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A governance framework

January 12, 2012

AFTER the abysmal benchmarks for poor governance set by the current PPP-led government, it is unclear if any new government can take the level of maladministration and corruption any lower. However, what is clear is that any new successor set up (including a reelected PPP-led coalition) will have to make far-reaching 'institutional' reforms if it is interested in providing better political as well as economic governance to the people.

While the constitution and the existing web of laws, procedures and rules of business governing the interaction of the state with the people provide for a fairly robust framework giving rise to the argument that while the letter of the law exists, its implementation in spirit hasbeen lacking there are some areas which need to be strengthened or clarified, and in some areas lacunae removed, for a better outcome on the governance front.Ideally, what should the contours of the governance framework look like? Quite a lot has been written and commented upon on this topic with particular reference to Pakistan, and I will attempt to piece some of this together. (The most recent is the 2006 report of the National Commission for Government Reforms NCGR headed by Dr Ishrat Husain, and the national governance plan of Mr Shaukat Tarin approved by the cabinet in December 2009). In a few cases, I will proffer some original comments.

But first, it will be useful to list the elements of bad governance that have been so egregiously put on display by the PPP government. Broadly, the three main elements are: Non-meritorious appointments to public office, often with ostensibly mala fide intent; Inability or unwillingness to manage conflicts of interest that arise when the private interests of holders of public office (both elected and unelected) clash with the wider public interest.

Examples have abounded both in this government and in the past where public policy has been influenced by the private, often commercial, interests of ministers and others. A clear example is pro-vided by the gas-load management plan of the government, which has been torpedoed by cabinet ministers owning CNG stations, or by the prime minister's decision to continue supply of gas to the fertiliser sector so that reportedly a key constituent from Multan is not inconvenienced.

Under Gen Musharraf, the NAB probe into the sugar crisis was stopped by the president under pressure from key cabinet ministers owning large sugar mills.

The wheat support price policy of the government is yet another example where the interest of a coterie of beneficiaries in the form of large landowners populating the cabinet and the assemblies trumps the interest of millions of consumers.

Lack of responsiveness to issues of common interest and public good, both in terms of timeliness as well as pertinence of response.

The prime minister's and the cabinet's inability to come to grips with the sever-est electricity and gas crisis to hit the country even after four years in government, would be an obvious example here.

Below is a non-exclusive list of some of the ways to strengthen both political as well as economic governance in the country: A declaration on potential conflicts of interest should be made mandatory, especially for cabinet ministers, senior bureaucrats and technocrats. In addition, any holder of public office or close relations should be barred from bidding for government contracts while in office.

Holders of public office should be required to make full disclosure of assets and sources of wealth, both for self and family, and provide evidence of nondelinquency with regard to tax, loans or any other financial obligation. Any failure to do so, or the provision of a false declaration, should result in automatic disqualification.

-The above laws should be especially applicable for public offices with direct fiduciary responsibility, such as the Federal Board of Revenue, heads of the public-sector enterprises etc.

The principal institutions of oversight and accountability (Election Commission, NAB, Auditor General's office, Federal Public Service Commission,Competition Commission, Public Procurement Regulatory Authority etc.) should be strengthened and made independent. Heads of these institutions should have constitutionally guaranteed fixed tenures, such as currently for the State Bank governor.

All discretionary powers and special quotas for appointments, transfers and promotions in the bureaucracy (with the prime minister) should be eliminated.

This task should be the exclusive domain of the respective public service commissions.

Cabinets should be small and technocratic, where possible.

Any new government that comes in should announce a cut in salaries and perks for the cabinet, and members of parliament.

As part of civil service reform, the recommendations of NCGR should be implemented, mainly the monetisation of perks of the bureaucracy and moving towards e-government.The footprint of the public sector will need to be reduced.

Public-sector procurement and government-run enterprises cause an unacceptablylarge loss to the exchequer each year, while stifling the space for competition and innovation.

Parliamentary oversight of executive spending should be increased. Any supplementary spending over approved budget should be brought to parliament ex ante for explanation and approval.

Medium-term budgets of government line ministries and division/departments should be linked to agreed outcomes, with a sign-off from the minister and the principal accounting officer.

These two public servants should then be answerable at least once a year to cabinet and parliament on progress towards agreed outcomes.

Despite its ostensible resilience, Pakistan and its people have been badly affected by the onslaught of poor governance. Without a comprehensive compact between all political parties on the governance agenda, in the same way as has been mooted for economic reform, narrow, parochial interests of holders of public office (be it politicians, bureaucrats or the military) will continuously trump the public good.

The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad.