Life after Public Sector Job Loss in Guinea

Abstract

Abstract Donors and policy-makers continue to emphasize reducing the role, and improving the efficiency, of the state as a key component of reform in sub-Saharan Africa economies. Macroeconomic stabilization efforts inevitably focus attention on the size of the wage bill and the attendant strain that is placed on the government’s limited budgetary resources. However, public sector wage and employment policies also have important direct impacts on the efficiency of the sector, as well as numerous indirect impacts on the rest of the economy.1 Thus, the retrenchment of government workers, as well as the rationalization of public sector pay scales and employment policies, have become essential components of structural adjustment programs in sub-Saharan Africa. This paper will focus on the Republic of Guinea’s successes and costs of implementing a public sector retrenchment program. Guinea’s experience is particularly poignant because of the public sector’s initial dominance of economic activity and the presence of severe institutional constraints to effective program implementation.