its civil service by establishing a robust analytical and empirical basis going forward for any dialogue and decisions on how compensation and human resource management reforms might be designed. Developing an improved framework for evidenced-based policy-making in civil service HRM is an approach that PACSA is well positioned to undertake, given its policy mandate and ongoing role in overseeing HRM practices and collecting civil service statistics. This is particularly the case in the context of the new Civil Service Management Strategy. The necessary resources—leadership that is committed to improving civil service performance, dedicated professional staff, and communication channels with personnel departments and other units in a large number of government bodies—are largely in place and any funding required for enhanced data-gathering and analysis would be modest. In contrast, the potential benefits are large.

The personnel information management system (PIMS) currently under development may allow more data analysis and better tracking of the performance of the HRM system. Specifically, for example, it would be worthwhile for PIMS to track details on the number of applications by position grade and location, in order for the government to get a more nuanced picture of which particular jobs it might have trouble filling. PIMS could track the detailed educational and demographic data of civil servants, particularly as this information is currently necessary to model the wage bill accurately (see below). PIMS could also be used to track the additional duty-related compensation received by civil servants, including supplementary earnings from per diem savings, seasonal shift work, etc.—thereby enabling the GOL to capture more accurately the full fiscal costs of the civil service (see below). Moreover, PIMS could usefully track data on contract worker and volunteer hiring, in order to help the GOL get a handle on this opaque set of practices and develop more consistent recruitment policies.

_Wage bill modeling._ Comprehensive wage bill modeling was not possible during this analysis because the necessary levels of disaggregated data were not made available to the World Bank. Moving forward, however, it will be important for the GOL to model the impact of any potential compensation reforms in the context of what appear to be growing fiscal constraints on the aggregate wage bill. PIMS, when it is deployed, should improve the availability of information and the ability of MOF and other agencies to track personnel numbers and wage costs—and could potentially form the basis for a detailed wage bill modeling exercise.

_Capturing the full fiscal cost of the civil service._ This report has detailed a number of practices in civil service hiring and compensation that obscure the true cost of paying the civil service in Lao PDR. The GOL continues to hire and pay contract workers and volunteers, who perform civil service jobs but are paid out of non-wage bill lines of the recurrent budget. In addition, development partners sometimes supplement civil service salaries or fund consultants to perform civil service line functions. Such practices mean that aggregate wage bill figures under-report the true cost of compensating the civil service. In order to capture this cost more accurately, the GOL should work to calculate at least the magnitude of these additional forms of compensation to individuals performing civil service roles. Furthermore, the GOL and its development partners must together guard against the proliferation of practices—such as salary supplementation and off-budget funding of line positions—that create perverse incentives and undermine human resource management. A tangible first step in this regard would be an agreement to further study these practices and examine how widely spread they are, along with a commitment to harmonizing donor approaches in order to avoid perpetuating adverse dynamics.

_Enhancing establishment controls._ The government could move to implement partial steps in establishment control to achieve some measure of performance-oriented reform. The HRM and incentives assessments presented in this report illuminate a number of such potential steps. One important action in this regard would be to control the tide of inevitable progression within the career structure by reforming the criteria for advancement. The GOL could mandate that only educational qualifications with direct relevance to job performance would result in step or grade advancement, going 31