Towards A Savvier Public Sector

Sri Lanka’s public sector is not very popular, except perhaps among those who work for it. A onetime finance minister recently quipped that the bloated public sector was so rampant with corruption and inefficiency and corruption that they almost equal rogue financial firms in their notoriety.  Sri Lanka has a public sector of around 6 percent of the population. In 2008 state workers took home 53.6 percent of tax revenues or 313.9 billion rupees as salaries and wages

But to say that the public sector has been completely useless would be wrong. Sri Lanka is regarded to have a unique development experience because with19 million people, it has achieved a literacy rate above 80 percent and a life expectancy above 70 years (World Bank 2000). But this has come without a matched level of economic development. Despite its remarkable rating on the human development index (HDI), which was 0.759 in 2007, Sri Lanka has only just managed to shake off its ‘low income ‘ image in exchange of a snappier ‘middle income’ status. Analysts say that relatively sophisticated government welfare services, especially in food, education and health, have been responsible for this extraordinary pattern of human development. But for Sri Lanka to move ahead down the road to becoming a developed nation, it is clear that more changes are in order.

This change has been happening, but slowly. The late eighties saw a shift in ideology with New Public Management (NPM) practices being adopted by the governments. NPM techniques emphasize rationalism and private sector management practices. Since 1989, more than 75 government entities have been corporatized and later partially or fully privatized. Large numbers of their workers (mostly political appointees) were retrenched. These developments enabled the government to reduce part of the public debt. Yet, overall, privatization has had only limited success.

History

The public sector of Sri Lankan has been functioning since the time of ancient kings, giving it a long history. During British times, serious reforms were introduced first in response to the Colebrooke and then through the Doughnomore Commissions. The Brits basically designed it as a system to collect revenue from the resources of the nation. Therefore, after independence, there was a need to change this objective to focus on development.

However this change in focus did not happen immediately. And subsequent governments simply carried on with the highly centralized system of the British, which was more of a logistical arm than anything else. A semblance of reform began in the 70’s in order to address unemployment and high poverty starting from the divisional development councils in 1971 and culminating in the provincial council system advocated by the 13^th amendment. All these systems were focused on providing improved public service delivery, but all failed in varying degrees due to several reasons.

Constraints

Policy implementation was poor and created a series of management problems like poor project choice, restrictive controls and a lack of commitment and political will. A major weakness has been the excessively piecemeal and often ad hoc character in policy implementation, meaning there has been no definite direction or long term strategic focus to measures implemented. A lack of coordination between levels of government, imbalances between political institutions and the bureaucracy and a high degree of political influence has also held back the smooth functioning of public sector reforms.

A study carried out in the year 2000 (Ramanie Samaratunge & Lynne Bennington) said the system of parliamentary democracy with a multi-party political system has produced pressures on successive governments to focus on a “welfare first and growth later” approach. It argues that this welfare model proved unsustainable in the long run, as neither the state nor the private sector performed effectively to produce necessary economic growth in this context.

Recent Developments

The current government, in its budget proposal for 2010 put forward the following recommendations as part of its medium term strategy

Reorient strategic public enterprises such as banks and utility services with modern managerial skills and best commercial practices; make all state enterprises commercially efficient and reduce their reliance on the state; Strengthen line ministries and departments in their service delivery to ensure that the government machinery is at work; Reduce bureaucratic controls & interventions and simplifying outlived systems and procedures by work of the Ministry of Management reforms etc.

Along with these changes it has also introduced higher salaries for public servants and has taken steps to further increase the number of public servants.

Empty Words?

The government is good at talking but will they deliver? Experts argue that creating a more efficient system of public services involves a change in fundamental attitudes more than anything else. Sri Lanka currently has a system that is more process oriented than result oriented. We plod along in no particular direction. The only purpose of out being is simply that, to plod along.

It is unlikely that politicization and corruption in public services can be stopped by the simple reform package stated above. It is also unlikely that it will change the self-serving attitudes of bureaucrats and public organizations. But given sufficient political will, it could be a start. But it still remains to be seen how these changes will make up the government’s overall strategy towards moving to greater efficiency. Indeed, it is not immediately apparent if such a strategy even exists.