Journal Issue

Bridging the “Management Skills Gap”

International Monetary Fund. External Relations Dept.
Published Date:
January 1990
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The World Bank’s Economic Development Institute increasingly works with developing nations to build up mid-career training capacity

Many developing countries have recently been faced with the need to adjust their economies and, in doing so, to implement rigorous macroeconomic policies. The will is certainly there, but governments are submerged under their daily tasks, often with inadequate administrative tools at their disposal. Moreover, many of these countries are still young, painfully learning the art of government and administration, not to mention managing development.

If overall macroeconomic management is to improve, the main instruments of economic policy—in the fiscal, financial, monetary, and trade spheres—must be better used. But for that to happen, economic policymakers and national economic managers need to deal effectively with policy analysis and implementation, as well as with planning and budgeting. They have to acquire analytical, diagnostic, and negotiation skills. They have to learn how to sell new policies to the public at large. They need to know how to manage behavioral and institutional changes. And they must be able to shape the institutional framework necessary to review and analyze policy directions on a regular basis.

In short, developing nations must achieve a much greater degree of dexterity in responding to internal and external shocks, such as that demonstrated frequently by countries such as the Republic of Korea and Japan. Such an achievement, however, will not come easily. Korea and Japan have benefited from a long and careful study of the matter. They have made a point of drawing from others the most relevant and useful lessons, keeping in mind their own traditions, culture, and environment. They have selectively used foreign technical assistance, without having to face the intense competition among donors now prevalent in many other countries, particularly those in Africa. Further, they realized very early the importance of in-service and overseas training, insisting on being trained in teams, so that they could best select know-how and experience and build a strong critical mass capable of replicating the training.

The critical issue thus becomes how developing countries can emulate these achievements, especially at a time when the world economy is not only becoming more complex and interdependent, but the effectiveness of technical assistance is being questioned in many forums. After spending large sums of money on technical expertise and support for years, many developing countries remain institutionally weak and far from being “self reliant.” Indeed, a very serious “management skills gap” persists.

For over 30 years, the Economic Development Institute has served as a “staff college,” providing mid-career training for senior development officials of countries borrowing from the Bank. In recent years, it has tried to help bridge the gap by trying new approaches—albeit in a modest way due to the small size of its resources relative to the magnitude of the problems—aimed at strengthening macroeconomic and sectoral management capacities. The large demand for mid-career training raises the issue of the development of training capacity in developing countries who do not wish to rely anymore on foreign technical assistance. But for this training to be worthwhile, it must be based on a careful identification of situations that call for training; on an analysis of training needs to identify the gaps in knowledge, skills, and attitudes that need to be filled; and on institution building.

Responding to training needs

Based on EDI’s efforts, and those of its clients and partners, to date, four key lessons on approaches to mid-career training can be drawn.

Using the general education system. It is highly desirable that basic notions and skills be imparted to future government officials (and for that matter, to future private sector managers), as part of their overall secondary and university education. If the fundamental principles of economics and management, for example, were to be conveyed to graduate students in a practical, down-to-earth, and concrete manner, in-service training could concentrate on what is supposed to be its primary function—refresher training to keep abreast of recent developments in the sector—rather than the remedial function it often must fulfill.

Streamlining government. Many countries, particularly in Sub-Saharan Africa and Asia, still must cope with the combined impact of inappropriate secondary and higher education and poorly managed administrative and economic structures. Increasingly, however, these countries are questioning the role of the State, especially the central part of the government machinery. EDI assists member countries and their training institutions in identifying ways and means through training to better implement necessary reforms in the civil service and the organization of the government. Some responsibilities must be decentralized to avoid overburdening the central government, and greater reliance should be placed on the nongovernmental sector—through community participation, a greater role for the informal sector, and increased cooperation with nongovernmental organizations (NGOs)—to help plan development projects, implement them, and provide services. All of these reforms require a strengthening of basic managerial skills.

Exchanging country experience. Rather than only working directly with individual countries, multilateral institutions should provide opportunities for countries wrestling with complex economic and political problems to share their experiences. EDI serves as the medium in this regard, with a view to raising awareness and stimulating discussions among peers about the experiences of other countries in implementing new policies. Indeed, this is the principal objective of its one-week seminar for senior policymakers and its follow-up two-week seminar for advisors and senior executives on economic and sector management. Optimal solutions are presented, but the focus is on alternatives tried by countries with similar economic and political backgrounds.

