Jucpa volume 10 number 11 november 2013

Journal of US-China Public Administration Volume 10, Number 11, November 2013 (Serial Number 97)

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Journal of US-China Public Administration Volume 10, Number 11, November 2013 (Serial Number 97)

Contents Public Service Delivery Challenges and Reform A Targeted Approach to the Provision of Ubiquitous Healthcare Services for the Newly Retired 1035 Joseph Alexander Meloche Climate Conditions, Larvae Free Number, DHF Incidence in Surabaya Indonesia

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Ririh Yudhastuti, Prijono Satyabakti, Hari Basuki

Public Policy and Regional Economy Farmer Associations and Rural Development in Taiwan

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Kun-Jung Liao The Assessment of the Impact of an Aging Population of China on the Country’s Economy

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Inna Stecenko

Collaborating Public Organizations Transformational Leadership and Organizational Outcomes: Evidence From Vietnamese Workers

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Ngoc-Hong Dao, In-Soo Han Bribery Problem in Kuwaiti Public Administration

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Yousef Mohammad Al Mutairi, Mohammad Qasem Ahmad Al-Qarioti

New Public Management Issues Management Control, Performance Factor in Moroccan Universities “Case of the University Hassan I of Settat”

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Fatima Ouahraoui, Mohamed Makhroute, Nada Soudi, Said Elmezouari, Laila Loukili Idrissi Model for Management of Public Funds Transfers in SICONV Luiz Lustosa Vieira, Ilka Massue Sabino Kawashita

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Journal of US-China Public Administration, ISSN 1548-6591 November 2013, Vol. 10, No. 11, 1035-1042

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A Targeted Approach to the Provision of Ubiquitous Healthcare Services for the Newly Retired Joseph Alexander Meloche North Carolina Central University, Durham, US

The purpose of this research is to discuss a targeted approach to health care provisions for the newly retired. This approach focuses on the application of specific services provided by the development of Web 2.0 technologies and an identification system that determines the needs of a community of newly retired. The paper examines the significance of this community and also discusses the steps required for the research. The first phase of the research which is covered here involves reviewing pervious literature to determine what information has been gathered about the subject. Once this has been accomplished that the researcher will investigate the defined community to determine what resources are in place and what additional resources need to be in put in place in order to help the community to continue to thrive. The final steps include implementing what services were found to be necessary for the continued growth of the community and a follow-up concerning the success of these services.

Keywords: newly retired, ubiquitous, health care services

Health care provision can best be supported by information services that are designed and selected specifically for a defined community of users. The application of these targeted services needs to address, the information needs of a specific and identified, information user population, and service facilities with a defined area available from the service providers. There also needs to be provision for direct ubiquitous (online) interaction between the community of user and service providers. The researcher sees this information service including collections of information directly relevant to the user community, and as a venue for the service providers to “push” timely information to the user community and to “pull” need related information from the community of users. This facility should also provide an ubiquitous environment in which for the community to post questions, and have solutions provided by authoritative professionals. Thus in this way, it will increase the effectiveness of current information services and service providers, by providing specific and identified sets of information to a well-defined group of information users. While the internet, the web, and a host of related services have provided almost universal ubiquitous access to information resources; it is ubiquitous access to relevant and germane resources that will fit the context of a person’s identified needs and locality that remains a challenge.

The developments of Web 2.0 and its supporting technologies have offered the hope of including the user or user group in the model and the proposed project aims to utilize the services of Web 2.0 and its supportive technologies (such as smart phones, e-readers, tablets, etc.) to provide access to accurate and comprehensive

Corresponding author: Joseph Alexander Meloche, Ph.D., assistant professor, School of Library and Information Sciences, North Carolina Central University; research field: information studies. E-mail: jmeloche@NCCU.EDU.

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sources of health related information both to newly retired seniors and to health information providers.

However there is still a long way to go to make the relevant timely and germane information available in a transparent ubiquitous manner that suits in format scope and timely delivery the needs of a specific user or user group. The members of user groups need to be identified in terms of the context of the use, which from an Activity Theory (AT) perspective is the activity(s) that they are being undertaken. Research that can capture the perceptions of need from both the newly retired and the care provision community is required. The work proposed here applies an AT framework and Q Methodology to identify the perceptions and scope of required information and to aid in the development of applications and resources that can address the information needs for the newly retired of the Durham Community.

Newly Retired—Significance Given the general rise in the elderly population, those aged 65 and older, logically, the need for information specific to their age group has also increased. However there are a number of barriers preventing ubiquitous access to comprehensive and accurate information, a fact which is particularly concerning when considering the seniors’ need have to access reputable sources of health related information. A number of studies (Wicks, 2004; Given, Ruecker, Simpson, Sadler, & Ruskin, 2007; Eriksson-Backa, 2010) have shown that seniors tend to seek health related information from interpersonal contacts, including friends, family, pharmacists, and physicians. However these sources of information may be ill-suited to adequately address all of an individual senior’s needs. While friends and relatives share information with seniors, as they are not professionals, they may not provide the most current, appropriate or accurate information.

Conversely, while older persons tend to count physicians among their interpersonal contacts as sources of information, Junius-Walker et al. (2011) showed that patients and physicians have different ideas of what is important where patient health is concerned. Additionally, increasing demand and rising healthcare costs have created situations in which physicians can have as little as 15 minutes per patient, leaving a limited amount of time to address concerns which they perceive as non-immediate (Belzer, 1999; Brownlee, 2012; Johnson & Capsso, 2012). As such, it seems that in many cases there is much potential for a patient not to have all of their information needs addressed via interpersonal contacts.

The presence of multiple health issues, economic factors, and a desire to maintain independence are factors which may lead seniors to seek health related information online (Eriksson-Backa, 2010; Given et al., 2007; Macias & McMillan, 2008). Many, however, have difficulties navigating the web due to low internet literacy skills or web designs which are not created with elder usability in mind, or simply due to the excessive content and unorganized nature of many sites. Seniors, who may have visual and motor impairments, tend to require particular features in website designs to facilitate navigation (Ellis & Kurniawan, 2000; Dinet & Vivian, 2009). These considerations are not always taken into account when websites are constructed or which provide, or appear to provide, health information. The Kaiser Family Foundation (2005) report showed that seniors can also have difficulty choosing reputable sources of information online and that they can be overwhelmed by the amount and/or presentation of information available.

Given this set of circumstances, it is clear that a means of acquiring relevant health information digitally, which is concise and yet as complete as possible, available in multiple languages, and provided in a format or platform that is designed for senior usability is necessary to address the growing need for senior-specific health related information in the modern era. According to the National Eye Institute (2006), “Health literacy has been

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identified as a significant barrier to the receipt of health care services and is increasingly recognized as a problem that impacts health care quality and costs” (p. D5). Health care provision can best be supported by information services that are designed specifically for a defined community of users. The application of these targeted services needs to address the information needs of a specific and identified information user population available from the service providers and service facilities within a defined area. There is also a need for provision of direct (online) interaction between the community of users and service providers.

While it is acknowledged that some seniors feel that they have missed the computer age, this may not be the case for new retirees as more than half of Americans aged 50 to 64 currently use the internet (National Eye Institute, 2006). Individuals 55 and over have shown some of the largest increase of Web 2.0 technology usage such as: tablets, smart phones, and e-readers since 2010 (Bonnington, 2011; Nielsen, 2011). The aim of the research involves the provision of health related information digitally through such devices via an information service which includes collections of information directly relevant to the user community. This will result in a “platform” that serves as a venue for the service providers to “push” timely information to the user community.

It should also provide an easy method for the community to post questions, which can be answered by authoritative professionals or the member community. Thus, in this way, it will increase the effectiveness of current information services and service providers to a specific and identified set of information users. For the purposes of this project, the user constitutes recent retirees in need of health related information as well as the institutions and information service organizations which seek to provide recent retirees with such information.

The clients to be served are the newly retired community (including individuals who may have retired earlier or later than typical US retirement age of 65) in Durham, North Carolina in addition to the health information providers (HIPs) which serve them. This selection was made because, as previously stated, recent retirees are a health disparity population in need of health related information and because retirees are shown to be embracing new technology contrary to the stereotype of their having an aversion to it. In the current atmosphere of e-health and m-health capabilities as well as the strain on medical services created by “Baby Boomer” retirement, there is a need to bridge the gap between these two phenomena. This research is premised on the need for information to be specific and germane to an identified user community, in this case Durham, N.C. retirees. While this case is narrow, it is envisioned that this technique could be applied internationally to any specific and underserved population. The focus in this study will be on needs associated with information related to health service provision. This would include the provision of information that is deemed important by both the user community and the service providers. Durham, N.C. is noted as among the top regions in the country for growth as a retirement community.

This project has the potential to affect a large portion of the Durham community. Not only will the newly retired be impacted but also family members who may be involved in their care in addition to community and health centers and organizations which target retirees. According to the 2010 Census, people 65 years old and over represent roughly 10% of the population of Durham County, equaling about 25,000 people; of those, approximately 13,000 are within the general retirement age range, ages from 65 to 74 (US Census Bureau, 2012). It should also be noted that this figure may not represent accurately the growing and aging Hispanic population in Durham, who are said to comprise more than one in ten of Durham County’s population but may be underrepresented in the census due to the undocumented status of a proportion of that population. North Carolina remains the ninth most populous state for undocumented immigrants and the state ranks eighth in the number of illegal immigrants in its labor force (Barrett, 2011). As Spanish-speakers in the county come into

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retirement age, their health related information needs will also need to be reconciled with their linguistic needs.

This project intends to address this dimension of information need as well. As the focus is on information services for the “newly retired”, it will have a continuously flowing population of users, who if serviced well by information services during their initiation into retirement, should experience reduced difficulties into the future.

With each year as people become new retirees in this community, they will be aided and supported by the refinement of services experienced by their forerunners. Thus, this project will actively seek to improve the quality of life and life experiences by its ubiquitous provision of targeted information to the newly retired community.

AT is defined as, “a practice-based theory” that when used in organisation studies, provides a powerful alternative lens through which to consider the findings (Greig, 2011, p. 306). Greig, Entwistle, and Beech (2012) addressed complex healthcare problems in diverse settings: insights from activity theory.

The key elements of an AT analysis are subject, tools, object, rules, community, and division of labor. AT will be utilized in the research process to help with the development and analysis of the various information resources and access services for the newly retired. The primary component of the analysis is the purposeful activity of the subject as they seek to obtain their object(ives). The outcome refers to the actuation achievement and in a successful activity will be closely related to the object being pursued. Importantly AT provides a comprehensive and relevant set of elements that supports and impacts on the process of achieving the desired object. These include relevant tools/instruments, the specific subject, in this case is the newly retired, rules or conditions, that relate to health information service provision, the community which is comprised by Durham County, and the division of labor relating to various agencies providing health information and health services to the elderly community. The area that we will focus on is on innovation, accomplished by an introduction of new “tools”, seen here in the broadest of senses including processes as well as information sets and access facilities. Importantly this research study will seek to allow the information user (the newly retired) and the community of information providers to work together regarding the assessment of needs and methods selected to address those needs. This will be accomplished by the application of Q Methodology to ascertain the perceptions held with regard to these matters by both the newly retired and the community of service providers.

Thus, the initial analysis of the needs will be done using the model provided by AT. The study looks at the influences (comprised of the elements discussed above) that are impacting upon the subject’s, activities. AT is a theoretical framework intended to inform the re-design of human activities based on inquiries into new concepts and models for human activity. It is a methodology that supports interventions to promote and define innovative collaborative practices. AT will also be used in the third year to assess the achievements and effects of the service intervention and to refine and improve service provision. Research through surveys on pre-knowledge and post-skills with information will also help with the assessment of impact.

Web 2.0 Innovation This research will support enhanced information service provision with a range of social and collaborative technologies, commonly referred to as Web 2.0 technologies. Web 2.0 promotes users and their interconnections through the following affordances: (1) user-defined linkages between users and content (e.g., posting on others’ pages); (2) simple mechanisms to share multimedia content (e.g., blogs); (3) prominent personal profiling (e.g., displaying user preferences on customized profile pages); and (4) inter-technology applications, enabling interfaces with services and features on other sites (Cormode & Krishnamurthy, 2008).

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The innovation provided will be informed by research into the application of Web 2.0 technologies to meet the information needs of the newly retired community in the Durham Community. The project will, in taking this approach, be able to address their health information needs in an accurate and precise manner by directing them to local services and sources of information and by identifying knowledge gaps that may exist as well. This is done to address their arising needs in a responsive manner. It is also envisioned that the project will allow for them to record their informational activities, aiding in the analysis of their evolving needs and ultimately leading to support for information service providers in the enhancement and development of their services.

Collaborative technologies themselves are unique in which they arose in the public domain and have only recently been drafted to support service provision in more formal settings. The informed adoption of these technologies will not only allow us to bring health information delivery up-to-date; it will also provide the means to identify and adopt technologies as they arise in a purposeful manner. It is important, to be as effective as possible, that these developments are informed by research.

To date most information provision for the elderly has occurred in face-to-face delivery. However collaborative information use through traditional methods (face-to-face, phone, email) has been found to be more useful than individually seeking information (Spence, Reddy, & Hall, 2005). While the field of collaborative practices in face-to-face settings still warrant research and improvement, little formal research has been done in conjunction with online collaboration based on the interactive facilities provided by Web 2.0 and rated developments. To-date, traditional online environments have impeded collaboration because they lack the immediacy and feedback of face-to-face contact. More recently however, Web 2.0, which supports interactivity, diversity, and collaboration, has caused a change in the role of online service provision and made interactive activities possible. A better understanding of information seeking and service provision in the new environment will benefit the design of effective information systems to support collaborative activities and service provision generally. It is expected that the methods developed in this project will be applicable as a model for other defined groups of users and service providers. It is the intention of the researcher to create an information provision medium that is comprised exclusively for the community being served in the most transparent and in the most accessible form possible.

A Way Forward-Approach To meet the needs of the community this project will begin with a mapping of health information service providers in the Durham region. It will then conduct an information survey of the providers to discern the range and extent of the service providers while simultaneously identifying the population of recently retired individuals in Durham, N.C. Once the community of newly retired individuals is identified, the researcher will proceed with a study to determine their perceived health information needs. The ultimate aim will be not only to provide the information that they require, but also to provide it in a mode that addresses their user requirements. Where possible, the simplest and most at hand solution will be selected, with attention being paid to providing an up-to-date, ongoing and responsive information service provision in accordance with the information needs identified in the research study. The study will be comprised of a broad based survey to identify and inform the user and service community in addition to a smaller Q Methodological Study to identify the perceived information needs from the perspective of both the user community and their information service providers. The process will proceed in the following manner: Â

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(1) The first step will utilize user-based research to identify the user community and all potential information service providers; (2) The second step will be to identify the information services that are available in detail for the community of users. It will also establish how current health information service provisions facilitate requirements that are germane to the user community, the newly retired; (3) The third step will be to conduct research using a Q Methodological Study to determine the perceived information needs of both the user community and the community of healthcare service providers; (4) The fourth step will be to assemble the information and services in a form(s) that will meet the identified needs and to evaluate and refine the service provision. The development of the set of information resources, access services and the like will result from an AT analysis of the needs, based on the information obtained from the above research; (5) The fifth step is the implementation of the set of information resources and access services to the community; (6) The sixth and final step is an implementation review and revision of the services in final two months.

The service provision will be timely as it will include, but not be limited to, many Web 2.0 services that are currently available. Also comparatively inexpensive, off-the-shelf devices such as e-readers, tablets, etc., will be used to host the information and/or provide access to service providers who host the information or advice services.

One of the key envisioned strengths of this information service provision is its limited nature. That is, as it addresses a specific community, bound by age and geographic area, it will allow for the provision of timely, relevant information that can be delivered in a medium desired and suitable to the user community. The limited scope will mean that the quality of information provided will be high and relevant and multiple modes of access can be provided, maintained, refined, and adapted as needs and services change and technological advances arise.

It is not the intention of this study to develop new information services, although it may well identify gaps in existing service provision. Its intention is to provide improved, effective access, in a multimodal manner, to a select set of services and a defined user community. In addition, the goal is to maximize access to relevant service provision for this specific community. It is envisioned that this model of targeted, adaptive service provision will gain momentum and will be a model for similar service provision endeavors.

As previously mentioned, it is not the goal of this project to develop new information services. Rather, the specific aims are: (1) To facilitate this population’s access to health related information that both they and HIPs deem relevant, including anything from finding medical supplies and services to obtaining information about medicines and diagnoses. This will be achieved with the creation of the service itself and the provision of training and technologies to individual retirees and HIPs; (2) To discover both what health related information is needed and better methods of disseminating it based upon the feedback provided by both retirees and HIPs. Through use of the service and the receipt of feedback through regular interviews and the application of research using Q Methodology within the project, to gain access to users’ perceptions of what is important and needed regarding health related information gathering and dissemination in both personal and general senses and from both the point of view of both the retiree and the HIP; Â

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(3) To support a network of communication between retirees and providers via Web 2.0 technologies that can be built upon as new portions of the community become retirees annually. The dissemination of information will be facilitated by the provision of computing devices, but will not be limited to use of these devices. Retirees will be able to build upon the information utilized and recommended by other retirees who have used the service. They will also have the opportunity to recommend the information they utilize to others among their interpersonal contacts. HIPs will be able to utilize the service to identify customers’ needs and dissemination requirements regarding health related information.

Each user, whether it is a group or individual, will be provided with or with access to mobile computing technology for the purposes of this project, will receive initial training and ongoing support from the research team. Evaluations of information seeking and evaluation skills will be conducted both at the beginning and end of the study. Q Methodology will also be employed to evaluate perceptions of health information need. Overall assessment of the project will be conducted utilizing interviews from users, surveys, and use statistics gathered from the technology.

Conclusions The developments of Web 2.0 and its supporting technologies offer the hope of access to accurate and comprehensive sources of health related information for newly retired seniors and to health information providers. This paper has presented a way forward applying an AT perspective that can capture the perceptions of need from both the newly retired and the care provision community. The work proposed here applies an AT framework and Q Methodology, to identify the perceptions and scope of required information and to aid in the development of applications and resources that will address the information needs for the newly retired of the Durham and similar communities.

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Cormode, G., & Krishnamurthy, B. (2008). Key differences between web 1.0 and web 2.0. First Monday, 13(6). doi:10.5210/fm.v13i6.2125 Dinet, J., & Vivian, R. (2009). Elderly people as web seekers: Needs, strategies and difficulties. In I. Maurtua (Ed.), Human-Computer Interaction (pp. 389-404). Retrieved from http:// www.intechopen.com/download/get/type/pdfs/id/8977 Ellis, R. D., & Kurniawan, S. H. (2000). Increasing the usability of online information for older users: A case study in participatory design. International Journal of Human-Computer Interaction, 12(2), 263-276.

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Climate Conditions, Larvae Free Number, DHF Incidence in Surabaya Indonesia Ririh Yudhastuti, Prijono Satyabakti, Hari Basuki Airlangga University, Surabaya, Indonesia Dengue is a serious public health problem in Indonesia, including the city of Surabaya. Dengue is endemic Surabaya city in Indonesia. Dengue incidence has been attributed to climatic conditions, this study aimed to determine the relationship of climate conditions (air temperature, relative humidity, rainfall, number of days rain, and duration of solar radiation), the condition of dengue vectors (larvae-free number), the incidence of DHF (Dengue Hemorrhagic Fever) in Surabaya in 2010-2012. The results of this study indicate that there is a significant correlation among air humidity, rainfall, number of rainy days, and duration of solar radiation with the incidence of DHF. Other climatic conditions such as temperature have no relationship with the incidence of DHF. Keywords : climate conditions, larvae-free number, Dengue Hemorrhagic Fever (DHF), Surabaya Indonesia

Vector borne diseases such as malaria and Dengue Hemorrhagic Fever (DHF) is necessary because the transmission of diseases such as these will increase with climate change (Glen & Sia, 2008; World Health Organization [WHO], 2013). In many tropical countries the disease is a cause of death (WHO, 2013; Amah, Rina, & Ririn, 2010; Chakravarti & Kumaria, 2005). Dengue continues to spread widely in tropical and subtropical countries, about 2.5 billion people (two fifths of the world population) are at risk for dengue virus infection (WHO, 2013). More than 100 tropical and subtropical countries have experienced outbreaks of dengue, approximately 500,000 cases each year are hospitalized with thousands of fatalities (WHO, 2013; Chakravarti & Kumaria, 2005). Dengue has become endemic in large cities in tropical countries, including Indonesia (Surabaya City Health Department, 2012). Since it was first discovered in 1968 in the city of Surabaya number of dengue incidence continues to rise and spread to all areas of the city (Surabaya City Health Department, 2012; Brisbois & Ali, 2010).

Some studies show the spread of the disease from a large urban area that acts as a reservoir of virus spread to many residential areas smaller communities (Chakravarti & Kumaria, 2005). Climatic conditions that affect the incidence of dengue such as rainfall, temperature, and humidity can influence the condition of dry Aedes eggs to develop into larvae when exposed to water, the larva to pupa and finally to adult mosquitoes 

The authors thank to the Ministry of Education and Culture of the Republic of Indonesia through Airlangga University, with financial support BOPTN 2013 this research can be accomplished.

Corresponding author: Ririh Yudhastuti, School of Public Health, Airlangga University; research field: environmental health.

E-mail: ririh.unair@gmail.com.

Prijono Satyabakti, School of Public Health, Airlangga University; research fields: epidemiology and infectious diseases.

E-mail: fkm@unair.ac.id.

Hari Basuki, School of Public Health, Airlangga University; research fields: biostatistics and demography. E-mail: haribasuki.nb @gmail.com.

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(Wongkoon, M. Jaroensutasinee, K. Jaroensutasinee, Preechapon, & Chumkiew, 2006; Halide & Ridd, 2008; Satoto, Umniyati, Suardipa, & Sintorini, 2013). Rainy days and rainfall caused much so that the chance of breeding place of mosquitoes breeding will increase, causing the mosquito population increases so will the risk of dengue transmission (Chakravarti & Kumaria, 2005). The disease is transmitted by Aedes spp mosquitoes that carry the dengue virus, of the family flaviviridae from. There are four types of dengue viruses that can cause dengue disease that DEN-1, DEN-2, DEN-3 and DEN-4 (Surabaya City Health Department, 2012; Chakravarti & Kumaria, 2005). Dengue virus enters the body through the bite of the mosquito vector Aedes aegypti and Aedes albopictus females.

Surabaya city is a dengue endemic areas in East Java Province, Indonesia has a climate factors mean air temperature 27.85°C with a mean of 75.75% air humidity (The Meteorology, Climatology, and Geophysics Agency [BMKG], 2012). Thus, climatic conditions (temperature and humidity) will support the increased density of the mosquito population and the subsequent impact on the transmission and spread of dengue fever, changes in ecological and socio-demographic factors play an important role in the improvement and expansion of endemic dengue disease (WHO, 2013; Chakravarti & Kumaria, 2005; Brisbois & Ali, 2010). The high status of entomological (vector) DHF as House Index (HI), Container Index (CI), Breteau Index (BI), and Resting Index (RI), supported by heavy rainfall also can lead to outbreaks (Chakravarti & Kumaria, 2005; Wongkoon et al., 2006). Status of the other vectors, can be seen through Ovitrap Index (OI) and Pupa Index (PI), also plays a role in the evaluation of post-dengue vector control (Chakravarti & Kumaria, 2005; Wongkoon et al., 2006; Satoto et al., 2013). This study was conducted to determine the relationship between the picture and climatic conditions (air temperature, relative humidity, rainfall, number of days rain, and duration of solar radiation) with the incidence rate of dengue fever in the city of Surabaya in 2010-2012.

Methods This study is a quantitative and descriptive study using ecological study design. This study can determine the relationship between climatic conditions (air temperature, relative humidity, rainfall, number of days rain and duration of solar radiation), and the incidence (rate of occurrence) of dengue in the city of Surabaya 2010-2012. Research location is in the city of Surabaya, East Java, with 31 sub-districts. The location of the study site made with due consideration to all districts in the region are endemic. The timing of the data collection was done during the months of May to October 2013. The population in this study was all recorded incidence of dengue in Surabaya City Health Department in 2010-2012. Observations were made on the total population in endemic areas of the city of Surabaya. Secondary data collection form and the incidence of dengue larvae-free rate are taken from Surabaya city health office in 2010-2012. Data climatic conditions (air temperature, relative humidity, rainfall number of days rain, and duration of solar radiation) were obtained from the Center for Meteorology, Climatology and Geophysics (BMKG) Surabaya Perak Station last three years.

The data were analyzed to provide information free larvae number and incidence rate of dengue and climatic conditions in the city of Surabaya in 2010-2012 collected. Stages of analysis conducted univariate and bivariate analysis. Univariate analysis is useful to illustrate the distribution of dengue incidence rate fluctuations as well as an overview of climatic factors (air temperature, relative humidity, rainfall number of days rain, and duration of solar radiation) in 2010-2012. Bivariate analysis using regression-correlation test, conducted to see the relationship between the independent variable is the dependent variable climatic conditions, namely free numbers larvae and incidence of dengue in the city of Surabaya in 2010-2012. To determine the Â

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degree/closeness of the relationship and the direction of the relationship between two numerical variables used correlation analysis. The numerical relationship between two variables can be patterned positive or negative.

