Thursday, June 16, 2011

Contract Management (Material for Students of MPA)

Contract
Contract is defined as a legally enforceable agreement between two or more parties (individuals, businesses, organizations, or government agencies) with mutual obligation to do or to refrain from doing specially one that is written and enforceable by law.  Contract is made on the writing or document containing such an agreement. Contract is legally binding agreement so there remains legal remedy by law for breach of contract. There are different practices in different countries about contract law. In Nepalese perspective, The Contract Law 2000 (2056 BS) and Public Procurement Act 2007 (2063 BS) are the major prevailing laws regulating contract.  According to section 2 sub-sections (a) of The Contract Act, 2000, 'Contract' is an agreement enforceable by law concluded between two or more parties for performing or not performing any work. Contract jurisdictions usually retain a high degree of freedom of contract, with parties largely at liberty to set their own terms. Broadly, contract is a form of economic ordering common throughout the world but different rules apply in jurisdictions.
Public Contract
Public contract is a means to deliver public services through market mechanism. Like that of definition of contract, public contract is also a legally enforceable agreement of a party to undertake/do the work or improvement as desired by a public authority, say government in broad sense. Such public work may be construction of public utilities, protection or facilitating the public lives and many more. Public contracts are largely governed by the general law of contracts, in Nepalese context, by Contract Act 2000 and Public Procurement Act 2007 are major. Public contract is little stricter, individuals and corporations are held to stricter standards in their dealings with the government than in their private dealings. This is one of the functions of public administration where identity and professionalization of officials are demonstrated. The Public Procurement Act 2007 of Nepal defines procurement contract as “Procurement Contract means a procurement contract entered into between a Public Entity and a supplier or construction entrepreneur or Consultant or service provider..."
Contract Management
Contract management is the management of contract that includes designing of terms and condition, negotiating the terms of condition, ensuring the compliance of terms and condition and documenting any changes occurred during its implementation or execution of the contract.
Hence, Contract management involves
  • Designing contract
  • Negotiating contract
  • Ensuring compliance of the contract
  • Documenting the changes occurred in the contract

Contract management theory is associated with Principle-Agent theory. Principle is government and agent is the party or person who does the work. There is always conflicting relation between principle and agent. Government wants to reduce the cost, maximize the output, wants right time, right place, right method, right quality and right quantity. On the other hand agents want to maximize the profit and market share. So, managing this conflicting situation is contract management. There must be some mechanism to address the conflicting aims/objectives of parties of contract.
This mechanism involves

1.   Market Information: - Government must have some market mechanism to collect information from the market. This can be done in two ways; first establishing an intelligence unit with the government unit another is to hire another agent for collecting information about the activities going on with the contract. The quality of the work, compliance of the contract rules are to be verified by the information collected.
2. The Selection of Agent: - Setting the criteria or the basis to select the agent what should be made earlier. The level of experience required, standard of economic background, public image, strength, etc should be determined before performing a contract. These things are basic to implement a contract successfully.
3. Monitoring the Performance of Agent: - There must be some mechanism to monitor the performance of the agent. This can be done by setting up a monitoring unit or committee with in the public office or by appointing a third party agent. Monitoring can be conducting on the regular basis or on the intermittent basis.

Contracting is the prime option for the government today to operate and spend public money when resourcing out/contracting out concepts are emerging even in developing country like Nepal because of new public Management concept and New Public Service concept. No doubt, there are some issues of corruption in contracting and procurement. Corruption in procurement affects the efficiency of public spending and donors' resources, creates waste and, ultimately, affects the quality of public life. Corruption in public contracting can take many forms, including bribery, deception (fraud) or simple abuse.

