The new government’s option


Published in The News International on December 31, 2007:

With the elections of 2008 forthcoming, and a change of hands on the governments reigns envisaged shortly, it is evident that any new government in Pakistan will have many issues to grapple with – from terrorism and conflict to the energy crisis and stalling fiscal indicators; inevitably and understandably, these will be the substrate of the new government’s focus as a result of which certain critical systemic issues are likely to get relegated to the background – issues that ultimately tangle most governments in a vicious spiral over the long term. Balance dictates that the new government must accord high priority to these issues right at the very outset. Foremost amongst these issues is the complex maze of malpractices and corruption, which in its truest sense cannot be extricated from governance challenges, mismanagement and inefficiencies. Within the framework of governance, these terms are often used interchangeably; the connotation of corruption makes it distinctive though as the other three may be inadvertent and without the intent to benefit whereas the nuance corruption has is one of deliberate and illegal gains. Notwithstanding the vague separating lines between these expressions, it is best to address them together as they have complex interdependencies.

As of now, the commitment of political contenders for public offices to address these issues is reflected in respective party manifestos, most of which have been published and launched; those in the public domain have been reviewed for their strength and potential as evidence of party positions to address the issue of corruption and related governance challenges. The assessment yields that most manifestos have alluded to corruption as a systemic issue – some directly whereas others as part of related issues. PML (N) and Tehrik-e-Insaf have sections on corruption whereas MQM and PPP refer to the phenomena as part of their respective sections on governance. PML (Q) has allocated two bulleted items each under Devolution and Diversity – two of their five-point agenda items whereas ANP refers to the subject under bullet 18 of its section, which focuses on ‘Structure of the state and the government’. Before going on to an analysis of these, it is acknowledged that many areas of broader structural reform within the ambit of local government, administration, police, labor, legislative and tax reforms in various manifestos also have a bearing on improving transparency and hence mitigating corruption. Notwithstanding, most of them now need to build significantly further on their manifestos to comprehensively address the range of malpractices that range from corruption in the administrative and operational domains to sinister patterns of state capture.

The former includes many forms of financial, moral, procedural and ethical malpractices in the delivery of publicly funded services, central regulatory functions, field inspection to ensure compliance with standards to corruption in contracting and procurements and malpractices in human resource hiring, placements and monitoring, as an outcome of which, state funds can be embezzled or pilfered and publicly funded services can get mis-targeted. On the other hand state capture is a broader phenomenon in policy and decision making where the laws and regulations of the land are made to favor a select few – usually cronies of the powerful with access to corridors of power.

Whereas the former is more easily amenable to structural reform, the latter is more deeply rooted in imbalances in institutional processes and is harder to fight. It is expected that political parties convey their positions on how they envisage addressing the former through interventions in the operational, administrative, technological and the civil service domains and the safeguards they envision building against state capture.

In state capture, an anticorruption agenda needs to go beyond the traditional technocratic approach focused on administrative reforms to a more overarching set of measures, which creates a number of policy and institutional imperatives.

Foremost, is the need for balance between the countervailing forces of the state – the judiciary, media, parliament and the civil society. This is a feat in itself since political parties sometimes have a vested interest in fostering an unbalanced act and in order to achieve this Herculean objective, reform of political institutions is needed as a starting point – a subject on which most manifestos are silent. Secondly, the core prerequisite for building safeguards against state capture also necessitates ensuring that certain key institutions are truly independent. Institutions such as the Public Accounts Committee, the Election Commission, the Provincial and Federal Public Service Commission, the National Accountability Bureau and the office of the Auditor General of Pakistan need to be adequately resourced and made to follow transparent procedures. Many manifestos have underscored commitments to ensure that one of these institutions, the National Accountability Bureau is not used as a tool for political exploitation and several others have referred to the need for appropriate leadership and transparency. However, only time will tell how these commitments cascade into action.

The other kind of malpractices referred to in the administrative and operational domains are relatively easier to counter through structured interventions in the administrative and services domain. Ironically it seems that many of these are individual coping strategies and represent economic responses to low incentives in the public system, which the private sector exploits for gains owing to limited oversight and accountability. Addressing these however, requires a firm commitment and a clear understanding and it is within the intent of bringing clarity to what is needed that the following points are articulated.

