A common refrain these days is that we need to urgently embark upon long overdue structural reforms, allied with governance reforms. However, most of the enunciated proposals have tended to be rather general in their import (e.g., privatisation, increase exports, raise tax to GDP ratio-with nothing substantive being tabled on the expenditure side of the fiscal equation, etc.), with little by way of specifics on policy measures, instruments and institutional arrangements for achieving these objectives.
While recognizing that any system of governance and its outcomes would be heavily dependent on the structure of the State—the role (functions), scope and delivery of services by level of government- and the delineation of administrative and financial powers, this somewhat longish piece attempts to discuss and address just one aspect. This writer views civil service reforms as critical, since these would constitute the bedrock of governance reforms in our context. Some commentators, including this writer, doubt the realization of the goal of higher and more equitable economic growth without reforming the civil service.
The institutions and systems governing state operations have become so dysfunctional that without a fundamental structuring service delivery cannot be improved, including the re-gearing of the civil service structure to enhance its professionalism.
The civil service structure and system and attempts at reform
The civil service structure is built around several cadres, the key ones being the Pakistan Administrative Service (PAS), Office Management, Police, Internal Revenue Service, Foreign Affairs, Economic and Commerce Groups. The PAS occupies the apex position, controlling the commanding heights of the economy and administration, with a sprinkling of these posts occupied by the Office Management Group at the Federal level.
This institutional architecture for running government is not an outcome of any ‘grand’ design or prioritization of government roles derived from any strategic vision. The existing structures have evolved from those inherited at Pakistan’s independence in response to a number of external and internal factors: (a) the constitutional division of subjects between the Federal and provincial governments and their respective legislative powers; (b) changing government priorities and ad-hoc decisions taken to address particular problems; c) international economic, social and political conditions; and (d) political expediency and domestic socio-political pressures.
Over the years more than two dozen commissions and committees were set up to reform the administrative machinery. The mandates of these entities was to develop a strategy for the organizational structure and the nature and scope of functions and powers, ostensibly aimed at improving their delivery of service to promote economic and social development.
However, their focus tended to be purely on matters like recruitment, training, career planning, compensation structures anchored in perks and privileges, appointments and transfers and grievance redressal. These attempts largely failed to improve performance, the stated objective of these exercises, requiring the inherited system to adapt itself to the needs and expectations of an “independent” nation. This experience has confirmed that we may be able address HR matters but still have a dysfunctional system.
For example, presently the system places no premium on timely action (in fact, does not punish deferral and procrastination) nor acknowledges lags as an outcome of systemic malfunction, if not its bankruptcy. The general mindset is casual, as if the time for delivering on a mandate is limitless. The processes require multiple approvals, innumerable visits to officialdom, convoluted and seemingly never ending processes that require scores of copies of documents like CINCs even when there is a decent biometric checking system already in place.
Therefore, much of the discussion to follow will focus on the system based on centralization of powers (even after the devolution of functions and powers under the 18th Amendment) and continuation of obsolete rules and regulations constraining economic activity (remembering that the GDP is literally a sum and size of commercial transactions), presided over by the PAS.
The need for such a review has also become urgent because a critical constraint today to the effective functioning of the government is the budgetary and doing business cost of its overextended mandate, beyond its primary role and the competence of its workforce. The overall trend has been for structures to grow. It has been relatively easy for new departments, agencies and staff positions to be created or added. And once established, their continued maintenance is supported by stakeholders and system beneficiaries.
Successive governments have played the role of employment bureaus, although their focus should have been on creating employment, not providing it. A veritable army of peons, chowkidars and clerks stalk the corridors of the secretariat and public sector agencies. The scale of overstaffing is such that under the service rules three categories of employees are required to get a bathroom cleaned; one to wipe the floor, one to clean the sink and one to wipe the dust off the windowsill!
Then there is the legal and institutional set up which has given rights to these employees, to the detriment of the citizenry for whom they have been purportedly employed to provide services. They have pre-empted financial resources, sometimes at the cost of the original purpose of employing them; priority being accorded to their entitlements over the purpose (schools, health-care facilities) or entitlements of the service recipients. It has become a service of the employees, for the employees and by the employees.