Required Government Policies for Effective Contract Management
  1. Decision to contract: In the first phase, government has to decide when to make a contract. This involves deciding by government to purchase or sell goods or contact or services, or to outsource the management of a unit.  Government determines what it needs to buy or sell or privatize (technical requirements, specific characteristics) and how it will go about it (contracting method, agency responsible, etc).
  2. Planned Direction: - Type of agent to be selected should be determined in advance with respect to the task to perform. Related experience, required standard of economic background etc must be determined. Rules that follow these principles also provide a good basis to prevent corruption.
  3. Paying Structure: - "When to pay" and "how to pay" must be determined and mentioned in the contracting paper. Pay structure can be: - Fixed pay method; partly pay method, reimbursement method, etc.
  4. Contract Process: - The process of contracting for different cost range must be determined. Other factors related to contract process involves type and mode of detriment, time and rang of advertisement, etc
  5. Selection Basis: - Selection basis like sole selection or competition base selection should be determined to different circumstances.
  6. Setting up the Monitoring, supervision and Evaluation process and standards.
The contracting needs minimum confidentiality and strictness. It is necessary to establish review systems, foster objective evaluation criteria and provide structures for it. It is also necessary to promote transparency and accountability, to facilitate oversight and citizen participation, and brings legitimacy to governmental decisions. Written procurement procedures should outline the whole process, using explicit criteria to award contracts. Public Procurement Act 2063 (2007) of Nepal exists to make legal provisions in order to make the procedures, processes and decisions relating to public procurement much more open, transparent, objective and reliable, to obtain the maximum returns of public expenditures in an economical and rational manner by promoting competition, fairness, honesty, accountability and reliability in public procurement processes.  
Resources Used:
3.     Class lecturer by Shree Krishna Shrestha, Public Administration Campus, TU, Jamal Kathmandu, June 16, 2011

Wednesday, June 15, 2011

The Whole of Government (Material for MPA Students)

"The Whole of Government" is a new concept following New Public Management, when some problems could not be addressed by existing practices. The whole of government relates to vertical and horizontal coordination to eliminate the situation in which different policies undermine each other. Hence, the concept can be summarized as:- Coordination+Integration=The Whole of Government. In Nepalese context, 'The High Level Mechanism' was formed under the chairmanship of then Prime Minister Giriza Prasad Koirala. 
Before going in depth with  TWG, it is pertinent to consider few factor that gave push to its emergence. 

  1. Pillarization of Departments: New Public Management (NPM) emphasized on 'Tunnel Vision' lacked to address integrally different sectors' problems.   NPM focused on single department for single task, because of which there emerged a form of pillars in each organization. In a ministry, there are few departments and each work differently. In a government, there are few ministries and they work differently and separately. This trend is same for all state units. That created pillarization with lack of coordination. NPM got criticized because of departmentalization became infamous. 
  2. Insecurity:- Different threats to mankind like natural disasters, conflict, racism, regionalism, and global network of terrorism significantly created insecurity. Individual organization or departments is unable to function addressing these threats. They needed coordination and group efforts. These two, mainly, reasons forced to the emergence of TWG

How to Implement TWG?

  1. Structural Set Up:- The concept of TWG need a mechanism for coordination of all ministries and departments. A special body can be set up in the chairmanship of Prime Minister consisting all ministers and departmental heads. This can be separated by in two categories. One of political coordinating group consisting PM and Ministers and the another of Secretaries and departmental heads. Similarly, this can also be formed in sectoral set up. But the board or committee or the office must be authorized as coordinating mechanism of the state. 
  2. Procedural Set Up:- Establishing networks for working in each office of the state is anther mechanism of implementing TWG. One must not do its work in isolation. Because in a state, an activity of one office of the state affects another. The shaping of nation is the responsibility of all units, not of one, and every single unit of the state is responsible for wrong dos of its counterpart. Work must be result based and the doer should be held responsible. 
  3. Cultural Set Up:- Developing evolutionary cultural set up so that all the state mechanism would work in mutual understanding and coordination can be another method of implementing TWG. 
Challenges of TWG

  1. Like the traditional approach, today in present days the same coordinating approach does not work . It needs comprehensive coordination appproach . It need horizontal coordination betwwn state agencies and it is very difficult and big task to coordinate horizontally in any environment.
  2. Accountability:- The fixed and solid rules should be established determining who is accountable to whom. But there is always confusions that either minters are accountable to primeminister or to the party in vertical structure. Similarly, in it is highly difficult coordinating in horizontal structur
  3. It is a long term  vision which needs enoughs patience, can't be established a good practice in a short span of time.

