The 9th International Anti-Corruption Conference
ADMINISTRATIVE MODERNISATION AND ETHICS PROGRAMS
Claudio Orrego L.
Inter-Ministerial Committee for Modernising Public Management
Republic of Chile
I. Conceptual Framework: The New Meaning of Ethics in the Public Sector
The issue of ethics in the Public Service has been gaining increased
concern among citizens, the media, politicians and policy-makers. The
strengthening of public confidence in government and public
institutions constitutes a necessary condition for both effective
democratic governance and a healthy economic development, as well as
for the preserving people's faith in the democratic system.
Regardless of the many dimensions of public ethics, every day is more
clear that a strategy to foster it can not be limited to fight
corruption, theft, robbery, favouritism and clientelism within the
public sector. Indeed, public ethics has become an issue beyond these
'obvious' tasks. In other words, public ethics goes far beyond merely
"not to robber" and "behaving according the law".
It includes some guiding principles about the relationships between public servants and
citizens, the pre-eminence of public interest over private interests,
and the necessary responsibility, integrity, probity and
accountability that the former must observe toward citizens and users
in performing their duties.
Is in this sense that public ethics today involves also the issues of
efficiency and efficacy in the use of public resources. Every time the
scarce public resources are misspent, key principles of public service
ethics are being violated. On the contrary, every time the use of
public resources is being optimised, improving society's welfare and
the quality of life of the poor, the principle of public service as a
vocation based on ethical grounds is being reinforced. Particularly in
poor countries, efficiency in the use of public resources constitutes
an ethical imperative.
But also, public ethics constitutes a condition for improving the
service and responsiveness that, in a democratic system, the
government and public officials are called for towards citizens. In
fact, public servants guided by public service principles and concerns
are key factors for enhancing government's efficiency and
Credibility and trust are increasingly recognised as two crucial
factors for enhancing governance and cooperation, reducing the room
for opportunistic behaviour and the consequent waste of society's
|Therefore, on the one hand public ethics demands improving public
sector's efficiency and effectiveness and, while on the other hand, a
certain level of public ethics constitutes a necessary condition for
improving the responsiveness, efficiency and effectiveness of the
government in order to perform better its roles. |
Of the many areas of public management modernisation,fostering
transparency constitutes a key instrument no only to improve
performance in the public sector, but also to strengthen public ethics
and fight corruption. Transparency implies not only guaranteeing
citizens and the media free access to information regarding public
sector's activities, budget and finance management, but also to
evaluate performance according to objective criteria and indicators,
making public the results of these assessments. This involves defining
and making explicit the objectives, goals, targets and commitments of
the government and its different agencies. This practice allows public
servants to direct their efforts towards specific goals, as well as it
makes possible for both public authorities and citizens to monitor and
evaluate the relative performance and accomplishment of the government
and public agencies and officials.
Likewise, clear, simply, easy-to-understand rules and procedures
constitute another tools for improving public ethics and credibility,
reducing the room for discretionary administrative behaviour,
favoritism, clientelistic and discriminatory practices, bribery and
corruption, reducing the costs associated to influence and rent-
seeking activities. Moreover, the disabling of discretionary
authority, replacing it by general, simply and clear rules and
procedures, also contributes to strengthen and make real the ethical
principle of equality and non-discrimination that public servants are
due to deserve to citizens in a democratic system.
Finally, public ethics dignifies public service and officials,
reinforcing further the values and principles of probity, integrity,
responsibility and responsiveness that must guide their behaviour.
This new meaning of public ethics thus requires certain institutional
arrangements and devices that create incentives that will encourage
and foster public service's integrity, honesty, efficiency and
effectiveness. A democratic political system constitutes a basic
precondition. But, although sine-qua-non, it is not the sole
condition. We need also a Public Service endowed with some
administrative and technical attributes and capabilities for
responding to the new challenges arising from openness, globalisation,
informatisation, privatisation, the greater scope for market forces
and private initiative, increasing competition, persistent
inequalities, and the new demands and concerns emerging from civil
society and ordinary citizens.
In many cases, the strengthening of public ethics in this new setting
entails administrative reforms within the government. "Administrative
modernisation" is thus one strategy for embracing this challenge, as a
part of an ethics program.