Lack of domain knowledge: stuck in a time warp
Whereas in any system the responsibility of those in top positions is policy analysis, the system in Pakistan has developed such that it has made little contribution to the development of policy skills. This is essentially because a generalist cadre, the PAS (former DMG) stream, monopolizes the top jobs with little expertise, controlling all key posts, the dominating heights of government.
The civil service structure designed by the PAS continues to be stuck in a time warp of misplaced arrogance of knowledge on what is good for economy and society, the need for administrative controls and patronage over transactions and procedures. In this age of specialization, a generalist with a non-technical academic qualification, e.g. in English Literature can be Secretary Education in the morning, Secretary Health in the afternoon and Secretary Finance in the evening-with inadequate capability to adapt to changing times and technological advancements!
They regard themselves as the government (as also ordained by at least the provincial government Rules of Business) and protectors of the system. They are the chosen race, treated as superior human beings to professionals (doctors, scientists, etc. in the public sector) or to employees of lower formations of government, being entitled to guaranteed inadequate promotions over time.
It is quite common for them to create unnecessary and superfluous posts to facilitate quick promotions. At times, to meet the need for a promotion ladder the position is split further, resulting in the diffusion of responsibility. The country pays a heavy price, in terms of outcomes, for preserving a system in which no one else is mobile and able to reach the highest levels in the civil service.
Although the PAS are in policy-making positions for almost half their careers, where domain knowledge is a critical requirement, frequent transfers provide no incentive to acquire that know-how. Therefore, the disadvantages of a decision-making generalist cadre have been worsened by a system of frequent transfers, which apart from introducing other weaknesses also means that civil servants can never be held accountable or judged on performance.
They are not accountable to anyone, other than themselves, on their performance. Their performance evaluation process and reports are secret. It is, therefore, amusing that whereas they are eloquent in their demand that domestic economic actors operate in a competitive environment and sink or swim based on performance they themselves oppose embracing performance as the principal criterion for own promotions.
Moreover, the mechanisms for public accountability of civil servants, like the Public Accounts Committee and grievance redressal systems are ineffective. In the Punjab, for instance, only 102 government functionaries were charged for any irregularity during the period 1985-2000 and even among them the conviction rate was below 20%, while the proceedings lasted a number of years. The system protects government servants. It is difficult to proceed against those not turning up for duty let alone those who attend office but do not provide any service.
In the opinion of this writer, performance is a function of the capability of the institutional structure and the system to implement policy actions and the concomitant instruments. The common refrain about adoption of merit as the guiding principle tends to place the individual at the centre of execution. Not belittling the importance of individual competence the design of the institutional arrangement and the allied system cannot be founded on individual skill and virtuosity.
Authority and decision-making in the administrative structure is excessively centralized and hierarchical, if not personalized, leaving little by way of initiative lower down the order. Under the highly controlled systems, information on procedures is not readily available and enforcement of rules and regulations is carried out in a non-transparent, arbitrary and discretionary manner.
At the same time, the power of veto is liberally distributed in the system; almost anyone can scuttle the process. Over time the personalization of power, by weakening the institutions, has become the norm, the dominant culture, resulting in patronage being managed by individuals in an ad hoc manner through the use of non-institutionalized mechanisms for conducting transactions or by manipulating processes.
Unholy nexus with politicians
Civil servants, and particularly the PAS, view individual political Ministers as “outsiders”, transient occupants of policymaking positions, to be kept in good humour. This stance is fortified by the inadequate knowledge and competence of our politicians in general of the area assigned to them. This conviction can be suspended if arrangements can be put in place for the sharing of the spoils of office.
And over time the system has become deeply embedded in the wider political structure, compromising integrity, independence, neutrality and competence. The system of transfers has also provided politicians leverage over bureaucrats and an opportunity to build “personal loyalties” and alliances that can extend over the entire span of the bureaucrat’s career that could be used to exercise patronage (through benefits like appointments to key posts) without the politicians accepting responsibility themselves.
One of the reasons for the submission of some civil servants to the political bosses is owing to their narrow or inadequate skill set and, therefore, limited market value and lack of potential to secure any other job or earning opportunity. Hence, several rely on manipulation and lobbying for posts within the government either through own connections within the service or the political leadership, enhancing their malleability. And the temptation of after retirement cushy jobs makes them even more pliable.
