Punjab’s unwieldy public sector governance

A defining element of public sector governance is the rapid proliferation of alternative institutional mechanisms

Over the past decade, a defining element of public sector governance in Punjab has been the rapid proliferation of alternative institutional mechanisms, such as the Public Sector Companies (PSCs), to undertake service delivery and commercial operations. In 2008, as many as 13 PSCs were operating in Punjab. This figure ballooned to 70 by 2018, an increase of 440% over a decade. The 2013-18 period was particularly fecund in this regard and alone witnessed the creation of 39 new PSCs.

This trend was undergirded by the vision of the PML-N government in Punjab. They assumed that by operating autonomously outside the realms of the traditional public sector, PSCs would be able to bypass the red tape and decision-making inertia that has long become the hallmark of our bureaucratic machinery. It was envisaged that these PSCs would enable the state to deliver high-quality and cost-effective services in sectors that were deemed beyond the capacity of the provincial administrative departments. Through the induction of technical professionals and subject experts in these PSCs, Punjab’s policymakers envisioned an improvement in the lives of its population. They focused on diverse areas such as energy, healthcare, education, waste management, water and sanitation, transport, family planning, etc. However, the chasm between the policy intent and the reality on the ground could not have been starker.

Apart from a handful of qualified success stories, the experiment with PSCs in Punjab turned out to be a case study in how not to plan and execute large-scale transformation of the public sector. Critical deficiencies in the governance of these PSCs meant that the abysmal performance of most of them has largely been a foregone conclusion. These deficiencies include longstanding vacancies and ill-suited appointments to senior management positions and board of directors of the PSC. A lack of ownership by the parent administrative departments; an apathy for defined processes and performance metrics that are stringently enforced; conflicting oversight and reporting lines that place various stakeholders at the cross purpose and invite conflict; and an absence of a coherent and sustained vision of public sector governance, accentuated further by the political transition of 2018.

While the incumbent provincial government initially endeavoured to address this by recommending the closure of certain non-performing PSCs and initiating the development of business plans to turn around the companies that were to be retained, little was achieved in resolving the underlying structural causes that resulted in their lacklustre performance in the first place. On the contrary, the critical deficiencies highlighted above continue to plague these PSCs despite three years of a reform-minded administration at the helm. Consequently, many of the 49 PSCs still operational in Punjab continue to flounder against their mandates, delivering poor or non-existent public services and commercial operations all the while imposing a sizable financial burden on the provincial exchequer.

It is interesting to observe that the tendency to set up alternate — even parallel in some cases — modes of service delivery is not limited to the previous government. The current administration has also shown its predilection for this modus operandi through its reliance on the creation of new provincial authorities and the conversion of existing PSCs into authorities where tenable. These authorities are seen as carrying none of the political baggage of the PSCs and are also viewed to be more muscular in their execution and enforcement abilities, backed as they are by statutory law. Put differently, their creation is a kind of admission by provincial policymakers that the regular bureaucratic machinery is either unwilling or incapable (or both) to effect the change envisioned by the government. Thus, beyond reform and redemption.

However, as in the case of PSCs, these authorities will not prove to be the panacea for the developmental woes of Punjab. Unless fundamental changes are made to the institutional and decision-making architecture of the province to address its governance and service delivery challenges, such spawning of new institutional entities will serve as little more than a self-serving exercise in passing the buck and kicking the can further down the road.

Published in The Express Tribune, August 12^th, 2021.

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