Moving from a command system to the market

Written by YRK Reddy | Updated: Oct 28 2006, 05:30am hrs
India has reformed and reinvented a clutch of public services both at the central and state levels and is now a poster nation for greater transparency, accountability and responsiveness towards its citizens. Recently, the World Bank published a report of case studies and another entitled Inclusive Growth and Service Delivery: Building on Indias Success.

The case studies are indeed varied, despite some common features like the use of technology and greater transparency. While Indias telecom sector is referred to as a textbook model of corporatisation, competition and privatisation, Andhra Pradeshs e-Seva model is an example of simple facilitation for urban and semi-urban citizens. Some, such as the reform in Maharashtras registration department, were driven by reform-oriented civil servants. Stories of reform from Andhra Pradesh, Karnataka and Madhya Pradesh have, however, been attributed to a visionary political leadership.

Further, while reform such as that of the telecom sector is top-down and comprehensive, others touch the front-end only for a small population. Moreover, many citizens charters are an uninspiring copy of the UKs New Public Management, arising from the chief secretaries and chief ministers meets on administrative reforms in 1996 and in 1997. They were neither driven by political leaders nor civil servants, and yet are another cynical acceptance of the flavour of the season.

Service provisioning for the public is nothing new. In ancient times, the Chinese and Indians managed irrigation canals, security, law and order and emergency foodgrains while the Romans provided pensions, theatre, public baths and even spas. Europe provided ports, lighthouses, water bodies, bridges and the like. Later developments and technology brought in postal and telegraph services, railways, electricity, health services et al.

Most were initially run by private parties selected by the monarchies and, as monopolies, faced little regulation. They created huge disparities and excluded whoever could not afford their charges. When the market failed thus, governments intervened and brought services such as public service provisioning into the public fold. The 1950s through to the early 1980s were marked by competitive welfarism, if one may call it that, when the state mindlessly entered many fields.

Public policy debates associated with choices at various levels and
the mechanisms that would sustain the reform are absent
The inadequacies of the bureaucracies showed up soon, along with political interference in interpreting welfare and social justiceand the fiscal stress called for further reform. Since the 1980s, in many countries, the state was unable to satisfy the important criteria of efficiency and equity in most cases. Thus, markets have failed once again, in another manner, calling for reform.

The response has been initiated through management rather than public policy. One sees the stamp of TQM, customer service, results-based management, business process re-engineering, etc. These were vastly leveraged on new information and communications technology. All this has ushered in aggressive managerialism with a strong bias to reforming transactions or processes.

The public policy debates and trade-offs associated with various choices at various levels and the institutional mechanisms that would sustain the reform are conspicuous by their absence. It is anybodys guess as to where another story of reform will come up and who, or what, will drive it. It is also anybodys guess where the sustainability of the reform already carried out is concerned.

There has been no analytical framework for public policy in the reform of public provisioning. If there were one, it would specify where the state will intervene and where it wont, what it will provide and what private agencies will provide, what it will delegate and what it would devolve to other bodies, what type of private-public partnerships it will use and in which fields it would promote them, the types of financing options it would use and the administrative structures it would create to regulate and monitor new agencies.

It would further have leads for transiting from the command system to networks, quasi-market or market models and mechanisms. Without such an analytical frame, reform of public service provisioning will continue to be a matter of chance rather than deliberate choiceand be vastly unsustainable.