II. Public Ethics and the Turn to Democracy in Chile
Even though the military regime carried out several economic reforms
in Chile, liberalising markets, privatising former public enterprises,
and downsizing the public sector, Public Service's modernisation was a
After the return to democracy in 1990, democratically elected
governments inherited a public sector badly prepared to respond to
citizens' demands regarding Public Service's efficiency, quality,
responsiveness, public ethics, and accountability.
For almost seventeen years, public officials were used to behaving
mainly on the basis of command, control, submissiveness and fear,
orienting their work towards satisfying general bureaucratic norms and
directions fixed by their centrally and politically appointed
authorities, rather than according to objective performance standards,
goals and incentives aimed at providing a better service to the
Despite the fact that Chile's Public Service has a strong tradition of
probity --embodied in institutions like the General Comptrollership
Office, and backed up by a long-lasting corporate culture of public
servants honesty, austerity and legal formalism--, the ideological
campaign against 'the state' and 'the public sector' carried out
during the military regime, along several irregularities and
scandalous detected in the privatisation of former public enterprises
and assets in that period, weakened public officials' image, moral,
The lack of transparency and accountability in the management of the
public sector arising from the lack of checks-and-balances mechanisms
during the dictatorship period, also contributed to damage the image
and moral of public servants.
Finally, the neglecting of the public sector modernisation, the low
wages and lack of incentives for public officials, their deteriorated
image and self-respect, along the greater opportunities arising from
the private sector in a free-market economy, altogether generated a
bad environment for public ethics.
The two governments of the Concertación de Partidos por la Democracia
have included among their programmatic priorities the modernisation of
the public sector as a condition for sustaining dynamic economic
growth; reducing poverty, inequality and social exclusion; improving
governance; and strengthening and widening democracy. Our motto is "A
state at the service of the people", conceived as part of the ethical
meaning of democracy.
In order to achieve this goal, the current administration created in
1994 a special body, the Inter-Ministerial Committee for Modernising
Public Service Management. The mission of this Committee is to drive
forward and co-ordinate the modernisation efforts within the State and
the public services, as well as to design and propose general policies
related to this matter.
This Committee is presided over by the Minister General Secretary of
the Presidency, and composed also by the Ministers of Finance,
Economy, Job and Social Security, and General Secretary of the
Government. This board has an Executive Secretariat, which I lead.
|The work of the Committee has aimed at introducing a 'new' culture in
the Public Service, based on the principles of quality & innovation,
evaluation, results-oriented, and user-focused. This 'new culture'
points at strengthening probity, transparency, accountability,
responsiveness, efficiency, quality and excellence within the Public
We have developed an Strategic Plan for Modernising Chile´s Public
Management. This plan has six different and distinct lines of action:
Human Resources, Quality of Service and Citizen Participation,
Strategic Management and Information Technology, Institutional reform
and decentralisation, Communications, and Transparency and Probity.
For further information on each one of these lines of actions, and the
different projects that are part of them, you can consult in
III. Public Ethics and Administrative Modernisation in Chile
The Committee's main contribution in order to improving ethics within
the Public Service can be placed under the broad label of
In fact, the strengthening of transparency and public ethics
constitutes a key component of our Public Service's modernisation
policy, since it is both a goal and a condition to improving the
responsiveness of the State to citizens' needs and demands, as well as
for the strengthening of our democratic system.
Along the creation of the Inter-Ministerial Committee, President
Eduardo Frei created in 1994? a Public Ethics Commission, with a
pluralist composition, and endowed with the task of submitting policy
and legislative proposals aimed at improving public ethics and to
The creation of the Public Ethics Commission was the response of
President Freis' administration to the increasing public concerns
regarding politicians and public officials' ethical behaviour. Various
scandalous and denounces of corruption, traffic of influences or
mismanagement and waste of public resources stressed by the media,
threatened public confidence in politicians and public institutions.
|In fact, democracy makes corruption practices more visible and
unacceptable. The rule of law, the division of power, democratic
political competition, free press, and effective individual rights,
altogether make possible for citizens and the public opinion to gain
greater sight and control over the ethics and behaviour of the
Government, public agencies, officials and politicians.
Particularly in a country like Chile, whose Public Service has been
historically characterised by a remarkable tradition of integrity and
probity, corruption and venality in public matters deserve strong
condemnation from the public opinion.
