16 A second useful comparison is the public sector wage relative to average income per capita. In OECD countries, government workers earned (ca. 1980) on average, 1.74 times per capita GDP, but they earned only 13 percent more than the average noncentral-government worker in the formal sector."<sup>1</sup> In Asia, and Latin America, central government emp!oyees earned almost three times the GDP per capita, and 1.3 times the noncentral government wage in Latin America (Heiler and Tait 1984:18-19). In Asia, although government workers earned, on average, 1.7 times the manufacturing wage, there was great dispersion about the mean, with government wages at or slightly below wages in industry for two countries--the Republic of Korea and Sri Lanka (0.95 and 0.99 respectively) (Edgren 1987:15). In Africa though, central government workers earned 6 times the GDP per capita, but only 80 percent of the average wage outside the central government, so that in spite of massive income inequality between the formal and informal economies, government wages are nonetheless low relative to the private formal sector (Heller and Tait 1984:18-19).

These data are not only dated, but also present a static picture. Employment has grown in most countries, sometimes at an alarming rate. There are countries in Africa like Ghana, Nigeria, and Zambia where civil service employment grew at an nnual rate of 15 percent for many years (1975-83) (Lindauer, Meesook, and Suebsaeng 1988:2-3). Yet while employment has risen, at least until recent years, real public sector wages have fallen in most developing countries since the late 1970s and early 1980s for a number of reasons."<sup>2</sup> The picture of a drop in real starting salaries has been sharpest in Africa (30 to 40 percent fall, on average, between 1975 and 1985), and less so in Latin America (10 to 20 percent from 1980 to 1987). In countries like Ghana, Sudan and Uganda, starting salaries fell 70 to 90 percent in real terms in the decade from the mid-1970s (Lindauer 1991b:82). In Asia, the pattern is unclear. In Bangladesh, India, and Pakistan, for example, real wages have fallen, and in Malaysia and Indonesia, they have risen (van Ginnekin 1990:449; Irfan and Ahmed 1985:426). In general, the effect on performance has been severe, especially in Africa. In Uganda, estimates are that government workers spend only one-third to one-half of their working day executing the duties of office--the rest of the day is spent on acquiring outside income (Lindauer, Meesook, and Suebsaeng 1988:21). Although it is difficult to demonstrate causation between reduced pay and reduced effort -- and to discount the effects of other factors -- it is safe to hypothesize that falling real wages hurt worker productivity.

Public. private and parapublic sector comparisons. A 1989 World Bank study (Levy and Newman) provides indirect substantiation for the hypothesis of endogenous wage determination in developing country firms. Aggregate data for the modern sector in CMte d'lvoire show a 16 percent drop in employment during the 1979-84 recession along with an 18 percent rise in real wages. It would be erroneous to conclude that high wages contributed to lower employment, however. Desegregated data show that the real wage fell for specific types of labor. The workforce at the end of the period had more education, training, and experience than at the beginning of the study, and workers with a given level of these attributes received a lower real wage