According to World Bank, governance is “the manner in which power is exercised in the management of a country’s economic and social resources for development”. In this sense governance is about the institutional environment in which citizens interact among themselves and with government agencies / officials. It is concerned directly with the management of the development process, involving both the public and the private sectors. It encompasses the functioning and capability of the public sector, as well as the rules and institutions that create the framework for the conduct of both public and private business, including accountability for economic and financial performance and regulatory, frameworks relating to companies, corporations and partnerships.
The capacity of this institutional environment is important for development because it helps determine the impact achieved by the economic policies adopted by the government. One of the essential lessons learnt from the development experience of the present day developed countries is the need for a strong state with clear cut vision and capacity to implement the policies formulated to achieve that vision. Many of the countries with weak states attempted to implement the same policies that worked for the strong states, but with very difficult outcomes. There are several factors underlying these differences but clearly one is the quality of governance in the countries concerned.
Universally, good governance has been synonymous with certain major characteristics. It is participatory, consensual, accountable, transparent, responsive effective and efficient, equitable and follows the rule of law through fair legal framework that are enforced impartially. It assures that corruption is minimized, the views of the majority are taken into account and that the views of the most vulnerable in society are incorporated in the process of decision-making. It is also responsive to the present and future needs of society.
From the above, it should be clear that good governance is an ideal concept, very few countries and societies have come close to achieving good governance in its totality. However, to ensure sustainable development, it is the right time to rationalize the role of the state.
State should concentrate on its traditional functions of protecting the society from external aggression and their proxies within the country and also establishing the writ of the state in order to ensure efficient and effective performance of its core functions-regulation and facilitation. At the same time, it should create enabling legal framework and accompanying institutional environment besides building essential physical infrastructure which private sector is unable or unwilling to provide. In order to shed its extra load, the state should take the following measures;
Speed up Privatization: Pakistan should accelerate her fourth generation of privatisation to eliminate/reduce the huge state subsidies being given to those SOEs which are continuously incurring losses but they could not be closed or privatized earlier because of social welfare considerations or due to their strategic nature even though better alternatives were available in the private sector. Not only is there a broad spectrum consensus on need and benefit of privatisation/ deregulation in the country but a robust private sector is ready to take on big State Owned Enterprises. Unconditional support of international organisations particularly of World Bank and International Monetary Fund and availability of a comprehensive legal and institutional framework which has matured during the last 20 years will go a long way in expeditious privatisation process. Thirdly given the emergence of an aggressively penetrative social/electronic media, an extremely intrusive civil society and a very activist judiciary, the process will be very transparent. Following strategy can be suggested for speeding up the process of privatisation;
- Let there be a strong elite commitment for privatisation at the political and bureaucratic level in the form of policy formulation followed by translation of this commitment into clear cut vision and mission-what, why, how and when to privatise. Government must decide that in order to reduce its budget deficit, state owned enterprises incurring huge losses will be privatised at all cost even if they have to be sold at a loss. Efficiency improvement will be the as basic objective of privatisation of profitable concerns
- There should be very scientific structuring of the privatisation deals by renowned firms who should look at the cash-flow statements rather than assets of the concern to be privatised. Corporatisation of the components of the large entities can generate maximum competition
- Strategic sale with management control should be the main course of action while ensuring that the interest of employees and the consumers is properly safeguarded through proper legislation backed by effective institutional mechanism
- Awareness campaign to inform the public about the entity to be privatised and sale of certain percentage of shares to the general public can go a long way to create ownership among the masses
- Needless to emphasize, transparency should be the cornerstone of the entire privatisation process which can be accomplished by strengthening the regulatory framework and ensuring access to information to media and the civil society organizations. Meanwhile all out efforts should be made to improve the efficiency of the public enterprises till they are-finally privatized. Concession / privatization contracts be drafted very carefully and meticulously to avoid future litigation. Clear cut conflict resolution mechanism be spelled out in the contract along with specific time frame for carrying out the capital improvements
Decentralize: Devolution of powers and decentralisation of service delivery institutions, backed by equitable distribution of resources is one of the key instruments to improve the efficiency and effectiveness of resource utilisation. Decentralization of resources and authority to local governments is a formal way to induce participation. However, decentralization has to be inclusive (i.e., addressing issues of less powerful, e.g., immigrants, minorities, ethnic groups) and to be accountable. For effective public service performance, a good balance of centralization and decentralization has to be sought and to be maintained, with an option to strengthen local governments so they can take on more responsibilities.
Meaningful devolution of powers to appropriate levels of decision making curbs centrifugal tendencies among the regions feeling marginalisation. Devolution can hold any federation together by helping to prevent or reduce conflict because they reduce actual or perceived inequities between various regions or between a region and the central government. A lot of work has been done in this respect; need is to implement it in letter and spirit. Devolution plan is still incomplete as the centre has transferred a lot of its administrative and fiscal powers to the provincial governments while the provinces are still reluctant to delegate the legitimate powers to their respective district governments.
Secondly it is important to provide sufficient fiscal space to these institutions as much depends upon their successful performance which is directly dependent upon availability of adequate financial resources. One has to devolve powers, decentralize and delegate authority, provide resources to the local/district governments so that they can take decisions very much in accordance with the requirements and the needs of those communities. There must, however, be accountability of the local governments by the provincial governments and of provincial governments by the federal government but not interference or usurpation of powers.
Rationalize Bureaucracy: While privatization and decentralization would reduce the span of the state control, reform of the one of the most important tools of statecraft i.e., its bureaucracy, is need of the day. Although there has a gradual decline in all the institutions of the state during the last 7 decades due to myriad reasons, the ineffectiveness of bureaucracy due to its diminishing capacity, over-politicization and corruption has seriously undermined Pakistan’s economic, social and political development. Failure to adequately provide the basic needs and deliver adequate social services are eroding the legitimacy and stability of the state
No doubt, there have been approximately two dozen high profile commissions and committees formed for this purpose in the country during the last 70 years but unfortunately, reforms for the sake of reforms has been the hallmark of all these efforts. The basic objective of any such exercise, namely to bring about fundamental structural and managerial changes in the legal framework, intuitional set up, recruitment, training and appointment procedure, work environment, incentive and reward, responsibility and accountability have often missed the attention they deserve.
The basic objectives of any administrative reforms should be to bring about attitudinal and behavioural changes in the civil servants which could result in effective service delivery, operational efficiency and customer satisfaction—a tall order but not impractical. This needs restructuring of legal and regulatory framework relating to the recruitment, training service conditions, including incentives and remuneration and accountability. Secondly it requires the restructuring of the intuitions responsible for their initial recruitment, training and subsequent career planning —public service commissions, training institutes, judiciary, parliamentary committees etc
Third is obviously the manning of these institutions as the best of legal framework and institutional setup will not be able to provide the manpower needed for a country the size of Pakistan in rapidly globalizing world where not only the state is making space for the private sector acting more as a regulator and facilitator than service provider but the global actors are playing increasingly greater role in public policy formulation and implementation. At the same time the boundaries between local and global issues are decreasing. Arab Spring started from a small incident, which happen routinely in Pakistan. Child labour, domestic violence, school curricula etc are now under greater scrutiny of the global actors not because we are dependent on outsiders for aid but as a member of the global community.