Improving performance

In the last few months, I have shared my views on a number of development topics. With so much expectation attached to a new government, it was an opportune time to do so.

But when we talk about reforming the economy, we often overlook a major constraint that prevents quick progress. That constraint is the capacity of government institutions to plan and implement a reform programme. We need a major rethink on how to improve government performance. Each government in Pakistan has pledged to do so. Yet none has seen success.

This column is in two parts. Today’s column discusses why we need to improve performance and the broad issues involved. A subsequent column will discuss specific reforms.

In its present form, government institutions do not give the support needed by businesses, nor do they help build human capital. The latter enables citizens to engage fully in the country’s economic life. In its Ease of Doing Business Report, the World Bank ranks Pakistan on the 136th place – out of 196 countries. Vietnam, India, and Sri Lanka are ranked between 69 and 100. Our rank in the WEF’s Competitiveness Index is equally low.

In terms of helping the common person, the UN’s Human Development Index is a good indicator of where we stand. In 2018, we were at the 150th place among 189 countries, falling from 146 two years before. Research shows a direct relationship between quality of human resource and economic development, though likely one feeds into the other.

Government performance has been weak, regardless of who is in power or how well the economy has performed. And it has been so across the board, whether it is social service, law enforcement, or regulatory functions. In many parts of the government, its writ is in name alone. Resultantly, citizens have lost trust in government. This is serious if we want them to have faith in political institutions. It also risks the country’s stability as we may be alienating a large number of the youth.

Civil servants are the instrument through which elected governments seek to deliver their promised agenda. I am using the term civil servants here in the broadest sense of officials from the federal, provincial, and even municipal governments. For the common person, the state is represented by the office whose service they need. This could be NADRA, tax, police, or the local office that issues building permits. When we include them all, the number of civil servants could be about three million. Such a vast scope is unwieldy.

Also, we need reforms across many areas such as managing performance, accountability, training, compensation, tenure, and more. Recommendations must tailor also to functions, such as policymaking or service provision, and correspond to the level of government, federal, provincial, or local. They may distinguish also between generalists and specialist civil servants. Because we need to reform governance at all levels and across its many aspects, ‘one size fits all’ will not do.

While improving civil servants’ performance is key, their performance is the outcome of a series of processes that take place behind the scenes. These include goals of the political government, its policies, the extent of follow-up, and how well they engender a culture of responsiveness.

A number of issues need to be addressed. For it to work, the plan must consider, though not submit entirely to, societal values and norms, or else they will not be accepted. There is stickiness about the government’s management of civil servants. Despite avowals to the contrary, governments do not always refrain from political interference in decision-making or in civil servants’ tenure. There is even a court order in this regard. Yet interference continues in practice. Media and civil society pressure does not always help. Everyone must keep trying because, at least in form, Pakistan’s civil institution is merit-based.

There are many other things to do. For one, we must raise civil servants’ skills and knowledge. This is needed at all levels, be it policymaking, service provision or law enforcement. At senior levels where it is most visible, the generalist approach can no longer work. Still we must balance between specialization and the risk of developing tunnel vision.

Accountability of civil servants virtually does not exist. NAB’s witch hunt does not count. Accountability must be of performance and should be built in to everyday working. Measurable performance and cost standards are needed. Likewise, there should be rules, presently absent, to appoint officials to senior positions and for removing them prematurely.

Devolution is resisted by both civil servants and provincial politicians. A lot of citizen and business problems would be taken care of if this were observed in true spirit. Provinces refuse to share financial and administrative powers that they so vehemently demand from the federal government.

To an extent, patronage occurs in most economies. In Pakistan, it seems to be excessive. Whether it is tax policy or concessions and government guarantees, cronyism is visible in many areas. Some people receive preferred treatment while most are denied basic needs. This degrades governance and spreads despondency among the majority.

Two other areas need brief mention. If governance doesn’t deliver, we must try to improve it and not take desperate measures. Recently, a provincial government, impatient with normal office working, set up many government-owned companies having their own pay scales and procurement practices. Such cures are likely worse than the malady.

Also, we must not change what is working, but not to the liking of powerful interests. Government procurement rules is a case in point. It is often criticized because officials do not wish to follow process or because doing so gives a different result than the one they want.

Despite challenges, we cannot give up on the goal of improving government performance. It is critical for our security and economic well-being. In a subsequent column, I will discuss more substantively the elements of government reform.

The writer was commerce minister from 2002 till 2007. He is chair and CEO of the Institute for Policy Reforms.