Filling in the gaps of public sector governance

  • Nation
  • Wednesday, 01 Mar 2017

The policy should not aim at improving Malaysia’s global rankings, but rather must meet domestic objectives.

FOLLOWING the forum on governance in Parliament for effective oversight of the Executive and public sector accountability, the Malaysian Economic Association convened its second forum on economic gover­nance last month with a discussion on the governance of the public sector itself.

Speakers gave credit to improvements made in the governance of the Malaysian public sector, but also lamented the many emerging indicators of failure to exercise good governance.

Positive developments which facilitated better governance included the greater use of technology like E-govern­ment. The case study of the MRT Committee showed that good gover­nance can result in the completion of large projects ahead of schedule and at lower-than-budget costs.

Speakers were generous in complimenting good governance practices which have en­­abled development policies to be implemented successfully. Others, especially those from the private sector, concluded that public sector service delivery, at best, was only average.

The positive impact of the use of technology and ongoing skills development on the efficiency of public service have been negated by other developments.

These included the creation of additional units in the civil service, especially the expansion of the Prime Minister’s office and the dominant role of ministers, too many genera­lists as leaders, too much centralisation of decision-making and control, and the drain on resources from the need to bail out govern­ment-linked companies.

The independence of the public sector from political interference, which was traditionally ensured by the permanent tenure of public sector officials all the way to the post of secretary-general, seems to be compromised in more recent times with ministers assuming roles of chief executives of government agencies. This has significant implications on go­vernance practices in the public sector.

How do we measure good governance? The forum guest speaker, Prof Kishore Mahbu­bani, applied a broad macro standard that gover­nance is better when social indicators such as mortality rates, life expectancy and rising proportion of middle class improve.

On this basis of measuring public sector governance in terms of incomes and socio-economic indicators, income inequality is less a reflection of governance compared to mea­sures being taken to improve the welfare of the bottom 10% or 40%.

When measured in this way, top perfor­mers in good governance were China and Vietnam, while countries traditionally seen as top ranking in good governance practices were now faring badly.

Regardless of how good governance is measured, policy design should not aim at improving Malaysia’s position in global rankings, but rather must meet domestic objectives. Good policies by themselves and effective governance for successful implementation will naturally result in better rankings.

After all, indicators impacting governance ranking are the outcomes of policy implementation, and not just the policy itself. For example, Malaysia has laws and regulations that are by themselves considered model laws of global best practices. Yet, Malaysia has low and declining ranking under the rule of law category.

At the same time, Malaysia has been smart in using the Doing Business Indicators to push authorities to improve implementation processes and procedures. The work by Pemudah in improving Doing Business rankings also resulted in lowering costs of doing business.

There were many proposals on reforms to improve governance of the public sector. Simple measures of quick wins to turn around what is viewed as weakening governance included stopping politicising of the civil service, better supervision by senior managers and leaders, application of sound processes in approval levels, avoidance of conflict of inte­rest in financial management and separation of functions in the delivery of ministerial duties.

Policy design procedures could include more stakeholder involvement and adoption of global practices, such as sharing consultative policy papers with relevant parties before the final decision and more widespread application of regulatory impact analysis as was introduced by the Malaysian Productivity Corporation.

Similarly, implementing asset declaration practices will enable Malaysia to adopt the Open Government Partnership to benefit from support by civil society for a more responsive and accountable government.

The more long-term improvement inclu­ded a more inclusive civil service, leveraging on the improving technical expertise of officials and avoiding creating parallel units whenever any unit fails to perform. Rather, reform and restructuring of existing units would accord longer-term benefits at lower costs.

Independent evaluation of public policies would create pressure on public sector institutions to always practise good governance. Such evaluation must result in sanctions of both institutions and its officials for non-observance of codes and procedures to instil the culture of greater efficiency while avoiding corrupt practices.

While definitions are important in measu­ring the size of the civil service, the Malaysian public sector is large in terms of growing shares of salaries and emoluments in the budget.

This has resulted in the declining ratio of development expenditure (31% of total budget in 2001 to only 16% in 2016), which meant that the public sector contribution to long-term growth potential was declining. Efficiency versus size through better gover­nance does matter for the public sector contribution to growth.

Overall, there were constructive discussions on how best Malaysia can take on board short-term quick win measures while explo­ring the longer term targets to improve public sector governance.

Mahbubani offered three basic principles to adopt – meritocracy, pragmatism and hones­ty in all dimensions, beyond money, the most difficult to fulfil.

The most important determinant of gover­nance in the public sector is the people, and their values. A public sector peopled by those with high integrity is the cornerstone of efficiency and high-quality delivery of public services.

Sadly, many participants raised concerns about a need for a conducive environment which incentivises public sector officials to exercise integrity in the conduct of their duties.

A better system of checks and balance, a revelation of important information and a more objective reward system for good practices could help improve integrity in the judiciary and the police as a requisite for integrity in the public sector to prevail.

The business community believes that everyone must play their part in the chain of good governance. Integrity at all levels is required for a culture of good governance. A system which promotes integrity requires adequate protection against victimisation, and whistleblowing regulations must be honour­ed by the leadership.

Datuk Latifah Merican Cheong is Deputy President of The Malaysian Economic Association. The views expressed here are entirely the views of the MEA.

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