Laos: Reforming Public Administration For The Market


Professor Mark Turner

When the Lao government decided to abandon central planning and embrace the market in 1986 they did not pay much attention to public administration. Despite early growth associated with opening up the economy under the New Economic Mechanism (NEM) it soon became apparent that the system of public administration was inadequate to cope with the new demands of a market economy. Thus, at the Fifth Party Congress (1991) there was agreement that administrative renewal should be a major priority of government. The bureaucracy needed reordering, and the new Constitution confirmed it. Everybody agreed that there was much to be done but not much to do it with. Also, the approach adopted for public administration has been in line with that used for the NEM - Koi koi bai (carefully, carefully go forward).

Early successes included downsizing the public service, fiscal centralization and the restructuring of central agencies. The public service was cut from 95,000 to its current size of approximately 72,000. Fiscal centralization involved the reassertion of central government authority over provincial and district leaders who had acquired virtual financial autonomy under central planning and early NEM policies. Recentralization also affected national government agencies. They were restructured, awarded greater authority and allocated functions previously performed at provincial and district levels. In 1996, for the first time, an official guide to government systematically recorded the organization of government ministries.

A variety of other reforms has also taken place such as considerable work on law reform and on human resource management and development. The government has shown interest in tackling corruption, eliminating red tape, and introducing performance evaluation and management. Perhaps the most important issue at present is the law concerning the territorial organization of the state. This draft law is soon scheduled to go to the National Assembly for discussion and will formalise the arrangements between central government and lower territorial levels.

The government is supported in its public sector reforms by the UNDP. A long-term program called Governance and Public Administration Reform has been in operation since 1993 aimed at facilitating incremental changes in Lao public administration. The program's terms of reference are necessarily broad as much remains to be done, from helping to upgrade district-level management to strengthening central management capacity.

WATCHPOINT: Public administration reform will be a business of steady progress rather than overnight miracles.


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