Positive relationship occurs when the increase of the variable followed by an increase of other variables. While the negative relationship occurs when one variable increment followed by a decrease in another variable.

Results Distribution of Dengue In 2010, the distribution of the incidence of dengue in the city of Surabaya showed that 50% more sub-districts have dengue incidence or Incidence Rate (IR) ≥ 100 per 100,000. In 2010, 50% of districts have IR ≥ 100 per 100,000, while in 2011 and 2012, 50% of districts in Surabaya have IR < 50 per 100,000. The mortality rate or Case Fatality Rate (CFR) due to dengue in Surabaya in 2010 was 0.38%, whereas in 2011 and 2012 respectively 0.69% and 0.64%. Based on national targets CFR Ministry of Health of the Republic of Indonesia DHF is 1%. Similarly, the larvae-free number in Surabaya in general still does not meet expectations or target of the Ministry of Health of the Republic of Indonesia, which is 95%. Larvae-Free Number (LFN) mean for the city of Surabaya for three years ranging from 80.24%-85.76%.

DHF data that are in the city of Surabaya in the period 2010-2012 are available in Table 1.

Table 1 Recapitulation Data Dengue Patients in the City of Surabaya Region Month January February March April May June July August September October November December Total

Year 2010 Patients deaths Deaths 128 0 242 2 477 4 490 3 475 4 515 0 360 0 209 0 94 0 119 0 131 0 139 0 3,379 13

Year 2011 Patients deaths Deaths 138 0 132 0 133 0 110 4 126 2 146 1 76 0 46 0 28 0 28 0 22 0 21 0 1,008 7

Year 2012 Patients deaths Deaths 90 0 105 2 173 0 131 2 196 2 118 1 70 0 48 0 45 0 46 0 36 0 33 0 1,091 7

Note. Sources : City Health Office Surabaya (2013).

Climate Conditions Climate change can affect the macro and micro spreader an infectious diseases, including the mosquito vector borne diseases. Increased humidity and rainfall is directly proportional to the increase in mosquito density, while the temperature has the optimum limit for mosquito breeding between 25-27°C. Climatic conditions have a significant effect on the risk of transmission of vector-borne diseases such as malaria and DHF (WHO, 2013; Brisbois & Ali, 2010).

Realtionship Between Temperatures and the Incidence of DHF Climate can influence the pattern of infections caused by either viral disease agents, bacteria or parasites,

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and vector is sensitive to temperature, humidity, and other ambient environmental conditions. In addition, the WHO also stated that mosquito-borne diseases such as dengue fever associated with warm weather conditions (WHO, 2013). The mean temperature in Surabaya city from 2010 to 2012: 30.2°C (in October 2011) and 30.2°C -30.4°C (October to November 2012), while the lowest in July 2012 (Surabaya City Health Department, 2012).

Research carried down the Glenn and Sia (2008), Metro Manila Philippines period 1996-2005 concluded that there was no significant correlation between the incidence of dengue temperature, as well as the results of the study Amah et al. (2010) in Serang district, Banten, West Java Indonesia. There is no significant relationship between the temperature in the incidence of dengue fever. Although the average monthly temperatures range between 30.2°C, an optimal temperature for breeding Aedes aegypti (21°C-31°C), but although the temperature in the city of Surabaya is the optimal temperature to increase mosquito populations, but not enough to infect DHF (WHO, 2013; Surabaya City Health Department, 2012; Halide & Ridd, 2008; Foley, Klein, Kim, Wilkerson, & Rueda, 2008) .

Relationship Between Humidity and the Incidence of DHF From the secondary data obtained from BMKG, looks humidity in October 2011 (63.2%) is the lowest humidity, while the highest humidity in April 2010 (80%) (BMKG Surabaya, 2012). Such moisture conditions make the ongoing proliferation of mosquitoes. Increased humidity and rainfall is directly proportional to the increase in the density of mosquitoes. Humidity conditions in Surabaya have averaged above 60%, which are optimal for breeding mosquitoes, primarily Aedes aegypti. In addition to the effect on the flies fly mosquito, higher humidity makes the mosquitoes become more active and frequent blood sucking. Often Aedes mosquito, Aedes aegypti and Aedes albopictus females looking for food by sucking the blood of humans, is used to continue the process of reproduction. This condition increases the transmission and spread of dengue in the region (Chakravarti & Kumaria, 2005).

Rainfall and the Incidence of DHF Rainy days and high rainfall in Surabaya, the number of rainy days at 28 days a month. Events differ in the dry season, where low rainfall and number of rainy days can reach zero (Surabaya City Health Department, 2012).

Rainfall has a direct influence on the presence of the Aedes aegypti mosquito breeding places. The population of Aedes aegypti mosquito breeding depends on the place. High rainfall and lasts for a long time can lead to flooding so as to eliminate the breeding places of Aedes aegypti mosquito that usually live in fresh water. As a result the number of mosquito breeding will be reduced so that the mosquito population will be reduced (Surabaya City Health Department, 2012; Wongkoon et al., 2006; Halide & Ridd, 2008). However, if the rainfall is small and for a long time will increase the breeding places of mosquitoes and mosquito populations increase (Halide & Ridd, 2008). As with other vector based diseases, dengue fever showed a pattern related to rainfall due to climate mainly affect the spread of vector mosquitoes and the possibility of transmitting the virus from one human to another human (Halide & Ridd, 2008; Foley et al., 2008). Rainfall is dependent on the number of days of rain, the highest rainfalls are on December 20 and January 10, 2012 (28 days), while the lowest in August to September 2011 and July to September 2012, which does not occur during the rainy months.

Duration of Solar Radiation With DHF Incidence The intensity or duration of solar radiation is very influential with the temperature and humidity around it.

Long exposures of the sun, is also associated with season and sunlight affect the growth of mosquito larvae (Wongkoon et al., 2006). Therefore, the mosquito Aedes aegypti is generally liked the shade, in the city of

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Surabaya, the old high solar irradiation in September and October, this condition causes rainfall and rainy days decreased (Halide & Ridd, 2008; Satoto et al., 2013). At the same time an increase in temperature and decrease in relative humidity (Wongkoon et al., 2006; Halide & Ridd, 2008). Even though the air temperature is high in Surabaya, but the humidity is not much change. This is indicated by the condition of 60% humidity in Surabaya, allowing Aedes aegypti and Aedes albopictus is able to reproduce well (Satoto et al., 2013). Mosquitoes Aedes aegypti have a habit of resting in a dark place and protected from the sun, so are in the habit of laying eggs (WHO, 2013; Wongkoon et al., 2006). There is a relationship between the seasons and the sun shines longer, the long dry season the sun shines longer than during the rainy season. The duration of sunshine makes more rapid growth of mosquito larvae and the activity of female mosquitoes seek blood for humans (anthropophilic) will increase.

Activities of female mosquitoes in search of food related to sustain reproduction (Wongkoon et al., 2006; Foley et al., 2008).

Relationship Between Climate and Vector Conditions In the period 2010-2012, the overall larvae free number in the city of Surabaya is still below the expected target of 95%. When viewed by region districts only one sub-district in 2011 and two districts in 2012 which have a Free Flick rate > 95%. The low larvae free number indicates that many mosquito breeding places in the community (Satoto et al., 2013; Somsak, Yanyong, & Ritting, 2010; Foley et al., 2008). The analysis showed a significant association with several components larvae free number, climate among air humidity, rainfall, number of rainy days, and duration of solar radiation, unless the air temperature throughout the year showed that the optimum value for mosquito breeding. Analysis to determine the relationship of climate larvae free number with results obtained following analysis (see Table 2).

Table 2 Results of Analysis Larvae Free Number Relationship With Climate Conditions in the City of Surabaya in 2010-2012 Climate Air temperature Humidity Rainfall Number of days rain Duration of solar radiation

Corellation of larvae free number-climate r = 0.370 p = 0.082 r = -0.687 p = 0.000* r = -0.521 p = 0.011* r = -0.665 p = 0.001* r = 0.649 p = 0.001*

Note. * Significant at 0.05.

The results of the above analysis show four variables associated with larvae free number, i.e., humidity, rainfall, number of rainy days, and duration of radiation. Three variables showed a negative correlation (relative humidity, rainfall, and number of rainy days) which means that the higher the value of these three variables, the lower the value of larvae free number. Duration of solar radiation has a positive correlation with the larvae free number (Somsak et al., 2010; Foley et al., 2008), which means the longer the daily solar radiation, the higher the value larvae free number.

Analysis of Incidence Rate by the relationship larvae free number district area showed the value of r = -0.268 and p = 0.010 (p < 0.05). Which mean that there is a negative relationship between Incidence Rate DHF with the mean larvae free number.

The results of this analysis, showed a lower value larvae free number than Incidence DHF. According to the

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facts (WHO, 2013), to prevent the transmission of dengue depends on measures of mosquito vector control, one effective way is to eliminate or prevent the breeding places of Aedes aegypti and Aedes albopictus in order to break the life cycle of the mosquito as a vector. When you should use a water reservoir (container), the container could be pursued by the unwelcome larvae or mosquito larvae Aedes aegypti and Aedes albopictus as the use of landfill smooth-walled does not absorb water and light for example ceramics (Chakravarti & Kumaria, 2005).

Measures 3 M (Drain, Close, and Bury): landfill drain action at least once a week to abolish the mosquito population, closing the landfill to prevent mosquito infestation and used as mosquito breeding and hoarding landfill that does not want to eliminate mosquito breeding places (Brisbois & Ali, 2010; Foley et al., 2008).

Incidece Rate (per 100.000)

600 500 400 300 200 100 0 50

60

70 80 larvae free number (%)

90

100

Figure 1. Relationship larvae free number value incidence rate district area with dengue in the city of Surabaya in 2010-2012. Source: City Health Office of Surabaya (the data is processed).

Conclusions Based on the results and pembahsan research, it can be concluded that climatic factors, such as humidity than temperature, rainfall, solar radiation and the old city of Surabaya in support of dengue vector mosquito breeding. Total incidence of DHF showed a declining trend over the last three years. DHF incidence rate associated with air humidity, rainfall, and number of rainy days. Index larvae (Larvae Free Number, HI, CI, BI, and OI) indicates that the presence of dengue vectors quite high in the city of Surabaya is recommended for the Department of Public Health and the City of Surabaya to improve the prevention and eradication of mosquito breeding places, in order to decide DHF vector mosquito life cycle.

References Amah, M. E. V., Rina, N. F., & Ririn, W. A. (2010, June 1). Climate factors and the incidence rate of dengue in Serang. Makara Health Series, 14, 31-38.

BMKG (The Meteorology, Climatology, and Geophysics Agency). (2012). Monitoring of temperature, humidity, rainfall, and rainy day in Perak station Surabaya region. Surabaya City.

Brisbois, B. W., & Ali, S. H. (2010). Climate change, vector-borne disease and interdisciplinary research: Social science perspectives on an environment and health controversy. Ecohealth, 7(4), 425-438.

Chakravarti, A., & Kumaria, R. (2005). Eco-epidemiological analysis of dengue infection during an outbreak of dengue fever, India. Virology Journal, 2, 32.

Foley, Klein, T. A., Kim, H. C., Wilkerson, R. C., & Rueda, L. M. (2008). The geographic distribution and ecology of Aedes sp potential in Republic of Korea. Journal of Entomology, 46, 680-692.

Glenn, L., & Sia, S. (2008). Correlation of climatic factor and dengue incidence in Metro Manila, Philippines. AMBIO: A Journal Â

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of the Human Environment, 37(4), 292-294.

Halide, H., & Ridd, P. (2008). A predictive models for dengue hemorrhagic fever epidemics. International Journal of Environmental Health, 18(4), 253-265.

Satoto, T. B. T., Umniyati S. R., Suardipa, A., & Sintorini, M. M. (2013). Effects of temperature, relative humidity, and DEN-2 virus infection transovarially on viability of Aedes aegypti. Community Health, National Public Health Journal, 7(7), 331-336.

Somsak, S., Yanyong, I., & Ritting, J. (2010). Impact of climate change on epidemic DHF. Research Journal of Applied Sciences, 5(4), 260-262.

Surabaya City Health Department. (2012). Annual report on surveilans activities Surabaya. Surabaya City.

Wongkoon, S., Jaroensutasinee, M., Jaroensutasinee, K., Preechapon, W., & Chumkiew, S. (2006). Larval occurence and climate factors affecting DHF incidence in Samui islands, Thailand. International Journal of Biological and Life Sciences, 2(2), 107-112.

World Health Organization (WHO). (2013). Dengue and severe dengue. Media Center, September 2013.

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Journal of US-China Public Administration, ISSN 1548-6591 November 2013, Vol. 10, No. 11, 1050-1060

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Farmer Associations and Rural Development in Taiwan Kun-Jung Liao National Chung Cheng University, Chiayi, Taiwan

This paper explores a unique Public-Private Partnership (PPP) formed by the government and Taiwanese Farmer Associations. Particularly, it will investigate a pattern of the PPP that has successfully promoted rural development and agricultural modernization in Taiwan since the 1950s. TFAâ&#x20AC;&#x2122;s (Taiwanese Farmer Associations) establishment inherently came from Japanese Cooperatives before World War II. The Performances of those farmer organizations are combinations of economic, social, and educational synergies. The rural development experiences in Taiwan demonstrate that success of rural modernization is carried out by a special PPP. First, this paper discusses the establishment and development of farmer cooperative organizations in East Asian societies. Particularly, it focuses on collaborative mold and process in which both the government and TFA have been extensively involved. A specific cooperative apparatus between the government and TFA functioning and operating as a perfect PPP has been formed under administrative guidance of the state. Thirdly, this paper looks at input and various supports in financial and policy perspectives by the public sector. Fourthly, the paper discusses legal framework, administrative apparatus, and governance pattern for TFA. Fifthly, the significant findings of paper illustrate that a specific PPP successfully involving in rural modernization in Taiwan is derived from the stateâ&#x20AC;&#x2122; guidance that properly regulates a collaboration between the government and TFA. The so-called East Asian model of PPP, as revealing in agricultural modernization and rural community development in Taiwan, may become valuable experiences for most of developing countries.

Keywords: public-private partnership, TFA (Taiwanese Farmer Associations), rural development, agricultural cooperative law, farmer association law

This paper, based on a PPP (Public-Private Partnership) approach, investigates Taiwanese Farmer Associations 1 (hereafter TFA) involving in rural development in Taiwan. There are similar agricultural cooperative organizations in the East Asian region. The Japanese government introduced the format of German cooperative society into Japan in the late 19th century. Later, Japan built similar farmer cooperative organizations in Korea and Taiwan in order to war-time economy. In fact, small-scale farmers in the East Asian societies generally organize their own cooperative organizations to get a better position in the market economy.

Japan Agricultural Cooperatives (JAs) are a kind of farmer organizations regulated by the Agricultural Cooperative Law. JAs are involved in various businesses and services, including marketing, extensions, and Corresponding author: Kun-Jung Liao, professor, Department of Political Science, Research Center for Public Policy and Management, National Chung Cheng University; research fields: public policy, political economy, Agricultural Cooperatives in East Asia. E-mail: polkjl@ccu.edu.tw.

1 There are some similar farmer organizations in East Asia. Although, there are different English translation, the formation, function, missions of organization are similar each other. Such as, Japanese Agricultural Cooperative Society (JA), Agricultural Cooperatives (NonghHyup in Korean, NH) in South Korea, and Farmer Cooperative Society in China, Taiwan Farmer Associations (TFA) in Taiwan.

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insurance services, etc., under a mutual assistance among members. JAs have been making great contributions to the agricultural industry and the modernization of rural areas through their cooperative mechanism.

TFA were basically developed from Japanese experiences of cooperative societies prior to World War II. As the Chinese government moved to Taiwan, it reformed those cooperative organizations for economic, social, and political control during the post World War II. Nowadays, those farmer organizations play a significant policy agent implementing the various agricultural policies for the government in Taiwan. This paper based on PPP approach tries to examine a collaborative pattern between the government and TFA that has successfully promoted rural development and modernization since the 1950s in Taiwan.

For development policy goal, the government has supported and built TFA to be able to carry out public programs. Their cooperative model not only reveals significant PPP, but also indicates a remarkable civic engagement in public policy implementation. This is an interesting case for a third sector2 that involves in public service delivery.

Agricultural Cooperative Organizations in East Asia TFA as in Korea and Japan have played a significant role in rural development since 1950s. Such an institutional arrangement largely improves the agricultural production, quality of life, and welfare in the rural communities. Many of these services, usually provided by the governments, have been carried out by TFA. However, Taiwan, Korea, and Japan have similar experiences that agricultural cooperative organizations under government backing carry out rural development programs.

In Japan, farmer organizations were initially formed by volunteering during the late 20th century. Farmers took collective actions to strengthen their bargaining power in market economy through organizational power.

Particularly, small farmers gather small amount of products into a large volume to get a bargaining power and reduce transaction cost in the market. Later, they were forced to transfer into government control. As a consequence, all farmers were obliged to join the organizations based on different prefectural governments to support the wartime economy (Nonaka, 2006, p. 1). During the post World War II, almost all farm households joined the JAs under a regulation of the Agricultural Cooperative Society Act promulgated in 1947. Each village had one farmer cooperative that provided all agricultural production-related services for farm households. At this time, the Japanese farmer cooperatives at prefectural and national levels ran many businesses such as credit, insurance, purchasing, marketing, and extension services. JAs have performed great functions related to agricultural policies such as governmental loan, control of rice supply and price (Nonaka, 2006, p. 3). JA provides guidance on various agricultural production services, including technologies, banking, marketing, and farm management, to individual members to help them operate their farms more efficiently.

Agriculture in Korea can be characterized with a small family farm structure. The average farm size was as small as 1.48 hectares in 2004. Following the promulgation of Agricultural Cooperative Law in 1957, Korean agricultural cooperative organizations (NonghHyup, NH in Korean), were established in 1958 to engage in the supply and marketing business of farmers. They consist of 2.4 million member farmers and about 1,220 member cooperatives and one apex federation, the NACF (National Agricultural Cooperatives 2

In this paper, agricultural cooperative societies existing in East Asia societies are defined as a kind of third-sector organizations.

According to Samiul Hasan, Mark Lyons, and Jenny Onyx, the Third Sector is composed of that vast array of organizations that are not part of government and not operated to profit their owners. Organizations that make up the third sector are the product of private collective action to provide goods or services for their members or for others (Hasan & Onyx, 2008, p. 2).

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Federation). NHs in Korea were founded as three-tiered system with village-level, city-level, and NACF at the national level.

Korean NHs as Japan and Taiwan, have experienced several stages of organizational transformation. In the 1960s, Korean NHs introduced mutual credit services that eliminated the practice of usury, notorious private high interest rate loans in rural areas. These organizations provided farmers with capital for their farm enterprises. In the 1970s, they started cooperative chain store business which greatly contributed to stabilizing commodity prices in the country. In the 1980s, they promoted farm mechanization programs as well as crop and breed improvement that largely upgraded farm productivity and increase farm household income. Those efforts cooperatives made have successfully promoted agricultural modernization and rural community development. In the early 2000s, Korean NH played a leading role to implement the New Rural Community Campaign to revitalize the agricultural industry and rural community. NHs have also launched a campaign of “Love Our Farming Villages” for making villages more vibrant places to live. NHs have made continuous institutional reform and innovation to overcome challenges from the liberalization of agricultural sector in Korea. In fact, farmer cooperatives in Japan, Korea, and Taiwan, with similar governance and close relations with governments, all play an important part in agricultural modernization and development of rural community. The distinctive collaborations between the farmer organizations and governments in the rural development process indicate a significant PPP in East Asia. As the Table 1 shows, there are many differences and similarities in terms of organization governance and their relations to governments.

Table 1 Similarities and Differences of Agricultural Cooperative Organizations in East Asia Category No. of members Dual membership No. of member cooperatives Organization establishment based on territory

Organization missions

Legal framework Government Regulatory agency Operation territory

Japan 9.03 million Members & associate members 550 Three-tiers: Village-level, prefecture-level, national level Multi-function and purpose: 1. extension 2. marketing 3. banking 4. insurance Agricultural Cooperative Law, 1947

Korean 2.4 million Members & associate members 1,220 Two-tiers village-level National level: NACF Multi-function and purpose: 1. extension 2. marketing 3. banking 4. insurance

Taiwan 1.8 million Members & associate members 259 Three-tiers: Village-level, county-level, province-level Multi-function and purpose: 1. extension 2. marketing 3. banking 4. insurance

Agricultural Cooperative Law

Farmer Association Law

Ministry of Agriculture

Ministry of Agriculture

On a restricted territory

On a restricted territory

Commission of Agriculture(cabinet level) On a restricted territory

The Nature of Partnership and Newly Applied to Policy Issues PPP can be defined as an arrangement whereby private parties participate in, or provide support for, the provision of infrastructure. Conventionally, a PPP project results in a contract for a private entity to deliver public infrastructure-based services (Grimsey & Lewis, 2004, p. 2). According to Grimsey and Lewis, a broader framework of PPP encompasses both “policy-level” partnership and “project-level” partnership. The former coordinates public sector and private sector inputs into decision-making about the design and formulation of policy initiatives. For example, urban transportation, subway system, or industrial development zone planning have been practiced in all world of many countries in past decades. No matter how PPP is

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defined, conventional PPP is almost constrained as infrastructure. They are largely applied to economic areas like highways, bridges, tunnels, and so on (Grimsey & Lewis, 2004, p. 7). Particularly, it is always linked with Build Operate Transfer, BOT/(Build Own Operate, BOO). Actually, there are many different types of PPPs and the models applied differ from country to country. The PPP concept is evolving in different issues in which the arrangements and applications are being implemented. In other words, PPP should go beyond conventional arrangement and application. It may be formed as an institutional arrangement that combines resources of public and private sectors and be used to deal with national and social development affairs. This paper tries to extend and use ideas of PPP in dealing with collaboration between the government and farmer organization in rural development process.

It seems the fact that Linder (1999, p. 35) defined PPP as a rubric for describing cooperative ventures between the state and private business. According to Linder, PPP should be more comprehensive and inclusive for widely applied in various new issues emerging since 2000s. The concept of PPP was usually limited to use in hardware-related public projects. Nevertheless, PPP should be extended to use in various policy issues, including agriculture, social welfare, the aged medicare, cultural, and creative industrial policy, etc. For most developing countries, governments have been the principal provider of infrastructure. Faced with effectiveness and efficiency in terms of financial input, construction projects implemented by governments have turned to the private sector. There have been so many successful projects that are implemented by specific PPP process and mold. However, few academic works discuss a particular type of institutional arrangement involving public agencies and civic organizations that may be able to co-work development of rural community.

Governance of PPP in Rural Development in Taiwan Taiwan has faced a small farming problem as Japan and Korea. Its average farm scale was as small as 1.4 hectares per farmer during decades. As one of small farming societies in East Asia, farmers in Taiwan has organized their first cooperative organization in order to strengthen their bargaining power in market economy since 1899. Later, these organizations were forced to convert into government agency in early 1930s for Japanese governmentâ&#x20AC;&#x2122;s food control. The post World War II, they came through several stages of organizational transformation during the past decades. This paper focuses on Taiwanese experiences that suggest a distinctive PPP between the government and farmer cooperative organizations in the issue of rural development. It is essentially characterized with institutional infrastructure that corresponds to what institutional economics calls the institutional environment (Williamson, 1975). This partnership includes formal and informal institutional arrangement that shape economic behavior of TFA and decision-making process of the government (North, 1990; Williamson, 1985). It governs bureaucratic behavior, agriculture policies, public financing, along with formal regulation and informal government-business networks that institutionally transformed into a supportive forces to promote rural development.

Not all kinds of PPPs have been successful in all of societies. PPP built in the government and TFA showed a very noteworthy establishment in Taiwan. As Figure 1 shows, the government supports TFA administratively and politically. General manager election of TFA is legally regulated by Farmer Association Law and is politically controlled by the government. TFA has four policy-oriented functions, i.e., supply, farm extension, financing, and insurance that form four major departments to carry out their business and public programs commissioned by the government. It becomes a multi-function in terms of service provision for farmer production and marketing. Its major roles can be concluded as follows:

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(1) It acts as a policy agent who helps the government to maintain a proper food policy and implement agricultural and social welfare programs; (2) It provides farmers with public goods such as information, technologies, and resources sharing for production, and helps farmers to achieve agricultural modernization through provision of cultivating knowledge, collecting marketing, banking, and insurance; (3) It holds political power and retains political stability in rural areas in Taiwan.

As described previously, TFA, although it carries out some public policies commissioned by the government, is neither a governmental agency nor a business organization. However, it forms through farmersâ&#x20AC;&#x2122; voluntary action regulated by Farmer Associations Law and provides abundant economic, social, and educational public goods. As Figure 1 shows, TFAâ&#x20AC;&#x2122;s multi-functions are achieved through four departments, including transportation and marketing, education extension, banking, and insurance departments. Each department has its unique missions and goals, but they support each other under service-oriented guidance regulated by a legal framework and sponsored by the government.

Government

Policy input Taiwan Farmer Associations

Supply Department

Credit Department

Farm Extension Department

Insurance Department

Policy output

Rural development Figure 1. PPP governance of rural development in Taiwan.