Tuesday, June 14, 2011

Efficiency In Public Enterprises

In any sphere  of activity, efficiency is defined as the rate of return or rate of result obtained to the means used. In simple term it is the ratio of  achievement to the means used. Similarly, it can be defined as a measure of time, cost and effort,  with comparison to productivity. Measuring of efficiency includes goods or services, time of processing, the functionality of the solution etc.  Laxmi Narain defines efficiency in public enterprises as "efficiency is the ability to produce the designed effect with minimum of effort, expenses or waste". It is important to decide that whether or not strict rules to adopt for measuring efficiency in public enterprises. Public enterprises have legitimate reasons to treat efficiency as secondary in some cases. 
Criteria of Efficiency Measurement
  • Profit or loss:- Efficiency, very rigidly, can be measure through the analysis of annual profit and loss of the public enterprise. This approach is suitable in private sector and in some public companies. But when the legitimate reasons are there to consider profit as a secondary in public sector, this approach will only be rigid means.
  • Contribution to National Economy:- Share of involvement in national economic activities may be another means to measure efficiency of public enterprises.  Contribution to the national economy through developmental activities or through tax can be measured. 
  • External Auditing:- Independent and fair auditing is mostly used and widely accepted method of measuring efficiency in public enterprise. 
  • Minimization of Wastage:- This refers to the minimum impact to the economy. If functioning of the enterprises do not add burden to other sector of the economy, efficiency may be low. But in contrary, when the enterprise do not put burden to the economy efficiency may be higher. 
  • Social Responsibility:- Efficiency of public enterprise producing public and basic essential goods or service and the public enterprises set up for commercial purpose can't be measured with same indicators. 
Some other criteria are:-
  • Productivity
  • Financial ratio analysis

(Written with the purpose of helping MPA, TU students appearing Examinations) 

Sunday, June 12, 2011

Functions of Government (Only from Administrative Perspective)

There are two philosophies to describe the functions of the government in modern time. They are as follows:-
  1. Conventional View:- According to this view, government should protect the life, property of the people, should raise the revenue, should take care of defense and maintain internal peace and order. Here we do not discuss much about the conventional view.
  2. Present/Modern View: 
    1. To Fame the Rule of the Game:- Government has to set all the necessary legal provision to run the state (may be through legislative), and has to make regulating mechanism.
Other roles are:-
    1. Develop Infrastructural
    2. Provision of Collective Goods and Services
    3. Establishment of Peace and Justice
    4. Protection of Natural Resource
    5. Accessibility of Service for all
    6. Promotion of International Relation
    7. Economic Growth with Sustainability

Why Government Intervention Necessary (From the point of view of Public Administration)