The Public Ethics Commission's Report contained several proposals
aimed at improving Public Service's probity, transparency and
responsiveness. The proposals were placed under 7 headings:
- Public servants' integrity (Probity),
- Conflicts of interest,
- Control and oversight ("fiscalización"),
- Contracts and Bidding,
- Penalty issues,
- Political Parties' financing, and
- Social control.
In order to improve probity, transparency, and efficiency in the
Chilean public sector, the Modernising Committee has designed and co-
ordinated the implementation of several initiatives of administrative
reform. In what follows, I describe the most important of them.
INFORMATION TECHNOLOGIES IN THE PUBLIC ADMINISTRATION
- Public Procurement Electronic Information System:
Accomplishing one of the Public Ethics Commission's recommendations in
order to improve transparency, the Committee designed an electronic
information system working on Internet for public sector's
contracts (see http://www.compraschile.cl/).
In addition, a bill generating a common framework for public sector's
procurements is ready to be sent to Congress, including the norms that
will validate electronic procurements.
This system allows any citizen or public sector provider to know all
the relevant information about public procurements (except from
Defence procurement). The system shows the contracting agency, the
supplier and its main stockholders, the involved services or goods,
the prices, duration of the contract, contracting procedures, and the
The implementation of this system will, once the law is approved, will
make possible to carry out procurements, auctions and contracts by
electronic means, opening the room to e-commerce. It will help to
standardise procurement procedures and to make them safer and more
transparent, improving efficiency and reducing the opportunities for
corruption and misspending.
The current State Procurement Agency (DAE), which has worked on a
centralised acquisitions and retail scheme, employing about 160 public
servants, will be suppressed, and their human resources will be
transferred to other public agencies were personnel is required. It
will be replaced by a new procurement agency, created with only 18
professionals with information management skills. In the new scheme,
information will be centralised but operation and decisions will be
even more decentralised.
This reform will save both time and costs. According to conservative
estimations, this system will generate savings for the Treasury
amounting to about USD200MM/year.
The operation of the system is being run by government officials, but
is currently in the process of being externalised trough an
- Administrative Probity Law:
In order to enforce probity within Chilean Administrative Law, the
Inter-Ministerial Committee elaborated a bill introducing several
guiding principles, norms and rules for the behaviour of public
servants. They include, among others:
- Norms about the responsibility of the Government towards citizens;
- The obligation for public agencies to provide free access to
administrative information, granting the public character of all
administrative acts generated by public institutions;
- Amendments to the Administrative Law Code, enacting norms aimed at
enforcing public servants' ethical behaviour in performing their post
and duties, according to honesty, integrity and loyalty principles;
- Norms regarding incompatible activities for public servants and
conflict of interest's issues;
- The obligation for high-rank public officials and authorities to
declare their interests before to take office.
After five years of discussion, the bill is close to be passed by Congress.
- The State Internet Portal (Chile´s Public Sector Home Page):
This initiative aims at placing together in a unique Internet Web Site
or Home Page, complete on-line information regarding the Government as
well as links to all different public agencies. The objective of this
project is to place the State closer to ordinary citizens, favouring
transparency and free and easy access to public information, as well
This web site http://www.estado.cl/ has expanded
the availability of public on line information, gathering up today more than 20.000 public
sector information screens, almost 400 government web sites, and as of
September of 1999 has more than 2000 visits a day.
- Office of Information and Claims (OIR)
These offices are being created in all public services in order to
provide expedite response and solutions to citizens' claims and
demands, bringing the State near to the public and helping to improve
the quality of the services offered. These offices are currently
operating in more than 65% of the public offices, and the goal is to
complete this process during the first half of the year 2000.
- Program Project Evaluation:
Since 1997, the Government of Chile has been evaluating its public
projects and programs through a very innovate system. Aimed at
improving performance, money allocation and transparency, this program
consists of a set of expert panels, compose by specialists hired on a
one time bases through a competitive and professional process. This
panels will evaluate one or two programs a year, and its conclusions
and recommendations will be sent to Congress and to the agency
responsible for the program. A monitoring system has been set up in
order to track the level of implementation of the different
Since 1997, 120 programs have been evaluated, which represents more
than MM US $ 1.200. Of these, some have come out as excellent
iniciatives, with very minor recommendations, others have been
considered important and necessary projects but have received heavy
criticism, and some have been recommended to end.