FARMER ASSOCIATIONS AND RURAL DEVELOPMENT IN TAIWAN

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Economic Function In general, the agricultural sector is weak in developing countries. Farmers in Taiwan averagely own small piece of land for farming. It is difficult to carry out the way of modernized cultivation. Apparently, production cost for small farms is high, and productivity is low. In this respect, TFA, as a client of the government takes a complementary part of the public-sector agencies to help farmers improve productivity through their cooperative apparatus. Since TFA is a civil organization, its cooperative device and governance have penetrated into local communities and established close and trustful relations with farmers and their families. Under administrative guidance of government, it provides all kinds of services, such as agricultural technological services, supply handling and purchasing, selling commodities, rice grounding, which forms well organized service networks from living to production of farm households.

As Table 2 shows, TFA helps farmers to improve cultivation skills, and teaches farmers how to use modernized farm tools. It also helps farmers how to properly use pesticides and how to use new kinds of crop seeds provided by government-sponsored agricultural high-tech laboratory. Those technical assistances and services have effectively upgraded agricultural production capabilities in rural communities; consequently, it has raised income distribution of farm villages which is indispensable for rural modernization in Taiwan since the 1950s. As farmers use more modernized skills, tools, and seeds provided through TFA networks, the agricultural sector was highly grown. In addition, TFA also plays a role of local banking which provides loans for farmers. TFA as farmer cooperative organizations, also provide a warehousing business and product processing services for its small-farm members. Those production-related services substantially lower the cost of farming production, and upgrade productivity. For example, TFA provides warehousing services for rice, worth an average of 45 million NT (New Taiwan Dollar) dollars from 1991 to 2002, and 15 million NT dollars from 1995 to 2002 for frozen warehousing services.

Most significant is the financial services. TFA, with credit department, provides farmers with various agricultural loans that are crucial for agricultural production. There are three types of loans, including unified loans, project loans, and agricultural development loans. In short, TFAâ&#x20AC;&#x2122;s economic functions are operated through agricultural extension, banking services, transportation and marketing, supply of tools, and insurance.

Those services enhance the agricultural policy implementation of the government and essentially improve productivity of the agricultural sector in general. FAT has significantly acted as an economic policy agent and substantially fostered rural development, consequently retaining political stability in rural areas.

Social Function Except economic-respect services for improvement of agricultural production capability, TFA also provides social-respect services in order to improve the quality of life in rural areas in Taiwan. Farmers in general are low-income and less educated classes. TFA under support of government provides various social services, such as family planning, financial management, recreations, and leadership training through its organizational network in order to lead them from underdeveloped into modernized society. As Table 2 and Table 4 show, TFA provides kindergarten and nursery services which make women in rural communities to be able to join farm production, consequently increases production capacity to a large extent. In addition, TFA also provides farmers with second-skill training programs averagely up to 1,030 classes and 39,133 students from 1991 to 2002. In addition, TFA also provides low-income farmer families with scholarships averagely amounting to 90 million NT dollars and benefiting 32,809 students from 1991 to 2002, which substantially upgrades literacy of poor

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FARMER ASSOCIATIONS AND RURAL DEVELOPMENT IN TAIWAN

families in rural areas. One of the most valuable services is writing service provision which is greatly helpful for less-educated farmers. TFA offers average 981,389 case services from 1991 to 2002. Table 4 demonstrates that TFA provides home economic extension to farmers. Its total expenses, including personnel and operation has up to 1,026 million NT dollars. Those social welfare services as effective as economic services are valuable for modernization in rural areas. Essentially, the government should be responsible for provision of those social services via education, social welfare policies. However, political institutions are not so as responsive as NGOs (Non-governmental organizations) in terms of service delivery efficiency.

Table 2 Social Services in Rural Areas Unit: Classes, Persons, NT Thousand, Cases Kindergarten Tech-Training services Classes Children Classes Persons 1991 1,398 48,186 626 21,555 1992 4,277 46,162 939 30,584 1993 989 32,947 635 23,048 1994 960 32,318 757 37,778 1995 937 31,641 736 26,263 1996 919 30,647 905 38,750 1997 849 28,038 977 56,215 1998 764 24,364 1,589 49,378 1999 701 21,703 1,448 46,659 2000 592 18,880 1,564 50,570 2001 787 24,352 783 44,391 2002 728 20,471 1,395 44,408 2003 472 13,650 1,239 35,543 2004 453 12,113 1,686 47,830 2005 477 13,933 3,839 79,379 2006 354 8,657 1,349 36,235 2007 485 11,394 1,215 34,763 2008 522 11,044 1,117 30,704 2009 381 7,412 1,485 38,526 Average 852.25 21,895.6 1,214.2 38,628.95 Note. Sources: Taiwan Farmer Associations Yearbook (2010, pp. 7-8).

Year

Scholarship Amounts Persons 31,086 22,152 39,786 25,492 181,645 26,963 151,123 28,756 159,535 34,120 62,670 35,854 61,298 38,586 154,993 39,447 67,583 40,352 67,157 40,872 68,443 35,363 40,416 25,747 32,598 19,466 147,840 33,157 208,636 40,114 270,943 60,424 344,909 63,745 324,376 57,837 373,772 64,398 139,440.45 36,642.25

Writing services Cases 5,788,896 3,274,978 297,838 367,402 369,059 278,956 306,844 223,443 201,987 236,403 212,586 228,280 227,752 196,446 181,922 190,497 138,085 135,074 126,168 649,130.8

TFA with social capital has extensive networks incorporated in bureaucracy and significantly plays a development policy agent. Since TFA has been working together with the government on co-production of agricultural sector, it has become a policy-patron of the government. Consequently, TFA also plays a crucial political stabilizer in rural areas. Ruling party and political elite could effectively control rural sector and implemented modernization projects through TFA networks. Stabilization is important for modernization process in most developing countries. Lack of political stability will substantially harm development efforts promoted by governments. Political relations between TFA and the government in Taiwan work as patron-client relations which the government protects the organizational interests and members of TFA politically support public policies and ruling legitimacy of KuoMingTang (KMT, Nationalist Party). It reveals political partnership which is considerably beneficial to rural development in Taiwan. Political stability in rural communities reinforce by TFAâ&#x20AC;&#x2122;s economic and social service supply; consequently, it leads to effectiveness of development policy carried out by the government.

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Educational Function Table 2 shows that TFA provides various social education services, including kindergarten, tech-training, scholarship, and writing services. Those education programs containing knowledge of food, clothing, housing, transportation, health and sanitation, and recreation are generally insufficient in rural communities. Its total operational expenses are 649,130 thousand NT dollars from 1991 to 2009. As growth of industrialization in Taiwan, a large number of labors move to urban areas. Consequently, human resources in rural areas become aged. As the social-economic environment has dramatically changed from traditional farming to commerce and industry, farmers must have sufficient knowledge of modern business management to low cost and increase productivity. Table 3 indicates that TFA also provides farm extension education services for farmers themselves. TFA, under support by the government, plays a role to help farmers upgrade their production and management skills. Most significantly, TFA teaches those aged and less education farmers to run farms with modern business management skill for improving production value. Its total operational expenses are 601,691 thousand NT dollars from 1991 to 2009.

Table 3 Farm Extension Services Unit: Classes, Persons, NT Thousand, Cases Production & marketing classes Classes Students 1991 6,303 25,645 428,458 1992 6,300 23,620 467,753 1993 4,878 14,974 267,921 1994 4,876 13,597 263,821 1995 6,047 16,130 291,414 1996 12,346 19,817 373,865 1997 12,733 22,453 424,882 1998 6,869 15,275 301,757 1999 6,586 14,487 296,092 2000 6,373 9,855 202,023 2001 7,057 23,047 435,720 2002 5,439 7,063 154,359 2003 6,909 7,902 163,056 2004 7,474 8,570 170,982 2005 6,694 7,961 166,166 2006 6,922 8,739 177,313 2007 7,038 8,459 179,053 2008 6,721 8,027 172,472 2009 6,693 7,487 161,774 Average 6,712.9 13,155.4 254,944.05 Note. Sources: Taiwan Farmers’ Associations Yearbook (2010, pp. 9-10).

Year

Villages involved

Demo houses

Operational expenses

12,061 834,837 9,760 23,965 11,234 19,344 20,955 30,920 18,264 16,693 22,860 7,223 5,825 7,172 5,549 4,953 5,632 5,713 5,325 53,414.25

679,648 739,085 756,519 834,886 939,542 1,022,951 1,173,313 906,403 834,350 735,302 599,705 378,230 368,217 361,603 297,431 339,405 349,057 365,832 352,360 601,691.95

As Table 4 shows, 4-H extension3 services are provided for training young groups in order to promote 3

4-H-Club in the United States is a youth organization administered by the National Institute of Food and Agriculture of the United States Department of Agriculture (USDA), with the mission of “engaging youth to reach their fullest potential while advancing the field of youth development”. The name represents four personal development areas of focus for the organization: head, heart, hands, and health. The organization has over 6.5 million members in the United States, from ages five to nineteen, in approximately 90,000 clubs. Clubs and related organizations now exist in many other countries as well; the organization and administration varies from country to country. TFA in Taiwan learned 4-H-Club from American rural development advisor, Dr. Anderson, and developed in Taiwan since the mid-1950s.

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modernization of human resources in rural communities. Its total operational expenses averagely amount to 138,643 thousand NT dollars from 1991 to 2009. In addition, home economics are valuable for rural development. Table 5 reveals that TFA provides total operational expenses in home economic extension services averagely amounting to 134,404 thousand NT dollars from 1991 to 2009. All programs and services carried out by TFA are financially supported by the Agricultural Council, a cabinet-level agency of Taiwan.

The successful outcomes of rural modernization in Taiwan come from an effective public-private partnership between the government and TFA. Table 4 4-H Extension Unit: Classes, Persons, NT Thousand, Cases 4-H-Club Teams Members 1991 206,122 7,761 136,708 1992 2,283 7,383 125,060 1993 4,321 4,594 79,926 1994 4,754 4,370 84,488 1995 5,181 6,170 108,529 1996 5,181 10,789 178,872 1997 5,562 11,086 179,691 1998 5,652 5,676 110,515 1999 5,735 5,283 97,604 2000 5,733 4,437 92,127 2001 6,533 8,578 173,413 2002 4,466 3,124 66,642 2003 5,956 3,479 76,070 2004 6,383 3,436 78,935 2005 5,390 3,232 77,854 2006 5,504 3,153 84,101 2007 5,891 3,455 85,011 2008 5,495 2,997 81,700 2009 5,543 2,795 73,229 Average 15,084.25 5,089.9 99,523.75 Note. Sources: Taiwan Farmersâ&#x20AC;&#x2122; Associations Yearbook (2010, pp. 9-10).

Year

Villages involved

Volunteer trainers

Operational expenses

7,505 7,644 4,928 5,076 7,634 11,537 11,236 7,090 7,887 8,159 11,886 4,450 5,122 5,421 5,195 6,153 6,112 6,344 9,240 6,930.95

108,403 113,495 118,813 128,330 142,255 148,604 582,306 758,081 112,784 109,180 77,182 54,235 46,034 41,248 36,530 44,077 49,384 50,823 51,106 138,643.5

Table 5 Home Economics Extension Unit: Classes, Persons, NT Thousand, Cases Year

Villages involved

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

5,653 6,041 4,648 4,796 5,812 5,516 6,853 6,812 6,942 6,869

Classes 12,199 482,829 7,291 6,976 10,629 18,045 155,821 10,162 9,113 8,439

Training Members 206,025 205,619 135,479 135,532 196,326 333,427 236,064 217,927 205,938 192,815

Volunteer trainer

Operational expenses

11,702 11,685 7,171 7,593 11,937 19,645 22,546 11,669 9,699 10,104

132,584 164,990 168,486 189,921 209,904 228,597 215,505 215,745 163,993 181,859

FARMER ASSOCIATIONS AND RURAL DEVELOPMENT IN TAIWAN

1059

(Table 5 continued) Training Classes Classes 2001 6,784 15,607 350,150 2002 5,700 6,205 146,363 2003 6,668 7,225 175,756 2004 7,036 7,619 186,357 2005 6,379 7,237 177,978 2006 6,741 7,638 191,387 2007 6,876 7,729 189,343 2008 6,505 7,391 188,953 2009 6,657 7,122 180,110 Average 5,964.4 39,763.85 192,577.45 Note. Sources: Taiwan Farmers’ Associations Yearbook (2010, p. 10).

Year

Villages involved

Volunteer trainer

Operational expenses

21,406 7,280 15,234 8,457 8,586 9,502 10,052 8,888 9,122 1,111.4

127,647 102,139 83,793 87,760 64,528 75,964 92,854 91,503 90,319 134,404.55

Conclusions Rural development is really a complicated process. Development literature points out that underdevelopment in less developed countries results from a “governance crisis” characterized with bureaucratic obstruction, pervasive rent seeking, red tape, and corrupted politics in public institutions; as a result, it leads to the failure of public programs in general. Modernization theorists emphasize the importance of rational institutional arrangement and physical and human capital, including technical and financial elements which determine success of social modernization. This paper argues that inefficient governance or incapable public institutions are fundamentally caused by a lack of involvement of the third sector. Development action if carried out simply by the government which controls over capital and technology may be failed as most developing countries have experienced in the past decades. This paper proposes that rural development and modernization of society should comprise public and private sectors all together as Taiwan, Korean, and Japanese experiences suggest. These two sectors may work as PPP governance that bonds public sources and organizational cooperative mechanism. In these circumstances, Taiwanese case indicates that successful PPP plays a role as a mediating variable that bridges public and private institutions and fosters development synergy.

TFA being a policy agent plays a supplementary part in giving an impetus to rural development in this island state. This shaping is an inherently political process that the state takes a leading role; nevertheless, the outcome is a combination of economic, social, and educational synergies.

TFA’s participation in rural development efforts not only strengthens their advocacy role but also represents farmers’ policy participations in rural community development. Obviously, the Third Sector is becoming increasingly important in meeting social needs and in multiplying resources such as solidarity, trustworthiness, and cooperativeness which are intangible policy effectiveness. Partnership characterized with associative networks based on a unique partnership becomes mediating structures between civil society and the state.

Rural development process in Taiwan since reveals that civil society enhances societies’ development by developing synergistic relationships with the public sector. The synergy has two components: complementary, referring to an extension to the capacity of government to achieve policy objectives, and partnership, referring to the successful cooperation between the government and farmer groups that enhance the effectiveness of development policies. The Third Sector substantially fills the social space left by the government, in terms of

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provision of social capital and cooperative function. Investigation of rural modernization experiences in Taiwan may provide a theoretical contribution to linking between the practice of PPP and rural development. Through a thorough examination of the Taiwanese experiences, this paper proposes that an effective PPP has to be operated and practiced through a proper institutional arrangement. Particularly, effective institutional arrangement of PPP has to be supported by the government.

In East Asia, rural modernization has been successfully achieved through an appropriate PPP that regulates their interplays between the government and farmer organizations. Close cooperation between the governments and farmer cooperative organizations is crucial for their success. For small farmers particularly, it is crucial to get competitive advantage to make business successful in the marketplace (Choi, 2006, p. 15). It is a rationale for the government to deliver public services to grass root farmer households through farmer cooperative organizations with low transaction cost. Obviously, Korea, Japan, and Taiwan have analogous organizational governance, similar public-private cooperative practices, and outcome alike. So-called East Asian model of PPP in agricultural modernization and rural community development may become valuable experience for most of developing countries.

References Bacon, D. (2002). Revitalizing civil society through social capital formation in faith based organizations: Research findings from Northern Ireland. Proceedings from the Fifth Conference of the International Society for Third-Sector Research, July 7-11, 2002, Cape Town, South Africa.

Bifarello, M. (2002). From delegating to participation: Third sector and the state in associative networks. Proceedings from the Fifth Conference of the International Society for Third- Sector Research, July 7-11, 2002, Cape Town, South Africa.

Bonser, F. C. (Ed.). (1995). Proceedings from the Role of NGOs in Economic Development “State-of-the-Art” International Research Conference. International Institute of Administrative Sciences.

Chalmers, D. A., Vilas, C. M., Hite, K., Martin, S. B., Piester, K., & Segarra, M. (Eds.). (1997). The new politics of inequality in Latin America. Oxford: Oxford University Press.

Chambers, R. (1983). Rural development: Putting the last first. London: Longman.

Choi, J. H. (2006). Agricultural cooperatives in Korea. Proceedings from 2006 FFTC-NACF International Seminar on Agricultural Cooperatives in Asia: Innovations and Opportunities in the 21st Century, September 11-15, 2006, Seoul, Korea.

Grimsey, D., & Lewis, M. K. (2007). Public private partnership. Cheltenham, UK: Edward Elgar.

Hasan, S., & Onyx, J. (Eds.). (2008). Comparative third sector governance in Asia: Structure, process, and political economy.

New York: Springer.

Linder, S. H. (1999). Coming to terms with the public-private partnershi. American Behavioral Scientist, 43(1), 35-51.

Nonaka, A. (2006). The agricultural structure and agricultural co-ops in Japan. Proceedings from 2006 FFTC-NACF International Seminar on Agricultural Cooperatives in Asia: Innovations and Opportunities in the 21st Century, September 11-15, 2006, Seoul, Korea.

North, D. (1990). Institutions, institutional change and economic performance. New York: Cambridge University Press.

Rapley, J. (1996). Understanding development: Theory and practice in the third world. Boulde, C.O.: Lynne Rienner Publisers.

Rashid, A. R. H., & Afandi, A. (1995). NGOs and development in Egypt: How much do we know, and where do we go from here?

In C. F. Bonser (Ed.), Proceedings: The Role of NGOs in Economic Development “State-of-the- Art” International Research Conference (pp. 23-28). International Institute of Administrative Sciences.

Regulska, J. (1999). NGOs and their vulnerabilities during the time of transition: The case of Poland. Voluntas, 10(1), 61-71.

Taiwan Provincial Farmers Association. (2010). Farmers associations yearbook in Taiwan.

Williamson, O. E. (1975). Market and Hierarchies. New York: Free Press.

Journal of US-China Public Administration, ISSN 1548-6591 November 2013, Vol. 10, No. 11, 1061-1069

D

DAVID

PUBLISHING

The Assessment of the Impact of an Aging Population of China on the Country’s Economy Inna Stecenko Science of Baltic International Academy, Riga, Latvia Latvian Academy of Sciences, Riga, Latvia In the article, the author on the basis of the analysis of the structure of the population of the People’s Republic of China (PRC) is making an attempt to identify the influence of increasing number of people over 65 years on the economic situation in the state. The introduction of reform of pension system of China is related to the additional expenses of the state. Basing on the method of pair correlation, the author shows that with increase of percentage of the aging population of PRC, the foreign exchange reserves of the state are increased; it is evident that the state forms the financial reserves for the pension fund of the country.

Keywords: PRC, pension system, social policy, correlation coefficient

At the end of 20th century, the social protection of the population has become the major attribute of the social policy of any civilized state. The goal of majority of the social protection systems is in the maintaining the stability of income of people, providing an equal access to the medical assistance and in the provision of necessary social services. In the economically developed states the social protection is an essential part of the national economy, the cost of which for many West-European states makes more than a quarter of gross domestic product. The most developed systems of social protection have the countries of the European Union (EU).

Thanks to the social protection systems the modern European economies have gotten the name socially-oriented.

As the experience of the Western-European countries shows, the existence of the thought out social protection system, covering all the citizens, not only leads to an improvement of their welfare, expends, and strengthens the country’s labor force, but also contributes to the economic growth and stabilization of the political and social situation in the country. Thus, the social protection has a positive impact on the society, promoting the social harmony and provision of the common sense of the social support among its members.

The determining influence on the systems of the social protection in the EU countries have the modern demographic trends (birth-rate failing is the below the natural reproduction of the population and its aging), strengthening of the European integration and economic globalization.

Corresponding author: Inna Stecenko, Ph.D. in economics, professor, head of the doctoral program “Regional Economy and Economic Policy”, Vice-Rector of Science of Baltic International Academy, expert of the Latvian Academy of Sciences in the field of Economics; research fields: the international economics, the investment attraction, the regional development. E-mail: i.stecenko@yahoo.com.

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Theory The researches of the issues of the social protection systems as one of the complex systems of the developed market economy, occupy an important place in the works of numerous scholars and practitioners in the economically developed countries, in the activity of the International Labor Organization, EU, International financial organizations such as the International Bank for Reconstruction and Development, International Monetary Fund. The International Organization of social protection exclusively has a deal with the issues of social protection. The most careful attention to the issues of social protection accounts for the 1970s and early 1980s, when the issues of the social policy and social protection were considered as one of the most important elements of the theory of the social state. It was associated with the significant increase of the social expenses in the general structure of GDP (Gross Domestic Product) of many European countries; therefore, many experts believe this index as a main in the development of theory of the “social state”. It promotes the development of the social protection system. Despite the fact that the national systems of the social protection in market economy countries are still far from the perfection, their development not least determined by the sufficiently high level of professionalism of experts, who are engaged in the formation of policy in the given field. The general-theoretical bases of formation and development of the social state and system of the social protection of the population are laid in the works of classics of the economic mind (Smith, 1759/1982; Keynes, 1956; Hayek, 2012; M. Friedman & R. Friedman, 1990). In particular, the problem of the state control over the social system protection is reflected in the works of supporters of neoclassical views of Marshall (1920) and Pigou (1949/1989).

The model of social maneuvering of the incomes of population and active intervention of the state in the issues of regulation of the social protection are disclosed in the researches of Keynes (1956). The particular provisions of welfare economics are represented by the theory of economic optimality of Pareto (2008). The ration of the social fairness with the categories of equality and freedom were researched by Rawls (1993), M. Friedman and R. Friedman (1990). The issues of formation and development of the “social market economy”, the basis of existing of which was the provision that the government should balance the requirements of the economic freedom of effectiveness and growth, on the one hand, need for the social fairness in the distribution of incomes, on the other hand.

The issues of the social protection have gotten quite serious development also in the works of such famous economists as: Beveridzh (1944), Andersen and Regini (2000), Stiglitz, Fitoussi, and Sen (2010), and others.

To the issues of the social protection of the population is devoted many works of the European and American scientists. The formation of the financial resources for the provision of pension fund of China is poorly studied topic. The importance of study of the given experience is represented by the following circumstances. Realizing that the volume of trade of China with the EU countries and USA is significant within the frameworks of volume of world trade, it is necessary to predict the future development of economy of PRC in the implementation of the social policy. Whether the implementation of the pension plan will have an influence on the stable growth of GDP, the ration of the yuan to the dollar, the yuan to the euro or not?

The economically developed countries of the EU have gained an extensive experience of how to organize and improve the social protection, taking into the consideration that any increase in the social security, pension payments has a significant influence on the budget of the state as a whole.

AN AGING POPULATION OF CHINA ON THE COUNTRY’S ECONOMY

1063

The Goal In this study, the author suggests to evaluate the impact of aging population of China on the stability of the economic development of the state that is predetermined the choice of the topic of this study.

Methods The following methods were used in the research: the method of scientific abstraction, deduction, system analysis, correlation analysis, and mathematical prediction.

Key Findings The attention of many researchers—economists is fixed on the economy of China, as the fast–growing market of Celestial Empire affects more profoundly on Eurasian continent and on the world economy as a whole. According to the research of the Organization for Economic Cooperation and Development (OECD) by 2016 the China will give way to the U.S., namely, to the leadership of the world’s largest economy and on the expert’s forecasts the GDP of China and India is most likely will exceed the GDP of “Group of 7” by 2025.

The income level per capita by 2060 in China will increase by seven times; the forecasts of OECD are based on the indicators of purchasing-power parities for 2005. At that, OECD warns that none of these forecasts are final1.

Although, the announced 7.7% of growth of GDP in 2012 is the lowest for China since 1999 (then the country’s economy grew by 7.6%) what is not surprising as the world crisis leaves mark and yet this indicator exceeds the planned 7.5% by the Chinese government—the moderate numbers which the economy of China will be easily to achieve. For the 2013 the planned economic growth of People’s Republic of China (PRC) is reduced the OECD from 7.8% to 7.4 %.2 The reason for that is not only the world economic crisis, but also internal, social and economic issues of the state. The author would like to focus on one of them—it is the increase of number of people of retirement age which lies in the plane of formation of social policy of China.

The Constitution of PRC and documents of PRC use the largest social and cultural commonalities as the most important for the Chinese society and to manage them are used such usual concepts for socialistic “constitutionalism” as: classes, workers, peasants, intellectuals, nations. In the introduction to the constitution it is written that “in the socialist construction it is necessary to relay on workers, peasants and intellectuals”, however, in the pension reform of China get only workers and intellectuals—the peasants of Celestial Empire are not yet included in the pension reform.

The economic reform of China stimulated the awareness of the specificity of interests of various classes and groups. However, the carried out researches of sociologists suggest that the representatives of various classes of population are increasingly identify themselves not with any class (and consequently do not support its political and social attitudes and programs) and with the other sociocultural commonalities (according to the nationality, education, age, and etc.): the young people are more clearly aware of their specific interests, ethnic, and confessional commonalities, personnel specialists, employees of government machine are formed, the lecturers are increasingly write about the transformation of intellectuals into the most progressive social force.

1 2

http://www.oecd-ilibrary.org/development/development-co-operation-report-2011_dcr-2011-en. http://www.stats.gov.cn/english/statisticaldata/.