First is the issue of institutionalizing integrity in public service. Manifestos have referred to elements of the fall-out as a result of lack thereof and have additionally referred to some measures. However, a comprehensive range of measures are needed to structurally inculcate integrity in public service. Manifestos now need to be built upon further to enable political parties to develop their own positions on developing systems of compensation adequate to sustain appropriate livelihood, systems for transparent hiring and promotion, mechanisms to provide appropriate oversight of discretionary decision making and their own systems for strengthening the incentives-performance-accountability nexus. It is important to develop options in view of the work that has already been initialized in this area particularly with reference to the work of National Commission for Government Reform and other initiatives in the area.

Secondly, one of the most effective means of ensuring compliance with ethical and administrative codes of conduct and building safeguards against vested interest is by capitalizing technology for promoting transparency in management and tracking. Technology is the best tool for promoting transparency in governance. Electronic equipment and supply inventories can track leakages from the system, nationwide databases for matching staff and wage payments can maintain up-to-date records and can therefore assist in eliminating abuses such as paying ghost workers whereas electronic bidding can promote greater transparency and hence prevent collusion in contracting. In addition, maintaining information systems on price, quality, volume and performance of suppliers can enable tracking of leakages and discrepancies. Here again political parties need clear strategies and follow-up plans to build further and strengthen and/or bridge gaps with reference to efforts in the area currently under way. For example the e-government initiative, the Electronic Government Directorate and initiatives such as PIFRA, which is focused on improving financial reporting and auditing and of which procurement reforms centered on electronic bidding is one component.

Thirdly, it must be appreciated that one of the determinants of malpractices and corruption in the domain of oversight and regulation is the form of regulation itself. For decades the post-colonial imprint on Pakistan’s administrative systems has fostered a command and control style of regulation to ensure compliance with government-stipulated norms and standards. This inherently breeds corruption owing to discrepancies in systems of compensation vis-à-vis vulnerability of the controls to exploitation by vested interests groups. There is therefore a need for a fundamental shift in the style of regulation from the one currently prescribed to market harnessing methods that are third party-based using contracts and self regulation, which mitigate reliance and command and control to a large extent. Again as in the former cases, a number of initiatives presently on ground need to be reviewed carefully and party positions should clearly set forth their respective options for a way forward. The recently-reported success in taxation and police reforms need to be examined closely for lessons that could be extrapolated. Restructuring of social services in the area of health where the government is presently attempting to leverage non-state actors through contracting arrangements and other alternative service delivery models merit objective evaluation of their true potential. Likewise, evaluation of current initiatives to develop physical infrastructure leveraging the public-private interface should be the basis of respective political parties coming forward with their positions in this area, which has a bearing on many regulatory functions. We have also seen a number of new institutional entities or regulatory authorities emerge over the last decade on the premise that separating the policy-formulation and standard-setting functions of the state (entrusted to ministries) from the function of policy implementation (for which the regulatory agencies are mandated) can reduce conflict of interest and enhance efficiency. It is expected that contenders for public offices and their party bases would develop clear positions on this and articulate a way forward. The idea should be to create autonomous agencies at an arm’s distance from the government’s control in the absence of which regulatory agencies become just another tier in the government’s hierarchy.

In the fourth place, it is well known that economic reforms can be one of the most powerful anti-corruption strategies; by promoting competition and market entry, they can enable a vibrant sector of small and medium enterprise to weaken the concentration of economic interests promoting state capture.  Here one expected to see the articulation of specific strategies in party manifestos as evidence of appropriate capacity in party ranks to offer solutions to steer Pakistan’s present growth into equitable and pro-poor growth.

From an institutional stand point several political parties have alluded to new commissions and institutional arrangements for addressing corruption. However, before that what is more important is a review of existing laws and institutions. In term of existing laws, it must be appreciated that the legal framework for dealing with corruption already existed even before the Ehtesab Ordinance, both in substantive and institutional terms. However it must be ensured that new laws do not dampen the spirit of existing anti-corruption efforts; in particular the National Reconciliation Ordinance has been a set back to anticorruption work in Pakistan, at least in spirit. Several institutions such as the National Accountability Bureau, established through the Ehtesab Ordinance 1996 and the Federal Investigation Agency (FIA) established under the Federal Investigation Agency Act, 1974, and the Wafaqi Mohtasib (Ombudsman) also exist. What is greatly required is the strengthening of the institutional framework as well as the implementation and application of the existing laws and procedures. Most importantly there is a need to build safeguards against using these institutions as tools of political exploitation.

