Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

Railway Reform: Toolkit for Improving Rail Sector Performance
5. Creating the Industry Structure
5.2 The First Building Block: Business Organization
Most government authorities trying to operate in a commercial environment
share the dilemma posed by government management incentive structures—a
built-in bias for bureaucratic objectives, political goals, and public services rather
than market advantage, resource efficiency and commercial gain. 50 Railways
share this dilemma. If they are run as and by public departments and authorities
they are ill-equipped to compete in a tough external business environment.
Archetypal railways have always been captive to bureaucratic pressures, which
can undermine their commitment to serving customers. Multiple constraints include:
(i) accountability measured-by-process (‘box-ticking’) rather than results;
(ii) vulnerability to short-term national budgeting processes that destabilize
longer-term business and investment planning; (iii) public service employment
norms and procedures that impede commercial operations; (iv) political patronage
or seniority as a basis for selecting board and senior management, rather
50 Good bureaucracy is essential to government administration and accountability; and
bureaucrats have an immediate responsibility to support the policies of political leadership.
The World Bank Page 67