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AN AGING POPULATION OF CHINA ON THE COUNTRY’S ECONOMY

The article 44 and 45 of the Constitution of China3 are formulated the tasks of the state and sometimes the society in the field of social security as well. Thus, the state in accordance with the law establishes the procedure of retirement of workers and employees (only), with the assumption that the “state and society provide for retirees”. At the state allots a task to develop a social insurance, social welfare, medical, and health services, the state and society should provide for disabled persons from the military personnel, to provide the financial assistance to the families of the fallen heroes, grant discounts to the service families, to assist to the blind, deaf, dumb, and the other citizens with the disabilities in employment, getting living allowance, getting education.

There are problems in the country and they are inevitable. The reform of pension system of China makes it aim by 2025 to cover all the working Chinese by the pension system.

Another problem, lying in the plane of social policy is the agrarian overpopulation of the country.

The government intensely pursuing a course of urbanization and by 2020 in rural localities will remain close to 500 million of people (about 30% of the population of the country) and the rest will live in the cities4.

It should be noted that in 2009 the number of persons participated in basic pension insurance in urban areas at year-end amounted to 218.91 million, a rise of 17.54 million persons year-on-year. Of the total, number of employees and retirees stood at 165.87 and 53.04 million, which rose 14.04 and 3.50 million persons respectively, year-on-year. The number of migrant workers participated in basic pension insurance hit 24.16 million, expanding 5.70 million persons year-on-year. The number of enterprises participated in basic pension insurance grew to 199.51 million persons, rose by 17.16 million persons year-on-year (see Table 1).

Table 1 The Analysis of the Socioeconomic Indices of China From 2008 to 2012 Category 2008 2009 2010 GDP growth rate 9.6 9.2 10.4 Government budget Public revenue (million yuan) 61,330 68,518 83,102 Foreign exchange reserves (billion US) 19,460 23,992 28,473 Population (million) 133,474 134,100 Urban (million) 62,186 66,557.5 Rural (million) 71,288 50.32 Population ages 0-14 (% of total) 18.5 16.60 Population ages 15-64 (% of total) 73.5 74.53 Population ages 65 and above (% of total) 8.5 8.86 Note. Sources: http://www.wto.org/english/res_e/booksp_e/anrep_e/anrep11_e.pdf.

2011

2012

9.3 -1.1 103,874 31,811 134,735 69,079 65,656 16.5 74.4 9.1

7.7 -1.5 117,210 33,116 135,404 71,182 64,222 16.5 74.1 9.4

The treatment on basic pensions for enterprise retirees improved, and all in full payment on schedule. The number of retirees brought into the community management arrived at 34.61 million, account for 73.2%, a year-on-year rise of 2%.

The revenue of basic pension insurance fund topped 974.0 billion yuan, up by 24.3%. Of which, revenue collection totaled 801.6 billion yuan, grew 23.4% year-on-year. Financial subsidies at all levels of basic pension insurance fund stood at 143.7 billion yuan. The total expenses of fund topped 739.0 billion yuan, up by 3 4

http://chinalawinfo.ru/constitutional_law/constitution. http://chinalawinfo.ru/economic_law.

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23.9% year-on-year. The accumulated basic pension insurance fund at year-end accounted for 993.1 billion yuan5 .

The analysis of independence number of working population in China at the level of growth of GDP of the country has been carried out, using the method of pair correlation.

The aim of the correlation analysis is to identify the degree of dependency that exists between factor-based and resulting attributes. As is known, the size of the linear relationship between two attributes characterize the linear correlation coefficient, which is denoted by r . The size of the correlation coefficient can be calculated by the following formula (Pearson correlation coefficient). n  n  n  n xi y i    xi   y i  i 1  i 1  i 1 

n

r

 xi  x  yi  y 



i 1

n

n

  n xi2    xi  i 1 i 1 i 1  i 1  n n 1 1 Where, x and y —mean values X and Y : x   xi , y   yi . n i1 n i 1 n : sample size; i : number of observation ( i  1, 2, ..., n ).

 x

i

 x

2

 y

i

 y

2

n

n

2

  n y i2    y i  i 1  i 1  n

n

2

(1)

Тhe size of the correlation coefficient ranges between -1 and 1.

The data are summarized in Table 2.

The carried out calculations show that the increasing number of residents and working residents at the age of 15-64 does not influence on the growth of GDP of China, even more interesting is the dependence of growth of GDP of the country from an agrarian population. It should be noted that the correlation coefficient is less than 0.5 that indicates to the weak dependence, however, according to the other indices the coefficient is negative.

Table 2 The Calculation of Correlation Coefficient of Dependence of Number of Population and Number of Working on the GDP Growth of PRC (Yielded by the Authors of This Paper) Year GDP growth (%) 2009 9.2 2010 10.4 2011 9.3 2012 7.7 Correlation coefficient

Popul (million) 133,474 134,100 134,735 135,404 -0.6518

Urban popul (million) 62,186 66,657 69,079 71,182 -0.49731

Rural popul (million) Popul (aged 15-64) 71,288 92,097 67,414 93,961 65,556 94,072 64,222 100,334 0.43678 -0.76523

On January 1, 2012, China is on the first place according to the gold and foreign exchange reserves ahead of Japan, the U.S., Saudi Arabia, and Russia. As it is known that the availability of the large amount of gold and foreign exchange reserves allows “insure” the economy of the country in the periods of financial crisis.

They are easier allowed to go through the capital outflow, devaluation of the currency.

Thus, gold and foreign exchange reserves are needed to bridge the deficit of balance of payments of the country in the “hard times” toward the external market. According to the opinion of experts, the volume of 5

http://www.stats.gov.cn/english/statisticaldata/.

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AN AGING POPULATION OF CHINA ON THE COUNTRY’S ECONOMY

reserves should not be less than the volume of quarter import of the country. The International reserves of PRC rose to 3.3 trillion of dollars, following the results of 20126.

The share of gold reserves in China’s reserves is 2%, while the index of Germany is 7%. By the volumes of reserves China ranks first, on the second line—Japan, Saudi Arabia, Russia, and Switzerland7.

The present level of gold and foreign exchange reserves of PRC is a good foundation for economic growth.

Thus, according to the forecast of the head of Sovereign Wealth Fund of China Investment Corp (CIC), LouTszieya, Chinese economy, taking into account some strengthening of the economic activity in the world, could increase by more than 8%, following the results of 2013.

According to the Table 3, along with the growth of income in PRC, will occur the accumulation of foreign exchange reserves this is evidenced by the high rate of correlation—0.95.

However, the GDP growth is not affect at the level of foreign exchange reserves and this confirms the negative index of correlation—0.88647.

Table 3 The Calculation of Correlation Coefficient Between Foreign Exchange Reserves, Public Revenue and GDP Growth (%) of China (Yielded by the Authors of This Paper) Year 2008 2009 2010 2011 2012 Correlation coefficient Intersept Slope

Foreign exchange reserves (billion US) 19,460 23,992 28,473 31,811 33,116 0.957952

Public revenue (million yuan) GDP growth (%) 61,330 9.6 68,518 9.2 83,102 10.4 103,874 9.3 117,210 7.7 -0.88647 -22,240 4.0

The data of the carried out analysis are represented as graphics and regression equation (see Figure 1).

140000

y = 54,259x ‐ 22240

foreign ex c hange res erves , billion US

foreign exc. reser

120000 100000

R 2 = 0,0057

public revenue, mln yuan

80000 60000

y = 24,684x ‐ 22240

40000 20000

R 2 = 0,9647

0 2007 2008 2009 2010 2011 2012 2013

L inear (foreign ex c hange res erves , billion US ) L inear (foreign ex c hange res erves , billion US ) L inear (foreign ex c hange res erves , billion US )

ye a r

Figure 1. The correlation of foreign exchange reserves and the public revenue.

However, the goal of the research is to identify the influence of increasing number of people over 65 years 6 7

http://www.imf.org/external/pubs/ft/gfsr/. http://www.rbc.ua/rus/top/show/zolotovalyutnye-rezervy-kitaya-v-2012-g-vdvoe-prevysili-mirovoy-04032013151600.

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old on the state of economy of China. The author made the calculations of dependence of increase of the foreign reserve currency on the different age groups of country’s population (see Table 4).

Thus, the obtained results showed that the amount of foreign exchange reserves of China is directly related to the level of ageing of population of the country, this is proved by obtained data of the correlation analysis: The correlation coefficient of foreign exchange reserves and the population over 65 years is 0.870—It is a high level of correlation. It is possible that it shows that the Chinese authorities in such way prepare for the decision of retirement policy by increasing foreign currency reserves.

Table 4 The Calculation of Correlation Coefficient of Dependence of Foreign Exchange Reserves on the Age Groups of the Population (From 0-14 and People Older Than 65 Years) (Yielded by the Authors of This Paper) Year

Foreign exchange reserves (billion US)

2008 2009 2010 2011 2012

19,460 23,992 28,473 31,811 33,116 -0.88647 slope intersept

Age from people) 24,663 22,245 22,164 22,341

0-14

(thousand

of

Age over 65 years (thousand of people) 11,257 11,309 11,881 11,870 12,727 0.870807 15.94 -143,146

It should be noted that the problem of ageing of population is not unique to China, it is intensely indicated by the European Commission, as the population over 65 years in the EU countries—27% is constantly increasing: in 2008—17.1%, 2009—17.2%, 2010—17.4%, 2011—17.5%, and 2012—17.8%.

The forecasts of the European Commission for the next 50 years represented by the Eurostat are also disappointing. As you can see from the data given in Table 5, if the number of people over 65 years in 2030 is 42.31% of the working population, then in 2060 this index will grow by 50%, and is more than 60% of all the population of 28 countries of EU. Table 5 The Forecast of the European Commission About the Number of People Over 65 Years as a Percentage of the Group From 15–64 Years Year Population size of the European Union Population size over 65 years (as % of the group 15-64) 2030 522,342,413 42.31 2035 524,536,969 45.52 2040 525,702,440 45.96 2045 525,624,613 51.55 2050 524,052,690 56.06 2055 521,034,357 60.11 2060 516,939,958 60.32 Note. Source: eurostat.ec.europa.eu/tgm/refreshTableAction.do?tab=table&plugin=1&pcode=tps00010&language=en.

It seems interesting to make the forecast of growth of number of people over 65 years in China and by the paces of the country’s income and foreign exchange reserves. In the calculations used the EXEL program, where as it is known, the equation for FORECAST is a + bx, where:

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AN AGING POPULATION OF CHINA ON THE COUNTRY’S ECONOMY

a  y  bx a  y  bx and:

b

(2)

 ( x  x )( y  y )  (x  x)

(3)

2

and where x and y are the sample means AVERAGE (known x’s) and AVERAGE (known y’s).

The calculated data are summarized in Table 6.

Table 6 The Forecast of Growth of Foreign Exchange Reserves, Public Revenue and People Over 65 Years (Yielded by the Authors of This Paper) Year 2013 2014 2015

Foreign exchange reserves (billion US) 37,025.5 40,096.5 43,167.5

Public revenue (million yuan) 130,941.6 145,653.2 160,364.8

Age over 65 years (thousand of people) 12,859.1 13,209.2 13,559.3

The made calculations will show that by 2015 exchange reserves of China could be increased by nearly 220% in comparison with 2008, the incomes will increase by 260% in comparison with 2008, respectively, if to assume that the level of growth will be kept.

According to the calculations, the level of people over 65 years will also increase and will be 13.5 million of people, undoubtedly, it will be a serious weigh of the budged of the country.

Conclusions Thus, first of all we should note that the effect of aging of the population is observed in most industrialized countries, primarily, in Europe, where the number of people over 65 years old is about 20%, although for China this percentage is almost two times lower—8.9%. It is curious that the level of foreign exchange reserves of China do not depend on GDP growth as evidenced by the negative coefficient of correlation -0.88647. However, the amount of China’s reserves affects the number of people over 65 years old, it confirms the correlation coefficient 0.870. Undoubtedly, the problem of ageing of population is characterized by the increasing number of elderly people what leads to a volume reduction in medical aid of population of youthful age and leads to the growth of social security of working population. This usually leads to the simultaneous decrease in health of population and requires reorientation of capital investments of the state toward the compensation of economic mechanisms which are designed to maintain the functioning of the social economic sector. Obviously, the made calculations show that China accumulated foreign exchange reserves are necessary, including maintain social reforms in the country and for the provision of social security of the population.

References Andersen, G. E., & Regini, M. (2000). Why deregulate labour markets? Oxford: Oxford University Press.

Barry, J. N. (2007). The Chinese economy: Transitions and growth. Cambridge: Massachussets Instituts of Technolodgy.

Friedman, M., & Friedman, R. (1990). Free to choose: A personal statement. San Diego: Harvest Books.

Hayek, F. (1988). The collected works of F. A. Hayek. W. W. Bartley, (Ed.). Chicago: University of Chicago Press.

Keynes, J. M. (1956). The world of mathematics (2000 ed.). J. R. Newman, (Ed.). Scotland, Dover: University of St Andrews, Scotland.

Marshall, A. (1920). Encyclopedia Americana (1987 ed.). New York: Marshall Cavendish.

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Оrlov, A. I. (2002). Ekonometrika. Мoskow: Eksamen.

Pigou, A. C. (1989). Employment and equilibrium. New York: MacMillan.

Rawls, J. (1993). Political liberalism. New York: Columbia University Press.

Shenkar, O. (2005). The Chinese century: The rising Chinese economy and its impact on the global economy, the balance of power, and your job. New York: Pearsn Education Inc. Smith, A. (1982). Theory of moral sentiment. In the glasgow edition of the works and correspondence of Adam Smith (Vol. 1) (pp.

184-185). Oxford: Oxford University Press.

Stiglitz, J. E., Fitoussi, J. P., & Sen, A. (2010). Mismeasuring our lives: Why GDP doesn’t Add Up. Fort Myers: The New Press.

Journal of US-China Public Administration, ISSN 1548-6591 November 2013, Vol. 10, No. 11, 1070-1082

D

DAVID

PUBLISHING

Transformational Leadership and Organizational Outcomes: Evidence From Vietnamese Workers Ngoc-Hong Dao , In-Soo Han Chungnam National University, Daejeon, South Korea

The purpose of this study was to investigate empirically the impact of transformational leadership on organizational outcomes (OCBâ&#x20AC;&#x201D;organizational citizenship behavior, OCâ&#x20AC;&#x201D;organizational commitment, and job satisfaction), and the mediating role of trust in the leader in the relationship between transformational leadership and organizational outcomes in Vietnamese employees. The results showed that, first, transformational leadership had a significant relationship with organizational citizenship behavior, organizational commitment, and job satisfaction. Second, there was a positive relationship between transformational leadership and trust in the leader. Third, trust in the leader was positively and significantly related to OCB, affective organizational commitment, and job satisfaction.

Fourth, a moderating role of trust in the leader was identified in the relationship between transformational leadership and organizational outcomes. Finally, some practical recommendations for developing leadership competencies in Vietnamese managers are suggested.

Keywords: Vietnam, transformational leadership, trust in leader, organizational outcomes

On January 11, 2007, Vietnam, one of the worldâ&#x20AC;&#x2122;s fastest growing economies, won formal approval from the World Trade Organization (WTO) to become its 150th member. This brought not only opportunities but also challenges to Vietnamese businesses and the economy. As business environments become global, there is a growing need for them to be more competitive and performance-oriented.

To gain competitive advantage, a variety of managerial effectiveness skills and innovative ideas are required by Vietnamese companies. Among other matters, much attention has been paid to the leadership issue, because it is well-known that leadership plays an important role in securing employee motivation and the behaviors needed to achieve organizational effectiveness. How to find and implement an effective leadership style in a changing business environment becomes one of the principal challenges to Vietnamese business management.

Despite its importance, however, there are few studies that have investigated which styles are appropriate in the Vietnamese context or tested empirically how they affect employee behavior and performance. Thus, in both theory and practice, there is growing interest in, and demand for, more systematic and empirical research on effective leadership styles in Vietnam.

Transformational leadership has gained attention in both business and academic fields since the 1980s, Ngoc-Hong Dao, master, Department of Business Administration, Chungnam National University; research fields: human resource management, organizational behavior. E-mail: daongochong110@gmail.com.

Corresponding author: In-Soo Han, Ph.D., professor, Department of Business Administration, Chungnam National University; research fields: human resource management, organizational behavior, innovation, business & society. E-mail: ishan@cnu.ac.kr.

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when new leadership was needed to deal with fundamental changes in the business world. It was considered an ideal type of leadership that can invoke the changes organizations need and positive follower behavior. Many research findings have been reported noting that transformational leadership has a positive effect on required individual and organizational outcomes (Podsakoff, MacKenzie, Moorman, & Fetter, 1990; Pillai, Schriesheim, & Williams, 1999; Goodwin, Wofford, & Whittington, 2001).

In this study, the relationship between transformational leadership and organizational outcomes, especially behavioral outcomes is investigated. The mediating role of trust in leadership between the two variables is also analyzed. The investigation and analysis are targeted at the particular business environment in Vietnam. Finally, some practical implications are suggested.

Theoretical Background and Hypotheses “Transformational leadership” was identified by Burns (1978) and extended by Bass (1985). The origin of transformational leader theory lies with the work of Burns (1978), who originally proposed two distinct leadership styles based on his analysis of the behaviors displayed by various political leaders. The first of these, transactional leadership, characterized many of the traditional leadership theories existing at that time.

According to Burns (1978), transactional leadership was based on an exchange process between leaders and subordinates, where rewards were administered to employees based on acceptable levels of displayed effort and performance. Burns also noted that these leaders appeared to obtain an adequate level of performance from their followers, who worked according to rather strictly defined tenets.

In contrast to transactional leadership, the second type of leadership style, transformational leadership, was conceptualized as one to encourage followers to transcend their own self-interests and move beyond simple leader-member transactions for the good of the group or the organization (Burns, 1978; Bass, 1985). According to Burns (1978), the transformational style creates significant changes in the life of people and organizations. It redesigns perceptions and values, and changes the expectations and aspirations of employees. Unlike the transactional style, it is not based on a “give and take” relationship, but on the leader’s personality, traits, and ability to make change through vision and goals.

Another researcher, Bass (1985), suggested a transformational leadership theory that was added to the initial concepts of Burns (1978). According to Bass, the extent to which a leader is transformational is measured first in terms of influence on the followers. Followers of such a leader feel trust, admiration, loyalty, and respect for the leader and they will do more than they are expected to do. The leader transforms and motivates followers with charisma, intellectual arousal, and individual consideration. Additionally, this leader seeks new ways of working while trying to identify new opportunities, as opposed to threats, and tries to break out of the status quo and alter the environment.

Burns (1978) and Bass (1985) posited that transformational leadership was a paradigm in which the leader influenced the followers to perform beyond expectations by making them more aware of the importance and value of goals, influencing them to transcend self-interest for the good of the group or organization, and by appealing to their higher-order needs. Also, many authors (House & Baetz, 1990; House & Podsakoff, 1996) have shown that transformational leaders demonstrate symbolic and meaningful leadership behaviors such as emphasizing the importance of a task, advocating ideological values, and articulating a great vision.

Transformational leaders take these steps as ways of producing affective and cognitive consequences among the followers. These consequences include emotional attachment and trust in the leader, arousal of intense

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TRANSFORMATIONAL LEADERSHIP AND ORGANIZATIONAL OUTCOMES

motivation, and enhanced self-efficacy in the followers.

The transformational leadership theory was further developed by Bass and Avolio (1995), who claimed that transformational leadership had four components: idealized influence, individualized consideration, inspirational motivation, and intellectual stimulation. The first, idealized influence is identified in leaders who behave in a manner that causes followers to want to emulate them. Originally, Bass (1985; 1999) had identified this construct as charisma, borrowing the term from Weber (1947). Bass (1985) defined a charismatic leader (one who exhibits idealized influence) as behaving in a consistent manner, guided by high moral principles. This leader is noted for his determination and persistence, and the subsequent behavior of followers who desire to act in a manner similar to the leader. Thus, idealized influence from a leader functions to transform followers by creating changes in their goals, values, needs, beliefs, and aspirations (Rowold & Heinitz, 2007; Yukl, 2002).

By individualized consideration, the leader builds a one-to-one relationship with his or her followers, and understands and considers their differing needs, skills, and aspirations. By inspirational motivation, the leader articulates an exciting vision of the future, shows the followers how to achieve the goals, and expresses his or her belief that they can do it. By intellectual stimulation, the leader broadens and elevates the interests of his or her employees, and stimulates followers to think about old problems in new ways (Bass, 1985).

Transformational Leadership and Organizational Outcomes A transformational leader is fundamentally an agent for change. The theory of transformational leadership right from inception (Bass, 1985; Burns, 1978) makes articulation of a vision by the leader an essential component of the leadership paradigm. The new vision so articulated inspires subordinates to greater efforts, directed toward bringing about a change in their attitudes, self-concepts, and motives (House & Shamir, 1993).

The combined effects of communicating the new vision by means of inspiring symbols and emotional appeals at varying levels and, possibly, the forging of emotional ties between the leader and the subordinates, as well as the modeling of ideal conduct and values by the leader, can lead to performance beyond expectations. Studies (Judge & Piccolo, 2004; Lowe, Kroeck, & Sivasubramaniam, 1996) have consistently supported the positive effects of transformational leadership on several organizational and individual outcomes, including organizational citizenship behavior (OCB), organizational commitment (OC), and job satisfaction.

In this study, we empirically investigate the hypothesis below: Hypothesis 1. Transformational leadership is positively related to organizational outcomes.

Transformational leadership and organizational citizenship behavior. Organizational citizenship behavior is generally conceptualized as behaviors related to the work place but which are discretionary; that is, they are not part of the formal organizational reward system but promote the effective functioning of the organization (Greenberg, 2005; Organ, 1988; Organ & Konovsky, 1989). It is commonly accepted that organizations need activities of employees that go beyond role prescriptions.

The fact that transformational leadership behaviors show significant, consistent, and positive relationships with OCB is not surprising since the heart of transformational leadership is the ability to get employees to perform above and beyond expectation, and this extra effort may show up in the form of citizenship behaviors.

A review of the leadership literature by Podsakoff et al. (1990) indicates that transformational leaders get followers to perform above and beyond expectations by articulating a vision, providing an appropriate role

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model, fostering the acceptance of group goals, providing individualized support and intellectual stimulation, and expressing high performance expectations.

It is hypothesized that: Hypothesis 1-a. Transformational leadership is positively related to the follower’s organizational citizenship behavior.

Transformational leadership and affective commitment. Affective commitment is the one of three types of organizational commitment; it is an attitudinal variable that denotes an employee’s level of attachment to the organization (Meyer & Allen, 1991). Affective commitment refers to an incumbent’s emotional attachment to the organization; that is, whether his/her expectations are met and he/she wishes to stay with the organization.

Studies have found that transformational leadership enhances the organizational commitment of followers (Goodwin et al. 2001; Judge & Bono, 2000). Organizational commitment of followers is influenced by transformational leadership (Lok & Crawford, 2004). Transformational leadership theory emphasizes the role of empowerment as a central mechanism of building commitment to the organization’s objectives (Bass, 1999).

Empowered employees are more likely to reciprocate with higher levels of commitment to their organization.

By showing respect and confidence in their followers, transformational leaders are able to develop a high degree of trust and loyalty in their followers to the extent that followers are willing to identify with the leader and the organization. As a result, followers trust in and emotionally identify with the leader, such that they are willing to stay with the organization, even under very difficult circumstances.

These findings can be expressed in the following hypothesis: Hypothesis 1-b. Transformational leadership is positively related to a follower’s affective commitment.

Transformational leadership and job satisfaction. Job satisfaction is defined as “an overall measure of the degree to which the employee is satisfied and happy with the job” (Hackman & Oldham, 1975). Many studies show that transformational leadership is positively correlated with employees’ job satisfaction (Bogler, 2001; Griffith, 2004). Leaders who practice transformational leadership reportedly have more satisfied and committed followers than do leaders who practice a non-transformational style of leadership. It is plausible that, through their collective and visionary approach, transformational leaders buffer employee distress and job dissatisfaction and motivate followers to collaborate and achieve greater results than expected (Bass & Avolio, 1994; Bass, 1999). Thus, in this study, we expect that: Hypothesis 1-c. Transformational leadership is positively related to a follower’s job satisfaction.

Transformational Leadership and Trust in the Leader Trust in a leader has been conceptualized as faith in and loyalty to the leader (Nooteboom & Six, 2003; Podsakoff et al., 1990). Transformational leaders gain trust from followers by maintaining their integrity and dedication, by being fair in their treatment of followers, by demonstrating their faith in followers, and by empowering them. It has been suggested that one way that charismatic and transformational leaders can demonstrate their dedication and build followers’ trust is through self-sacrificial behaviors (Conger & Kanungo, 1998; House & Shamir, 1993). Leaders can self-sacrifice by taking on a proportionately larger workload, by foregoing the trappings of power, or by postponing rewards, for example. In sum, transformational leadership behaviors are successful, in part, due to care and concern perceived in the relationship.

Bennis and Nanus (1985), Gillespie and Mann (2004), and Pillai et al. (1999) have demonstrated that there

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is a direct relationship between transformational leadership and trust. This is supported by Saracostti (2007) who demonstrated that trust is social capital to organizations. This would be expected because transformational leaders would need to work hard to earn the trust of their followers if the leaders intend to achieve their goals.

Thus, it is hypothesized that: Hypothesis 2. Transformational leadership is positively related to trust in a leader.

