Civil-service reform was introduced in Malawi in 1995 in a very neat policy docu-ment, the Chatsika Report (1995). It was instituted against the background of a de-mand for more pay by the civil service. However, its remit was much broader: to advise on a systematic policy with respect to civil-service remuneration and there-fore the role of the civil service in society.
Competition was the central principle adopted by the Commission, with the supply and demand of scarce skills being a primary concern. High rates of pay for some
professionals – doctors, lawyers, engineers, architects, quantity surveyors, ac-countants, auditors and traffic controllers – were therefore deemed necessary to stem the drain to private and parastatal sectors, or to other countries (Chatsika Report 1995: 8, 23, 41). There were also major discrepancies in pay between these sectors in the senior managerial ranks. The salary of the top civil servant, the Secre-tary to the President and Cabinet, was only one tenth that of the highest paid man-ager in the parastatal sector. Nor did top civil servants enjoy fringe benefits such as free housing, a company car and payment by their employer of water, electricity and telephone bills and city rates, which their colleagues in other sectors enjoyed (Chat-sika Report 1995: 10, 11, 12).
Salary differentials providing incentives for competitive performance were also be-ing eroded within the civil service, with salaries over time becombe-ing more and more compressed. It followed that ‘Little attention has been paid to the need to use salary differentials as a positive tool to motivate officers to work hard’ (Chatsika Report 1995: 6). The competitive context made this an even more pressing issue: ‘Unlike in the parastatal and private sectors, salaries between grades are too close in the gov-ernment’ (Chatsika Report 1995: 8).
This seemingly neat reasoning assumes a very simplistic view of motivation and of the working of markets. The Chatsika Report sees great problems in relation to mo-tivation: ‘Many people in the civil service report late for duties, knock off early, stand idle, do other tasks’ (Chatsika Report 1995: 9). However, it assumed a simple linear relationship between reducing the size of the civil service, increasing remuneration and improving performance. This is at odds with the considerable literature on or-ganisation theory. Studies of oror-ganisational behaviour have argued forcefully that, when a certain number of basic needs are satisfied, there are factors other than money which stimulate people to perform well (Herzberg 1966; Likert 1961; Maslow 1970). The possibility that the motivation to work in the public sector may differ from the motivation to work in the private sector is not entertained either. Therkild-sen and Tidemand (2007; 47-56) found in a wide-ranging survey among Tanzanian and Ugandan civil servants also that the motivation of civil servants is much more complicated than a simple linear relation to remuneration would suggest. Motiva-tion in the private sector may also be more problematic than the report assumed.
The private sector in Malawi indeed pays high salaries for scarce skills – for exam-ple, financial controllers – but this does not deter such employees from spending considerable time on their own private concerns. The problem of accepting organi-sational discipline may occur more widely than in the public sector alone.
The Chatsika Report assumed a homogeneous labour market and therefore a per-fect mobility of skills. However, a look at differentials between different branches of industry, including within the private sector, suggests that Malawian labour markets are segmented. One stark comparison of inequality: the lowest average monthly earnings in 1995 were found to be in agriculture, forestry and fishing (MK 67.87), while the highest monthly earnings were obtained in financing, insurance and busi-ness services (MK 1,160.40) (GOM, various dates). Not only may markets be seg-mented, but it is also questionable whether one should stick to competitive rates on other grounds. The comparison with private enterprise makes the international mar-ket in skills the reference point: this is a highly competitive labour marmar-ket to which few Malawians would gain entry. Comparison with rates of civil-service pay in other poor countries would have resulted in different judgements. For example, in com-parison with the remuneration of high-level civil servants in a number of poor coun-tries studied by Hirschmann (1999: 297) – Cambodia, Mongolia, Tanzania and Mo-zambique – the Malawian civil service is well paid.
This neat reasoning also makes assumptions with respect to the differences be-tween higher and lower levels of staff. Reducing the size of the service is a major theme throughout the report: ‘Government should maintain a small, but efficient civil service’ (Chatsika Report 1995: 9). This reduction should, however, take place first among the junior staff. The civil service was most bloated among the huge numbers of lower employees. They are considered superfluous, and this entails the judgement that they are not working. The subtext here puts a low value on the peo-ple on the frontline as compared to those in functions removed from it. Senior ranks could view themselves as included by nature in the performance-driven, small, and efficient civil service. By contrast, there is no competitive reasoning with respect to the lower staff: they are supposed to be freely available at almost any price. Accord-ing to the Chatsika report, however, their remuneration needs to be raised as well.
At this point the Commission suspended considerations of competitiveness and switched to considering different motivations for high performance. ‘The current levels of salaries – especially for the lowest grades – are not adequate when the cost of living is concerned’ (Chatsika Report 1995: 8). If people in the lowest ranks could not subsist reasonably on their salaries, then they could not be expected to be motivated to work. This could be funded out of savings made through right-sizing.
It was therefore proposed that the salaries of the lowest grades should be doubled.
‘The commission is convinced that once the civil service is trimmed to the right size, government can afford to pay the cost of living related salaries to the lowest paid’
(Chatsika Report 1995: 43). However, according to the report, the wage bill for the lower level employees – where most of the cutting was supposed to be done – does
not add up to more than 10% of the total expenditure on wages and salaries. The policy’s bias towards the higher echelons led, as can be expected, to elite capture (Durevall and Erlandsson 2005). However, when we consider output, the lower ranks seem to be crucial. Crook and Ayee (2006) demonstrated in a Ghanaian case study that effective public-sector reform is dependent upon the lower and middle eche-lons in the organisation:
In much of the discussion on moving to an ‘enabling’ state, the necessity for public organisational change, particularly in the capacity of basic or front-line officials to adapt to regulatory and more client-responsive ro-les, has been relatively neglected. (Crook and Ayee 2006: 20)
One logical question is avoided in the Chatsika Report: what should the government do? It is reasonable to ask how many people are needed to carry out particular tasks. The report recommends a study to rationalize the Malawi government in or-der to realize savings. However, there are wior-der questions, such as whether the gov-ernment should provide education and health as part of basic needs in society, or whether it should be proactive in creating infrastructure to attract investment.
Given the unrealistic foundations of the exercise, civil-service reform was bound to fail in Malawi. These assumptions were fairly common elsewhere. More thought is needed regarding motivation, the nature of labour markets, the actual output of gov-ernment workers and the actual tasks of govgov-ernment. What is needed is a revival of approaches stemming from social and political theory that is grounded in a philo-sophical approach.