Business Page – June 3rd, 2001

Governance and Management

Introduction

‘Governance’ has been elevated to the status of jargon in the public sector lexicon. It is seen as something of a panacea for all the ills facing society. No wonder the manifestos of the political parties at the last general elections made all kinds of promises about what they would do to improve governance in Guyana if they won the elections. The manifesto of the PPP/C states boldly that ‘Good governance has become a fundamental priority of the PPP/C since 1992’. It then went on to list several areas of attention and the improvement of good governance. The PNC/R promised “a new form of governance that will allow the country to move away from ethnic divisiveness over centralization of decision making, inefficiencies in product definition and implementation, avoidance of the rule of law, and the mushrooming growth of corrupt practices”.

On the other hand little was said about management and its relationship to governance. Is the problem that government is really a qualitative that can be interrupted however one chooses? Perhaps it is and the manifestoes themselves are a good example. Why the PPP/C claims that it introduced good governance in1992, the GAP-WPA considers this a mirage and that “ while on paper, governance has improved, in actual fact, it is close to the worst of times”.

Definition

There is no single, acceptable decision   of governance but it is clear that while there is a distinction between governance, government and management they all have to do with the exercise of political power to mange the affairs of the nation. The link however between governance and management appears to be relatively recent. The financial and fiscal crisis experienced in several countries have drawn attention to the inefficiencies, ineffectiveness an corrupt practices in those countries. Yet, these were mere symptoms of the absence of good governance. With the surge of electoral democracies around the world, the increasing pace of globalisation, and the influence of the IFI’s, donor countries and multinationals have increased the calls and pressures for good governance particularly in developing countries. Bad governance leads to inefficiencies, fiscal deficits and loss of confidence in governments.

The new role of Government

In an ideal situation, the government manages less but better, differently but more effectively, changes its focus from controller to enabler and from interferer to facilitator. Yet, for a long time to come, the state will remain a major provider of the basic infrastructure and social services and will continue to bear responsibility for setting the rules according to which the system works and to enforce sanctions and take corrective actions when the system fails. As governments receive international support including debt forgiveness and seek to attract foreign investments, they will have to match the skills of the private sector and the MFI’s in negotiating capacity to ensure that they receive the best deal and that they deliver a standard of service considered by the citizenry.

The World Bank has identified several symptoms of public management failure with which we in Guyana can so easily identify. These of course are not limited to the national level but exist at the level of State Corporations in the Board in the municipalities and regions as well. These include poor quality services; inability to make and implement policy or even to make routine decisions; weak financial management, including unrealistic budgeting and poor control; the practice of employing public resources in the pursuit of private interest; the arbitrary applications of laws and rules; excessive rules and regulations which stifle entrepreneurial activity and encourage certain forms of corruption; closed or non-transparent, decision-making systems; and resources allocated in a manner that is not conducive to development.

Causes

The World Bank adds that “these factors combined with poor economic performance, depress public confidence and makes recovery difficult”. The causes identified by the World Bank also reflect conditions existing in Guyana. It noted that poor public management stems from low level of human resource development and weak institutions. Guyanese have consistently lamented the political culture which allows government political control over key institutions. Over the years, civil society has been badly weakened and they are few institutional controls to prevent poor governance. The challenge therefore is whether it is possible to have good governance in the contexts of the voting patterns in Guyana and the serious resource deficiencies from which we suffer.

Conflict

What the studies do not seem to consider is the possible conflict between governance, which requires the involvement of stakeholders, and management. Examples abound particularly in those Boards and Commissions on which stakeholders sit. There is an immediate conflict between his role of an operator and that as a Director. As an operator, he is involved in setting policies, granting licenses, providing for waivers and remissions etc. To say that he should not vote on any issue in which he is involved is simplistic because directly or indirectly he is affected by every decision made by the Commission.

It is no different in any engagement in which the representative of the private sector meets with the government. Anecdotal evidence abounds of persons using private sector organizations to promote their own business and to engage in self-censorship so as not to offend the government to which they may need to turn for tax and other assistance. The combination of laws which give politicians immense power over businesses, and a small society which a literal handful of persons function in several and at times conflicting capacities is a major challenge for any developing country. 

Good governance also depends on a strong managerial and ethical culture in the private sector. Even if this existed some time ago, the exodus from the country, poverty, illiteracy and lack of institutional capacity have rendered good and effective governance a difficult proposition. It is like starting from scratch with the bare minimum of resources.