Trust in a Leader and Organizational Outcomes The effect of trust in the leader with regard to organizational outcomes has attracted increasing interest in recent years (Mayer, Davis, & Schoorman, 1999; Hosmer, 1995). This indicates that researchers and practitioners continue to recognize trust as an important factor in determining employee behavior and employee attitude. The consequences of trust include organizational outcomes, such as organizational citizenship behavior, affective commitment, and job satisfaction.

Thus, it is hypothesized that: Hypothesis 3. Trust in the leader is positively related to organizational outcomes.

Hypothesis 3-1. Trust in a leader is positively related to the followers’ organizational citizenship behaviors.

Hypothesis 3-2. Trust in a leader is positively related to the followers’ affective commitment.

Hypothesis 3-3. Trust in a leader is positively related to the followers’ job satisfaction.

Mediating Role of Trust in a Leader Between Transformational Leadership and Organizational Outcomes Many studies have shown that transformational leadership is consistently associated with trust in the leader (Batram & Casimir, 2007; Lowe et al., 1996). Trust in the leader correlates positively with various outcomes such as organizational citizenship behaviors, performance, and satisfaction (Jung & Avolio, 2000; Pillai et al., 1999). Thus, it would be expected that trust would play mediating roles in the relationship between transformational leadership and organizational outcomes.

Organ (1988) and Konovsky and Pugh (1994) demonstrated that organizational citizenship behaviors occur in a context in which social exchanges, which are involved in transformational leadership, characterize the quality of leader-subordinate relationships. These authors demonstrated, in particular, that trust plays an important mediating role in the relationship between transformational leadership and organizational citizenship behavior. It seems reasonable to think that when transformational leaders motivate employees to perform above and beyond expectations, this will lead to organizational citizenship behavior on the part of the subordinates. However, the trust relationship between transformational leadership and OCBs seems to be a pivotal condition for OCB to occur. This means that without the trust relationship, there is no link between transformational leadership and organizational citizenship behavior. Thus, in this study, it is supposed that: Hypothesis 4. Trust in a leader mediates the relationship between transformational leadership and organizational outcomes.

Hypothesis 4-1. Trust in a leader mediates the relationship between transformational leadership and organizational citizenship behavior.

Hypothesis 4-2. Trust in a leader mediates the relationship between transformational leadership and affective commitment.

Hypothesis 4-3. Trust in a leader mediates the relationship between transformational leadership and job

TRANSFORMATIONAL LEADERSHIP AND ORGANIZATIONAL OUTCOMES

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satisfaction.

The hypothesized model of the study is shown in Figure 1.

Figure 1. The hypothesized model.

Method Sample Data for this study were obtained from employees of well-known conglomerates, such as the Adidas Company and Viettel Mobile in Vietnam. The final sample for the study consisted of 200 employees who worked with their direct supervisor. A cover letter attached to each questionnaire explained the objective of the survey and assured respondents of the confidentiality of their responses and the voluntary nature of participation in the survey. Of the 200 questionnaires distributed, 186 were finally returned usable, giving a response rate of 93% (186/200).

Of these respondents, 49.5% were males and 50.5% were females. The most common ages of the employees were between 26 and 45: specifically, from 26 to 35 years old (59.1%) and from 36 to 45 years old (37.1%). Most (79%) of the participants had earned a post-secondary school degree (bachelors or graduate degree).

Measures The questionnaires were initially prepared in English. To collect information from Vietnamese employees, the questionnaires are translated from English into Vietnamese by the author, and checked using a back-translation method (Parameswaran & Yaprak, 1987).

Transformational leadership. Transformational leadership was measured using 20 items of the Multi-Factor Leadership Questionnaire (MLQ-Form 5X) (Bass & Avolio, 1995). Subjects judged how frequently their immediate leader engaged in transformational leadership behaviors. Ratings were completed on a five-point scale with: 1 indicating “Not at all” and 5 indicating “Frequently”. Sample items included: “My leader goes beyond self-interest for the good of the group”, and “My leader helps me to develop my strengths”.

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These items were averaged to form a scale, which had a reliability of 0.96.

Trust in leader. This variable was measured by seven items adapted from Gabarro and Athos (1978). On a five-point scale, ranging from 1 (“strongly disagree”) to 5 (“strongly agree”), employees indicated the extent to which they trusted their direct leaders. Sample items included, “I am not sure I fully trust my supervisor”, and, “I believe my supervisor has great integrity”. These items were averaged to form a scale, with a reliability of 0.92.

Organizational citizenship behavior. A 10-item scale developed by Organ and Ryan (1995) was used to measure OCB. Response options ranged from 1, “strongly disagree”, to 5, “strongly agree”. Sample items for the service-oriented OCB scale are, “I help other employees with their work when they have been absent”, and “I do not spend a great deal of time in conversation at work”. The alpha reliability of our OCB scale was 0.92.

Affective commitment. Affective commitment was measured by a five-item scale developed by Meyer and Allen (1991). Participants were asked to rate each item on a five-point Likert scale (1 = strongly disagree, 5 = strongly agree). Sample items from this measure include the following: “I enjoy discussing my organization with people outside it”, and, “I feel ‘emotionally attached’ to this organization”. The alpha reliability of this measure was 0.89.

Job satisfaction. A five-item job satisfaction scale developed by Hackman and Oldham (1975) was used to measure job satisfaction. Participants were asked to rate each item on a five-point Likert scale (1 = strongly disagree, 5 = strongly agree). A sample item is, “Generally speaking, I am very satisfied with this job”. The alpha reliability of this scale was 0.88.

Control variables: Demographic variables (age, gender, educational levels, and tenure) were included as control variables because previous studies have suggested that they may have potential effects on the mediators and outcome variables in the study (Kammeyer-Mueller & Wanberg, 2003).

Results Descriptive Statistics and Interrelationships Table 1 includes means, standard deviations, alpha coefficients, and correlations among the variables. It shows that transformational leadership has significant positive correlations with trust in the leader (r = 0.90, p < 0.01), organizational citizenship behavior (r = 0.89, p < 0.01), affective commitment (r = 0.86, p < 0.01), and job satisfaction (r = 0.90, p < 0.01).

Table 1 Descriptive Statistics, Alpha Coefficients, and Correlations Variables 1. Age 2. Education 3. Gender 4. Tenure 5.Transformational leadership 6. Trust 7. OCB 8. Affective commitment 9. Job satisfaction Notes. * p < 0.05; ** p < 0.01.

M S. D 33.9

3.90 .59 3.96 .59 3.96 .52 3.94 .57 3.94 .56

1 1 0.24** -0.24** 0.24** -0.11 -0.03 0.00 -0.04 -0.01

2

3

4

5

6

7

8

9

1 -0.13 -0.01 -0.20** -0.17* -0.21** -0.22** -0.21**

1 0.03 0.02 -0.01 -0.01 -0.08 -0.01

1 0.12 0.09 0.12 0.09 0.11

(0.96) 0.90** 0.89** 0.86** 0.90**

(0.92) 0.96** 0.89** 0.93**

(0.92) 0.92** 0.937**

(0.89) 0.948**

(0.88)

TRANSFORMATIONAL LEADERSHIP AND ORGANIZATIONAL OUTCOMES

1077

It is noteworthy that educational level was negatively related to all measured constructs. The higher the education the employees had, the lower they rated their leader’s transformational leadership, their organizational citizenship behavior, affective commitment, and job satisfaction. This result can be interpreted as indicating that the more educated employees (e.g., university graduates) might have higher aspiration levels and expect more of their leader and companies than high school graduates.

Validity Following common practice (Tsui, Pearce, Porter, & Tripoli, 1997), a confirmatory factor analysis (CFA) was conducted on the 20 items that measured the five constructs in this study. As revealed in Table 2, the results confirmed a five-factor structure with an adjusted goodness-of-fit index (GFI) of 0.97 and root mean square error of approximation (RMSEA) of 0.05. If the values of GFI, CFI, and NFI exceed the cut-off value of 0.9, and the value of RMSEA is below the cut-off value of 0.08, then the model is said to be acceptable (Hu & Bentler, 1999).

Table 2 Validity of Measurement Model χ2 310.14

df 220

RMSEA 0.05

CFI 0.97

GFI 0.88

NFI 0.91

The potential threat of common method bias was checked with Harman’s single-factor test via confirmatory factor analysis. This test is based on the assumption that common method bias is a serious problem when a single latent factor accounts for more than 50% of the total variance of the measures (P. Podsakoff, MacKenzie, Lee, & N. Podsakoff, 2003). The results for the single-factor model were as follows: χ2 = 2364.22, df = 1034, GFI = 0.64, AGFI = 0.61, NFI = 0.74, and RMSEA = 0.083. The chi-squared test demonstrated that the five-factor model was superior to the single-factor model (310.14 vs. 2364.22).

Consequently, the results were worse than that of a five-factor model and one single-factor model did not account for the majority of the variance. In short, common method bias was not of importance in this study.

Hypothesis Testing Hypothesis 1 postulated that a positive relationship would exist between transformational leadership and organizational outcomes. Table 2, showing the results of multiple regressions on the relationships between transformational leadership and organizational outcomes, indicates that transformational leadership is positively and significantly related to organizational citizenship behavior (0.88, p < 0.001), affective commitment (0.85, p < 0.001), and job satisfaction (0.89, p < 0.001). Thus, Hypothesis 1, 2, 3 are supported.

Hypothesis 2 proposes that transformational leadership is positively related to trust in the leader. This is confirmed in Table 4 showing that transformational leadership has a positive relationship with trust in the leader (β = 0.91, p < 0,001). Thus, Hypothesis 2 is supported.

Hypothesis 3 predicts that trust in the leader is positively related to organizational outcomes (organizational citizenship behavior, affective commitment, and job satisfaction). As shown in Table 4, trust in the leader had a positive relationship with organizational citizenship behavior (β = 0.88, p < 0.001), affective commitment (β = 0.85, p < 0.001), and job satisfaction (β = 0.89, p < 0.001). Thus, Hypotheses 3-1, 3-2, and 3-3 are supported, so Hypothesis 3 is fully supported.

Hypothesis 4 proposes that trust mediates the relationships between transformational leadership and

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organizational outcomes. To test the mediating role of trust in a leader, the three-steps-regression approach recommended by Baron and Kenny (1966) was followed. According to them, the three following regression equations should be estimated to test mediation. First, regressing the mediator on the independent variable; second, regressing the dependent variable on the independent variable, and third, regressing the dependent variable on both independent variable and on the mediator.

To establish mediation, the following conditions must hold. First, the independent variable must affect the mediator in the first equation. Second, the independent variable must be shown to affect the dependent variable in the second equation. Third, the mediator must affect the dependent variable in the third equation. If these conditions are all hold in the predicted direction, then the effect of the independent variable on the dependent variable must be less in the third equation than in the second. Perfect mediation holds if the independent variable has no effect when the mediator is controlled. Partial mediation holds in the case that the effect is significantly reduced in the third case.

Hypothesis 4-1 predicts that trust in the leader mediates the relationship between transformational leadership and organizational citizenship behavior. Table 3 and Table 4 show that the three required conditions were met. The effects of transformational leadership (independent variable) on the dependent variable are significantly reduced to 0.14, although it does not reach zero. Thus, the hypothesis is partially supported.

Table 3 Results of Multiple Regression on the Relationships Between Transformational Leadership and Organizational Outcomes

Age Education Gender Tenure Transformational Leadership R2

Model 1 0.03 -0.29*** -0.05 0.05

OCB Model 2 0.11 -029** -0.12 -0.10

Dependent variable Affective commitment Model 3 Model 4 -0.13 0.04 -0.28*** -0.05 -0.13 -0.13 0.10 -0.02

0.88*** 0.1

0.79***

Model 5 0.02 -0.30 -0.05 0.10

0.85*** 0.08

0.74***

Job satisfaction Model 6 0.10** -0.06 -0.01 -0.02 0.89***

0.08

0.81***

Notes. * p < 0.05; ** p < 0.01; *** p < 0.001.

Table 4 Regression Results for Hypotheses 3, 4, and 5 Trust in leader Model 1 Model 2 Age -0.01 0.07* ** Education -0.26 -001 Gender -0.05 -0.01 Tenure 0.09 -0.04 Transformational leadership 0.91*** Trust in leader R2 0.08 0.81*** Notes. * p < 0.05; ** p < 0.01; *** p < 0.001.

Dependent variable OCB Affective commitment Job satisfaction Model 3 Model 4 Model 5 Model 6 Model 7 Model 8 0.11** -0.03 0.04 -0.00 0.10** 0.06 -0.05 -0.04 -0.05 -0.04 -0.06 -0.06 -0.01 -0.01 -0.10* -0.09 -0.01 -0.01 -0.01 0.02 -0.02 0.02 -0.02 0.00 ** *** 0.14 0.30 0.34*** *** *** *** *** 0.88 0.82 0.85 0.61 0.89 0.61*** *** *** *** *** ** 0.80 0.92 0.74 0.91 0.80 0.88***

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To solidify the testing results, another more statistically rigorous method, the Sobel test (1982), by which a mediation hypothesis may be assessed, was also used. It provides a more direct test of an indirect effect. In the case of simple mediation, the Sobel test is conducted by comparing the strength of the indirect effect of the independent variable (X) on the dependent variable (Y) to the point null hypothesis, so that it equals zero.

Results from the Sobel tests indicated that the indirect effects of transformational leadership on OCB (z = 14.51, p < 0.01) is in the anticipated direction and is statistically significant. Thus, Hypothesis 4-1 was supported.

The reduced effect of transformational leadership on affective commitment from 0.85 (p < 0.001) to 0.30 (p <0.001) confirms Hypothesis 4-2. Partial mediation holds in this case, too. Results from the Sobel test also indicated the mediating role of trust in the leader in the relationship between transformational leadership and affective commitment. The indirect effects (z = 8.08, p < 0.01) were statistically significant. Thus, Hypothesis 4-1 was supported.

Hypothesis 4-3, proposing that trust in the leader plays a mediating role in the relationship between transformational leadership and job satisfaction, is confirmed in Tables 3 and 4. It can be seen in the table that the three conditions for mediation are met, and the effect of transformational leadership on job satisfaction was reduced from 0.89 (p < 0.001) in equation 2 to 0.34 (p < 0.001) in equation 3. Thus, the results show that Hypothesis 4-3 is partially supported. The results of the Sobel test also reinforce the mediation role of trust in the leader. The results indicate that the indirect effect of transformational leadership on job satisfaction (z = 9.61, p < 0.001) is in the anticipated direction and is statistically significant. Thus, Hypothesis 4-3 is supported too.

Discussions and Conclusions The purpose of the study was to investigate empirically the impact of transformational leadership on organizational outcomes (OCB, OC, and job satisfaction), and the mediator role of trust in a leader in the relationship between transformational leadership and organizational outcomes in Vietnamese employees. The major findings of the study can be summarized as follows.

First, transformational leadership was found to have a significant relationship with organizational citizenship behavior, organizational commitment, and job satisfaction. This was consistent with previous research indicating that there was a positive and significant link between transformational leadership and organizational outcomes.

Second, there was a positive relationship between transformational leadership and trust in the leader. This indicates that the more a leader practices transformational leadership behavior, the greater is the possibility that he or she will be trusted by the followers.

Third, as predicted, trust in the leader was positively significantly related to OCB, affective organizational commitment, and job satisfaction. These findings suggest that trust in the leader might have a significant effect on employee organizational outcome.

Fourth, a moderating role of trust in the leader was identified between transformational leadership and organizational outcomes. This means that transformational leadership could indirectly affect employeeâ&#x20AC;&#x2122;s organizational outcomes through the mediation of trust in the leader as well as affecting them directly. A transformational leader can be a precursor to trust in the leader and its impact on positive organizational outcomes.

This study has several important theoretical and practical implications. Theoretically, the research

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TRANSFORMATIONAL LEADERSHIP AND ORGANIZATIONAL OUTCOMES

framework used in the study may not so new. This study, however, confirms that much previous research on transformational leadership and trust in Western cultures could also be generalized in the Vietnamese setting.

Regarding practice, research findings indicate that developing transformational leadership and trust is of great importance in securing OCB, affective commitment, and job satisfaction in Vietnamese workers. The potential benefits of transformational leadership and trust in leaders in Vietnamese companies have to be attended to.

For the development of this type of leadership, two management practices can be specifically recommended. First, the behaviors and competencies a transformational leader must exhibit have to be included in the performance appraisal of a leader as an evaluation item. Trust in the leader also needs to be evaluated by both the leader’s superiors and subordinates. To the extent the leaders feel these traits and behavior can be evaluated by their superiors, and that the results can influence their salary and promotion, they would seek to develop these positive traits and behaviors for themselves.

Second, official training courses to develop leadership competencies have to be designed and arranged for supervisors and leaders so that they can learn how to implement transformational leadership and how to elicit the trust of their subordinates. Regular and mandatory leadership training should be supplied to managers across all levels, especially those just promoted to a manager position. The 360° feedback process may be a factor in the effective implementation of the program.

The results of this study must be viewed in light of its limitations. First, most measures in the study used self-reported ratings. This raises common method bias concerns. The result of Harman’s single-factor test using confirmatory factor analysis in this study demonstrated that common method bias was not a critical problem.

However, such a technique only evaluates the extent to which common method bias may pose a problem (Kandemir, Yaprak, & Cavusgil, 2006). Thus, using multiple sources of data is needed to minimize the problem in future studies. Second, this study is based on cross-sectional data, which limits any causal interpretation among variables. It should be expanded to a longitudinal study to obtain more concrete results. Third, the generalizability of the findings may be limited by the Vietnamese sample used.

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Journal of US-China Public Administration, ISSN 1548-6591 November 2013, Vol. 10, No. 11, 1083-1097

D

DAVID

PUBLISHING

Bribery Problem in Kuwaiti Public Administration Yousef Mohammad Al Mutairi, Mohammad Qasem Ahmad Al-Qarioti Kuwait University, Kuwait, Kuwait

This empirical study examines the bribery problem in Kuwaiti public administration, its conception, magnitude, reasons, and its consequences. The study is a field research which is based on a random sample consisted of (600) people from various spheres of life in society. Study findings have shown that bribery in Kuwaiti administration is widespread and increasing, transcends nationality, gender, position, education level, and agencies in Kuwait which require paying attention to what kind of measures need to be taken to eradicate it. Recommendations are suggested on ways how to eradicate this problem in order not to become a phenomenon.

Keywords: corruption, bribery, Kuwait, public administration, organizational behavior

Bribery is a very well-known problem which faces various communities, especially in the developing countries. The present study examines this problem especially bribery practices of government officials in providing illegal services and decisions in exchange of personal gains. The main objective of the study is to identify magnitude, causes, and consequences of bribery in Kuwaiti administration, and what can be done to eradicate this problem. The study is divided into four main parts: The first part is the introduction; the second part provides a theoretical framework; the third part outlines the methodology and statistical methods used; the fourth part states the study results in term of magnitude, forms, reasons, and consequences of bribery in Kuwaiti administration. And the last part provides conclusions and recommendations.

Theoretical Framework Bribery as a form of corruption faces many countries in the world regardless of political systems, or development levels. It is prevalent practice in government departments and private companies, under various forms to the extent that it is considered by most employees a part of their income (Jain, 2001). Some researchers estimated bribes 12% of GDP (Gross Domestic Product) in countries like Nigeria, Venezuela, and Kenya (Nwabuzor, 2005). Bribery takes various forms such as taking/giving someone money or benefit as an exchange of illegal decisions. With regard to causes of bribery, many factors contribute to bribery such as weak adherence to religious and social values, ineffective oversight and accountability over government officials, lack of equal opportunities, poverty, and bad social conditions.

As far as the expected results of bribery, many negative consequences at the individual and social levels such as (Lambsdorff, 2003; Meon & Weill, 2005; Caselli, 2005): (1) Disrupting social values: bribery can lead to increasing public tolerance/acceptance of bribery which will Yousef Mohammad Al Mutairi, Ph.D., Department of Public Administration, Kuwait University; research fields: public administration, public finance, public budgeting, organizational behavior. E-mail: yamutairi@cba.edu.kw.

Corresponding author: Mohammad Qasem Ahmad Al-Qarioti, Ph.D., professor, Department of Public Administration, Kuwait University; research fields: public administration, public policy, organizational behavior, human resources management, administrative reform. E-mail: qarioti@cba.edu.kw. Â

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be at the expense of public interest and can weaken institutional and national loyalty, which is harmful for society; (2) Corrupting business environment as people will be obliged to pay bribes in order to get access to services which will be to the detriment of community development; (3) Wasting public resources through employing unqualified people which can result in losing talented people, low productivity, and sacrifice public interest for the benefit of some influential groups. It is not hard to imagine negative consequences when bribery reaches all sectors such as food, public utilities, construction, and similar areas where wrong administrative decisions can be taken (Aidt, 2003).

Several measures can be taken to reduce the negative expected outcomes of bribery. Some of these measures are: (1) Promoting transparency in government as a means to reduce the exacerbation of bribery as transparency sheds light on illegal practices of influential people and on employees who are involved in bribery. Some efforts in this regard have been adopted by transparency organizations on the international and national levels which carried out valuable studies on the problem, and on monitoring bribery-related issues (Transparency International, and national branches of the organization in many countries, including Kuwait); (2) Carrying awareness campaigns through various educational institutions, including religious institutions to eradicate bribery and explain its negative aspects on society; (3) Enhancing the role of various controlling political and judiciary agencies to oversight and take deterrent measures against those involved in bribery cases.

Literature Review Literature review did not find many empirical studies deal with bribery in Kuwait, Gulf Cooperation Council (GCC) countries, or Arab countries due to the nature of such studies. Most studies were either theoretical or religion oriented (Madkoor, 1997; Al Ghassab, 2011). This fact makes this study of special importance as an important pioneer empirical research in this area. Nevertheless, some of the relevant research in this sphere is mentioned below: (1) Social Contract Center Study (2011): This study provides theoretical analysis of corruption practices in Egypt, its direct and indirect causes which constitute a suitable environment cause of corruption in Egypt before 25th revolution in 2011 and how to combat it; (2) Al-Jaouni Study (2009): This is a statistical descriptive study of administrative and financial corruption indexes in Arab countries as an explanation of poverty and underdevelopment in these countries. Study results show that the highest average of corruption in Arab countries is 3.681 on the 10 pointsâ&#x20AC;&#x2122; corruption index where (0) refers to the highest point of corruption and (10) refers to the least level of corruption; (3) Shehatah Study (1992): This psychological study discusses the relationship between bribery and psychological personality characteristics of people who practice bribery. Study findings reveal that bribed employees are over emotional, depressed, unable to deal with conflict, and weak; (4) Aisaway Study (1992): This psychological study discusses reasons for bribery. Study findings show that people who are involved in bribery are psychopathtic and suffer various kinds of phobia and low morale and mostly work in services sector such as customs, passports, taxes, and finance departments; (5) Bell, Peter, Frain, Felicity Marie, and Lauchs, Mark (2013): This paper explores the literature surrounding the under-researched phenomenon of international bribery. It identifies significant gaps in the Â

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literature, in particular the effectiveness of policy approaches, the prevalence of international bribery, the occurrence of private-to-private sector international bribery and a clear understanding of how this form of white collar crime can effectively be detected, investigated, and prevented. Considering the definitions, impacts on society, the policy approaches and difficulties in controlling white collar crime, and international bribery; (6) Sabau and Elina Monica (2013): This paper shows the limits of the perception indexes issued by Transparency International and World Bank Institute in assessing the audit risk or fraud risk at company level and national economic environment. Instead, it presents an advanced econometric analysis for corruption level assessment. It demonstrates that using factor analysis by auditors becomes an instrument of major importance in determining accurate audit risk or fraud risk associated with national economic context; (7) Zaloznaya and Marina (2012): This article explores the variation in bureaucratic bribery practices of ordinary Ukrainians. It shows that participation in corruption is closely associated with actorsâ&#x20AC;&#x2122; exposure to organizational cultures. Interviews with university-affiliated Ukrainians those students and professors acquire crime-related definitions through encounters with institutionalized bribery mechanisms, conversations with peers and colleagues with more substantial experience within specific universities, and observations of other students and instructors. The article concludes with a brief discussion of the potential synthesis of differential association and organizational theories as a powerful tool for the study of bureaucratic corruption; (8) Nell and Mathias (2009): This paper argues from a legal perspective that contracts obtained by means of bribery should be valid. Nullity and voidability decrease the incentive for voluntary disclosure, assist corrupt actors with enforcing their bribe agreements, and provide leeway for abuse.

Thus, they run counter to effective anti-corruption. It is argued that other instruments are more suitable for preventing corruption.

The Field Study In order to achieve study objectives a random sample consists of (600) people was chosen from Kuwaiti society which represent government officials, private sector employees, university students, retirees, and business people. A pilot study on a sample of (30) individuals represent all groups has been conducted at the outset to make sure of the clarity of the research tool and its consistency. The Cronbach coefficient was (0.78) for all questions in the questionnaire which is consistent with the statistical standards. The second step which took place in April 2012, was distributing questionnaires. A total number of (465) of completed questionnaires were analyzed which represent (77.5%) of the sample size. The distribution of the sample is shown in Table 1 where males constituted (59.8%), females (40.2%). According to age groups, 25-40 years old were (40.4%), less than 25 years old (30.1%), and (29.1%) 41 years old and more. Government employees constituted (21.7 %) of the sample, employees in the private sector (22.8%), university students (17%), retirees (22.4%), and self-employed (16.1%). With regard to nationality (73.1%) of respondents were Kuwaitis and (26.9%) non-Kuwaitis.

