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LESSONS:

Tonga: Economic and Public Sector Reform Program (Loan 1904[SF])

sector: Public Sector Management | country: Tonga

Political economy dimension of reforms should be considered to better assess feasibility of policy measures. The civil service strike highlighted the importance of communicating the full implications of proposed actions. It then becomes important to identify and understand the various groups affected by and opposed to the reforms in order to have better ideas on the need, magnitude, and practical considerations for possible mitigation or compensation measures. As such, there is a need for careful assessment of winners and losers, including addressing the concerns of losers.

Careful prioritizing of reform issues facilitate better sequencing and pacing of reform measures. Reform issues are often interrelated. As such, priority actions and measures should be established. Reform measures may require careful prioritizing, especially as these entail attendant sequencing and pacing considerations. Although ADB chose to focus on fiscal policy measures, public sector, and public sector enterprise reforms were also simultaneously tackled under the program. The reforms in these areas could have been paced over a longer time with appropriate sequencing, especially for public sector enterprises since an appropriate regulatory framework was not in place that would ensure affordable services and competition. More meaningful indicators may need to be adopted to capture the effects of the policy measures over a longer period of time.

Implementation is equally important. The reform process is ultimately about implementation. Although vital legislations were easily enacted within a short time period, concomitant implementing rules and guidelines, including changes in institutional arrangements entailed additional time for these to be put in place. As such, extra effort must be devoted during program preparation stage in considering the implementing mechanisms and the time needed for these to actually take effect.

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