These days some senior officers after retirement are hired by the private sector, not for any particular area of knowledge, but for their ability to influence government decisions to benefit the entity that has hired them.
Obsolete rules and regulations constraining economic activity
Some major reasons for poor implementation of even good and well-directed government policies include a) primitive regulations and administrative systems, which are either inherited from colonial times and guarded jealously or designed later but nurtured and protected with unrelenting zeal; and b) practices that are inconsistent with the declared policy. Many of these regulations are conflicting and irrelevant to current needs; standards and criteria are archaic and either not clearly prescribed or the bar set high and difficult to cross and the capacity of the market to bear the ensuing costs.
The cumbersome procedures and immeasurable criteria provide an extortionary handle to government functionaries. They prefer such arrangements not only because they help them acquire rent extraction powers but also because it gives them certainty of command, partly because they understand little about subtlety of induced behaviour.
More importantly, some functions have become outdated and redundant over time. There are multiple agencies with overlapping functions and mandates, engaged in similar activities. Simply drive past the Blue Area in Islamabad to see countless buildings with offices of government agencies with exotic names, with only a handful in Islamabad knowing their operational responsibilities. This duplication has gotten worse after the 18th Amendment under which a host of functions have been hived off to the provincial governments without resulting in any shrinkage in the size of the Federal Government.
Even within governments interrelated functions have been fragmented across two or more departments or autonomous bodies. It has, therefore, become difficult to differentiate the work of some ministries from that of the autonomous bodies attached to them, diffusing a number of mandates between a large number of agencies, creating inefficiency and problems of policy and implementation coherence and coordination.
The theological principle to regulate economic activity is based on a complete distrust of the market and a belief in the state’s omnipotence. Unfortunately, donors have also been providing uniform advice, persuading borrowers to set up the same institutions in all countries regardless of size and local cultures-in which apart from other issues appointments are not merit-based.
In our case, even civil society is suspicious of markets providing the bureaucracy an excuse to regulate which opts for direct controls rather than market-friendly fiscal rewards and punishments. It was the nature of our economic development that even the middle class was not the product of a dynamic independent process of growth but was created through public sector employment.
Hence, society cannot seem to visualize progress without state patronage, viewing the state as an all-powerful paternal entity protecting against all risk and providing for all occasions. As a result, there is a huge footprint of the State in the economy of almost 70% of the economy through SOEs, the culture of SROs and unwieldly and burdensome trade and commerce regulations, presided over by 122 regulatory agencies, distorting markets and raising the cost of doing business, with governments continuing to be large and unaccountable and ruling rather than serve.
The sustenance of a centralized system of decision making, along with unthinking observance of not just overabundant and obsolete rules but also arbitrary use of discretionary powers continues to weaken, if not grievously damage, prospects for growth.
A result of the hierarchical structures and business processes described above is that the public sector has become overstaffed and over-extended. It is performing too many functions, beyond what should be the staple role of the government, manned by a bureaucracy afflicted by lack of competence, dwindling morale from eroding salary scales, corruption, politicization and little accountability.
This can be illustrated by the fact that whereas the government spends almost two percentage points lower on education than what is normal for a country at Pakistan’s income level there are 24 percentage points more illiterate Pakistanis; suggesting that the problem is less because of expenditure on inputs and more because of poor accountability of government functionaries.
Overstaffing has been compounded not by the increase in transactions or the growing complexity of functional responsibilities, but as a result of the upgrading of existing posts, creation of new posts just to accommodate the burgeoning workforce or the routine regularization of contract staff.
However, the appropriateness and relevance of functions, rules and conventions, despite the new challenges of the rapidly changing technological and global market environments, a hyper active media and the growing expectations of a more informed and enthusiastic citizenry, is not open for enquiry, debate and discussion on the need for any transformation.
The civil service, and key segments of society which can influence decisions on the required revamping, want this system to endure in this manner forever, successfully resisting any possibility of change. And it would be too much to expect that the present overriding culture in the civil service to, going forward, suddenly start embracing and nurturing values of integrity, fairness, objectivity and transparency.
(This is the first part of a three-part essay. Its second part will be carried tomorrow)
Copyright Business Recorder, 2023