Why every prime minister has failed to ‘fix’ the civil service of Pakistan
Citizens demand it, politicians want it, and experts know how to do it. Why, then, has every reform failed?
The civil service pays around Rs30,000 per month as the starting salary, which might discourage talented individuals from applying to civil services. PHOTO: FILE
Every prime minister of Pakistan has promised to ‘fix’ the civil service. The issue has enjoyed support from parties across the political spectrum. After all, who wouldn’t like Pakistan to have a better civil service? The citizens demand it. The politicians want to do it. The experts know how to do it. Why, then, has every reform effort either failed miserably or been shot down in its infancy?
The short answer is that it is easy to talk about civil service reform but is much more difficult to do it. The long answer is that the civil service problem has fiscal, legislative, political and administrative constraints that make it unwieldy. Let me illustrate this by a few hypothetical examples.
Suppose that you are the prime minister of Pakistan who was elected on the promise of reform. You have 10,000 competent civil servants at your disposal who are not working hard. How do you make sure that these competent individuals work hard when they are sitting in the office from 9am to 5pm? This is called the moral hazard problem in standard economic theory. Fortunately, there is a simple solution to this problem: providing incentives.
High achieving bureaucrats will get a performance bonus and low achieving bureaucrats will be fired. Now comes the complicated part. Civil servants are usually employed for life and can only be fired in exceptional cases. A legislative change might allow firing but would most certainly face widespread opposition from government officials who could potentially shut the government down. You probably don’t want that to happen.
With disincentives for low performance no longer possible, you would need other options. If you can’t fire government officials or pay them less for shirking at work, you can still reward high achievement to encourage better performance. The problem with this strategy is that it requires a lot of money. For a country that collects only 11% of its domestic gross product (GDP) in tax revenue, has had a history of fiscal deficits and has had to go to the International Monetary Fund (IMF) for bailouts on several occasions, expensive options to reform the civil service become impractical.
While monetary incentives might not be possible, you do have the option of using non-monetary incentives to encourage performance. Some typical examples include faster promotions and special recognition for high performers. The problem here is that promotions in civil service are largely tenure-based. This would again require a legislative change and might face opposition from government officials. While the evidence for non-monetary incentives such as recognition shows that it can encourage performance, this impact is often very small compared to the scale of the civil service problem.
Let us think of another illustration to depict a slightly different problem.
Suppose again that you are the prime minister but this time around you have a dearth of talented individuals in the civil service. How do you attract such individuals to the civil service so that public service delivery can be improved? This is the adverse selection problem in standard economic theory. There are two legs to this problem. First, are you attracting talented individuals to apply for civil service jobs? Second, are you selecting the most talented individuals from the applicant pool?
Tackling the first leg of the problem, the civil service only pays around Rs30,000 per month as the starting salary. This might discourage talented individuals from applying to civil services. You can potentially solve this problem by raising the base salary for government officials, which would again require a lot of finances. Alternatively, you could position joining the civil service as an act of patriotism to encourage talented individuals, but this is unlikely to have a major impact.
Tackling the second leg of the problem, the Federal Public Service Commission (FPSC) regularly conducts exams and interviews with the aim of hiring the most qualified individuals in the applicant pool. However, these exams usually test for memory rather than IQ or relevant skills. With the way the current Central Superior Services (CSS) exam is structured, an individual with a background in English literature can end up working for the tax department. Not exactly the best strategy in a world of specialisation. You as the PM can try to change the exam. While this is one of the more achievable tasks, there could be considerable opposition from individuals who have been preparing for the exam in the current format. Hence, any change would need to be announced a few years in advance before the change can eventually take place.
I hope that the two illustrations above have shed some light on the complexities of civil service reform in Pakistan. Armed with this knowledge, the next time some politician comes with tall claims about a magic bullet to fix the civil services, I hope you will roll your eyes and ask a simple question: How?
The short answer is that it is easy to talk about civil service reform but is much more difficult to do it. The long answer is that the civil service problem has fiscal, legislative, political and administrative constraints that make it unwieldy. Let me illustrate this by a few hypothetical examples.
Suppose that you are the prime minister of Pakistan who was elected on the promise of reform. You have 10,000 competent civil servants at your disposal who are not working hard. How do you make sure that these competent individuals work hard when they are sitting in the office from 9am to 5pm? This is called the moral hazard problem in standard economic theory. Fortunately, there is a simple solution to this problem: providing incentives.
High achieving bureaucrats will get a performance bonus and low achieving bureaucrats will be fired. Now comes the complicated part. Civil servants are usually employed for life and can only be fired in exceptional cases. A legislative change might allow firing but would most certainly face widespread opposition from government officials who could potentially shut the government down. You probably don’t want that to happen.
With disincentives for low performance no longer possible, you would need other options. If you can’t fire government officials or pay them less for shirking at work, you can still reward high achievement to encourage better performance. The problem with this strategy is that it requires a lot of money. For a country that collects only 11% of its domestic gross product (GDP) in tax revenue, has had a history of fiscal deficits and has had to go to the International Monetary Fund (IMF) for bailouts on several occasions, expensive options to reform the civil service become impractical.
While monetary incentives might not be possible, you do have the option of using non-monetary incentives to encourage performance. Some typical examples include faster promotions and special recognition for high performers. The problem here is that promotions in civil service are largely tenure-based. This would again require a legislative change and might face opposition from government officials. While the evidence for non-monetary incentives such as recognition shows that it can encourage performance, this impact is often very small compared to the scale of the civil service problem.
Let us think of another illustration to depict a slightly different problem.
Suppose again that you are the prime minister but this time around you have a dearth of talented individuals in the civil service. How do you attract such individuals to the civil service so that public service delivery can be improved? This is the adverse selection problem in standard economic theory. There are two legs to this problem. First, are you attracting talented individuals to apply for civil service jobs? Second, are you selecting the most talented individuals from the applicant pool?
Tackling the first leg of the problem, the civil service only pays around Rs30,000 per month as the starting salary. This might discourage talented individuals from applying to civil services. You can potentially solve this problem by raising the base salary for government officials, which would again require a lot of finances. Alternatively, you could position joining the civil service as an act of patriotism to encourage talented individuals, but this is unlikely to have a major impact.
Tackling the second leg of the problem, the Federal Public Service Commission (FPSC) regularly conducts exams and interviews with the aim of hiring the most qualified individuals in the applicant pool. However, these exams usually test for memory rather than IQ or relevant skills. With the way the current Central Superior Services (CSS) exam is structured, an individual with a background in English literature can end up working for the tax department. Not exactly the best strategy in a world of specialisation. You as the PM can try to change the exam. While this is one of the more achievable tasks, there could be considerable opposition from individuals who have been preparing for the exam in the current format. Hence, any change would need to be announced a few years in advance before the change can eventually take place.
I hope that the two illustrations above have shed some light on the complexities of civil service reform in Pakistan. Armed with this knowledge, the next time some politician comes with tall claims about a magic bullet to fix the civil services, I hope you will roll your eyes and ask a simple question: How?