Officials are anxious to understand how macroeconomic reforms and sectoral restructuring can be successfully implemented, and at what cost. In EDI’s Sub-Saharan Africa seminars on the political economy and sus-tainability of structural adjustment programs, for example, emphasis has been placed on their “ownership” (country involvement at the design stage), their careful formulation, and their institutional dimensions, including a realistic schedule for implementation (allowing time to properly explain the new policies and measures to the people).

No development activity can be implemented or sustained without skilled managers and appropriate institutions within a country.

Decisionmakers and their advisors typically stress that improved development management includes the strengthening, expansion, and adaptation of not only the institutions usually associated with the government machinery—ministries, key control agencies, public enterprises, and decentralized government units—but also the judicial and political party systems, NGOs, professional associations, private enterprises, and chambers of commerce. There is a strong linkage between the quality of political institutions and processes and the efficiency and effectiveness of institutions established to manage development programs and projects in the public sector. In other words, there is a need in all sectors—public and private—for more professionalism and a better sense of accountability.

Developing managerial skills. Training must not only be directed at senior staff, but must occur at the middle level of government, which is a critical element in day-to-day implementation of development programs. There is indeed a strong demand for training, both in national or sectoral economic management; such training generally requires more than a week or two. The two types of management, of course, work hand-in-hand, as one cannot, for example, isolate agricultural development and policy matters from the macroeconomic and overall socio-political aspects, structures, and policies of the countries requesting assistance. In addition, more specialized issues in public and private sector management take a high priority in almost every region of the world. Rural financial markets need a new style of management when the shackles of past, highly regulated systems are removed (the same applies to a wide range of marketing and agribusiness activities). Urban financial management calls for a fair amount of training in municipal budgeting and the analysis of municipality creditworthiness. Moreover, the rapid emergence of new technology makes it imperative that the use of sophisticated computer software be mastered by managers at all levels.

Building capacity for training

No development activity can be implemented or sustained without skilled managers and appropriate institutions within a country. Clearly, a systematic effort must be made to build up training capacity. But how should this be done? Many developing countries have established their own mid-career training institutions, with some in Asia and Latin America acquiring a relatively good reputation for offering programs that respond to some of the macroeconomic and sectoral managerial needs mentioned above. However, few countries are truly able to organize on their own high quality courses and seminars on issues of political economy and policy analysis and implementation. They therefore require technical assistance in strengthening their capacity in these areas.

Broadly speaking, strengthening local institutions in developing countries requires systematic programs of training of trainers and workshops to develop the preparation and dissemination of training materials. Along with the efforts of multilateral and bilateral aid agencies, and at times in cooperation with them, the EDI is extending advice and teaching support to a selected group of training institutions. To this end, EDI has entered into partnerships with over 45 institutions in the developing world, with a special emphasis on those operating in Sub-Saharan Africa, the region where EDI currently allocates about half of its resources. EDI has also tried to increase the synergy among training institutions by supporting associations, or networks of training institutions in a particular region, in the hope that they would organize joint activities or tighten their links through exchanges of faculty and training materials, and the pooling of resources to offer consulting services. All this has been done with the view not only to build up training capacity but also to create the tools that may, in the long run, help developing countries reduce reliance on outside technical assistance.

An example of such an integrated approach to institutional development is a program called UNEDIL, the name being derived from the supporting institutions. It is financed by the United Nations Development Program, with the EDI as the executing agency, supported by the International Labor Organization. Its purpose is to provide funding and technical assistance, with a view to strengthening a group of sixteen training institutions in 20 countries of Sub-Saharan francophone and anglophone Africa. The program was conceived following close consultation with these institutions—the clients of the program—with a view to developing solid networks among them, thereby placing them in a position to multiply the benefits of the program to other institutions in their network at the regional and national levels.

Most of the training institutions involved—although poor in funding and human resources—realize that they should be playing a more important role in the management of development. But they feel their role is marginalized in their respective countries, because of their (1) lack of visibility and autonomy in managing their own affairs (e. g., continuing reliance on donors and governments); (2) lack of sophistication in reaching their potential clients (e.g., poor marketing, needs assessment, public relations, and client development skills and processes); (3) modest intervention skills (e.g., in tailor-made training, consulting, and research); and (4) modest knowledge and information about the development process and management issues. As a result, the UNEDIL program takes a multi-dimensional approach, with all activities planned, designed, and implemented by working groups made up of African practitioners. A catalytic role is played by two UNEDIL field offices—one for francophone African institutions, and the other for anglo-phone institutions.