Many parties have alluded to a commitment to strengthen these institutions. However in order to put this into practice, action beyond hand picking leadership will be required. The specific weaknesses of every agency mandated with accountability tasks will have to be assessed. For example, The Ombudsman’s office is a potentially robust institutional framework; similar institutional entities have been used most effectively for addressing injustices to individuals in many countries. One manifesto has outlined a commitment to develop Ombudsman’s offices in every district. As an ultimate objective this maybe a good idea; however before that it is important to address the Ombudsman’s mandate in Pakistan. Presently the institution is not mandated to deal with any action which falls within the purview of corruption – a weakness that significantly narrows its focus. Therefore in addition to broadening physical infrastructure, strategic empirical insights into prevailing impediments can lead to common sense restructuring solutions which can be both operationally sound as well as technically feasible.

As a nation we cannot afford to take the issue of malpractices and corruption lightly; Transparency International’s Global Corruption Barometer and its World Corruption Report of 2007 – both of them released this year as well as many other comparative country rankings originating from the World Bank, the World Economic Forum or other institutions point to the need to address this issue as do locally conducted evaluations by institutes such as PIDE and GALLUP. We in the social sector deem factors such as the setting of overall directions and management of public resources critical  for being addressed, as without attention to these state funds will continue to be pilfered and publicly funded services will continue to get mis-targeted.

The manifestos therefore need significant follow up work to come up with solutions that enhance efficiency, effectiveness and equity and most importantly decrease malpractices in the current system. In doing so one would expect follow up strategies to be embedded in a contemporaneous context, positively critiquing, objectively analyzing and pragmatically looking at programs, strategies and instruments on the table to assess weaknesses and bridge gaps in area that have the promise of sustained impact. Clearly we are not starting a country de novo. The ultimate test, however will come in assessing the extent to which commitments reflected in manifestos are honored a few years down the line; it is hoped that this time round, they would fare better than what is evident from past records.

The author is the Founder President of a health think tank. E mail:

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Corruption: the need-greed equation


Published in The News International on December 09, 2007:

Pakistan’s ranking on the 7th position in the recently released Global Corruption Barometer by Transparency International should lend a serious impetus to address an issue, which is deeply ingrained in the institutional processes of the country, both in the public and private sectors and in many fiscal, ethical and moral shades. However it is important to recognize that corruption is not specific to Pakistan but is a systemic phenomenon, endemic to developing countries and prevalent in many in western nations. Corruption is also not a new occurrence in Pakistan but is a manifestation of a time long practice; this is evidenced by a reference made to the phenomenon by the Quaid on the occasion of his address to the Constituent Assembly of Pakistan on August 11, 1947. Corruption is also not a phenomenon for which a particular government can be blamed; notwithstanding, various governments have set precedence for ingraining different forms of corruption and have failed to pay due attention to the matter.

Corrupt behaviors fall on a spectrum and although it may be difficult to categorize them, it is useful to draw a distinction between the two forms of corruption from the point of view of the feasibility of anti-corruption reform in Pakistan. On one end of the spectrum are corrupt practices, which fall in the operational/administrative domains; most of these represent individual coping strategies and are relatively, more readily amenable to reform. At the other end of the spectrum, corruption involves a level of state capture, which is rooted in weak capacity of state institutions along with lack of control and accountability and vested economic interests of the powerful elite. The determinants of state capture are not amenable to reform within an isolated sector.

The first kind of corruption involves a variety of patterns in the operational, administrative and regulatory domains; these range from financial corruption in contracting and procurements where a huge margin exists for building in kickbacks to corruption in many regulatory domains; these include granting permissions, licenses and registrations and monitoring and inspections to ensure compliance with stipulated standards in the domains of quality, price and volume regulation. In these cases, commissions, bribes and deliberate inattention to oversight are endemic and clearly it is not just the public sector which is involved but also the private sector that fuels this practice. This form of corruption also includes the moral, procedural and financial forms of corruption in the delivery of services as in the case of the health, population and education sectors, where discretionary funds can be embezzled, inspectors may be deliberately inattentive to oversight and providers can get by through moonlighting in the private sector, pilfering state funds and charging costs for services that are meant to be provided by the state for free. There can be no condoning these practices, notwithstanding it must be appreciated that many of the above represent individual coping strategies and are economic responses to low incentives in the public system. When a public servant is not paid enough to pay for his utility bills and cover the cost of the children’s education, but at the same time has the discretionary authority which enables him to raise money elsewhere, it is only plausible that he will exercise that power. These practices are exacerbated by poor oversight and accountability and ultimately get institutionalized in the system, enabling most of the stakeholders to benefit from them in one way or the other.