Primarily, Government has to intervene when market is inefficient and not competent. Generally when market is failure, direct government interventions are necessary. Otherwise, government should promote the public welfare and work to facilitate the market. But in reality, intervention by the government is felt due to the following reasons:-
  1. Provision of Public Good: Public goods are those goods and services whose availability of one person does not affect to the availability to another. Each and every person in can use these services without respect of rich or poor, powerful or weaker. Such goods and service can't be provide by the private sector, due to its high cost or high risk or low return but these services are necessary for the daily life of the people. So, governed intervention is necessary. Such provisions include, road, means of transportation, drinking water, sanitation, electricity, education, health etc. Private sector is always profit oriented, so government is the only entity responsible to manages these activities ensuring easy accessibility of such public goods. Hence, in this point, government's intervention is required. 
  2. Control Natural Monopoly:- Government is the only entity authorized to use natural resources for producing public goods and service. Marginal cost of new product unit (of road, electricity etc), goes on decreasing., But if the responsibility of such function is given to private sector, there is always chance to create natural monopoly. They can set the prise of each unit not based upon the marginal cost but on average price. So, to control the natural monopoly, government intervention is necessary. 
  3. Externalities:-  Externalities occur when due to benefit of one party or person, another party or person may be affected. For example, when rich people use cars poor people are affected by its smoke without using car. Similarly in brick industry, cement industry or in any other area such externalities may arise. Hence, to regulate those externalities and to compensate the affected people, state interventions are necessary.
  4. Markets' Imperfect Competition:- Private sector go for the aggressive promotional activities but that may lack sustainability. Imperfect competition in the market due to the influence of some people may create profit for short term and may hinder the benefit of general people as a whole. To remove such practices and to increase competition in the market government has to intervene. 
  5. Equality and Equity:- All the citizens are liable to receive public goods and service equally, but in reality poor and weaker section are excluded from market. Government has to secure their place in the market by providing subsidies, etc. Government interventions are justified that it should make provision of state services to all the section of the society.
  6. Accountability:- It is necessary to fix that who is accountable to make provision  of essential goods and service to the people. If the responsibility is left to the market, as stated above, weaker section is excluded. So the government is the only responsible to take accountability to make provision of such goods and services to the people.
These are the only few reasons of causes of government intervention. There are many factors which demand the government intervention.

Major Determinants for Establishing Roles and Functions of Government (From the point of view of Public Administration)

Roles of the government differ form country to country. If the state is developed and economically advance, role of the government may be less but the case may not be same for the least developed country. Following are the few determinants of the role role of the government. 

  1. Forms of the Government:- Role and functions of the governments depend upon the political form of the government. The forms of the government may be Autocratic, Monarchical, Republic, Unitary or Federal, Democratic or Dictatorship etc. Roles and functions of the government are determined by the form of the government. For example, if the government is Federal roles will be less and on the contrary, if the government is Unitary, roles will be more. 
  2. Roles of the State and non-State Actors:-  Until the 20th century, there were only two actors namely, state sector and private sectors. But now in new era, there are 3 actors, namely: State, Private and Civil Society. The role of one actor depends upon the execution of role of another actor. Role of one actor depends upon success and failure of another. In the past, around 1930s, role of the Public Enterprise increased tremendously, when private sector failed relatively. But now the equation has been changed with the involvement of the civil society. Role of the government is determined by the interrelationship persisting among private sector, civil sector and government. Non-state actor may provide goods and services where government can't reach or government can provide service where private sector is failed to cover and so on. 
  3. Expectation of the People toward Government:- Role and Functions of the government also depend upon the expectation of the people. When the expectation is high, role of the government is high and vice versa. 
  4. Form of Economic System:- Role of the government depends upon the type of economy that the country has adapted. Capitalistic economy requires less efforts from the government where as socialistic economy requires higher roles. 
  5. Global Trend:- According to the global trend role of the government may be determined. Free trade, open market, no restriction determines fewer roles where as regularity global trend requires higher roles of the state. 
  6. Nature of the Government Intervention:- During different time period different government intervention have been seen in the world. Role of the government in Lassiez-faire system and in welfare state system can't be same. 

