- Continued from Part – I, published on October 21, 2018
There has sadly become a trend for policy makers in general, and economists in particular, to envisage economic issues whereby, on one hand, they mainly analyse and articulate about the economy in terms of the various macroeconomic accounts — and here too broadly speaking fiscal and current accounts — and to understand less the actual working of economics at the level of institutions, organisations, and markets.
On the other hand, they view economic issues in a lack of plural way, which would otherwise mean analysing economic activity, economic agents, and the way they make economic transactions from the political economic perspective — that is seeing real world economic problems as an outcome of many influences including political, behavioural, sociological, and anthropological, among others.
Moreover, there is a lack of attention to the informal institutional perspectives to economic activity, and which mainly include culture, norms, and conventions; the basis for formal institutions. What is also not understood properly and least communicated to policy formulation, is the extent of path dependent nature of economic agents of a particular area. So in certain area where this is high, requires strong policies on the educational and promotional side, for example, in support of the main policy towards shifting attitudes and actions towards meeting a different goal or set of goals.
The above shortcomings on the part of subsequent policy makers, at the federal or provincial levels, has meant that policy is not appropriately qualified to understand the local needs of the real world issues at hand. Federal, and provincial governments will have to adopt this approach to policy making that internalized the microeconomic foundations of the macroeconomic issues in a plural way.
Yet, neither parliaments nor media raises these issues; for the former that would mean getting exposed in terms of lack of thought and performance on this account of any meaningful kind, and for the latter to commit to doing more work for small increase in ratings, and in turn profits. Who cares? Also, the electorate can hardly question this trend, since they have been so much pushed into meeting the daily natured ends and means cycle by subsequent governments; which has meant that all they do mostly is to basically vote and make some agitation here and there in whatever little spare time they could find, or whatever small organizational arrangement they could muster in between elections.
Anyway, the capacity of electorate is overall not much, given the lack of apparently low levels of investments in social sector made by subsequent governments to basically save themselves from a ‘crisis of democracy’ situation — where people become capable to ask too many questions, are in an independent position to choose whomever they like in elections, and that is purely on the basis of merit. Surely the unholy alliance of government and media cannot allow that? Will the electorate take up this challenge by voting a political party into office that helps them in breaking this cycle? Will PTI prove that they already have elected a political party that can deliver on the above? Hope remains eternal.
The provincial governments should evolve plans on similar lines for other departments at the provincial level for bringing greater information and accountability overall
Given all this, the task of the new government is immense, and if they really want to deliver they will have to empower the people by giving them solutions at the provincial, district and tehsil levels. The first among many competing steps could be that the federal government asks/directs provincial governments and those of territories, to take stock of the present economic and law and order situation at the district level, and in turn, produce a set of ‘white papers’ for individual districts, indicating in it also solutions to the problems for example (among others) (a) the performance of institutions, organizations, and markets, (b) and to even go to the level of checking for example the physical condition of buildings — households, markets, schools, hospitals, bridges, etc — and are they disaster ready, for example in the case of a fire or an earthquake, and (c) does the population density and physical infrastructure allow the respective governments to ensure a healthy and safe lifestyle for the inhabitants of a particular area, and the steps to improve the situation.
As a precursor to a well functioning local governance system, and for provincial government to plan better its expenditure and revenue needs, a second set of white papers should be for individual local councils/tehsils, whereby this white paper could go ahead and reflect the distribution of houses with regard to population density, and the different related statistics that allow it to know (a) are housewives literate and how many are working in a job, (b) the age distribution of children over the households, (c) the income, wealth, and tax liabilities over the entire household horizon, among others.
Hence, with this information the local governments should plan, as part of this white paper, with regard to estimating (i) the level of social sector infrastructural expenditures, and annual budgets to keep these institutions, organisations, and markets (to the extent of providing enabling environment) running in a local council/tehsil, required to meet the needs of the population of a particular local council/tehsil of a district, (ii) the extent to which these expenditures could be met from taxes collected from the inhabitants of that local council population, and reaching at the level of remaining demands need from the provincial divisible pool, and (iii) the amount of shortfall (or bridge financing needs) that remains for local councils, even after both the avenues (indicated above) have been exhausted.
The basic premise here is that inhabitants of a local council should be made the responsibility of that council, with need expenditures financed through local taxes and divisible pool primarily, and the rest through bridge financing. Therefore, in the light of these (and similar) estimations, the local governments could plan economic policy that is creative, which in turn allows rationalising expenditures and/or enhancing revenues, and planning appropriately for doing bridge financing, for example in the shape of bank borrowing or raising equity needs over a finite horizon, till the time revenues can fill this gap (and the need for bridge financing diminishes).
At the same time, for improving upon the authenticity level of the white papers, the government should use for instance (a) offices of ombudsman (by increasing their capacity and powers), and (b) to legislate, in collaboration with the provincial governments, towards creating an overarching network of ‘independent evaluation offices’ (IEOs) at the provincial levels, with its head office working at the federal level; whereby, both the augmented ombudsman offices and IEOs, working together to check the veracity and technical competence of the white papers produced by the provincial governments.
This effort will also require a technically empowered and independent bureau of statistics, with offices present in every local council, and which could do deep coverage of issues and in a variety of areas, in turn supporting the formulation of white papers specifically, and the planning of government, generally. The current situation of Pakistan Bureau of Statistics leaves a lot to be asked for.
At the same time, media will have to perform in a more socially responsible way, and in doing so focus increasingly on the performance of provinces and territories, and within it the local councils. In this regard, what the federal government can and should do is to come up with a comprehensive plan to use Pakistan Television (PTV; state television) to report on all issues at all the tiers of government, especially at the provincial and local levels- for which separate channels of PTV could be introduced.
Moreover, the government should also give subsidy to PTV and private channels, to support them in both taking up this socially responsible task as indicated above, and in also putting an appropriate cut on advertisement time, in turn freeing up airtime for informational/educational content on both the issues indicated above, and other important aspects with regard to overall nation-building. For this, in addition to seeking advice from the state TV and private channels, the government should also seek legislative advice/suggestions from PEMRA (Pakistan Electronic Media Regulatory Authority), for putting up for subsequent parliamentary approval.
Last but not the least, the role and performance of (a) chairmen and chief economists of the planning and development departments, and (b) the chambers of commerce need to be made more public by the respective departments through holding media briefings, and also where parliamentary committees at the provincial level to seek briefing sessions with them. The provincial governments should evolve plans on similar lines for other departments at the provincial level for bringing greater information and accountability overall. Moreover, the media related steps/legislation will help deliver better on these goals.