- Agency financial and management balance statements.
Since 1998, every public agency in the country has to sent to the
Ministry of Finance and the Presidency a full financial and management
balance statemente. These statements are sent to Congress, but are
also available on the Internet through the Inter-ministerial Committee
on Modernising Public Management´s web page. In the past these
statements were only financial, but since the performance contracts
were enacted as official policy, the results of those contracts
(including the performance indicators) have to be included in these
statements. Even though they have not been strongly scrutinised, they
provide very important information, some of which could embarrass
several senior officials and provide plenty of ammunition to
opposition leaders or journalist.
- Internal Audit Office:
Created by the President in 1994, this office has had the important
task of created a body of internal auditors in every Ministry of the
Chilean Government. Their task has been to run government wide reports
on issues that are related with transparency and probity, with the
principal goal of raising awareness within the administration about
these issues and possible vulnerable areas.
Currently, there are auditors in every Ministry with a year long
preventive plan. Also, the Internal Audit Office has run very
important studies, one of which was the basis for the comprehensive
reform of our procurement system. A bill will be been sent to Congress
to institutionalise this initiative.
SUMMARY OF THE MAIN INITIATIVES OF THE PUBLIC MANAGEMENT STRATEGIC PLAN
Inter-Ministerial Committee for Modernising Public Service Management
Ministry General Secretariat of the Presidency
Republic of Chile
The Inter-Ministerial Committee for Modernising Public Service
Management is co-ordinated by the Ministry General Secretariat of the
Presidency. Created in 1994 by President Eduardo Frei, this committee
gathers the following ministries: Interior, Government General
Secretariat, Finance, Economy, Labour and the General Secretariat of
the Presidency. Its main work areas were defined in the 1997-2000
Strategic Plan for the State Reform, approved in January 1994 by the
committee (more information on English or Spanish see
Its main initiatives are the following:
- HUMAN RESOURCES
- Performance based Incentives: This line of work introduces for the
first time in Chile an incentive pay system for public servants, based
on institutional and individual performance.
The Institutional Performance bonus is granted to the whole personnel
of a public agency according to a Management Improvement Program
(MIP). These programs are established each year for each agency,
containing specific management goals for the incoming year as well as
performance indicators to measure the effective degree of
accomplishment. A Presidential Decree grants official character to
each program. These programs are available
in www.modernizacion.cl. In
turn, the Individual Performance bonus is granted to employees
according to the results of a personal relative performance
assessment. The methodology used for assessing individual performance
is being currently reviewed, in order to improve it. In order to
allocate the institutional and the individual performance bonuses,
both the public bodies and their personnel are ranked and located in
three categories: the best third receives the highest bonus; the
second third just a half of the former; and the last third receives
- Senior Civil Service Program. This is one of the most meaningful
initiatives related to state reform. It aims to manage Public Services
by professional and motivated leaders, with an equilibrated set of
both political and technical skills. It supposes a technical and
competitive selection process, the definition of performance contracts
with management indicators and goals linked to their payment level.
The Government is in the final stages of analysis of the bill before
sending it to Congress.
- SERVICE QUALITY AND CITIZEN PARTICIPATION
- National Quality Award: This award aims to recognising and
stimulating agencies that accomplished efficiently their social role,
in the framework of modern management. It creation represents a
breakpoint in our Public Sector history. Last year, more than 107
agencies applied for this award. The winners agencies were FONASA,
Registro Civil XII Región, IRS, San Martín de Quillota's Hospital and
SERCOTEC. This program is on its second year, were more than 60
agencies are applying. The award will be granted in October.
- National Award for Innovations in Public Management: It recognises
innovative initiatives inside Public Administration Agencies (the
previous award recognises quality management system for each
institution). The best innovative initiatives are replicated along the
country. This year, in the first version of this competition, 237
projects applied, being 53 of them pre- qualified. The Jury must
select 10 winner projects among them (these projects may be checked in
- Procedures Simplification Program (cutting red tape): This program
was established by a Presidential instruction in December 1998. It
refers to procedure simplification and the establishment of Citizen's
Charters (its contents may be checked in www.modernizacion.cl).
