For years now, we are despaired of the way our economy and state is managed. The state does not provide people with any tangible benefits; it cannot even guarantee their lives and liberties. The social fabric is crumbling. Rent-seeking and corruption—by-products of a crumbling state—have served to destroy the economy while the public pays for these wasteful activities through an increasing burden of taxation and accelerating rate of inflation.
A careful analysis will reveal that many of our problems are caused by three features of our chosen form of government:
- The government has absolute power. All forms of executive, legislative, and financial power are concentrated in the hands of the prime minister, while all other government functionaries pale in comparison. Meanwhile, the citizenry is beholden to all manner of minor government functionaries.
- This concentrated form of government seems to grow at a rapid pace through borrowing and implicit taxation. These resources are the basis of government buying-off power, fostering rent-seeking and corruption.
- As a result of this growing centralization of government, all state functionaries are above any form of accountability. The lack of accountability has numbed the public to printed stories of corruption, maladministration, and nepotism.
A consensus on the need for reform is never on the horizon. However, there is little understanding of precisely what reform is necessary. It seems that we now face a crisis of lack of understanding of the process of reform. Any serious reform effort in Pakistan, I believe, should begin with three principles: (i) decentralize; (ii) professionalize; and (iii) autonomize.
Decentralisation
This involves reducing the powers of the federal and provincial government, and allowing communities, towns, cities, and local governments to take over many of the functions that are important to the community. Thus, police, schooling, health, parks, and recreation could all be devolved to the local government. Two important outcomes of this should be noted:
• The federal government’s power has to be reduced and duplication avoided. Decision-making, as well as the utilization of funds, should devolve to the level required for the delivery of maximum benefit to the community.
• Both the federal government and the local and provincial government should be competing for resources, especially the scarcest of resources—human and managerial. Consequently, the current civil service arrangement based on a centralized Public Service Commission with an established hierarchy of service—the federal service at the apex and the local at the lowest level—would be inimical to the spirit of decentralization.
Professionalization
Pakistan’s key Ministries and institutions are managed according to an approach that was established in the last century. Even the British, who designed the system, no longer use it. This system selects competent generalists early in life, offers them little additional training or incentive to professionalize, and guarantees them key positions. Nowadays, in more advanced countries, there is a trend towards professional management in a highly competitive environment in both private and public management. Increasingly, governments are placing performance-based institutions based on clearly written performance-based contracts in the hands of the finest professionals.
Pakistan’s system of a core civil service that has the protected the right to all senior appointments regardless of professional capability is certainly not consistent with this. We have also seen the adverse effects of such a system and hence should be more than ready to reform along the lines of professionalization.
Autonomization
Another modern trend in all industrial countries is that of autonomous institutions. Apart from line ministries, most institutions, such as universities, research institutions, school systems, and regulatory bodies, tend to be autonomous agencies. At times, governments can make key appointments, such as heads of agencies. Quite often, even these appointments are in the hands of independent boards of directors. For example, the government may be able to nominate a governor of a central bank, but in most cases, it cannot appoint a university president. Even where the government can appoint an agency head, tenure rules will prevent a capricious firing but hold the agency head to clearly defined output goals.
Hiring and wage and incentive structures within these institutions are not centrally controlled and subjected to national uniformity standards, but remain an instrument of internal management control.
The practice of putting secretaries, ministries, parliamentarians and other politically involved people on boards of director or governing bodies of agencies, SOEs and universities vitiates the independence and workings of these organizations. Similarly, all appointments going to the prime minister or the provincial chief minister too means that the agency become politically involved.
In most countries, reputable and decent citizens, such as leading public intellectuals, civil society members serve on the governing bodies of autonomous agencies to help appoint and run them through professional management without the need to go ministries, and the prime minister. That should tell us that such central control by the politicians and the bureaucrats is inefficient and probably an important reason for the failure of SOEs, regulatory agencies and our universities ad think tanks.
Reform is a lengthy and difficult process and we would all do well to study it and demand a meaningful reform. It would also be wise to heed advice that flows from a study of reform around the world. The beginning of all serious reform efforts must be improving the abysmal government productivity as well as a our policymaking process. This must begin with ‘decentralize, professionalize, and autonomize’.
