Need for Civil Service reforms

September 30, 2014


The writer is a former governor of the State Bank of Pakistan.
The writer is a former governor of the State Bank of Pakistan.

THE attention to civil service reform stems from the pressure of the wage bill on the fiscal health of the government. The public sector is overstaffed and overextended. It is performing too many functions, beyond what should be the core role of the government, manned by a bureaucracy that is afflicted by lack of competence, eroding salary scales, corruption, politicisation and little accountability.

This can be illustrated by the fact that whereas the government spends almost two percentage points lower than what is normal for a country at Pakistan’s income level there are 24 percentage points more illiterate Pakistanis. This suggests that the problem is less because of expenditure on inputs and more because of poor accountability of government functionaries.

Here, the government plays the role of an employment bureau. Governments should be 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.

There are multiple agencies with overlapping functions and mandates, engaged in similar activities. Simply drive past the Blue Area to see countless buildings with offices of government agencies with exotic names, with only a handful in Islamabad knowing their operational responsibilities.

The legal and institutional set-up has given rights to civil servants which are detrimental to citizens.

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, the creation of new posts just to accommodate the burgeoning workforce or the routine regularisation of contract staff.

Moreover, the mechanisms for the public accountability of civil servants, like the Public Accounts Committee and grievance redressal systems, are ineffective. In Punjab, for instance, only 102 government functionaries were charged for any irregularity during the period 1985-2000 and even then the conviction rate was below 20pc, 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.

The legal and institutional set-up 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, the priority being accorded to their entitlements over the purpose (schools, healthcare facilities) or over the entitlements of service recipients. It has become a service of the employees, for the employees and by the employees.

Over time, the system has also become deeply embedded in the wider political structure, compromising independence, neutrality and competence. The system of transfers has also provided politicians leverage over the bureaucrats and an opportunity to build alliances that may extend over the entire span of the bureaucrat’s career that could be used to exercise patronage without the politicians accepting responsibility themselves.

Whereas in any system, the responsibility of those in top positions is policy analysis, the system in Pakistan has developed in such a way that it has made little contribution to the development of policy skills. This is essentially because a generalist cadre monopolises the top jobs with little expertise. In this age of specialisation a generalist with an academic qualification in English literature can be secretary education in the morning, secretary health in the afternoon and secretary finance in the evening.

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 promotions over time. The country pays a heavy price for preserving a system in which no one else is mobile and able to reach the highest levels in the civil service.

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 the basis of performance.

Unified pay grades have also damaged incentive structures. Under this system anyone in Grade 20 gets the same compensation as, say, the finance secretary, with much greater responsibility. This irrational structure needs changing. A shift to a contractual basis of appointments can enable this.

Therefore, recruitments of the bulk of the public sector workforce should be on contract and (to counter the curse of transfers), to the extent practical, on a department-specific basis. For example, doctors should be appointed to a particular health unit on a non-transferable basis. Only a small core, recruited on the basis of specialisation (to ensure knowledge, continuity and security of tenure) should form part of the permanent cadre and paid market-based salaries, but without perks like cars, accommodation, etc.

Some of the major reasons for poor implementation of even good and well-directed government policies include archaic regulations and administrative systems and practices that are inconsistent with the declared policy. Information on procedures is not readily available and enforcement of rules and regulations is carried out in a non-transparent manner. More importantly, the power of veto is liberally distributed in the system; almost anyone can scuttle the process.

The theological principle to regulate economic activity is based on a complete distrust of the market and a belief in the state’s omnipotence. Even civil society in Pakistan is suspicious of markets providing the bureaucracy an excuse to regulate which opts for direct controls rather than market-friendly fiscal rewards and punishments. This argument will be continued in my next column.

The writer is a former governor of the State Bank of Pakistan.

Published in Dawn, September 30th, 2014