In order to analyze study results, the statistical package (SPSS, Version 20) was used to calculate frequencies, percentages, means, standard deviations, and one Way Analysis of Variance. Besides that, qualitative analysis of open questions was conducted.

Findings Table 1

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BRIBERY PROBLEM IN KUWAITI PUBLIC ADMINISTRATION

Distribution of the Study Sample Variable 1. Identity Government employees Private company employees University students Retirees Self-employed (Business People) 2. Age group Less than 25 years 25-40 years 41 years and more 3. Education Secondary Two years college First university degree Graduate study 4. Gender Male Female 5. Nationality Kuwaiti Non-Kuwaiti Total

Frequency

%

101 106 79 104 75

21.7 22.8 17 22 16.1

140 188 137

30.1 40.4 29.5

74 97 241 53

15.9 20.9 51.8 41.4

278 17.8

59.8 40.2

340 215 465

73.1 26.9 100

The Concept of Bribery The first four questions in the questionnaire focused on the concept of bribery. The analysis shows that an average statistical mean of responses to the first question if employees asked for or received bribery in exchange of illegal services was (3.75) points on Likert’s five points scale as shown in Table 2, This result reflects a high level of consensus among respondents on the conception of bribery.

Magnitude of Bribery With regard to magnitude of bribery in Kuwaiti administration, responses to questions in this regard indicate as shown in Table 3 that (32.3%) of respondents believe that bribery is prevalent at a level of 10-20% (26%) more than 20%, and (24.1%) 10-20%, (13.3%) 1-5%, and (4.3%), less than 1%. These results mean that bribery is a common practice in Kuwaiti public administration. This conclusion is substantiated by responses to question No. 6 with regard to the bribery practices in the public sector in comparison with the private sector. As Table 4 shows that means on Likert’s scale with regard to bribery in the government sector is higher than the private sector (3.91), higher among employees at higher levels (3.54), local business people are more aggressive in giving bribes (3.55) in comparison with foreigners (3.40). With regard to gender, results show that male employees take bribes (3.46) more than their female colleagues (2.56). Moreover, study results show that bribery is a common practice in Kuwaiti administration (3.60), Kuwaitis and non-Kuwaitis take bribes (4.14) and bribery is higher for non-Kuwaitis (2.56) than the Kuwaitis (2.32), though the mean of their belief that the state is serious in eradicating bribery is only (2.99) points.

On Likert’s five points scale, means of respondents’ approval that Kuwaiti employees take bribes were (2.32), non-Kuwaiti employees (2.56), and all employees (4.13). These findings show conclusively public acceptance of bribery and non-Kuwaitis are more receptive to bribery than Kuwaiti employees. Moreover, it is obvious that bribery is prevalent in all government agencies with a mean of (3.60). This conclusion is substantiated as the mean of respondents’ approval that bribery is common in Kuwaiti administration was (2.71)

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points. With regard to the seriousness of government in fighting bribery, the study shows a mean of (2.99) which reflects public skepticism of the seriousness of the state in this regard.

Table 2 Means and Standard Deviations of Responses Regarding Conception of Bribery Question No. 1 2 3 4 General mean

Mean 3.75 3.22 3.31 2.96 3.31

Standard deviation 1.350 1.336 1.361 1.333

Table 3 The Level of Involvement in Bribery Degree of Involvement Less than 1% 1-less than 5% 5-less than 10% 10-less than 20% 20% and more Total

Frequency 20 62 112 150 121 465

% 4.3 13.3 24.1 32.3 26 100

Table 4 Areas and Forms of Bribery Practices Question No. 6 7 8 9 10 11 12 13 14 15 16 17

Bribery is practiced more in the public sector than the private sector Bribery increases among higher administrative levels rather than lower levels Local business people who give bribes to employees Foreign business people present bribes to employees Male employees receive bribes more than female employees Kuwaiti employees receive bribes Non Kuwaiti employees receive bribes Kuwaiti and non Kuwaiti employees receive bribes Bribery is a common practice in government agencies Bribery increases in Kuwaiti administration Bribery decreases in Kuwaiti administration The Kuwaiti State is very serious in eradicating bribery

General mean

Means 3.91 3.54 3.55 3.40 3.46 2.32 2.56 4.13 3.60 2.71 3.54 2.99

Standard deviation 0.986 1.133 0.948 1.011 1.023 0.993 1.149 0.902 1.044 1.054 0.980 1.276 3.31

Consequences of Bribery Study results reveal that bribery has many implications and can lead to great negative impacts on society, which are in a descending order, as shown in Table 5: (1) Corrupting work environment; (2) Disrespect of public law; (3) Hurting the image of government institutions; (4) Sacrificing peopleâ&#x20AC;&#x2122;s rights; (5) Weakening institutional loyalty; Â

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BRIBERY PROBLEM IN KUWAITI PUBLIC ADMINISTRATION (6) Poor corporate performance; (7) Weakening sense of citizenship.

Table 5 Consequences of Bribery Question No. 26 27 28 29 30 31 32

Consequences

Mean

Standard deviation

Poor corporate performance Corrupting work environment Weakening institutional loyalty Hurting the image of government institutions Weakening sense of citizenship Loss of citizens’ rights Disrespect of public law

4.4989 4.6215 4.5075 4.5699 4.3957 4.5570 4.6172

0.66994 0.61129 0.74020 0.70707 0.82940 0.72922 0.68207

General mean

4.53

High means of respondents’ approval of negative consequences of bribery reflects strong public belief how harmful bribery can be on society on all fronts which necessitates serious efforts to eradicate this phenomenon.

The above mentioned results with regard to the four researched dimensions of bribery reveal, as shown in Table 6, are compatible as the overall statistical means were for conception (3.31), magnitude (3.33), reasons (4.00), and consequences of bribery on Likert’s five points scale (4.53).

Table 6 Means and Standard Deviations of the Various Dimensions of Bribery Bribery dimensions

Conception

Magnitude

Reasons

Consequences

Mean S.D.

3.31 0.965

3.33 0.451

4.00 0.568

4.53 0.527

Government Employees Engaged in Bribery Study results show in a descending order public officials who take bribes work, as shown in Table 7, in the following government agencies: (1) Customs and Tax Administrations; (2) Ministry of Interior; (3) Ministry of Municipality; (4) Ministry of Finance and related departments; (5) Department of Prisons; (6) Departments of Real Estate; (7) Department of Tenders and Procurement practices; (8) Ministry of Education and related Institutions; (9) Judiciary/Prosecution; (10) Ministry of Information and related Departments.

Admitting Bribery Practices Study results as shown in Table 8 show that (14.8%) of respondents admit that they paid bribes to employees, (78.7%) never paid bribes, and (6.5%) did not answer the question. These results indicate that bribery is a

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BRIBERY PROBLEM IN KUWAITI PUBLIC ADMINISTRATION common practice in Kuwaiti administration.

Table 7 Frequencies and Percentages of Respondents Regarding Government Employees Who Take Bribes Rank 1 2 3 4 5 6 7 8 9 10

Government agency Customs and tax agencies Ministry of interior Ministry of municipality Departments of purchase, tenders, and practices Ministry of finance Department of prisons Department of real estate registration Ministry of education Judiciary, prosecutors Media institutions

Frequency 367 366 365 360 359 357 354 351 347 345

% 78.9 78.7 78.5 77.4 77.2 76.8 76.1 75.5 74.6 74.2

Number 69 366 30 465

% 14.8 78.7 6.5 100

Table 8 Admitting Paying Bribes Engagements in bribe Paid bribes Did not pay bribes No answer Total

Ways of Knowing About Bribery Study results, as shown in Table 9, indicate that (12.7%) of respondents mention that government officials demanded bribe, (40.9%) knew about bribes from others, and (3.1%) took the initiative to pay bribes to facilitate their transactions, and (43%) did not know about bribery.

With regard to the amounts paid as bribes, study results, as shown in Table 10, reveal that (4.5%) of respondents mentioned that they paid less 10 KD (Kuwaiti Dinar), (1.7%), (10-20 KD), (6.9%) (20-50) KD, and (7.7%) more than (50) KD. Findings show that (7.7%) of respondents paid more than (50 KD), and (6.9%) paid (20-50) KD. Table 9 Ways of Knowing About Bribes How knew that I have to pay bribes From employees From ordinary people By myself Did not pay bribe Total

Number 61 190 14 200 465

% 13.1 40.9 3.0 43.0 100

With respect to previous knowledge of those who paid bribes that this is unlawful and constitutes a crime, the study, as shown in Table 11, indicates that (77.8%) of respondents knew that bribery is illegal, (9.9%) did not know that bribery is illegal, and (12.3%) did not answer the question.

Table 10 Amounts of Bribes Amount in KD

Â

Number

%

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BRIBERY PROBLEM IN KUWAITI PUBLIC ADMINISTRATION

Did not pay Less than 10 KDs 10-less than 20 KDs 20-less than 50 KDs 50 KDs or more Total

366 22 9 32 36 465

78.7 4.7 1.9 6.9 7.7 100

Number 362 46 57 465

% 77.8 9.9 12.3 100

Table 11 Previous Knowledge That Bribe Is Illegal Knowing that bribe is illegal Know Do not know Not sure Total

Study findings show that 77.8% of respondents knew that paying bribe is a crime but nevertheless paid bribes which reflect social tolerance of bribery.

Reasons for Bribery With regard to reasons of bribery in Kuwaiti administration, the study identifies as shown in Table 12, many reasons which are, in a descending order, as follows: (1) Lack of religious faith; (2) Weak control; (3) Greed; (4) Lack of legal penalties; (5) Complication of procedures and red tape; (6) Social tolerance of bribery; (7) Lack of legal education; (8) Low income.

Table12 Reasons of Bribery Question No. Reason 18 Weak of control 19 Lack of legal penalties 20 Low income 21 Greed 22 Social tolerance of bribery 23 Lack of adherence to religious values 24 Lack of legal education 25 Complicated procedures and red tape General mean

Mean 4.3677 4.1355 3.6323 4.1548 3.6968 4.4882 3.6946 3.8860 2.98

Standard deviation 0.80692 0.99834 1.19095 0.88187 1.14681 0.82287 1.14718 1.16427

Bribery and Personal Characteristics In order to see relationships between bribery and personal characteristics correlation analysis was conducted.

The analysis revealed as Table 13 shows weak positive relationships between gender, magnitude, reasons and negative relationships with conception and effect of bribery.

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Table 13 Correlation of Concept, Magnitude, Reasons, Effect of Bribery and Personal Characteristics Conception Magnitude Reasons Effect Gender Pearson correlation -0.120 0.033 .016 -0.003 Significance level. (2-tailed) 0.010* 0.475 .731 0.948 Number of cases 465 465 465 465 Age Pearson correlation 0.094 0.000 -0.011 0.018 0.993 0.814 0.693 Significance level. (2-tailed) 0.042** Number of Cases 465 465 465 465 Education Pearson correlation 0.118 0.038 0.070 0.133 0.417 0.134 0.004 Significance level. (2-tailed) 0.011** Number of Cases 465 465 465 465 Workplace Pearson correlation -0.010 0.030 0.169 0.085 Significance level. (2-tailed) 0.824 0.518 0.000** 0.068 Number of Cases 465 465 465 465 Nationality Pearson correlation -0.053 -0.049 -0.110 -0.014 Significance level. (2-tailed) 0.252 0.293 0.018** 0.757 Number of Cases 465 465 465 465 * ** Notes. Correlation is significant at the 0.01 level (2-tailed); Correlation is significant at the 0.05 level (2-tailed).

In order to see relationships between administrative levels, gender, and bribery, a correlation analysis was conducted. The analysis revealed as Table 14 shows, positive relationship (0.100 *) between conception of bribery and administrative level, and insignificant positive relationship (0.028) between bribery and gender.

To examine whether bribery varies with personal characteristics, ONE WAY ANOVA was conducted. As shown in Table 15, the conception of bribery only varies at a statistically significant level among respondents according to gender but not its magnitude, reasons, or consequences.

Table 14 Correlations Between Conception of Bribery, Administrative Level, and Gender Conception of Bribery 0.100* 0.032 465 Gender 0.028 0.546 465

Correlation Coefficient Pearson correlation Significance level. (2-tailed) Number of cases Pearson correlation Significance level. (2-tailed) Number of cases

Note. * Correlation is significant at the 0.05 level (2-tailed).

With regard to respondentsâ&#x20AC;&#x2122; views toward bribery with regard to age, study results, as shown in Table 16, reveal no variation at any statistically significant level in conception, magnitude, reasons, or consequences of bribery.

Table 15

Â

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BRIBERY PROBLEM IN KUWAITI PUBLIC ADMINISTRATION

One Way Variance of Perception, Magnitude, Causes, and Consequences of Bribery According to Gender

Conception

Magnitude

Causes

Consequences

Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total

Sum of squares

Df

Mean square F

6.216 426.506 432.721 0.105 94.661 94.765 0.038 150.033 150.071 0.001 129.242 129.243

1 463 464 1 463 464 1 463 464 1 463 464

6.216 0.921

6.747

Significance level 0.010*

0.105 0.204

0.511

0.475

0.038 0.324

0.118

0.731

0.001 0.279

0.004

0.948

Note. * Statistically significant at the level of significance (0.05).

Table 16 One Way Variance of Conception, Magnitude, Causes, and Consequences of Bribery According to Age

Conception

Magnitude

Causes

Consequence

Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total

Sum of squares

Df

Mean square

F

Sig.

3.947 428.774 432.721 0.054 94.711 94.765 0.259 149.812 150.071 0.060 129.183 129.243

2 462 464 2 462 464 2 462 464 2 462 464

1.973 0.928

2.126

0.120

0.027 0.205

0.133

0.876

0.130 0.324

0.399

0.671

0.030 0.280

0.107

0.899

As far as respondents’ views of bribery due to level of education, study results, as shown in Table 17, indicate that responses vary at a statistically significant level with regard to conception and consequences but not to magnitude and causes of bribery.

With respect to respondents’ views of bribery due to type of agency, study results, as shown in Table 18, indicate variations at statistically significant levels with regard to conception and causes but not to magnitude and consequences of bribery.

Table 17 One Way Variance of Conception, Magnitude, Causes, and Consequences of Bribery According to Education

Conception

Between groups Within groups Total

Sum of squares 12.570 420.151 432.721

Df 3 461 464

Mean square 4.190 0.911

F 4.597

Sig. 0.003*

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BRIBERY PROBLEM IN KUWAITI PUBLIC ADMINISTRATION (Table 17 continued)

Magnitude

Reasons

Consequences

Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total

Sum of squares 0.281 94.484 94.765 1.151 148.920 150.071 2.427 126.817 129.243

Df 3 461 464 3 461 464 3 461 464

Mean square 0.094 0.205

F 0.457

Sig. 0.712

0.384 0.323

1.188

0.314

0.809 0.275

2.940

0.033*

Note. * Statistically significant at the level of significance (0.05).

Table 18 One Way Variance of Conception, Magnitude, Causes, and Consequences of Bribery According to Agency

Conception

Magnitude

Causes

Consequences

Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total

Sum of squares 10.003 422.718 432.721 0.211 94.555 94.765 4.816 145.255 150.071 2.080 127.163 129.243

Df 4 460 464 4 460 464 4 460 464 4 460 464

Mean square 2.501 0.919

F 2.721

Sig. 0.029*

0.053 0.206

0.256

0.906

1.204 0.316

3.813

0.005*

0.520 0.276

1.881

0.113

Note. * Statistically significant at the level of significance (0.05).

With regard to variations in respondents’ views of bribery due to nationality, study results, as shown in Table 19, show that respondent’s views vary at statistically significant levels only in magnitude but not in conception, causes, or consequences of bribery.

Table 19 One Way Variance of Perception, Magnitude, Causes, and Consequences of Bribery According to Nationality

Conception

Magnitude

Causes

Consequences

Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total

Sum of squares 1.228 431.493 432.721 0.227 94.539 94.765 1.813 148.258 150.071 0.027 129.216 129.243

Note. * Statistically significant at the level of significance (0.05).

Df 1 463 464 1 463 464 1 463 464 1 463 464

Mean square F 1.228 1.318 0.932

Sig. 0.252

0.227 0.204

1.110

0.293

1.813 0.320

5.663

0.018*

0.027 0.279

0.096

0.757

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BRIBERY PROBLEM IN KUWAITI PUBLIC ADMINISTRATION

Conclusions and Recommendations Conception and Magnitude of Bribery in Kuwaiti Administration As shown in Table 6, there is common conception of bribery (3.31), its magnitude (3.33), causes (4.0), and consequences (4.53). Moreover, 21.3% of respondents agree that bribery as an illegal practice means that government officials benefit and make personal gains from people in exchange of favors or services they provide to them.

There is consensus among respondents that bribery is more widespread in the government sector than the case in the private sector due to the discretionary powers which public servants enjoy which tempt them to use for personal interests by accepting bribes. Moreover, study results show that bribery is practiced by both local and foreign businessmen. This conclusion is substantiated by a positive correlation (0.10*) at a statistically significant level between employees’ administrative level and engagement in bribery.

Study results show that 13.8% of respondents think that bribery is widespread in all government agencies and 12.2% think it is increasing, 56.6% of think that non Kuwaitis take bribes. Moreover, study results show that 17.6% of respondents think that bribery practices in Kuwaiti society range from 10%-20%, (58.3%) 1—less than 5%, and (24.1%) 5%-10%.

Study findings show that 36.1% of respondents think that the state is not serious enough in fighting bribery, and 27.1% did not have a clear opinion on the subject.

Causes of Bribery As far as reasons of bribery in Kuwaiti administration, study findings show in a descending order several causes which are as follows: (1) Lack of adherence to religious values; (2) Weak control; (3) Greed; (4) Lack of legal penalties; (5) Complication of work procedures; (6) Social tolerance of bribery; (7) Lack of legal education; (8) Low income.

Consequences of Bribery Study results show low level of public awareness in society of the negative consequences of bribery on society as only 1.1% of respondents think that bribery weakens institutional performance of government institutions, 1% think that bribery spoils work environment and decrease institutional loyalty, 2.1% bribery distorts government’s image and weakens sense of national belonging, 2.4% think it sacrifices public interest and private rights, and 2.1% think its contributes to the dissemination of a culture of disrespect for the law.

Which Government Agencies Are Engaged in Bribery Study findings show categories of employees which were involved in bribery practices. These categories which are in different types of government agencies are in a descending order as follows: (1) Departments of customs and tax; (2) Ministry of interior;

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(3) Ministry of municipality; (4) Ministry of financial and related departments; (5) Department of prisons; (6) Department of real estate; (7) Department of tenders and procurement practices; (8) Ministry of education; (9) Judiciary/Prosecution departments; (10) Ministry of information and related departments.

Ways of Knowing About Bribery Study results show that 12.7% of respondents mention that employees asked them directly to pay bribes, 40.9% knew from others that they need to pay bribes, 3.1% reported that they themselves offered employees bribes to facilitate their transactions, and 43% did not go through the experience of bribery. With regard to amounts paid as bribes, study results showed that 4.5% of respondents mentioned that they paid less than 10 KD, 1.7% (10-20 KD), 6.9% (20-50 KD), and 7.7% paid more than (50 KD). This shows that the largest percentage of those who paid a bribe, 7.7% paid more than (50 KD), followed respectively 6.9% by those who paid (20-50 KD).

Knowledge of Illegality of Bribery Study results show that (77.8%) of respondents mention that they knew that bribery is a crime punishable by law, (9.9%) did not know that it was a crime, and (12.3%) did not respond. These results show that Kuwaiti society tolerates bribery and does not see it a serious problem.

Personal Characteristics and Bribery With regard to the relationships between personal variables and bribery, study findings show that respondents view on bribery do not vary due to gender but only in its conception. This might be explained by prevailing cultural norms which make men have more access to bribery practices than women. Likewise, variations at statistical significant levels were found in respondents’ views only on the conception and consequences but not on magnitude and causes of bribery according to education level. This can be explained as highly educated respondents are more aware of bribery practices and its negative results on society than less educated employee. As far as nationality is concerned, study results show that respondent’s views vary at statistically significant levels only in their view of magnitude of bribery but not in its conception, causes, or consequences. This might be explained because Kuwaitis have more access to information regarding bribery practices than non-Kuwaitis.

In the light of study findings, some recommendations can be suggested. Government agencies have to exert intensive efforts to raise public awareness of the seriousness of bribery and its negative repercussions on society.

Such efforts are of prime importance at a time where Arab countries face social and political unrest which represent the most serious manifestations against corruption, injustice, inequity, and bribery which come on top list of slogans in demonstrations against governments. The roles of media and religious institutions are of prime importance in this regard as the study shows social tolerance of bribery and lack of adherence to religious values.

It is important to hold a national conference on the problem of bribery in Kuwait to shed light on this problem them and discuss way to eradicate this serious problem. Conducting training programs, seminars, and workshops which focus on bribery as a crime and its adverse effects on the image of the government, its employees, and on society at large are necessary. This is important in view of study findings of positive

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BRIBERY PROBLEM IN KUWAITI PUBLIC ADMINISTRATION

relationship between administrative level and bribery, which hold top administration a special responsibility to address this problem.

It may be important to reconsider salary scales for non-Kuwaitis as study findings show that 56.6% of respondents mention that non-Kuwaitis take bribe and one reason for this is low income. It is illogical to discriminate in salaries paid for the same job as this might be taken as justifications for taking bribes.

Government agencies must simplify procedures, prepare and distribute brochures to service recipients stating their access rights to services, and specify documents, conditions, and time needed for getting the service, and what they can do in the event of a delay of service. This would reduce people’s resort to pay bribes to get services. This is important because study findings show that people’s ignorance of their rights besides complicated procedures come in the third and fourth ranks as reasons for paying bribes.

Reconsideration of legislations which relate to the penalties for bribery and tightening sanctions, as study findings show that despite the majority of employees learned that receiving bribery is illegal but nevertheless they take bribes. This explains the lack of deterrent penalties which came in fifth place as one of the reasons of bribery. Tightening internal and external government control and lawful penalties for employees who take bribes, because study findings show that the weak oversight comes as the sixth cause of bribery.

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Journal of US-China Public Administration, ISSN 1548-6591 November 2013, Vol. 10, No. 11, 1098-1114

D

DAVID

PUBLISHING

Management Control, Performance Factor in Moroccan Universities “Case of the University Hassan I of Settat” Fatima Ouahraoui, Mohamed Makhroute, Nada Soudi, Said Elmezouari National Business School, Settat, Morocco University of Hassan I, Settat, Morocco

Laila Loukili Idrissi University of Hassan I, Settat, Morocco The reform of higher education and the promulgation of the Law 01-00 in 2000 were a solid foundation of governance renovated in Moroccan universities. In 2009 the emergency plan has come to supplement and reaffirm the achievements of this reform. Indeed, following the deployment of the emergency plan and the introduction of an approach to contracts and projects in public education, Moroccan universities have moved from a logic means to a logic of results. Faced with this situation, and in order to ensure effective control, effective and efficient emergency plan, management control is then the “backbone” to meet the challenge of all reforms and make successful its deployment.

Keywords: emergency plan, university reform, contracting, management control

Moroccan universities are now facing a number of changes that affect their missions and modes of operation, whether in economic, social, or cultural levels. Their environment has become increasingly competitive and demanding both in terms of quality of basic services as their modes of governance.

Indeed, the reflection and the desire to renovate the university governance in Morocco and implement a modern management in the university are not new.

Several innovative projects have translated this willingness. On one hand the Law 01-00 enacted by Dahir No. 1-00-199 of 19 May 2000, on the organization of higher education, through the Law 69-00 promulgated by Dahir No. 1-03-195 of 11 November 2003 organizing the financial control procedures of the state owned enterprises (including universities). On the other hand the 2009 emergency plan with an approach to management by objective. 

Fatima Ouahraoui, Ph.D. candidate in National Business School (University of Hassan I); research fields: management control in public organizations, new public management, university governance. E-mail: fatima.wahraoui@gmail.com.  Corresponding author: Mohamed Makhroute, Ph.D. candidate in National Business School (University of Hassan I); research field: financing of private organizations. E-mail: mohamed.makhroute@gmail.com.

Nada Soudi, Ph.D. candidate in National Business School (University of Hassan I); research field: innovation in organizations.

E-mail: soudi_n@yahoo.fr.

Said Elmezouari, Ph.D., professor in National Business School (University of Hassan I); research fields: financial, accounting and management control. E-mail: elmezouari_s@yahoo.fr.

Laila Loukili Idrissi, project officer to the president of University of Hassan I; research field: university governance. E-mail: leilaloukili@yahoo.fr.

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Establishing a contractual logic of development in Moroccan universities, the emergency plan is project-based contracts under the plan.

From this perspective, the emergency plan came with a management approach that allows the university a management by objectives, whose achievement is sanctioned by the budgets allocated by the Ministry of Higher Education, negotiated with the Ministry of Finance and disbursed according to the objectives achieved.

To this end, the Moroccan university has grown from a logic of means to a logic of results, based on a particular performance management to promote a dialogue management.

Face looking proclaimed performance, university presidents are thus led to set up a government renovated.

Management control appears as the â&#x20AC;&#x153;spearheadâ&#x20AC;? of all reforms.