Role and Function of Government (From Public Administration Point of view)

People expect services from government from "Cradle to Grave" or from "Womb to Tomb". In any type of country either developed or least developed, people need some kind of disciplinary mechanism to run the society smoothly. This mechanism is the government. 
Defining Government
From the political dimension government is the political institution or organization consisting people and institutions that are authorized to formulate public policy and to manage public affairs. There is always game of power gaining in the political system and another name of power game is government in very narrow sense. From the point of view of social dimension, government is a social institution empowered to make decision for the benefit of the society and welfare of the people. Government is the old concept and the new form which should replace the government is the "governance". Government formulates policy, makes rules, make decisions and regulate the people on the basis of these rules and customs. 
As stated government is the political and social institution working for the welfare of the people. When people are out to disciplinary track, there is need of binding them into rules. The first aim of the government is to make society disciplined. Some basic reasons of forming government are:-
  • Greed and Oppression: People are selfish by nature. They are in the search of self happiness. They can do, if not bounded by any kind of rules, anything and can be oppressive. So, to protect these phenomenon in the society, some mechanism did exist even in the long past. Poorer need to be protected, hence concept of government emerged. 
  • Order and Tradition: - Maintaining the tradition and orders of the government, people in the past formed social groups and organizations. These groups and organization selected leader. Later on, in the long run these leaders started ruling the society and gradually formed the government.
  • Natural Right:- People are free from the birth  and need protection. They have natural right to get food, shelter etc. For the provision of these essential things, a special mechanism was felt necessary, so the concept of government emerged. 
  • Social Contract:- Society has various needs above the personal capacity and personal reach. But they have expectation in their life above their capacity. These activities can only be fulfilled by the organized institutions or by the government. To fulfill the gap of personal expectation and their gap, people go for the social contract. They assigned some of the leaders of the society to work for the fulfillment of the needs above personal reach and the selected leaders ruled the society and state forming the government. In this view government is a contract between society and institution. These contracting institution is government. Hence, government exists until it fulfills the needs of the society as per the contract and the government will be dismissed if it fails to address the needs of the society. Hence, government is the social contract. 

Thursday, June 9, 2011

Human Resource Control

The success of any organization lies on utilizing right people at the right place on right time. The performance measurement of individual person in the organization is very difficult task to be carried out. It’s pretty hard to tell whether one person is performing well or another. Likewise, it is also difficult to watch each and every activity of the individual. Every one has unique character and has unique performance. It is hard to find the unique feature of the individual.  Hence, it’s hard to find different human control mechanism for individual personality in the organization. For further see: Managing Quality and Human Resources: A Guide to Continuous Improvement
Techniques of Control
·         Planning Control: Planning is vital in any activity. Control mechanism should be incorporated in human resource planning. Proper clarification should be made in responsibilities for implementation and control, method of control in term of process includes hire, education and development and retires. Human resource can be controlled as per the need of the organization if planned tactfully. There may be ad-hoc decision or binding rules or law to guide the control mechanism. There may not be such rules and leader or managers may have to control by there leadership skill or by their commanding capacity. It one has best system to hire or recruit the staff, control of human resource will be easier and vise versa. Further study seeCulture and accountability in organizations: Variations in forms of social control across cultures [An article from: Human Resource Management Review
·     Performance Management System: Similarly, another importance factor is existence of performance management system in the organization. Reward and punishment is the another best practice to control human resource. But this can be better option only when performance measuring mechanism is impartial and fair.
·         Industrial Bargaining: Employee relationship, industrial bargaining and informal relationship between employees and managers can play vital role in human resource control through mutual understanding and shared goals.
·         Chain of Command and Setting Reporting Channels: Establishing proper reporting channels and procedure within the organization is the most widely used method of human resource control. Regular briefing, circulation and daily reporting system can be effective channel in a small organization.
·        Goal setting: Goal setting for the organization and for individual is another tool to control human resource and get optimum return from the employees. Organization has to help individual achieve their organizational goals and consequently invisible relationship will help organization to control human resource.
·         Managing Line Business Separately: Organization has to do various line functions for which different type of people are working. Single mechanism to control human resource in the organization may not be effective, so different mechanisms are required. Organization has to apply different control mechanism for the people working in production need different mechanism for the people working in sales.
·         Increasing attachment and Loyalty:  Employees participation in decision making and value sharing helps increasing attachment and loyalty.
·         Decentralization and devolution of power: Responsibility sharing and power devolution help line agencies feel that they are independent to act as per the need of function.
·         Developing Indicator:  Organization must develop some key indicators which can facilitate controlling human resources in the organization. This will help organization measure the result having the clear view of what is going to happen in organization and how it will steam. Such indicators may be reward, punishment etc.  
Some key issues in Human resource control
  • Commitment versus Control: In Present days, for addressing human welfare and human right issue, emphasis is given to the need to move from a “control strategy” to a “commitment strategy”, which increases attachment and loyalty by such means as developing shared goals and reducing the tightness of management control. (Walton 1985) The concept of commitment is another defining characteristic of human resource control.
  • Freedom versus Control: line managers want the freedom to get things done in their own way, interpreting company policies to meet their needs. The thrust for devolution of responsibility for the betterment of the organization encourages such feelings to bust the moral. Issues come with the concern of proper degree of compliance to job and working environment. There is low level of need of control mechanism and low chances of conflict in the organization when line managers and employees are provide with the higher responsibility and authority. There is high chance of conflict when authority is used rigidly. For further see: Health Manpower Planning 4: Methods and Strategies for the Maintenance of Standards and for Cost Control (v. 4)
  • Facilitation versus Control: Industrial bargaining and individual attachment are related to terms and conditions such as hours of work, holidays and employee benefits. The provision of better incentive system will defiantly increase attachment of the employees to the organization. Higher the facilitation decreases the need of rigid control mechanism. Lack of commitment by line managers to performing their roles and achieving the right balance creates havoc. For further study see: Total Quality Management in Human Service Organizations (SAGE Human Services Guides)

