Sunday, June 5, 2011

Incentives matter: In defense of Nepalese civil servants

A majority of Nepali people have the habit of blaming the civil servants, bureaucrats and public institutions for their miseries. They are partially right. The day-to-day operations of public institutions are run by civil servants and bureaucrats. The public has to deal with them to get past red tapes and to basically get anything done that requires the Government of Nepal’s seal. The civil servants are at times rude and openly speak of ‘fast track services’ involving unethical practices. This is prevalent in pretty much every public institution you can think of.

Why are such tendencies rampant within our public institutions? The answer lies in the way they were/are built and governed, insufficient public sector wages, and unwarranted political interference. The last one is the worst of all evils, which is killing all incentives to perform better, instilling a culture of inefficiency, and treating consumers as slaves when they should be treated as kings.

These factors are eroding the morale of civil servants and making them inefficient. The initially honest civil servants, who struggle hard to pass the Public Service Commission examination, plunge headlong into corrupt and illogical environment where they find it hard to live by their principles and morals. They get consumed by the corrupt institutional structure, evil machinations of political leaders and union bosses. Those brave enough to challenge the system are faced with a situation where they are forced to quit; others succumb to it until they retire.

Let me give an example of how the state of our public institutions erodes incentives and efficiency of civil servants. Take a tour of the Department of Mines and Exploration, which comes under the Ministry of Industry (MoI). The building looks like it has never been painted since being constructed. The hallway leading to the office of the undersecretary stinks horribly bad, probably because the toilet has not been cleaned for days. Water is dripping from pipes hung on the ceiling. The walls are dilapidated and floors are not properly swept. The smart, energetic undersecretary is given a room that has an old computer which takes minutes to boot up. It consists of a simple desk with a Nepali language newspaper, few documents and a telephone on it. It is irrational on our part to expect professionalism and efficiency from this civil servant when his working space is worse than that of a receptionist in a private firm or I/NGO.

The sorry state of office used by this undersecretary is not an isolated case. Visit offices inside Singha Durbar itself. The first floor occupied by the Ministry of Commerce and Supplies and the MoI stinks of dirty toilet nearby while the parking area is littered with broken bricks and torn papers. The floors of the building have not been properly wiped, and the civil servants’ offices are cramped, messy with inadequate lights. Some workers do not even have computers. They are surrounded by piles of documents improperly stacked in folders. The staffs are not properly dressed and look perennially disconsolate and listless. Under such conditions, how on earth will the morale of civil servants be high and how can we expect them to be professional?

No wonder the productivity of our civil servants and corruption in public institutions are one of the worst in South Asia. The regretful state of our public institutions and the facilities in there are a big disincentive for civil servants to work hard and be efficient. That being said, do not make the mistake of jumping down to the conclusion that all public institutions are like this. Some of the offices that get loads of donor money and good yearly budget allocations are no less well-off and equipped than private sector offices. But, that is a different story for later.

While the sorry state of our public buildings and inadequate facilities are part of the story accounting for inefficiency of our civil servants, insufficient wage is another major incentive-killer. The salary and benefits of civil servants do not even come close to the one received by their counterparts in private sectors and I/NGOs. It is hard for a civil servant to live in major urban areas with just, on an average, Rs 15,000 a month. Since inflation is already pretty high, their real purchasing power is decreasing. This means it is even harder for them to keep up with normal household expenses, coupled with health and education costs of their children. Given such conditions, civil servants have every incentive to earn extra money from other means, which usually constitutes unethical practices like taking bribes. This partially explains the inefficiency and delay to get anything done from our public institutions.

The biggest evil of all is political interference by selfish and uneducated politicians who have no idea about the value of and respect for competent civil servants and meager salary they earn with respect to their workload. Instead, our civil servants are humiliated by the politicians time and again. Some politicians slap high-level district officials for not sending comfy vehicles to pick them up from district airports; some place unqualified and incompetent party cadres to high-level positions in public institutions, while honest civil servants work for years to get promoted; some forcefully take luxurious vehicles from virtually bankrupt institutions; some arbitrarily transfer civil servants to offices that have nothing do with their acquired knowledge and experience; and some send receipts of personal expenses to be paid by insolvent state-owned enterprises.

The civil servants are compelled to comply with and adjust to these kinds of undeserved demands. It is imprudent on our part to expect that the balance sheets and public sector books be clean when the devils of disasters are prying on the efficacy of our civil servants.

Blaming them for all the wrongs in public institutions is injudicious and bigoted analysis. The blame should be directed to the working condition and those who are disinclined to change it for good, paltry wage and excessive politicization of bureaucracy.

[Published in Republica, June 4, 2011, p.6]