Reasons for the Reduction of Public Servants and Its Implications Nationally and Internationally

Gartskia Mikhail

Abstract. The current global market situation forces national governments into taking all possible measures to review their expenditure budgets and reduce state costs. The maintenance of federal public servants is considered to be the heaviest burden as far as state expenditures are concerned. In recent years among experts in Russia the new perception was spread. According to it the number of public servants is greatly exaggerated and the reduction is a significant decision that will save taxpayers’ money on wages and maintenance of the apparatus of civil servants.

Keywords: Public servants, state policy, efficiency, IMF.

Introduction

The science of management has always paid a lot of attention to the term «efficiency». Benjamin Disraeli who twice served as Prime Minister of the United Kingdom was sure that there can be economy only where there is efficiency. The cornerstone of the management and public administration (which are deeply interrelated) is an answer to the question: «How to accomplish a job with a minimum expenditure of time, money and effort?».
The latest trend shows that more and more countries tackle the problem of state inefficiency through the «cuts» to the public sector with a view to reduce fiscal expenditure and increase the competitiveness of the economy. There are many reasons of such phenomena. The most significant is the fact that with a reduced bureaucracy, the government will be forced to either simplify its processes or automate them, thus making life easier for the citizens. The government will also be able to afford to pay its employees more, reducing the incentive for corruption.
The problem is that the tendency which is mentioned above has also many disadvantages and weak points. First of all one should admit that such radical measures can lead to the surge in unemployment. The opponents of the reforms point out the fact that the dismissal of millions of people will lead to the problem of lack of jobs. Thus, we face a kind of vicious circle when the solving of one problem creates another problem.
In order to find out whether there are more advantages or disadvantages of the reduction of public servants it is logical to analyse the reasons and specificities of its implication in Russia and abroad.

The reasons and specificities of the reduction of public servants in Russia

The IMF stats concerning the proportion of the officials in the working population of the country is of great scientific interest. According to it Russia comes fifth with 30% of workers employed in the public sector. And 17% of them are directly employed by the executive, legislative and judicial bodies (the civil servants or officials). Finance Minister Anton Siluanov believes that nowadays bureaucracy in Russia is over inflated even in comparison with the Soviet period. In 2016 Mr. Siluanov announced that the Government worked out a plan which is designed to downsize 4,000 public servants all around the country. The main reason which was outlined by the Minister was a budgetary economies. As the wages savings are expected to be more than 700 million rubles per month, not including the cost of maintaining the bureaucracy in the regions of Russia. But in fact reasons of such reforms seems to be more extensive and complex.
The most important thing is that one cannot deny that the technological progress reached the point when programs and robots can already do the work of about half of the 13 million people employed in the public sector. And they are much more efficient in fact. Very soon most of these employees could be replaced or fired. And officials of lower-level and mid-level, people who are afraid to take unconventional decisions and work within a given algorithm can be easily replaced by the robots. Such changes can be related to rationality and financial gains. As the «technification» and modernisation of the work flow includes one-off costs (such as the costs for the purchase of equipment and software). Unlike maintaining of the huge apparatus of public servants which includes variable costs related to the salary.
Many experts believe that the mentioned processes are now typical of all the developed countries nevertheless they have some regional peculiarities. Russia has the world’s biggest territory. Of course there can be no universal decision that will equally solve problems of the Republic of Crimea and Khabarovsk Territory. The number of federal public servants in the various subjects of the Russian Federation differs significantly. That is why the legislator should separate the regions where the maintenance of bureaucracy costs in relation to income too much (e.g. Republic of Ingushetia; Chechen Republic; Republic of Tuva) from those subjects where there is a balance (e.g. Moscow; St. Petersburg; Vladimir Region).
As can be seen from the facts mentioned above, from the point of view of economy, such measures are quite justified. But only time will tell whether the Government will be able to optimise the public service work in the regions so that the reduction of public servants is rational and just.

The reasons and specificities of the reduction of public servants abroad (in the case of Greece)

In order to analyse the foreign example of studied policy it is interesting to discuss Greece reforms (2015). EU member country since 1981 Greece faced a debt crisis in 2010. The number of public servants in Greece fell by 18% between 2009 and 2015 to just under 567,000. It was a condition of the country’s loan agreements which required cuts to the public sector to reduce fiscal expenditure and increase the competitiveness of the economy.
The changes made in the public sector (described above) have failed to increase GDP or improve competitiveness. Instead, they have created serious shortages of staff and undermined the quality of basic social services such as health, education, justice and public security.
Despite the significant reduction in the number of civil servants and their wages, the economic recession and high unemployment are still present and the competitiveness of the economy has not improved in Greece. According to government and the unions, further layoffs and spending reductions are expected overburden the economy and worsen the recession.
The Hellenic example shows that studied policy can be more harmful than productive if there are no conditions needed for the reforms in the country.

Conclusion

Many governments nowadays face the difficult task of reducing the size and improving the efficiency of an overstaffed public sector as part of a general changes with a view to increase economic growth and cut fiscal deficits. These retrenchment efforts often face considerable political and social opposition. To overcome opposition and to treat public employees who lose their jobs fairly, governments often provide severance payments to workers who leave public employment. However, problems in the design and implementation of these compensation schemes frequently reduce their efficiency and may result in the failure of the retrenchment.
Despite the consistency and logic of such reforms still there are a lot of questions concerning its application in practice.

References

Books
Aline Coudouel. Analyzing the Distributional Impact of Reforms, Vol. 2, The International Bank for Reconstruction and Development, 2006

Articles
Penny Georgiadou. «Greece: Reducing the number of public servants — latest developments». In: (June 2016)