Institutions – and the people who staff them

Cadre deployment has featured strongly over the past week, with the handover by the ANC of documents from its deployment committee to the DA and the rejection by the Pretoria High Court of the DA’s case to have the practice declared unconstitutional.

This is, as journalists might say, a developing story, but potentially of great significance.

If cadre deployment is about the staffing of the state, this is at root a matter of the state of South Africa’s institutions, since institutions are fundamentally about people. Institutions are created by bringing people together to share responsibilities, to take advantage of varied talents in pursuit of common goals. Institutions reflect not only the sum of the contributions and failings of the individuals within them, but also the value of relationships, interactions, systems and mechanisms that amplify individuals’ efforts.

Social and economic functioning

Institutions are critical for social functioning. They establish rules and processes through which contentious issues are mediated; ideally, these are respected by those who engage with them, and their decisions are regarded as legitimate.

Moreover, institutions have a significant impact on a society’s economic performance. This takes many forms, and there are conflicting views on how this should be optimised. On the most basic level, institutions regulate behaviour. This makes the world more predictable and attractive for long-term planning.

The quality and effectiveness of institutions matters deeply for economic outcomes. For example, from earliest history, societies have established mechanisms to control the use of violence. This is not only a matter of morality; insecurity compromises anything more than raw survival.

As the potential of new technologies and experiences expands the vistas of a society, the range of social functions expands, and so the need for new institutions. The possibilities of exchanging diverse goods produced the need for a medium of exchange, and in time the need for bodies that had the credibility to issue it. Roads and bridges would make trade with distant regions possible, and they needed to be constructed and maintained. For this, some form of organising authority would be necessary. And so on.

In brief, this explains the economic impulses behind the evolution from a hereditary bronze-age chieftain, through the city state, to the Roman Empire, the feudal order, parliaments and republics and the modern administrative state. Bear in mind that the frame of reference is not only a growing list of responsibilities, but also established responsibilities that have grown in complexity. Both subsistence agriculture and AI-driven production are economic mechanisms, but they are vastly different qualitatively. Institutions matter fundamentally, probably more now than in the past.

As Alma Kanani and Marco Larizza, a pair of World Bank economists, put it: ‘Institutions are as good as the capacity of the State that upholds them. Institutions are embedded in a country’s social context, which affects the way they function as well as their effect on economic outcomes.’

Economic progression

Government policy has sought to accelerate the country’s progress through increasingly sophisticated and value-adding activities. In other words, this is a drive towards greater economic complexity. In this respect, the government has looked admiringly at a number of rapid developers – mostly the East Asian industrialised societies – and drawn the lesson that a powerful state is the key catalyst to make this happen.

It’s a beguiling vision. It promised (and promises) quick, comprehensive wins, along with political control remaining firmly with the state.

It hasn’t turned out like this. In attempting to create a ‘developmental state’, the ANC (perhaps distinct from the government) took at best a number of superficial lessons and ignored the more profound ones. It contented itself with creating a parody of the institutions that had driven the East Asian growth stories, without their substance.

One of the seminal texts on the matter is Peter Evans’s 1995 book Embedded Autonomy. The rather clumsy title captures the theme: the developmental state needed to be staffed with people of exceptional calibre who were at once connected to key interests in society (such as the business community), but sufficiently independent from them so that they could act – in principle – in the interests of greater societal objectives.

South Africa, however, dispensed both with the meritocracy that countries like Japan, South Korea and Taiwan held in high regard, and with the autonomy that the state and its agencies should have from the currents of day-to-day politics. In the 1990s, not only was merit subordinated to the imperatives of ‘transformation’ – often quite consciously – but the state was explicitly conceived of as the tool of the ruling party, to be peopled with its supporters. The state, in other words, was embedded within a political movement, with little autonomy from it. More than that, the ideological and interest diversity in the ANC, not to mention the blatant rent-seeking that emerged in short order, meant that policy was subject to constant contestation and was constantly trying to balance what at times could be contradictory interests.

A very worthwhile commentary on the condition of South Africa’s state institutions was produced late last year by Ivor Chipkin and Rafael Leite of the New South Institute, entitled The Five Cs of the Contemporary Crisis of Government and How to Overcome Them. Noting the relegation of the Public Service Commission to near impotence in the 1990s, as staffing decisions were passed to the relevant political heads through the Public Service Act of 1994, the authors remark: ‘In effect, the Public Service Act makes each and every public servant in South Africa a political appointment, potentially. The situation in municipalities is even more acute. Not only are all administrative appointments made by elected politicians (councillors) but councillors themselves perform these administrative tasks. In this way the post-Apartheid system of government failed to instantiate a separation between political and administrative office.’

Add to this cadre deployment, the explicit meddling of a non-state party structure in administrative matters, and the debasement of the state – its corruption – was all but guaranteed.

