Reform the bureaucracy
Reform the Bureaucracy
The Times of India
30 July 2007
We face an inexplicable dichotomy in India between the performance of our public and private sector. While Indian business performance is often second to none, the results of India’s public sector are poor beyond description. Delivering simple things like water, electricity, roads and education are well beyond our capacity. This is unacceptable and an explanation is in order. The blame for our poor public sector performance can be laid on the way our bureaucracy is structured and on its incentives structure. I base this conclusion not solely on academic comparisons, but also on the learning acquired by working for 18 years in the IAS and for seven years in the bureaucracy in Victoria state in Australia. Performance of senior Australian bureaucrats was significantly better than anything one had experienced in India. No IAS officer knows more in the relevant subject area, can think as well and as strategically, or lead a team of professionals better, than his Australian counterpart. Australia also constantly benchmarks against the world’s best. Being just a little better than Bihar is not considered sufficient. A new bureaucracy can, however, emerge in India if certain principles are followed: abolition of tenure at senior levels; open market recruitment for each position; contestability of policy advice to political leaders; market competitiveness of remuneration and extensive delegation of responsibility. It is true that merit is taken into account at the entry point of the IAS. But merit is not a one-off measure. Shouldn’t a secretary to the government be a person with a proven track record? Shouldn’t the person be an expert on his subject or a great motivator? What has writing a good essay in an examination at age 21 to do with being a good bureaucrat? Second, we do not reward our officers for performance and integrity. The legal protections provided to IAS officers are such that even when caught taking bribes, they cannot be punished, let alone demoted for non-performance. Errant officers increasingly become indolent, arrogant and incompetent, and yet, advance without resistance into the position of secretary. While Indian taxpayers support this ineffective bureaucracy, thinking perhaps that there is no alternative, advanced countries have used the findings of agency and public choice theory to design systems that reward expertise, leadership and ruthlessly punish bad performance. In doing so, they have transformed their public servants into dynamic agents of change and excellence. We need to begin the desperately needed change by making a fundamental shift in accountability, ensuring that the bureaucracy becomes merely one of the many potential service providers to ministers. This can be done by ministers contractually appointing specialists who are committed to delivering their party’s policy platform as their advisers. No file would then go to a minister without these advisers having had a look. Ministers would then appoint their secretary through an open (preferably global) market competition — in the first instance, on a two-year ‘hire-and-fire’ performance-based contract — paying a salary comparable with what senior MNC executives get in India. Secretaries would similarly appoint their joint secretaries. Each of the newly appointed secretaries would then implement a two-year strategic process to restructure the bureaucracy into departments such as defence, justice, external affairs, public finance, physical infrastructure, social infrastructure, commerce, social capital and community, and sustainability. This would involve significant training and redundancy planning. A public administration Act could under-pin the restructured bureaucracy. Positions requiring significant judgment and leadership skills would be brought under a three-year performance-based contract. By no means will this reform be a panacea for India’s chronic misgovernance. Our political and electoral systems need funda-mental reforms too. But we must begin somewhere, and changing our bureaucratic leadership will make a big difference.
This article was published in the Times of India on July 30, 2007. Please read the original article here.