Efficiency Models in the Public Sector

One of the biggest trends in the developing countries in this decade is how to realize the good government concept. This concept contains four major aspects that should be improved: accountability, transparency, participation, and law enforcement. The first aspect of the good governance can be reached by increasing efficiency of the public sector. Therefore, efficiency is a keyword to improve government’s performance. In general, there are four models that are often be implemented to push the efficiency of public sector.

First of all, the easiest way to make a better efficiency is by reducing the employee. As we all know, the number of civil servant in Indonesia is around 4 million nowadays. Unfortunately, this situation never makes us proud; otherwise it shows a phenomenon that our government has a serious problem especially in spending budget for employee’s salary. That’s why, parts of them are really important to be reduced gradually. In this case, the ideal number of civil servant is around 2.2 million, based on assumption that every civil servant appropriately serves 100 peoples.

The next crucial point is determining the employees who will be resolve d. Here, we need at least three qualifications such as grade of education, employee’s age, and personnel status. Considering those, the best employees we need are peoples who well educated (minimum S1), in productive ages (25 – 50 years old), and permanent employee (not contract worker). As a result, we could determine a group of employee who will get early pension. The new composition of public servant will lead to achieving some advantages such as increasing effectiveness of work distribution and efficiency of budget, and making the structure of organization more slightly and energize. Otherwise, there are some disadvantages such as raising unemployment, requiring a big fund as compensation, and potentially emerging a conflict.

Secondly, reframing the structure of organization is also a strategic policy to avoid inefficiency. Nowadays, bureaucracy hierarchical structure called “echelon” is dividing into ten stages starts from Va and Vb (the lowest) until Ia and Ib (the highest). This condition, that similar to “pyramids building”, has some basic weaknesses such as making the coordination among them more difficult because of extending the span of control. Moreover, the amount of structural position will construct a structural orientation, not functional orientation, among the employees. Therefore, in order to make the organization more flat and flexible, we do need to banish the middle level and below. Echelon IV and V would not be longer establish, while echelon III would be more restricted. At the same time, functional position should be promoted. Actually, we have two more methods of reframing the structure, namely combining or integrating two or more units into one, and eliminating a certain unit or more. The main consideration to apply these methods is performance that they have showed in the past and probability to achieve a better performance in the future.

The third model that recently has becomes a public concern is making the procedure and work mechanism more strictly. Under the New Order era, people scarcely have an access to public policy formulation and implementation. There was no information disclosure, while supervisory agents had done nothing against abuse of power among the government bodies. As a result, inefficiency increased dramatically. As Professor Sumitro Djojohadikusumo had ever mentioned, the leakage of our development fund was more than 30% every year. Recently, in the reform era, public awareness is getting better. Consequently, government institutions are demanded to show the best performance by using their management resources as efficient as possible and working as effective as possible.

To accommodate the public demands, the President issued instruction number 7/1999 about AKIP / Akuntabilitas Kinerja Instansi Pemerintah (similar with GPRA / Government Performance Result Act in US). Based on this regulation, government institutions have to make a strategic planning to improve people’s opportunity to control the government directly and easily. On the smaller scale of activities or units, procedure rearrangement should also be applied. In this case, project leaders have to make monthly plan, not three monthly as usual. If they aren’t able to realize the plan, the budget can’t be used anymore. In other words, the procedure and work mechanism becomes stricter and harder.

Finally, the most difficult effort to increase the efficiency is by decreasing government’s role and encouraging private sector involvement. The success of implementing this model depends not only on the government policy, but also on the ability and readiness of the private sector. Unfortunately, the glory of private sector in Indonesia hasn’t been built by its own capacity. They had grown by receiving much government facilities. However, decreasing government’s role is a global phenomenon in recent years. In addition, people trust to the government has largely disappeared. Therefore, there is no choice but enlarging the role of private sector in many activities of public fields. Here, there are four methods of encouraging private sector: privatisation, partnership, contracting out, and economizing the management resource usage. Of course, it is impossible to give all kind of services or activities to the private. Usually they just interested in certain services that potentially make some profit. The most important thing is that the policy will create three types of fairly competition: public and public, public and private, private and private. In other words, people participation must be increased while governments interfere is expected to decrease significantly.

By doing these four models, the public sector will becomes more competitive and accountable. At the same time, the good governance concept is going to be realized in our government’s bodies. Surely, it will lead to make a triangulation relation between the government / public sector, the private sector and the civil society better and more harmonize. The ultimate goal is the improvement of public services and public wealth.