Strategic Management: Evolution and Process

Used in the Second World War widely
·        1950s- Private sector developed concept of earning more profit by using military strategy against their enemies in the market, called 'Business financial Budget'
·        1060s- long range planning, business is a continuous activity
o   long
o   based upon own resources (analysis of internal factors only)
·        1970s- Strategic planning
o   analysis of external factors also
o   analysis of internal factors
o   Business strategy planning
o   corporate strategy planning
·        1980s- Strategic Management
o   Planning
o   Implementation
o   Monitoring and
o   Evaluation
·        Like war, businesses are also war of the product with w4eanpons of quality, price, competitiveness etc
·        1990s- Public sector
o   Public sector considered uneducation, unemployment, poverty etc. as its enemies and to fight against these social enemies, public sector adopted strategic management like that of military who used strategy against their enemies.
·        Thought of military generals came developing through private sector and finally in public sector

What is Strategic Management?
o   SM is a set of decisions and actions to match between the organizational environment with the strategy, structure and process of organization that determines the long range performance of the organization.
o   systematic analysis of future challenges of the organization
o   Base of future is always present and past
o   systematic analysis of pivotal issues and concerns
o   the comprehensive analysis of the organization capacity  to address
Features of SM
o   Planned evolution (making balance between pure plan and gradualism pragmatically)
o   Specific attitude-With optimism (Positive attitudes)
o   Strategic thinking and actions to revel conscious efforts(knowing result in advance)
o   Collective learning (among related/Stockholders)
o   Creations and retention of factors that make success.