This communication describes an experience in a Moroccan university. These are mainly: (1) Describing oneâ&#x20AC;&#x2122;s experience with the new approach to management by objectives, in terms of budget execution, and monitoring qualitative and quantitative performance indicators; (2) Show through the constraints faced by the university, the usefulness of setting up a management control system that meets current needs and future of good university governance as part of the logic of contract brought by the plan emergency.

Our research was conducted at the University of Hassan I, one of the youngest Moroccan universities hosting more than 11,000 students and public institutions including six multidisciplinary namely: (1) Faculty of Science and Technology (FST) in Settat; (2) The National School of Business and Management (ENCG) in Settat; (3) The Faculty of Law Economics and Social science (FSJES) in Settat; (4) Faculty polydisciplinary (FPK) in Khouribga; (5) The National School of Applied Science (ENSA) in Khouribga; (6) The Higher School of Technology (EST) at Berrchid.

On the theoretical level, it is proposing a reflection on a model of management control in terms of the levers of control model developed by Simons (1995), as part of a process of diagnostic and interactive control of a new university governance.

Methodologically, the research is based on a constructivist approach, in which the model is not given a priori, but is subject to a process of social construction, for all the actors involved in the project. It fit also as part of a research intervention referred transformative. The tools used are the literature review, interviews with stakeholders of the university and the department, and working sessions with project coordinators involved in the emergency plan.

After having discussed the Moroccan university governance, the forms of its organization of monitoring and evaluation as well as the contribution of the emergency plan as a new mode of governance, It will show the issues of management control through the case of the University of Hassan I, the results will take it back to provide a reflection on a model of management control adapted to the strategic stakes of the university.

The University Governance in Morocco: The Organizational Arrangements and Methods of Control In practical terms, the notion of governance refers to the idea of operating a management style. This mode of management has progressed from private to public company expected to improve results.

However, the adoption of a management style requires an organization in the structure of decisions and

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CASE OF THE UNIVERSITY HASSAN I OF SETTAT

actions as well as a monitoring and evaluation devices.

The organizational arrangements of universities: the provision of the Law 01-00.

The promulgated Law 01-00 by the Dahir No. 1-00-199 of 19 May 2000, has a principal objective, that of organizing the higher education in Morocco.

In the Article 4 of Law 01-00, the universities are established by law in accordance with Article 46 of the Constitution. They are public institutions with legal personality and administrative and financial autonomy.

They are placed under the guardianship of the state.

The Missions of the University In addition to their academic training missions and scientific research, the law of 01-00 has strengthened the role of the university by reforming the Moroccan system of higher education, to be adaptabe to the international standards of quality and relevance of performance.

The law has extended the missions of the university, giving it more flexibility and action to develop, allowing them to: (1) Ensure the provision of services for consideration; (2) Create innovative business incubators operating in patents and licensing and marketing the products of their activities; (3) Make investments in public and privat; (4) Create subsidiary companies in the economic, scientific, and Cultural domaines (Article 7 of Law 01-00).

The Management Bodies of the University Universities are managed by a board of the university governing body on all matters relating to missions and the functioning of the university (Section 12).

It consists of several members and is chaired by the university president and a board management that is responsible for administrative and financial affairs of the university.

The Staff of Universities Section 17 of the Act provides that the personal status of universities and their benefits system are fixed by decree, which limits the autonomy of universities in human resource management.

The Accounting and Financial Management of Universities The Moroccan university as a public organism, is submitted to the rules of the public accounting under the provisions of Royal Decree No. 330-66 of 21 April 1967, which states that financial obligations to public officers and public accountants.

The authorizing public revenue and expenses, being the president of the university, has the capacity to initiate, record, liquidate, or order the recovery of a debt or the payment of a debt. The public accountant, is a civil servant with the quality to execute on behalf of the university operations revenues, expenses, or handling of securities.

The higher education institutions belonging to the university do not have moral personality, they are not competent to order or to see the revenue or expenses, the university president has to delegate his signature to the heads of institutions as sub-officers.

However, the revenues of universities are composed mainly of government grants, fees collected under

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continuing education, products and profits from the work of research and services, including the work of expertise, products and profits from its operations and its heritage. While expenses include salaries and allowances treatments served to staff, capital expenditure and operating (Article 18 of Law 01-00).

The Arrangements for Monitoring and Evaluation of Universities The Law 69-00 of the Dahir No. 1-03-195 of 11 November 2003 concerning the financial control of the state-owned enterprises and other organizations, has come to: (1) Ensure regular monitoring of the management of organizations subject to financial control; (2) Ensure the consistency of its economic and financial operations in terms of legal; (3) Assess the quality of their management of economic and financial performance and compliance of their management missions and objectives assigned to them; (4) Work to improve their information systems and management.

The Moroccan university, a public institution with legal personality and financial autonomy is vested with a public mission of serving the public purse.

Since universities do not have eligibility criteria which are an information system and management performance1 including: a status of personnel, an organizational chart, a manual procedure and organization, proper accounting, sincere and a certified Rules markets, a Multi-Year Plan and an annual management report or a plan contract, it is subject to due diligence performed by the management of public enterprises and privatization. This implies that a controller of the state, under the Ministry of Finance controls the operations, while a paymaster validates spending and approval of strategic documents of the institution is given broadly to the ministry.

The Emergency Plan: Toward a Renovated Governance of the Moroccan University The emergency plan is the result of an inventory that reflects the mismanagement and misconduct of the missions of the university.

The Context of Developing the Emergency Plan Being on a number of evaluation reports, including the report of the Board of Higher Education in 2008 (CSE2), the education sector in Morocco is considered more difficult to know: (1) A mismatch between the university and the labor market, the unemployment rate for graduates of higher education is the highest compared to other categories of graduates. The average rate of 26% between 1999 and 2006 (43.6% for holders of advanced degrees) Report of the CSE 2008; (2) An inconsistency between the private sector and mass selective studies in guidance from the high school degree (baccalaureat). Seventy eight percent of graduates of the academic year 2006/2007 are branches of literary and social science (CSE Report 2008); (3) Insufficient infrastructure, the local university and training materials and human resources.

Given these facts, a royal decision was made to develop an emergency plan aimed at accelerating the implementation of the reform over the next four years.

In response to the royal speech, the Ministry of National Education of Higher Education and Vocational 1

Abdelaziz Talbi: Ex-Director of public entreprises and privatization â&#x20AC;&#x153;meeting MENA-OCDE on corporate governance in public enterprises Rabat, September 14-15, 2005â&#x20AC;?.

2 National body to evaluate the system of education and training; chaired by Majesty King Mohammed VI.

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Training have initiated the development of a strategic review of education sector, through a consulting firm.

The said firm gave a report on strategic diagnosis of school education, higher education and vocational training, which after approval of all concerned, namely the universities and the ministry, were the subject of a plan action four-year plan called emergency.

The Emergency Plan was presented as organized around four areas of action each containing a set of projects. Moreover, the adoption of a method of working out with those previously declined proved crucial.

The approach sat well on key levers: (1) The definition of an ambitious plan outlined in great detail: areas of intervention, projects, action plans, planning, resources; (2) The adoption of a logical process, which has to involve all major players in the system of Education and Training in the development of the Emergency Plan; (3) The involvement of field actors to ensure declination â&#x20AC;&#x153;proximityâ&#x20AC;? of each measure identified and ensures the practical feasibility; (4) The development of a tracking device that will close the best possible control of the implementation of actions.

Emergency Plan Introduces the Logic of Contracting at the University Following on the guiding principles and objectives set by the 2008 report of the CSE, 12 projects have been identified for higher education and scientific research and this through three areas of intervention: Area 1: To stimulate the initiative and excellence in high school and university: Project 12: Promoting excellence; Project 13: The development of the supply of higher education; Project 14: Promotion of Scientific Research.

Area 2: Addressing cross-cutting issues of the system: Project 15: Capacity building of staff of the University; Project 16: Improving the governance of the University and strengthening its autonomy; Project 17: Optimization of human resources management.

Area 3: Providing the means to succeed: Project 18: Completion of the implementation of devolution/decentralization and optimizing the organization of the Ministry; Project 19: Planning and Management System of Education and Training; Project 20: Language skills; Project 21: Establishment of a system of efficient information and guidance monitoring and evaluation of staff; Project 22: Optimization and sustainability of financial resources; Project 23: Mobilization and communication around the university.

For each project identified a form of operationalization was developed defining measures, strategic objectives, indicators and resource mobilization.

Three fundamental principles of autonomy, professionalism and contracts were used as a guideline for the design and articulation of the goals of the plan to meet the real needs of universities in terms of infrastructure, diversification of training, promotion excellence, governance and openness to the

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socio-economic environment.

The universities have developed their plans for facilities in accordance with the principles, aims, objectives, and measures of the Emergency Plan. These projects have been translated into concrete actions, budgeted and which were planned in the period 2009-2012. They are subject to a four-year contract between the State and the Universities.

To this end, the new contracting approach will strengthen the role of universities in the training of skills for socio-economic development and position in the devices support the major projects of reform and sectoral development conducted by the state.

The commitments of the universities as part of their contracts for the period 2009/2012 focused in particular: (1) The extension and upgrade university infrastructures; (2) The development and diversification of the supply of training and orientation to the scientific, technical and professional making sure this effort contributes to economic and social development at regional and national levels; (3) Improving the quality of university education and the effectiveness of the university education system in terms of internal and external efficiency; (4) Promotion of scientific research and improving its governance and visibility of its performance; (5) Optimizing the use of resources and institutional capacity building of governance of the University to consolidate its independence.

In part against the state is committed to making available university the necessary means to achieve the fixed objectives which include 12.6 billion Dirhams and 2,400 budget items over four years.

The implementation of these contractual commitments is accompanied by a monitoring and evaluation built around the following axes: (1) Monitoring committees of evaluation: a. An internal committee at the University; b. A central committee at the Ministry.

(2) Periodic reporting: a. A progress report on the progress; b. An annual report on the review of achievements.

(3) A set of indicators for monitoring (frequency biannual).

(4) An annual action plan.

(5) A process central to assessing the degree of achievement of objectives, proposals for improving performance and direction of budgetary subsidies.

The Emergency Plan: Situation Case of University Hassan I University Hassan I, one of the 15 universities that have signed the development contract with the government represented by the Ministry of Higher Education Professional Training and Scientific Research and the Ministry of Finance and privatization.

In addition to national objectives, development contracts reflect the university mission and strategy of universities in the short to medium term, each according to his own vision of development that takes into account the specific economic and social environment.

For this reason, the achievement of contract on which they are incurred directly translates into achieving

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their missions and their successful development strategy.

In our case it will try to highlight the experience of the University Hassan I, and it will try to show through an example project, the Derg in achieving its objectives, commitment of budgets and monitoring its indicators.

The contract management tool case of the University Hassan I. The establishment of contracts is an act of participatory management, which empowers the signatories and associates to the level of implementation decisions.

University Hassan I in the person of its president signed a four-year plan beginning in 2009, with the Ministry of Economy and Finance which is aimed at large development and upgrade University Hassan I. The contract is for defining the commitments of the signatories for the implementation of the 2009-2012 development plan, integrating the project specific Emergency Plan at the University Hassan 1 of Settat. The contract also defines the means required for this implementation and the monitoring and evaluation.

1. The commitments of the University.

The University will implement its development plan in order to achieve the targets of the emergency plan details, by year, with a special focus: (1) The development of the supply of higher education; (2) Improved internal and external efficiency of the system; (3) Promotion of scientific research; (4) Capacity building of staff of the University through the implementation of a continuing education plan; (5) Improving the governance of the University and strengthening its independence.

Thus, these goals are translated into targets, their translation appears as follows: 2. The commitments of the State.

The State undertakes to allocate at the University grants and capital and operating budget items necessary for the implementation of the objectives of this contract. The commitments of the state subsidy and budget items are stopped as follows (see Table 1 and Table 2): Table 1 Grants Budget (in Millions of Dirhams) Investissement Fonctionnement Total

2009 55 30 86

2010 49 36 85

2011 27 43 70

2012 32 51 84

2009 19

2010 31

2011 27

2012 26

Table 2 Budget Items Postes budgĂŠtaires annuels

To achieve these projects, a resource team made up of vice presidents of the university and heads of institutions under the university and coordinated by the university president, was set up in addition to an ad hoc after the university council has been formed to monitor and review the various proposed projects (see Table 3).

The diagnosis of the situation after two years of signing the contract will enable the university to know the strengths and weaknesses, and the foreseeable difficulties.

It will provide the information necessary for the establishment of a system of management control.

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Table 3 Details of Contractual Objectives 2009-2012 Year Objectives and measurement indicators 1. Registration of students per school: -Number of new students: Institutions with open access (BAC): Faculty of law, economics and social Faculty polydisciplinary Khouribga Subtotal 1 Institutions with regulated access National school of business and management With BAC Parallel track National school of applied sciences With BAC Parallel track Higher school of technology With BAC Parallel track Faculty of science and technology With BAC Parallel track Subtotal 2 Total -% Of new entrants in the professional courses open access institutions -% Of students enrolled in master degree 2. -Emulation of excellence -Number of students awarded prizes -% Of students awarded prizes 3. -Fight against repetition and dropout -Dropout rate in the first year license -Graduation rate Any number of years On the statutory degree -Number of students with a tutor -% Of student in first and second semesters license with a tutor 4. -Improved external efficiency -Number of students license key chains have benefited from professional modules in S5 and S63 -% Of undergraduate students who received basic vocational modules in S5 and S6 -Insertion rate After six months After 12 months 3

S5 and S6 means semester 5 & Semester 6.

Target values 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013

1,021 685 1,706

1,550 560 2,110

1,688 736 2,424

1,750 706 2,456

1,815 698 2,513

90 0

180 20

180 30

200 40

240 40

42 0

120 10

120 10

120 10

120 10

50 0

70 0

210 0

390 0

390 0

500 0 682 2,388

580 80 1,060 3,170

680 164 1,394 3,818

820 160 1,740 4,196

1,000 192 1,992 4,505

12.55

37.11

46.29

45.59

44.41

41.17

59.36

74.04

72.88

72.88

72 1

76 1

85 1

93 1

25

20

16.5

12

0

70 45 1,176 100

80 55 1,130 100

90 60 1,162 100

90 70 1,219 100

801

1,894

3,363

4,338

4,502

30

60

80

100

100

10 30

15 40

20 45

30 50

60 20

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CASE OF THE UNIVERSITY HASSAN I OF SETTAT

(Table 3 continued) Year

Target values

2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 Objectives and measurement indicators After 24 months 40 50 55 65 5. -Promotion of scientific research -Number of publications in international journals indexed 32 40 50 60 100 -Number of publications with co-signature Moroccan 16 20 30 40 50 -Number of theses 4 10 15 30 50 -Number of applied research projects conducted with companies -Number of patents 1 2 6 9 -% Of research units accredited 80 100 100 100 100 6. -Capacity building of staff through ongoing training -Number of teachers who received training abroad 81 90 98 106 -% Of teachers who received training abroad 30 30 30 30 -Number of new teachers who received teacher training 12 30 24 30 -% Of new teachers who received teacher training 100 100 100 100 -Number of teachers who received teacher training 68 75 81 89 -% Of teachers who have benefited from teacher training 25 25 25 25 -Number of administrative and technicians who have 112 117 123 132 received training -% Of administrative and technicians who have received 50 50 50 50 training

The realization of the diagnosis is based on the literature review, the collection of individual points of view, particularly through interviews and by group work sessions.

The diagnosis will focus on two main components: the objectives of the contract (contractual indicators as available data) and availability of resources for their implementation (budget execution).

Based on the table below, it is clear that the university comes to exceed its targets in comparison to the situation in 2008 (base year), and against targets in respect of 2010. However negative differences are also significant compared to targets (see Table 4).

What is noteworthy is that the rise of these indicators is a bottom-up, each institution as these achievements and all these data are consolidated by the central coordinator of projects at the university.

Among the difficulties encountered on the ascent and the calculation of these indicators, we can cite4: (1) The lack of functional organization â&#x20AC;&#x153;fixedâ&#x20AC;? and those responsible for systematic reporting and information feedback. It means that coordinators at school level are not systematic and are not affected 100% to the reporting and monitoring indicators; (2) The frequency of back information is not systematic (monthly for example), it is usually in connection with the preparation of progress reports or annual report, that institutions are beginning to send their canvas; (3) Poor communication about the indicators, explains the quality of indicators and the differences between the assessment and evaluation.

The following is a summary table of actions Investment Project 13 and 14 which were the subject of 4

Based on work sessions with the project coordinators.

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contract at the University Hassan I: The quantities produced are expressed in square meters for construction, development, maintenance and repair for building and related studies (see Table 5).

At work on these observations, it is clear that the establishment of a system of management control and budget monitoring is essential (see Table 6).

After schematizing the process and segmenting activities around the universityâ&#x20AC;&#x2122;s strategic objectives and particularly empowering actors in relation to their missions, the university is required to develop monitoring tools and evaluation of its activities.

Table 4 Based on the Annual Report of 2010, the Analysis of Indicators Related to the University Hassan I Contract Targets Contract Hassan I University

2008 2009 (base year )

Number of new students: 2,388 Student % Of new entrants in the professional courses enrollment 12.55 open access institutions by institution: % Of students enrolled in master degree 41.17 Number of students awarded prizes

1. The develop Emulation of excellence % Of students awarded prizes ment of the supply of higher Dropout rate in the first year license education Graduation rate regardless of the Fight against number of years repetition and Number of students with a tutor dropout

3. Promotion of scientific research

44.41

29

+131% -37%

54

+31%

2012

3,170

3,818

4,196

4,505

37.11

46.29

45.59

59.36

74.04

72.88

72.88

72

76

85

93

1

1

1

1

0.8

-20%

25

20

16.5

12

17

-15%

70

80

90

90

95 12,169.

3

+58%

-27%

+19%

1,130

1,162

1,219

100

100

100

100

1,894

3,363

4,338

4,502

60

80

100

100

100

+233% +25%

32

40

50

60

100

24

-25%

16

20

30

40

50

4

10

15

30

50

8

+100% -47%

1

2

6

9

2

+0%

100

100

100

100

Number of teachers who received training abroad

81

90

98

106

% Of teachers who received training abroad

30

30

30

30

26

-13%

12

30

24

30

100

100

100

100

50

-50%

68

75

81

89

25

25

25

25

60

+140%

112

117

123

132

50

50

50

50

31

-38%

0

Number of students license key chains have benefited from professional modules in S5 and 801 S6 % Of undergraduate students who received 30 basic vocational modules in S5 and S6 Number of publications in international journals indexed Number of publications with co-signature Moroccan Number of theses

+977%

-52%

Number of applied research projects conducted with companies Number of patents % Of research units accredited

4. Strengthening of staff skills through continuing education

Gap/ 2008

2011

1,176

% Of students in first and second semesters license with a tutor 2. Improving external efficiency

60

Gap/ Target 2010

2010 results

2010

Number of new teachers who received teacher training % Of new teachers who received teacher training Number of teachers who received teacher training % Of teachers who have benefited from teacher training Number of administrative and technicians who have received training % Of administrative and technicians who have received training

80

CASE OF THE UNIVERSITY HASSAN I OF SETTAT

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Table 5 Canvas of Chart Budget Execution for Each Establishment Project

Measures

Actions

Rehabilitation, Project 13: maintenance and Common actions Improved supply equipment of to all institutions of higher universities

Investments 1. Planning of the presidency 2. Buy a car 3. Equipment from the presidency 4. Structuring of communication service 5. Optimization of information system for planning optimisation 6. Establishment of a process of internal evaluation within the university 7. Documentation center 8. Setting up a recycling center and transfer of technology 9. Extension of the car park of the university

1. Equipment chains Specific actions to 2. Commercial vehicle an academic institution 3. Offshoring 4. Establishment of a gravity irrigation Project 14: Promotion of research

Home capacity development

Common actions to all institutions

1. Setting up a system of guidance and information 2. Structure services human resource management 3. Language Resource Centerc 4. Construction of the club at the University

1. External relations services Specific actions to 2. Strengthening of research institutions an academic institution 3. Cold Room

Table 6 Example of Constraints Related to Budget Execution According to the Assessment Report of the Ministry Establishment

Inconsistances budget

Case of ENSA

1. The construction project of the National School of Applied Sciences Khouribga at a cost of 55 MDH in Sheet Monitoring and 58 MDH in the tables of budget execution. Similarly, the physical and expense are not reported in the Tracker, whereas the table of budget execution in May 2010 has issued a credit of 5.025 MDH for this action.

2. The information in the monitoring form requested in the table: State of implementation of the action, have not been filled.

Case of EST

1. The construction project of the School of Technology Berrechid at a cost of 29 million dirhams in the tracking sheet and 40 million dirhams in the tables of budget execution.

2. The information in the Tracking Sheet requested in the table: State of implementation of the action, have not been filled.

Case of FPK

1. The proposed construction and equipment of the polydisciplinary Faculty of Khouribga at a cost of 125 million dirhams in the tracking sheet and 127 million dirhams in the tables of budget execution.

2. The information in the Tracking Sheet requested in the table: State of implementation of the action, were not informed.

Case of FST

1. For the mechanical center, the cost of equipment replacement is 570 KDH in Sheet and 1.4 MDH Monitoring in the table of budget execution.

2. The cost of equipment replacement is the 3.552 MDH in Sheet and 11.854 MDH Monitoring in the table of budget execution.

3. For courses of action equipment, the cost in the monitoring form is 9.945 MDH and the picture of budget execution of 14.714 MDH. For the same action, the information contained in sheet of % on acquisition of equipment (30%) is not consistent with the rate of the expenditure (91.5%).

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Issues of Management Control in the Moroccan Public Universities The Control Levers of Simons, a Conceptual Framework for a Model of Management Control In France, the adoption of the organic law on finance laws in August 2001, aims to guide the management of public spending toward more efficiency by introducing management by objectives instead of management by the means. The adoption of a management control directly inspired by the managerial emergency plan, universities are encouraged by their supervisory authorities to acquire management control devices. Indeed, the emergency plan reported in addition to tracing the project practices of private companies is central to its implementation.

For this reason the interministerial circular of 21 June 2001 was to “the development of management control in government”. Circular also provides a definition of management control: Management control is a control system implemented by an official in his field assignment, to improve the relationship between the resources committed, including resources Human activity and either developed or the results obtained in the framework determined by a strategic advance with established guidelines. It ensures at the same time, management of services on the basis of objectives and commitment to service and knowledge of costs, activities and results.

In Morocco, through the implementation of the objectives and the means encrypted and quantified projects including the proposed 16 which fits in the space 3 of the emergency plan, the key lever is to “cross-cutting issues facing the system”. Its objective is to improve the governance of the University and strengthening its autonomy.

However, the improvement of university governance and the strengthening of its autonomy, are through5: (1) The optimization and rationalization of human resources; (2) The management of financial resources (optimization, rationalization, the rate of budget execution, diversification of resources); (3) The establishment of an internal control system within the university; (4) Strengthening institutional capacity.

From this, it is clear that the emergency plan combines the logic of the contract that is based on the objectives and means the logic of monitoring and evaluation. The adoption of an internal control and management control is one of the clear recommendations of the emergency plan.

The question in this context is to know in which theoretical framework can we write the model of management control to set up in Moroccan universities.

To do this, we propose to work the levers of control of Simons (1995) which operate a dual distinction between on the one hand, control systems focused on the attention opposed to systems-oriented research to opportunities and learning and on the other hand, systems to oversee strategic areas opposed to systems responsible for formulating and implementing the strategy (see Figure 1).

The figure of R. Simons, distinguishes four levers of control that can be used in a complementary and do system within a comprehensive management control: (1) Belief systems, which focus on an explicit set of organizational values that managers communicate formally and reinforce systematically, to develop a culture and organizational goals, likely to create meaning and provide a common direction;

5

Monitoring-evaluation: Progress Report 2010: feedback workshops project 16 and 18.

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CASE OF THE UNIVERSITY HASSAN I OF SETTAT

Systems to develop research and learning opportunities

Systems to focus research and attention

Systems to guide the strategic area Belief Systems

Boundary Systems

Fundamenta l values

Risks to avoid Stratégie

Systems to formulate and implement strategy

Strategic uncertainties

Interactive control Systems

Critical variables of

Diagnostic control Systems

Figure 1. Levels of control. Source: Simons (1995).

(2) Systems that address the boundary delimitation of strategic and focused the attention of the risks to be avoided; (3) Diagnostic control systems, which focus on the control of critical variables and critical success factors and represent the most classic of management control based on the subsequent verification of results, comparisons to their goals or standards, and the adoption of corrective measures; (4) Interactive control systems, focusing on the strategic uncertainties and research oriented opportunities and the emergence of new strategies.

The common thread between the various systems is that they are formal mechanisms of control by Simons (1995).

The latter defines management control systems as “the procedures and processes based on information used by managers to maintain or change the configurations of the activities of the organization” (Simons, 1995, p. 5).

Beyond belief systems and boundaries, it focuses particularly on the control diagnostic and interactive control.

Control systems are diagnostic of “formal information systems that managers use to monitor organizational outcomes and correct deviations from preset standards of performance” (Simons, 1995, p. 59).

These feedback systems are the basis of traditional control systems according to Simons, their characteristics are three: (1) The ability to measure the results of a process; (2) The existence of predefined standards to which the results can be compared; (3) The ability to correct deviations from standards.

These three characteristics correspond to those of control cybernetics and his three conditions for the validity of Hofstede (1978). While the interactive control systems are defined as “formal information systems used by managers to engage regularly and personally in the decision-making activities of subordinates”

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(Simons, 1995, p. 95).