It’s a mark of just how dire this has become that the government now speaks of the need to ‘professionalise’ the public service – something that should have been an axiom from the start, for any institution. It’s arguably even worse, since state dysfunction has sapped the state’s very legitimacy, and damaged the claim that it has on people to respect its authority.

Upshot

The upshot is that South Africa has established a large apparatus with limited ability to perform more than rudimentary functions. It is able to issue passports and ID documents (though not when ‘the system is down’), to deploy traffic and police officers, to collect taxes and the like. But it is not a developmental agent. Indeed, even in respect of the more basic functions – such as maintaining physical security – the South African state can claim scant credit.

As for the higher-end functions, such as steering developmental initiatives, it’s hard to find much of value, certainly in recent years. Each of South Africa’s large macro plans – the RDP, GEAR, ASGISA, the NDP – have petered out amidst implementation difficulties or disagreements over contentious elements. It has never been able to create a sort of apex coordination institution along the line of Japan’s Ministry of International Trade and Industry and South Korea’s Ministry of Trade, Industry and Energy.

The Department of Trade, Industry and Competition and the minister responsible have tried to play something approaching this role, though it transparently lacks the skills and relationships to do so. If anything, an outsized sympathy with organised labour (and a corresponding latent suspicion of business) and protectionist instincts have worked against innovation and the economic progression that a developmental state would wish to foster.

Cumulatively, this helps explain why South Africa’s economy is not only failing to grow, but in some ways is in decline – losing ground in its economic complexity and its global competitiveness.

What can be done?

Successful countries and developmentally oriented administrations take as their starting point the capacity and professionalism of their institutions. This means recognising what they are intended to do and focusing on those objectives.

South Africa has established a large state, tasked with all manner of responsibilities, many of which are peripheral to the core mandates of its constituent parts, and some of which are difficult properly to define and measure. This needs to be radically revised, and the state refocused on meeting those core mandates. It should, for instance, be the task of the police to prevent and investigate crime, not to reflect demographics or to support empowerment through procurement.

In other words, the new orientation of a reformed civil service must be ‘ruthless meritocracy’.

The key to this is to break the political stranglehold of politics on the civil service. This is, institutionally, a relatively simple matter. The Public Service Commission should be reintroduced as the body responsible for running the civil service, with an explicit mandate to ensure professional and impartial conduct, and to hold civil servants to the highest standards. Where political appointments might be made – say at the level of directors-general, though whether these appointments are advisable would need to be carefully considered – such positions should be contract-bound to the incumbency of the principal.

A capacitated civil service demands highly selective recruitment and promotion. Suggestions have been floated for an entrance exam. This is a decent idea, no panacea certainly, but something that does set an initial bar for employment and which, over time, will help make the civil service a prestige career. Such an exam has been used in South Korea, and it’s revealing just how extensive the skills evaluated are, and how high the proportion of unsuccessful applicants can be. Typically, for every applicant passing the test, 40 or more – sometimes well over 100 – fail it.

Such a system would need to focus on bringing in the country’s best and brightest, irrespective of their race or sex or any other ascriptive characteristic. For the recruitment of specialist skills, at least as an interim measure, non-citizens may be considered.

It would also demand rapid and aggressive consequence management. Perhaps because of protective labour legislation, and perhaps because of general failures in the institutional culture, the civil service has harboured numerous people with neither the skills nor the inclination to do their work. There are, for instance, numerous anecdotes of people accused of wrongdoing who have been able to game the system for years while awaiting their disciplinary proceedings. This needs to change. A clear, simplified code of conduct, expanded capacity at the PSA and where necessary private sector contractors should strive to resolve charges within a dedicated timeframe.

None of this is complicated, at least not conceptually. The hard work will follow in the process of building a resilient institutional culture. For this, there is no simple prescription, but it is achievable if the systems and incentives can be properly arranged. From that could come the potential for South Africa’s governmental institutions to play a proper developmental and growth-accelerating role, and to manage an increasingly complex and sophisticated economy.

But none of this will make any difference if, having made the appropriate systems changes, the political incumbents choose to sidestep it by interfering, as the ANC has done via its cadre deployment initiative. News24 recently observed: ‘The committee’s records revealed, for the first time, the ANC, through the committee based at the party’s headquarters in Luthuli House, had complete control over the appointment of senior government executives and that no senior bureaucrat could be appointed to any position without the committee’s concurrence.’

A professional, enabling civil service needs to be just that: professional, skilled, properly managed and committed to its efficient internal working and chains of authority. But cadre deployment, whether as it exists now or as some sort of informal, unadmitted successor, will continue to cripple the country.

The economy will continue to pay a high price for this.

SOURCE:Institutions – and the people who staff them – Daily Friend