Why technocrats fail

Published February 25, 2023
The writer is the author of Pakistan: Principles of Public Policy Redefined – How to fast track progress and win over citizens.
The writer is the author of Pakistan: Principles of Public Policy Redefined – How to fast track progress and win over citizens.

IN military regimes, which have together ac­­c­o­unted for almost half of the country’s history, it was technocrats, for most purposes, who led the government. Even in many civilian governments, key positions such as the finance and commerce ministries were often imposed upon them.

Despite their seemingly strong credentials, however, their performance remained mostly unsatisfactory, and if the experiment were to be repeated, there is no reason to expect any different outcome. It is, therefore, necessary to reconsider how technical expertise may best be availed in matters of governance.

What did our past technocrat governments fail to achieve? Well, for one, they could not achieve a taxation system that is fair and where what is due gets collected, nor did they manage to increase and diversify exports with goods and services that are internationally competitive, whose sale is not dependent upon receiving state subsidies and grants of ‘favoured’ status by buyer countries.

They were not able to remove discriminatory regulations and subsidies that favour the powerful — of which the corporate sector and banks are the biggest beneficiaries, nor were they able to bring agriculture and livestock productivity and quality at par with international standards or impose agricultural income tax on a par with other sectors.

They were not able to help industry progress from the simple assembly of imported products for domestic sale to national indigenous development, manufacturing and export of products, nor were they able to cut losses by state-owned enterprises.

They were neither able to ensure reasonable quality healthcare and education/skills training for all nor were they able to significantly reduce corruption.

Technocrat dispensations neither intended to nor could have built a narrative that could galvanise citizens’ support for policy reforms.

Why did they fail? To begin with, under military rule, the governments they served were formed in violation of the Constitution and therefore lacked legitimacy. They neither intended to nor could have built a narrative that could galvanise citizens’ support for policy reforms that would have adversely affected special interest groups. Additionally, the wrong persons were selected as technocrats — often commercial bankers, former IMF/World Bank staffers and persons with a narrowly focused background in finance/economics.

Such individuals lacked the essential qualities and competence required for a national-level policymaker. For example, these technocrats could not relate to ordinary citizens and did not represent them in any way. Some technocrats had a clear conflict of interest in their roles, as they were closely associated with businesses in the same field for which they were devising policies (more on this below).

For decades, these wrongly selected technocrats focused only on short-term financial manipulations — of the currency exchange rate, bank interest rates, deferred payments for imports, juggling of certain import/export duties and subsidies, and so forth.

The real economy — comprising agriculture and industry (including IT) and international trade/exports — was not paid sufficient attention to for the medium or long term.

What are essential qualities that should be sought in a national-level policymaker? As discussed in one of my earlier articles, they include awareness of the living conditions of the people and their needs; an understanding of society’s core values and priorities; empathy with the people; loyalty to this country; deep knowledge of and experience in one or more sectors; a public mandate; and an absence of conflict of interest.

The majority of our population is directly or indirectly dependent on agricultural income, while agriculture accounts for half of the employed labour force.

Cotton goods, leather and rice still make up 70 per cent of our exports. Key industries, such as textile, fertiliser, tractors and agricultural machinery, and sugar and flour mills are linked to agriculture. Less than 1pc of the population owns shares in the corporate sector or banks.

It is true that the services sector currently accounts for more than 50pc of GDP flows, but the country’s financial sector, wholesale/retail trade and transport sectors, and most other services sectors primarily serve the domestic market and have not attracted substantial foreign investors.

The services sector does not compare with agriculture in exports, and insufficient exports are the bane of our economy and the main reason behind the current fears of default. It would, therefore, be a gross misreading of the reality to surmise that Pakistan is essentially a services economy which can be steered by tinkering with rates and percentages.

Given the context, what is the most effective way to engage technocrats? First, there should be agreement that we are a democracy where lower-income citizens form the majority, and the well-being of the majority is paramount. Then come the next steps: our elected representatives should set clear national development policy objectives and guidelines, after which parliamentary parties should select technical specialists.

Technocrats, once appointed, should work under and within the given policy parameters, instead of acting as policymakers themselves, and help develop plans and activities. Meanwhile, the elected representatives should build a public narrative to explain and convince citizens of what needs to be done. And once a strong unified narrative is built, the citizenry can be expected to stand by the government when it is doing away with the unjust privileges extended to special interest groups.

In conclusion, it may help to illustrate the proposed arrangement using the structure of a corporate enterprise. The elected representatives may be seen as the board of directors of the company, representing the owners (the citizens). The bureaucracy forms the management staff, while the technocrats function as management consultants.

The BoD sets the objectives and policy guidelines to benefit the owners (citizens). The management then develops plans and acts to achieve that. The management consultants, based on their broad experience and area expertise, may be engaged to advise the management (or to take a more practical part in developing plans) or even advise the BoD, as needed. But always, the BoD (here, the elected representatives) should be the final decision-makers.

The writer is the author of Pakistan: Principles of Public Policy Redefined – How to fast track progress and win over citizens.

zua2@cornell.edu

Published in Dawn, February 25th, 2023

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