Indeed, through the interactive control levers, Simons proposes to reverse the traditional relationship between strategy and management control, that the control occurs at the stage of implementation of the strategy, he said the top management must foster a interactive dialogue within the organization “through dialogue, debate and learning around the interactive process, new strategies are emerging” (Simons, 1995, p. 102).

In concrete terms, the diagnostic control systems rely on power devices management control are: The calculation of costs, plans, budgets, dashboards, management reporting systems, etc.

However, the interactive control systems are based on participatory management schemes, encouraging interaction, information sharing and learning through processes of “bottom up” or cross, it uses eg. committees, meetings, groups of progress, or performance reviews.

These systems do not exclude the diagnosis control, to the extent Simons recommended to use together the two levers of control with different purposes: diagnosis of control levers to control the implementation of deliberate strategies, the key factors driving success in strategic business areas of the existing company, the control levers to encourage interactive learning, innovation and the emergence of new strategies. Provided that “if the organization has no control systems (...), one of these systems will be used interactively and (n-1) systems will be used in a diagnostic” (Simons, 1995, p. 103).

As part of the emergency plan, universities are encouraged to develop systems of management control.

The question is what are the levers of control available to these universities?

Clearly, monitoring of project indicators of the emergency plan and reporting to the ministry, as the development of budget systems refer them to a diagnostic monitoring system.

This is clearly the same, referring to the French example. Indeed due to the organic law on finance laws (August 2001), a methodological guide (D.I.R.E, 2002)6, was written at the request of the group “Improvement of Public Management” mandated to coordinate the development of control management. The stated objectives are forward about: Enhancing the understanding of management control in government departments, to educate managers on the possible contribution of management control, to provide common references to the actors of management control public environment, enhance the experiences in management control in the public sector.

Overall this paper provides a fairly standard overview of the concepts, methods, tools, and controls management.

The Tools of Management Control: Reflection on a Model to Develop Within the University As part of the control levers of Simons, the tools of management control are distinguished: (1) Conventional diagnostic tools of control: plans, budgets, dashboards, reporting systems, and monitoring of cost, etc.; (2) Interactive control tools: The Balanced Scorecard7.

In a context such as the university, the performance management is necessary for the implementation of its strategy and achieving its objectives, while the dialogue management is also needed at all levels, to promote the ideas of development and strategies in the short and long run.

6

The inter-ministerial delegation to the state reform.

Communication Gérald Naro and Denis Travallé “in search of conceptual and methodological foundations of balanced scorecard: The model of Kaplan and Norton revisited through the conceptual framework of the levers of control”.

7

CASE OF THE UNIVERSITY HASSAN I OF SETTAT

1112

For this reason, the combination of the two types of controls proposed by Simons is useful for the proper control of the university.

In the same sense, the methodological guide (Simons, 2002), presents a practical tool to provide answers to the questions of organization, development, and implementation of any aspect of management control. It favors an approach issues.

The issues are grouped into generic categories (Simons, 2002): (1) Those who are finalizing the management control system, that is to say, the control system design and management be structured around the strategic directions; (2) Those concerning the major stages of structuring management cycle (planning and forecasting, management and performance monitoring, performance measurement and animation).

The guide has proposed a matrix (see Figure 2) whose goal is to cross the management issues raised by the organization, e.g., developing or preparing a budget, â&#x20AC;&#x153;measure performanceâ&#x20AC;? with the tools of management control (diagnostic and interactive). issues tools

Preparation and budget monitoring

Indicators and scorecards

Cost analysis

completion

Set the latitudes management Define the elements Design of the subjected to comparisons management control and accountability Define the key points of the actors to put under control

Performance indicators Strategic cos scorecards t management report and ABC method information balanced scorecard Management Scorecards accounting balanced scorecard forecast costs

Translate strategy into decline and action programs

Management cycle: planning, control and animation

Planning and forecasting

Elaboration of a budget ratios budget budgeting in the first euro Elaboration of Control the budget execution a budget ratios budget Develop and prepare a budget

Piloting activity Piloting performance Pilot the implementation of the strategy

Performance Measuring performance Measurement

Animation

Animating the dialogue of management

ratios budget

Elaboration of a budget ratios budget

Performance indicators

Management accounting forecast costs

A comparative analysis Segmentation (benchmarking) Responsibility centre A comparative analysis Strategic segmentation Responsibility centre strategic segmentation Responsibility centre

Performance indicators Performance indicators scorecards report and information Performance indicators Strategic cost scorecards management report and information balanced scorecard Management accounting classification of costs Scorecards full cost balanced scorecard variance analysis ABC method Scorecards Variance analysis report and strategic cost information management Balanced Scorecard Internal transfer price

Strategic segmentation

Strategic segmentation

Responsibility A Comparative centre analysis strategic segmentation Responsibility A Comparative centre analysis strategic segmentation

Figure 2. Crossing the table issues to be resolved by the manager and tools of management control. Source: Methodological guide of the inter-ministerial delegation to the state reform (D.I.R.E, 2002).

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Conclusions The emergency plan as it was initiated at the University of Morocco, has translated an overall strategic vision of the Moroccan state to modernize and upgrade the education sector.

The contractual logic of results he brought to clearly strengthen the role of universities in the development of their missions, and to better support this approach and help them improve their performance and achieve their goals effectively and efficiently, it is imperative that each university develops its tools for managing and modernizing its governance.

To this end, this paper was to describe the new logic of contracting in which the Moroccan university enrolled since 2009 and show through a case study of the need to develop a system of management control in terms of the control levers of Simon (1995).

The extension of this work will consist of a research intervention in the University Hassan I. Its objective is the establishment of a system of management control as a connection of steps.

The approach consists firstly in a segmentation of activities around the universityâ&#x20AC;&#x2122;s strategic objectives, and secondly as part of the control levers diagnosis, presenting the tools of management control with a conventional system for tracking costs, budget planning, periodic reporting, and dashboards.

Finally, depending on the degree of the university autonomy, implementing a balanced scorecard within the interactive control levers developed by Simons may be considered. The aim is to involve all stakeholders of the university about its objectives and missions to other strategies to emerge much more innovative.

However, it is clear that all this requires above all the empowerment of budget management and human resources of the University of Morocco.

It is not enough to commit budgets and line items to achieving goals, without changing the current budget and accounting rules8. This is to increase the leeway of personnel services, mainly stage of preparing their annual budgets and also the management of their resources during the year9.

It is not enough also to set targets and performance indicators without empowering and motivating the university personnel. To accomplish this, it will require a clear and more flexible status10 to give more autonomy to the university human resource management.

References Analytical Report. (2008). State and prospects of education and training system. Kingdom of Morocco: Higher Education Council.

Annual Report. (2010). Development contract university 2009-2012. Royaume of Morocco: Department of Higher Education, Staff Training and Scientific Research (2011).

Chtouki, H. (2006). University governance: The concept and context. Moroccan Audit Review and Development, 22, 253-258.

Henri, S., & VĂŠronique, Z. (2004). Science research management: Approach qualimetric, observing the complex object.

Paris.

8

The Moroccan university work always with a public accounting dating back to 1967.

Heaviness in the public procurement procedure fact that the monitoring of budgets and commitment is not systematic.

10 Limits of Article 17 of Law 01-00 on the organization of higher education.

9

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Hofstede, G. (1978). The poverty of management control philosophy. Academy of Management Review, 3(3), 450-461.

Kaplan, R. S., & Norton, D. P. (2001). How to use the balanced scorecard. Paris: Eyrolles, Editions dâ&#x20AC;&#x2122;organisation.

Kaplan, R. S., & Norton, D. P. (1998). The balanced scorecard. Paris: Editions dâ&#x20AC;&#x2122;Organisation.

Michel, G. (2009). Management control (9th ed.). Paris.

Simons, R. L. (1995). Levers of control: How managers use innovative control system to drive strategic reneval (p. 217). Boston, Massachustts: Harvard Business School Press.

D

Journal of US-China Public Administration, ISSN 1548-6591 November 2013, Vol. 10, No. 11, 1115-1121

DAVID

PUBLISHING

Model for Management of Public Funds Transfers in SICONV Luiz Lustosa Vieira

Ilka Massue Sabino Kawashita

University of Brasilia, Brasilia, Brazil Ministry of Planning, Brasilia, Brazil

Ministry of Planning, Brasilia, Brazil

This article consolidates the efforts of the Information Systems Research Group for the construction of a reference model for the management of agreements celebrated based on the Brazilian federal government’s voluntary funds transfers. It presents the Reference Model for covenants’ processes, which is the product of the third phase of this research project. This model will be used as reference in the fourth phase of this project, when it will be applied to a sample of covenants. Experience gained in this step will allow the consolidation of the Reference Model. An important contribution of this work is to facilitate the understanding of proposals, so processes analyzed can be improved and redesigned. Processes information, from organization to details of each activity, can then be disseminated to all interested parties. Results here presented are not final. They will serve as input to the next stage of the project, which is the Assessment of the Reference Model by selected Stadual and municipal governments.

Each entity will contribute with its own perspective to improving the idealized model.

Keywords: transparency in government, new technologies and public policies, government, information systems, e-government, governance

Ministry of Planning aiming at facilitating the access to the resources available in the Union’s General Budget by means of voluntary funds transfers highlighted, based on previous studies related to the topic, that determinant success factors of those interested in accessing these funds are the capacity and organization of their agents in executing activities required for future covenants qualification. The more prepared and organized the agent is, the greater the amount of resources he has access to.

In this regard, a policy of more adequate distribution and with less risk of failure in the results necessarily passes through agents’ improvement both in terms of procedures for the acquisition of resources and their project management capacity.

The strategy of the Ministry in this segment is based on the following guidelines: (1) Consolidation of successful experiences in a model of voluntary funds transfer process that will serve as reference; 1

Covenants system of the Federal Government.

Corresponding author: Luiz Lustosa Vieira, Ph.D. in Information Systems from the University of Toulouse, France, Post Ph.D. in Government Information Systems from the University of Grenoble, France and graduated in Public Administration Institute at Methodist Bennett Rio de Janeiro; professor at the University of Brasilia, Brazil; planning analyst at the Ministry of Planning in Brazil; research fields: information technology strategic planning and government. E-mail: luiz.vieira@planejamento.gov.br.

Ilka Massue Sabino Kawashita, Master in Computer Science from University of Montreal, Canada and graduated in Mechanical Engineering at University of Brasilia, Brazil; a project manager practitioner, PMP certified since 2006, with more than 20 years of experience in project management, systems analysis, and software development with focus on object-oriented software development methodologies and adoption of best practices such as PMBOK and COBIT; planning analyst at the Ministry of Planning in Brazil; research field: information technology strategic planning and government. E-mail: ilka.kawashita@planejamento.gov.br.

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(2) Production of a methodology that allows the concerned agents the comprehensive and objective identification of their capabilities, deficiencies, and priority points for improvement; (3) Survey to gather data about a sample of agents’ working with voluntary funds transfers processes using the referred methodology and comparative analysis in relation to the Reference Model, both cited above; (4) Based on these surveys, determine the necessary guidelines and potential cooperation plans between the Ministry of Planning, States, and Municipalities, aiming at processes improvement within the State or Municipality.

Objective This article describes the results obtained in the idealization of a model for the process of voluntary funds transfers that will be adopted as reference for evaluation of practices adopted by covenants, as described in guideline 1.

This work sought to consolidate the group’s understanding, with the collaboration of the Ministries of Tourism, Social Development, and Planning in the role of grantors, as well as the Government of the State of Pernambuco in the role of covenant, on what the best practices that should be observed in the voluntary funds transfers processes are. Thus, the construction of the Idealized Reference Model is the result of the third phase of the project (Construction of a Reference Model for Management of Agreements).

Therefore, the objective of the Idealized Reference Model is to serve as a parameter to guide the work that will be developed in phase four of the project (Assessment of the Reference Model). At that moment, three States and five Municipalities will be visited to check the effectiveness of the idealized model as a parameter for the evaluation of covenants’ practices related to voluntary funds transfers. For this reason, the level of detail shown in Idealized Reference Model is deemed sufficient for carrying out the work of this project’s phase four.

At the end of phase four, the project team will have collected enough information and feedback to evolve the Idealized Reference Model to a higher level of maturity, which is called the Consolidated Reference Model.

This is the project’s final product that will be made available for covenants. The consolidated model will present processes’ activities that compose it in greater level of detail.

The methodology Business Process Improvement (BPI) (Harrington, 1991), chosen by its conformity to the adopted platform of mapping process, and recognized quality, was applied to the project. BPI was also customized for the Guide of Simplification of the National Program of Public Administration and Bureaucracy (GESPUBLICA), which, in addition to the documentation of processes, guides a set of actions relating to the management and improvement of such processes, making the creation of a corporate database of improved processes documentation possible. The aforementioned methodology warrants the accurate portrait of the process and consequent consensus about reality represented, by gathering information, about current situation (as is), as well as the definition of the future situation (to be), through work sessions using Joint Application Design (JAD)2 technique (Wood & Silver, 1989). The adherence of the process modeling 2

Joint Application Design (JAD)—is a software specification method created by IBM in the 1970s, whose goal was to reduce the time spent with the specification of systems, by the elimination of costly rework obtained by carrying out of specification with groups of interviewees formed by all the people who were involved directly or indirectly with the process. This method ensures a better vision of the whole and dispenses the consolidation work later. The meetings are characterized by objectivity, having a coordinator, whose role is to lead the group into a logical sequence of topics, avoiding the deviations of subject. Data obtained are being placed at the sight of all, in order to avoid different understandings related to the same theme.

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methodology to GESPUBLICA is ensured by the Manual of Process Modeling Standards, created and maintained by the Process Management Office of the Coordination of Administrative Modernization (COMOR/MP).

Methodology Applied The software Architecture of Integrated Information Systems (ARIS) (Davis & Brabander, 2007) was used as a tool for documentation and information management. The adoption of ARIS Products in conjunction with the methodology for modeling the Reference Model allows jobs to be structured with high degree of detail and information, which will enable the use of such documentation in futures initiatives.

Methodology for Modeling the Reference Model As mentioned, the work of drawing up the Idealized Reference Model for voluntary funds transfers processes was developed mainly using JAD methodology, which consists in meeting with people directly or indirectly involved in the processes: (1) Suppliers—who provide inputs for the implementation of the process; (2) Performers—who perform the activities of the processes; (3) Customers—who receive the processes’ products.

Meetings occur to allow these actors to discuss the activities according to their own perspectives, reaching a consensus on the implementation of the process and generating a homogeneous and accorded view of the process. The adoption of JAD for processes’ documentation allowed: (1) Adopt a method for decisions that require interagency involvement; (2) Allow participants to view the big picture; (3) Reduce requirements gathering time, as future validations were not required, as traditionally occured in conventional methods; (4) Reduce decision-making time; (5) Take advantage of the synergy of the group meetings—a void loss of information or detail; (6) Information is gathered, clarified, aggregated, and documented during work sessions; (7) Results are immediately presented, which allows uniform understanding of all participants.

At the end of each modeling meeting, participants identified best practices and improvement recommendations that, at that moment, should guide the evaluation of practices adopted by covenants.

Manual of Process Modeling Standards To ensure that process modeling activities executed at the Ministry of Planning are standardized and in accordance with the Ministry’s needs, the Manual of Process Modeling Standards was developed and is maintained by the COMOR/MP. For the elaboration of the Idealized Reference Model, the research Group used the Manual and the Term of Reference considering the following aspects of: (1) Graphical representation, by means of diagrams and/or flowcharts; (2) Resulting products/services and their requirements—final event of the process flow; (3) Logical paths and interdependencies—processes’ interfaces; (4) Customers and suppliers—initial interface (suppliers) and end of the flow (customers); (5) Inputs required—input event to initiate process activities.

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Process Modeling Process modeling is the term used to work relating to: (1) Mapping—process identification and diagramming as it is performed (as is). Mapping is understood as the identification of the workflows with well determined beginning, middle, and end; with clearly defined inputs and products/services; and with activities that follow a logical sequence allowing an integrated and chained vision the work; (2) Redesign—process optimization (proposed or to be). Redesign is understood as the improvements made through the rationalization of the workflow. Generates a base reference that allows, among other applications, to create conditions for the construction of the organizational structure; definition and evaluation of internal and/or institutional performance indicators; formulation of information systems plans; application of the Plan Do Check Action (PDCA) Cycle (Shewhart, 1939).

Diagrams Diagrams are graphical representations elaborated to present a certain reality in simplified form, thus enabling a better understanding. Diagrams are primarily composed of symbols and attributes, which are text-based information that complements the representation.

Value Added Chain (VAC) diagram. Model that represents the systemic vision of the organizational processes, as it presents a macro vision of interconnection and/or chaining of macro processes, processes, threads, and tasks, following their execution sequence.

Process flow diagram. Model that represents the detailed overview of sub-process/process in a logical sequence and shows its integration with the other VAC processes. ARIS represents processes as a string of events and activities, as shown in the Process Flow Diagram.

An activity is the action performed that is intended to support the organization’s objectives. Activities correspond to “what” is done and “how” it is done during the process. “What” is done is described by activity’s attribute “name” and “how” it is done by attribute “description”. Activity’s description naming should follow the rule: verb in the infinitive tense, i.e.: Meet Demands.

Events are the results of some activity/action or are used to represent temporal events (Example of temporal events: at the end of the year, every six months, daily). These objects control or influence the sequence of process activities, by triggering the execution of one or more of them. Events obey the following naming rule: verb in past tense, i.e.: Demands Met. The modeling of a process always starts with the object “Interface Process” or the symbol “Event” and ends in the same way.

Standardization and Modeling Work performed for the mapping and optimization of the voluntary funds transfer process to States and Municipalities was based and focused on covenants views. Representation of processes was guided by the Manual of Process Modeling Standards and used ARIS as modeling tool solution. The experience of the technical staff of SLTI/MPOG3; and best practices identified between grantor and covenant contributed to guiding the structuring, organization, and interaction are reflected in the proposed Idealized Reference Model.

Information and graphical representation of redesigned voluntary funds transfer process are consolidated into ARIS database, which among other applications, allowed the generation of this documentation, considering the following aspects of processes: 3

Secretariat of Logistics and Information Technology/Ministry of Planning, Budget and Management.

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(1) Models of processes of the Value Added Chain related to the Management of Voluntary Funds Transfers Programs with the graphical representation of the processes in relation to the PDCA cycle, as well as the representation of the inputs and outputs in the whole process life cycle; (2) Models containing diagrams of inherent Voluntary Funds Transfers processes, with graphical representation of their activities, events, process’ logical path and interfaces with other processes.

The Idealized Reference Model included in this article is structured in two levels, which allow the understanding from processes to the activities flow of each one of the processes that compose the Model of Reference. It is worth mentioning that only covenants’ processes were detailed into activities’ flows, as this is the scope of this work. Grantors’ processes were only represented in Value Added Chain models, with their respective inputs and outputs, to demonstrate complementarity between grantors and covenants actions.

The logic that guided process structuring and organization is detailed below: (1) Level 1. Value Added Chain (VAC): on which are represented voluntary funds transfers processes, contemplating the whole life-cycle of each process, from the identification of needs to the assessment of the agreement’s general results. The processes are arranged in order to highlight the performances that fit to grantors and drafted. Two VAC representations are used: The first highlights the VAC within the PDCA cycle; the second details the inputs and outputs that promote integration between VAC’s processes (see Figure 1); (2) Level 2. Process Elements: presents the decomposition of the processes identified in level 1 into their respective activities flow. As previously mentioned, this level does not show grantor’s processes, only covenant’s processes are represented.

It is important to emphasize that the sequence adopted for representation of processes in this article follows the flow of the PDCA model, i.e., the first are presented processes that compose the Planning phase, after those of the Implementation phase, followed by Control and, finally, processes of Evaluation phase are presented.

Gerir programas para Tranferências Voluntárias Regras das ações de transferência voluntária

Diretrizes dos programas Planejar programas de governo

Ações Orçamentárias

Divulgação das ações Transferência Voluntária

PPA

Resultados dos programas Formalizar Processo de Transferência Voluntária

Instauração de TCE

Instrumentos de transferência voluntária

LIberação de recurso

Liberar recursos

Previsao de dotação orçamentária Propostas

Instrumentos de transferência voluntária

Analisar Prestação Contas Convênio

Relatório final de prestação de contas

Avaliar resultados gerais dos Convênios

Relatórios de fiscalização

Elaborar proposta de projeto

Documentação para prestação de contas

OB Registros da execução

Parecer da proposta (Técnico/Jurídico)

Demandas da sociedade

Cronograma do convênio

Relatórios de análise de registros de execução

Executar Convênios

Relatório final de execução

Relatório final

Relatório de alcance dos objetivos

Elaborar prestação de contas de convênio

PPA Levantar necessidades

Demandas da sociedade

Relatório do acompanhamento

Bloqueio de recurso

Diretrizes de governo

Diretrizes de governo

Acompanhar Convênios

Divulgação das Ações

Identificar recursos Lista de necessidades

Fonte de recursos

Cronograma do convênio

LDO

Relatório de acompanhamento

Acompanhar execução

LOA

Figure 1. Value Added Chain (VAC)—Management of Voluntary Funds Transfers Programs (representation of processes inputs and outputs).

Conclusions Ministry of Planning in order to facilitate access to resources made available in the Union’s General Budget by means of voluntary funds transfers determined, based on previous studies related to the topic, that a

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key success factor of interested parties in their pursuit of accessing these resources is the agents capacity and organization in the execution of activities required for proponents qualification. The more prepared and organized the agent is, the greater the amount of resources he has access to.

In this regard, a policy of more adequate distribution and with less risk of failure in the results necessarily passes through agents’ improvement, both, in procedures for acquisition of resources and in their project management capacity.

The strategy of the Ministry in this segment is based on the following guidelines: (1) Consolidation of successful experiences in a model of the voluntary funds transfer process that will serve as reference; (2) Production of a methodology that allows interested agents the comprehensive and objective identification of their capabilities, deficiencies and priority points for improvement; (3) Conduct a survey, with a sample of agents, to gather data about their way of working with regard to the voluntary funds transfer process, using the methodology and comparative analysis in relation to the Reference Model, both cited above; (4) Determination based on these surveys of the necessary guidelines, possible plans of cooperation between MPOG4 with States and/or Municipalities, aiming at the improvement of the process in the context of the Municipality or State.

The implementation of the BPI methodology mentioned in item (2), above, to obtain a Model for the voluntary funds transfer process is complete. The software ARIS was used as tool for documentation and information management, for identification of capabilities, deficiencies, and priority points for improvement of the voluntary funds transfer process. Item (3) highlights the work performed for the mapping and optimization of voluntary funds transfer process to States and Municipalities with focus on covenants views. It is important to note that the sequence adopted for representation of processes in this article follows PDCA model flow, i.e., first are presented the processes that compose the Planning phase, after those of the Implementation phase, followed by Control and, finally, assessment phase processes are presented.

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Davis, R. (2001). Business process modeling with ARIS: A practical guide. London: Springer-Verlag.

Davis, R., & Brabander, E. (2007). ARIS design platform: Getting started with BPM. London: Springer-Verlag.

Harrington, H. J. (1991). Business process improvement: The breakthrough strategy for total quality, productivity, and competitiveness. USA: McGraw-Hill.

Scheer, A. W. (2000). ARIS—Business process modeling. USA: Springer.

Shewhart, W. A. (1931). Controle econômico da qualidade do produto fabricado (Economic control of quality of manufactured).

New York: D. Van Nostrand Company.

Shewhart, W. A. (1939). Método estatístico do ponto de vista do controle de qualidade (Statistical method from the viewpoint of quality control). Washington, D.C.: The Graduate School, the Department of Agriculture.

SICONV (Covenants system of the Federal Government). (2009). Sistema de Convênios do Governo Federal (Covenants system of the Federal Government). Retrieved from http://www.siconv.gov.br Vieira, L. L. (2007). Comparative study of the management of government information systems projects—Proposal A-IV international conference on systems integration-Brasília-DF 2 a December 5, 2007.

Vieira, L. L. (2008). Management of government information systems projects—A comparative study—I InfoBrasil IT & Telecon _ Fortaleza-Ceará-Brazil-May 2008.

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Vieira, L. L. (2013a). Public policy—The reality in the practice of management covenants. Proceedings from the 4th International Workshop Advances in Cleaner Production, São Paulo.

Vieira, L. L. (2013b). Evaluation of procedures of the party in SICONV. Proceedings from the 4th International Workshop Advances in Cleaner Production, São Paulo.

Vieira, L. L., & Aguiar, N. J. A. (2011). Public politics—The reality in the practice of management agreements. Proceedings from 8th CONTECSI International Conference on Information Systems and Technology, São Paulo.

Wainwright, E. (2009). Convergence, information and records management: Observations from an Australian government information management perspective. Retrieved from http://www.nla.gov.au/ Weinstein, P. C. (1998). Ontology-based metadata: Transforming the MARC legacy. Pittsburg: Digital Libraries.

Whitten, J. (1994). Systems analysis and design. USA: McGraw-Hill.

Wood, J., & Silver, D. (1989). Joint application design. USA: Wiley.

Zweers, K., & Planque, K. (2001). Electronic government from an organizational based perspective towards a client oriented approach. In J. E. J. Prins (Ed.), Designing e-government (p. 92). Kluwer Law International.