ews media headlines are saying that the government has decided to close down 33 state-owned enterprises as a part of its ‘right-sizing’ programme. The push for optimum staffing and investment levels includes abolition, merger or downsizing of 82 organisations and departments at the federal level. Austerity measures aiming to reduce the overall federal spending are also under way. The initiatives align with Vision 2025, which calls for a much leaner government.

The idea that a number of organisations at the federal level are overstaffed has been around for a while, particularly since 18th Amendment, which devolved several subjects to the provincial governments. The recent right-sizing initiative, however, involves more than 80 public sector organisations and encompasses a wide range of measures. These include mergers, abolitions, transfers to other ministries and transfers to the private sector.

The word ‘reform’ is often used in this context in news bulletins, talk shows, academic discussions and casual conversation apparently without an adequate understanding of its implications. Reform is closely associated with change. When something is not functioning as expected or desired, there is a need for reform. This involves seeking solutions to address and fix the problem. It is often necessary to alter existing structures or systems. The list of problems and solutions can be extensive, with new problems frequently emerging from the solutions implemented after the previous reform effort. This is not unique to Pakistan. International literature on the subject, particularly from Western sources, provides ample evidence that solutions often lead to new problems.

For instance, New Public Management called for private sector-inspired management and fragmentation with an increased number of autonomous bodies. This change later created the problem of coordination in the public sector, leading to creation of coordinating bodies and a smaller lesser number of new organisations reporting directly to the government.

Other recent reform strategies have introduced various approaches, including more public sector companies, implementing Public-Private Partnerships (where the government retains management while the private sector handles most of the operations) or privatisation. While these reform strategies can be effective in the right kinds of cases, sometimes they can exacerbate the existing problems.

Imagine a Lego set designed to replicate a grand building. You can move blocks from one spot to another. You can also take all of them apart and create entirely new structures. By rearranging the same blocks, you can build a variety of designs. This is very similar to how governments are restructured. Just as you can reconfigure a Lego model to improve or change its design, governments can undertake restructuring to enhance efficiency or adapt to latest reform strategies.

This is not the first time a government has embarked on an extensive restructuring effort at the federal level. Significant reforms were commissioned and reports prepared by the National Commission of Government Reforms in 2008 and then by Institutional Reforms Cell in 2018-2021. However, a full implementation of the proposed reforms was thwarted by political changes. A massive restructuring took place at the federal level following the passage of the 18th Amendment as several ministries and public sector organisations were transferred to the provinces.

This process took a while. There were lots of experiments and much playing around with different structures. The record (Pakistan State Administration Database) shows that between 2008 and 2018 six organisations were closed down entirely; there were 158 reorganisations within a single entity and seven involving multiple organisations. The massive restructuring planned by the current government, with a very high number of mergers and abolitions, is thus quite unusual.

It is feared that some of the long-term implications of the proposed changes may not have been fully appreciated.

Linking reform and restructuring to performance has always been challenging for policy scientists and public administration researchers. While economists might like to connect every initiative to measurable outcomes, the managerial costs of restructuring are often overlooked. These costs become evident over the long term.

Every time an organisation undergoes a merger, split or transfer to a different ministry; or privatisation; it affects the organisation’s operations, introduces new leadership and alters working methods. A recent study on CEO turnover in US federal government concluded that frequent changes in the top leadership lead to greater rigidity, centralised decision making and restricted flow of information.

Similar effects should be anticipated following extensive mergers and closure of ministries in Pakistan considering these reforms will also lead to changes in top leadership of these organisations. Effective change management requires significant time and effort to navigate transitions and during this time efficiency is often undermined.

The proposed reforms have been presented as an austerity initiative meant to reduce the overall expenditure. With such massive restructuring, the government has to also think of the managerial and efficiency costs. Of course, the concept of opportunity cost can be brought in with the idea that choosing one option often means forgoing another. The government has to think strategically, planning for the next ten years at the minimum to make the appropriate choices with the reforms.

Rather than undertaking extensive restructuring in response to short-term pressures, it is important that such decisions are based on thorough calculations that go beyond annua budgets. The success of reforms depends on their execution, long-term planning and the strategic vision. Consistency in these areas is going to be vital.

The writer is an assistant professor at the Department of Governance and Global Studies, Information Technology University