servants in Brazil, Ethiopia, Liberia, Madagascar, and Mali answered “no” when asked if they felt safe in reporting on corruption, citing concerns about lack of whistleblower protection and fear of negative repercussions. Individuals with higher levels of trust in their organization’s management and confidence that there would be no reprisals were more likely to report acts of corruption.

Public administrations across countries provide insufficient training to staff. The Bureaucracy Lab surveys asked respondents whether they have received any training funded by the government in the past year. In several countries across regions—Ethiopia, Argentina, Kosovo, and Bosnia and Herzegovina, for example—most civil servants had not undertaken any training. Even when training is undertaken, it is often not what public sector workers need as trainings are not anchored in organizational needs or linked to the competencies required for different jobs.

Many development challenges require a whole-of-government approach but collaboration and coordination between bureaucrats across ministries and levels of government is challenging. Bureaucracy Lab surveys reveal that collaboration across organizations is difficult. In Poland, around half of the respondents never collaborate on climate change policies with other units in their organization, and two-thirds of the respondents from central government climate change relevant agencies say that they never engage with local government on climate change. Another survey in Lithuania showed that only 40 percent of school staff stated that they worked regularly with officials in local government over the past year to create education measures and plans for youth mental health. Strengthening behavioral competencies on leadership, collaboration, and communication and attitudes of civil servants to foster collaboration can help complement formal coordination mechanisms.

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This chapter explores two questions: What are the different ways in which digital technologies can improve the management of the public sector workforce; and are governments sufficiently investing in the digital skills of their workers to effectively use these technologies?

Governments have invested heavily in core digital management information systems for managing the workforce but underutilize these systems for data-informed workforce management. The number of countries with payroll and human resource management information systems (HRMIS) has increased sharply over the past two decades, and these are now an essential part of the core suite of information systems.

However, the performance of these systems has been underwhelming. Many governments, even upper-middle-income countries like Brazil, underutilize their excellent HR and payroll systems, using these primarily for transaction processing and not for HR data analytics. For example, a survey of Latin American countries on the use of these systems found that HRMIS data is used less frequently for diagnostic and predictive analytics than other core systems.

Digital technologies lower the cost of monitoring workers and strengthen performance-based management, but there are also risks with excessive monitoring. The use of mobile phones to monitor government service providers, when combined with incentives, has reduced absenteeism in India, Pakistan, and Uganda. Performance incentives for tax officials can improve revenue collections. There are, however, limits and risks to digital monitoring and greater potential lies in using these technologies to improve management-by-empowerment and to spur public service motivation. Reducing absenteeism, while necessary, is not sufficient to ensure that doctors, teachers, and managers, once they show up to work, are motivated to perform well and to serve the public. Excessive monitoring, which is done in some firms, can also backfire and can be highly demotivating.

Better digitally enabled management of the public sector workforce is conditional on the abilities and incentives of senior civil servants. Effective utilization of digital technologies and data requires not only managerial capacity but also a culture of using evidence to support decision-making and to enhance service delivery, which in turn requires changes to existing work practices. Bureaucracy Lab surveys in Argentina (Mendoza), Ethiopia, and Kosovo revealed that one major constraint to implementing new technologies, in addition to skills gaps and lack of training, is resistance by managers and staff to the changes to work practices that digital technologies bring.

Governments have also not invested sufficiently in developing foundational and advanced digital skills in the public sector workforce. Most low- and middle-income countries do not have adequate job profiles or digital competency frameworks for public sector workers nor structured planning for future needs. Bureaucracy Lab surveys for Argentina (Mendoza province) and Kosovo, for example, reveal that only 30 percent and 55 percent of the managers respectively stated that they gathered information on the digital skills of staff in their agency to inform their human resource planning. Basic digital training in the use of IT equipment and software is limited, with a minority of staff in Argentina, Ethiopia, Kosovo, Pakistan, and the Philippines having received such training in the past year.

Managers also expressed frustration with the lack of training in data analytical skills to effectively utilize the information collected in management information systems. Low-and middle-income countries also generally do not have specialized digital occupational groups to build more advanced digital skills in government. For example, in Latin America and the Caribbean region, only 12 percent of governments have a dedicated career track for data analysts. Such professional networks are important not only for having a viable career but also as a driver of public service motivation, particularly for workers who can earn much more in the private sector.

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The final chapter provides a set of guideposts, or strategic reform priorities, for a more effective public sector workforce. These recommendations are distinguished by some relatively easier reforms, or “quick wins”, that can be enacted in the short term even in low-income countries; and more difficult and necessary longer-term reforms, which may be more suitable for middle-income countries.

There are several potential quick wins for improving wage bill management, management practices, and the potential for digital technologies. Payroll systems can be used to eliminate ghost workers, improve the geographical and functional distribution of staff, and to conduct wage bill simulations. The quality of new hires can be improved through competency-based screening, and through recruitment campaigns and outreach to emphasize the mission of the public service.

Compensation practices can be improved through regular monitoring of the number of applicants per vacancy to gauge public-private wage differentials; and elimination of distortionary allowances to improve wage equity and transparency. Management practices can emphasize management by empowerment, such as through reorienting performance evaluations as mechanism for strengthening mission orientation and alignment of individual and organizational goals; emphasizing whistleblower protection so that public servants feel safe in reporting acts of corruption; and fostering community engagement through digital tools.

Short, “pulse” staff surveys using smartphones can be used to get rapid responses from employees on their experiences and perceptions of management practices, to gauge employee motivation, and to involve them in solving organizational problems. Governments can attract digital talent by appealing to public service motivation and targeting recruitment campaigns to women given their relatively higher preference for public sector employment. 

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