Currently, 91 agencies are eliminating or reducing 309 procedures.
This involves an important waiting-time saving for both firms and
citizens. From the 309 projects, 216 consist of procedure reduction
and the remaining 87 consist of procedure elimination. This program
includes the evaluation of each project.
- Citizen's Charters: 12 Agencies have established Citizen's Charters.
They are formal commitments with citizens, were agencies define the
quality standards for their service (standards are related to response
time, waiting time, service delivery, etc.) and the pay back system
for unsatisfied engagement. Among others, we can highlight the
following Charts: CONADI, CAPREDENA and Santiago's Justice Assistance
- Implementation of Complaints and Information Offices: These bureaux
must deliver an easy solution to citizen requirements and to received
suggestions and complaints to improving institutional management. More
than 65% of total government agencies have one of these bureaux. The
goal is to achieve 100% by the year 2000.
- TRANSPARENCY AND PROBITY
- Public Procurement Electronic Information System : Accomplishing one
of the public ethics commission recommendations, this committee
designed an electronic information system working on Internet, it
operation will be externalised during this month. Additionally, a law
project to generate a common framework for public administration's
procurements process and to validate electronic procurement is ready
to be sent to congress. This reform will generate cost and time
saving. According to conservatives estimations financial saves will be
close to USD 200 MM / year.
- Administration Probity Law: This project enforce probity in Chilean
administrative right. This project is about to be approved by
- STRATEGIC MANAGEMENT
- Financial and management balance statements: Under the instruction
of this commission and the budget direction, agencies developed
integrated management balances for 1998. Those balances show agencies
financial position and the achievement of some critical management
goals, including service quality improvement. As a transparency
initiative those balances are available in www.estado.cl or
Pilot Program for output based budgets and flexible financial
administration: This program, promoted by the budget direction,
explore the possibility to transform the actual budget system, based
on a cash flow basis, into an output based budget, synchronised with
public policies and ministerial goals. To achieve this goal, we have
been working with 8 agencies since fall semester 1998. Budget
direction is allowing budget management flexibility to agencies
achieving a set goals established with the budget direction. Also,
this pilot program is testing accrual accounting for the different
agencies that are participating in the program.
- Management Improvement Programs: They are an annual base management
goals system, those goals are established by each agency, approved by
supreme decree. Goals achievement define the incentives to be pay
explained on the human resources section of this document.
- Government Program Evaluation System: A group of independent experts
analyse the real impact of social programs, production development
projects and government institutional development. To date, 60
programs have already being evaluated and other 20 are in the
- INSTITUTIONAL DEVELOPMENT
- Decentralisation Commitments: This commission, trough the Ministry
of Interior, designed a series of programs and norms to empower
agencies decentralisation. Those norms were underwrite by state
ministries, and the overall program is controlled by the ministry of
- Regulatory Institutions: A report was written with a set of
proposals about regulatory institutions reform
(www.modernizacion.cl), the report includes a proposition about legal
and administrative reforms to be made, in order to reorganised
regulatory organisations. Meanwhile, six different regulatory agencies
have experienced legal, financial and management reforms in order to
bee more competitive and effective in their complex role of
- National committee for information and communications technologies:
It main goal was to elaborate a diagnosis about macro tendencies in
technology and communications and their impact over our country.
Second, this commission proposed a set of recommendations in order to
empower IT introduction and development in Chile. This report may be
check in www.modernizacion.cl .
- Supreme Decree N°81, electronic document and digital signature
(published in O.D. July 26, 1999): This document validate for the
public sector the use of electronic documents and digital signatures.
This program allows the Chilean State to enter in the digital era.
This technology will be adopted smoothly by public institutions. A
pilot program with ten key institutions started one months ago. Its
results are expected for next March, when a full government wide
implementation will take place.
- State Internet Portal (www.estado.cl): This web site has expanded
the public information offering as the on line public services,
gathering more than 20.000 public sector information screens, with
almost 400 web sites. This web site has already more than 100,000
- Government INTRANET and the implementation of a national video
conference system. The public intranet will connect all agencies'
networks. It will mean USD 100 MM / 5 years cost savings for the
State. Intranet will also allowed a substantial increase on data flow
transfer quality on the net. More information (www.modernizacion.cl ).