Strategic Management in Public Sector 
o   Felt after 1990s when private sector government success form using SM in the organization.
o   Poverty, uneducation, terrorism etc are main thing to fight with
o   Public sector was considered as "under Performed Sector" and to win public confidence, public sector adopted SM
Why SM in Public Sector
o   Public Sector as Underperformed sector
o   To become pro-active: Routine job, inertia, public sector was considered alwya reactive, to overcome this deficiency public sector adopted SM, also public sector is ruled based job, routine job
o   To change the perspective: Shifty form short term perspective to long term perspective, nation is not only of one generation, for building basis for next generation, hence long term perspective is needed.  
o   To change approach: Incremental model or gradualism couldn't change the public sector; hence approach should be adoptive matching with change of society.
o   Role of the public sector: Public sector is normally considered as 'followers of the order/directives' and it does not optimize the resources; to change this concept SM is adopted in Public sector.
Process of SM
1.      Clarify on jurisdiction and Mandate
2.      Develop the Vision
a.      what to become
b.      Desired/idealistic situation or destination
3.      Develop the mission
a.      why do we exist
b.      activities / for whom / which values
4.      Evaluate the external and internal situation ( Environmental scanning)
a.      
SWOT Analysis
                                                                                      i.      Strength
                                                                                     ii.      Weakness 
                                                                                  iii.      Opportunities 
                                                                                   iv.      Threats 
b.      PESTLE Analysis
                                                                                      i.      Political
                                                                                    ii.      Economical
                                                                                  iii.      Social
                                                                                   iv.      Technological
                                                                                     v.      Legal
                                                                                   vi.      Ecological
5.      Develop strategies accordingly
6.      Formulate the goals and objectives
7.      Implementation
a.      developing action plan ( activities, indicator, resources, responsible person)
b.      Institution for implementation
c.       Resources
d.      Authority
e.      Leadership
f.        Management
8.      Monitoring and Evaluation
a.      Monitoring: regular/ continuous activity throughout the implementation
b.      Evaluation:
                                                                                      i.      Mid-term evaluation
                                                                                    ii.      Interim evaluation
                                                                                  iii.      Post evaluation

Ethics Management in Public Administration

Ethics management in public sector includes managing activities of public administration through public service values, norms, standards. These values, norms and standard are often described as code of conduct and policies formulated to regulate behaviors and decisions of public officials or authorities.
In general,
·         Public services should be value based but not interest based,
·         Obeying and complying laws is not only the concern but application of values in service delivery in optimum level in important,
·         Ethics teaches to differentiate what is good and what is bad; what is right and what is wrong.
Theories supporting ethics management
1.    Constitutional Theory (Regime Theory)
Main concern of this theory is:
a.    Ethics in optimum level is possible only in freedom i.e. liberty. Free and  fair political setting,  expression of views is possible only in condition of rule of law,
b.    How the constitution grantees the freedom of people is basic foundation of ethics,
2.    Citizenship Theory:
Main concern of this theory is:
a.    Citizenship is the symbol or certificate of ownership of state,
b.    Owner of citizenship is the authority to question,
c.    People or citizens are the persons to decide right and wrong but not the public officials who decide on behave of citizens.

3.    Public interest Theory

Main concern of this theory is:
a.    Anything done on the favor of public interest is ethical, if it satisfies want of citizens,
b.    There are certain universal values despite of any religion, culture, law, tradition which are public choice,
c.    State should be like that where expression of choice is respected.

Need of Ethics in Public Sector:
·         Administration or management is based on check and balance,
·         When there was dichotomy between politics and administration , administration was checked and balanced by politics,
1.    The demise of dichotomy between politics and administration i.e. check and balance by ethics,
2.    Decision making practices (rationality and bounded rationality): deciding with limited information then bounded ratinal8ty evolves, where public interest may disappeared, i.e. whole essence of public interest may be minimized
3.    Optimizing resources for larger sector of society then pleasing few,
4.    Peoples' awareness
a.    Whether the people are neutral, independent or not,
b.    To establish ethical state
5.    Public officials are to play the role and stewardship
a.    The general role of public officials is to stewardship
b.    But debate as steward of servant
c.    However steward the right of general public
d.    Their role should move form service to steward
6.    Discretionary  power  
a.    Rules, regulations cannot include all the daily life happenings so authorize to decide him on the spot.
b.    Balancing these authority needs ethics,
c.    As public service is permanent, government, so the political cadres on politics i.e. permanent politicians > these two aspects are highly important in balancing state system
7.    Decentralization
a.    Proper use of resources
b.    from of thought
8.    Multinational Setting
a.    International interest of ethical administration
b.    the mostly focus  is on accountability of people
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