There is evidence to show that corruption at this level can be addressed to some extent if attention is paid to three aspects of reform, which strengthens the incentives-performance-accountability nexus. Lessons learnt from police reforms in the federal capital can be instructive in this regard and show that where systems of compensation adequate to sustain appropriate livelihood are set up, and where services generate incentives for performance, it is possible to implement ethical and administrative codes of conduct. Such examples can be used as evidence to structure transparent systems of public service that safeguard accountability and can be strengthened further by mainstreaming technology. There is also the need to promote market harnessing methods in regulation using contracting and self regulation; these mitigate reliance on discretionary command and control mechanisms. Some level of success in this approach has been shown in the domain of taxation reforms and needs to be further build upon in other areas, particularly the social sector where governments can leverage markets to deliver services in new models of service delivery. The National Commission for Government Reform can be a good entry point for such reforms, albeit if the government has sustained policy support.

The other kind of corruption – much harder to fight is rooted in state capture, which is a broader phenomenon in policy and decision making, where the laws and regulations of the land are made to favor a select few – usually cronies of powerful with access to the corridors of power. In this form of corruption, decision makers use state resources and leverage for patronage either for personal or institutional gains. In addition to straightforward commissions on large transactions, this form of corruption also manifests itself as preferential treatment to well connected individuals. This form of corruption also overlaps with regulatory capture which results in regulation to be self serving.

Here an anticorruption agenda needs to go beyond the traditional technocratic approach focused on administrative reform to a more overarching set of measures to address many issues related to structural reform; this creates a number of policy and institutional imperatives. In the first place, it necessitates reform of political institutions and building mechanisms of oversight. Secondly there is need for judicial and prosecutorial reforms; within this context, the current emphasis to ensure an independent judiciary is well placed, however it must also be ensured that the judiciary is transparent in view of the evidence presented in Transparency International’s World Corruption Report of 2007, which focused on corruption in the judicial system. In the third place, there is a greater need to expand the use of consumer voice by creating avenues for seeking redress, rejuvenate the civil society and ensure that the media remains open. In addition it must also be recognized that economic reforms can be one of the most powerful anti-corruption strategies; by promoting competition and market entry, it can enable a vibrant sector of small and medium enterprise to weaken the concentration of economic interests promoting state capture.

In order to implement these approaches, Pakistan needs neither new statutes nor another set of institutional mechanisms. A number of federal and provincial laws exist, including the Ehtesab Ordinance 1996. What is greatly required is strengthening of the institutional framework as well as the implementation and application of the existing laws and procedures. However it must be ensured that new laws do not dampen the spirit of existing anti-corruption efforts; in particular the National Reconciliation Ordinance has been a set back to anticorruption work in Pakistan, at least in spirit.

Pakistan also does not need new institutional mechanisms to counter corruption. The Federal Investigation Agency (FIA) and the National Accountability Bureau exist and must be strengthened further and where needed depoliticized. The office of the Wafaqi Mohtasib, which is currently not mandated to deal with corruption but has a related role should be broadened and closer synergies created between institutional arrangements.

A focus on these arrangements would also enable redressing mis-governance, mismanagement and inefficiencies in addition to corruption as these are deeply inter-woven and failure to address them will continue to mis-target resources and compromise public investments, regardless of the level of economic growth and the increase in fiscal space.

We cannot afford to regard corruption taboo anymore. Patriotism does not entail shying away from core issues but addressing them through constructive criticism and helping develop and deploy solutions.

However garnering an unyielding commitment to this agenda in the wake of Pakistan geo-strategic vulnerability would be a feat – it would be interesting to note how many political parties commit them to this agenda in the forthcoming months.

The author is the founder president of the NGO Heartfile