Promising signs

Evaluating the impact of mid-career training programs raises three broad questions. First, have the professional capacities of officials who have participated in these programs been enhanced and has their performance as decisionmakers, managers, or advisors improved? Second, have the combined sources of learning and countries’ exchanges of experiences had a real impact on the overall administrative and managerial performance of a particular ministry or agency? Third, what was the effect of any improvement or increase in the intellectual and technical capacity of their agencies, and has the combination of these training activities made a useful contribution to the countries’ capacity for thinking and acting on their development problems?

EDI’s own impact evaluation relies in most instances on interviews with former participants and senior officials who have dealt with these individuals. But the relationship between participation in EDI’s activities and action in a country on an issue covered in a seminar has to be treated cautiously. EDI’s actions alone will seldom cause countries and agencies to change procedures or policies, but a combination of EDI’s actions can contribute important elements to the process of change. Such combined activities will in turn trigger longer-term development efforts, such as the strengthening of training capacity, including applied policy research and the production of good training materials.

This said, EDI is already seeing some encouraging results. First, many countries have shown great interest and have contributed effectively in exchanges of experiences, realizing also the need to pursue these discussions in expanded and longer training activities. EDI policy and economic and sector management seminars have been recognized as valuable forums to stimulate reflections on alternative ways to cope with economic difficulties. In addition, they have helped improve the capacity of governments to conduct a dialogue with international financial agencies and spread the understanding that makes possible effective implementation of agreed reforms.

Without claiming a direct causal relationship, evaluations of EDI activities have noted a good number of cases that traced a fairly direct link between seminar discussions and subsequent government actions. In some respects, EDI can be said to assist countries in their efforts to “internalize” the process of preparing their own economic and sectoral adjustment programs. Further, EDI’s three-to four-week economic management seminars—especially those on adjustment—have demonstrated an increasing understanding among participants of complex issues and greater acquisition of skills in policy analysis and sector management. But much more needs to be done. Policy measures recommended under adjustment require serious negotiation skills to reach some form of consensus and raise all sorts of implementation issues. A better appreciation of these issues would demand more intensive preparation and development of indigenous training resources. This is one of EDI’s goals under its new strategic plan for 1990-94.

There are also good reasons to be satisfied with the impact of capacity building for in-service training, particularly of more skill-oriented courses for mid-level officials. China shines among many others in replicating courses on its own, disseminating training materials translated into Chinese and, more important, applying the lessons learned in the areas of sectoral management (i.e., railways, highways, agricultural credit, and development finance). Cote d’lvoire also stands out for its efforts to improve municipal resource mobilization through improvements in the collection of municipal fees, following an EDI seminar on this topic.

The Agricultural Management Training for Africa program (AMTA) has clearly had an impact. This program—initiated in 1984 by the International Fund for Agricultural Development, the Organization of African Unity, and the African Development Bank, with the cooperation of EDI—has helped improve the performance of agricultural projects financed by these and other agencies. As a result, the skills of project management teams have been upgraded in most of the countries in Africa.

Another success story in institutional development is EDI’s cooperation with the transport and communication divisions of the Eastern and Southern African Management Institute (ESAMI). This cooperation led to the strengthening of ESAMI in the field of training materials development, and the launching of new courses in international project procurement and contract negotiations, and in railway management—all are now given regularly by the Institute without EDI’s support. A similar success was achieved with Xian Highways Institute in China, which, following joint courses on highway planning with EDI, is now delivering on its own the same course.

Certainly, progress has been made. But in the decade ahead, developing countries need to increase their efforts—with the support of foreign technical assistance and their own training institutions—to fill the management gaps in macroeconomic and sectoral management skills, especially in policy analysis and implementation. This should be one of the major goals of any long-term strategic planning. Development management, after all, is the management of people, who are the main agents of development and change. Aid and development will only be efficient if the education and the training of these agents receives the entire commitment of the governments that are responsible for managing them and stand to benefit.

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