Facing up to the difficulties of public sector reform
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For example, Shanxi, Shanghai, Zhejiang, Guangdong and Chongqing were chosen to pilot public institution pension reform in 2008. But so far none of the five cities has really pushed the policy forward. No one wants to be the first. In 2009 Guangdong tried to promote an ambitious reform of the universities. But even before implementation began, the program had met strong opposition from the teaching staff and was set aside.
Of course, it is unfair to lay all the blame on the 40 million public institution workers. People are rational "economic men". They put their own interests first. When senior engineers in public institutions find out that their retirement pensions are lower than those of ordinary officials in the administration department, they will naturally say "no" to a reform that leads to such unfair treatment. The reform of public institutions implies a parallel transformation of the government and the administrative system. The slow progress of public institution reform is a reflection of the inadequate transformation of government functions. The two processes interact and weaken each other. In order to push the reform of public institutions, we need to start with government restructuring and administrative reform.
Reform of public institution reforms is also closely related with reform of the financial system and the trade system. It involves many aspects such as personnel management, income distribution, social security, and tax policy. If even one of the above fails to function properly, others will be affected and the overall effectiveness of the reform will suffer. Therefore, public institution reform must be coordinated with other reforms, and combined with supporting measures. Policy coherence will determine the overall effectiveness of the reform.
Now that reform of public institutions is under way, we must not stop halfway. But in view of the vast size and the complexity of public institutions, we should plan fully for the difficulties ahead. The reform strategy should be flexible and, in particular, should fully respect the wishes of those most affected. In this way we can protect the interests of the majority.
(This article was first published in Chinese and translated by Li Huiru)
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