CONFERENCE ON DEMOCRATIC TRANSITION AND CONSOLIDATION
Working Group 6: The Reform of the State Bureaucracy
Coordinator: Byung-Kook Kim
The Reform of the State Bureaucracy
Béatrice Hibou*
Session 4 questions A et C
* Do privatisation, downsizing, deregulation and decentralisation do what they claim
to do: raise efficiency, cut down deficits, expand consumer’s choice and further democratic
consolidation ?
* Has privatisation simply replaced public monopoly with private monopoly? What is
the value of privatisation if it does not strengthen competition?
* What shouldn’t reformers do when reforming state bureaucracy?
What is privatization beyond a lesson in the rules of the market incarnated in
competition?
Privatization can no longer be thought of as the sole modality for the transfer of
assets from the public sphere to the private sphere. Today, privatization is applied not only
to public companies, but also public services (through concessions and delegations),
economic resources (the appropriation and exploitation of natural resources and national
heritage), functions once undertaken by the state (labor management, economic regulation),
and even the regalian functions of the state (customs, the tax system, interior and exterior
security). In other words, privatization now touches upon modes of government in and of
*
The following observations derive from research conducted over approximately ten years in African and
North African countries, as well as in Greece and Portugal.
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themselves. Beyond the effects of competition, this is no doubt the most important of its
consequences.
Evidently, according to elementary economic principles, the privatization of public
enterprises and the transfer of property signifies:
• a new mode of management
• the primacy of the criteria of efficacy and profitability
• the efficient allocation of productive resources
• the realization of a true “market economy”
• the inflow of new capital
But the modalities and the results of privatizations of public enterprises are always a
reflection of political systems, national historical trajectories, and the modes of insertion in
the international domain. They reveal, then, the state of political and economic societies
insofar as political logics also take place in the economic realm. The observation of
concrete privatization practice (and, more generally, liberalization reforms) suggests that
such reforms are in fact applied in a manner that deviates from the discursive precepts and
logics set forth in theory. Moreover, the sociopolitical effects of these reforms also diverge
significantly from planned results. For this session’s debate, I will underscore two
important points. First, measures that seek to diminish the weight and interventions of the
state in the economy do not signify real autonomy of the economic realm with respect to
the political realm. Second, despite demands from civil society and conditionalities put
forth in terms of “good government” and “capacity building,” reforms lead to the
reinforcement of both elites and regimes in power. The link between economic and political
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liberalization, which underlies the interventions of international founders and the prevailing
ideology of the international community, is far from coming to pass. To the contrary, the
margins for action for countries undergoing reform appear to be significant, at least from a
political point of view.
In this context, a point can be stressed. The myth of “rule of laws” stems from an
approach that stresses procedures, rules, and the law over the substance of public action and
regulation. Provisions are made for the determination of fixed and known rules that are
identical for all. The disengagement of the state (downsizing and process of delegation to
private entities) and privatizations are part of this framework insofar as they reduce pockets
of specific regulation and thus tend to diminish discretionary behavior on the part of the
political administration. Stability, transparency, and the predictability of rules and
economic texts are supposed to secure economic actors, accelerate growth, and favor
investment. And economic actions are supposed to be depoliticized due to strict definitions
of the public and private spheres, as well as of relations between them. Ultimately, implicit
definitions of the state and the public realm mobilize the concept of “rule of law.” The
implicit model is the so-called Weberian model of the rational-legal state and the
assumption that state interventions are bureaucratized and repetitive. This model
presupposes a certain number of normative and circumstantial principles, which are often
not made explicit as such. They include the unity of the principles of state action (legality,
universality, bureaucratization, direct control) and the duality of organization (clear
distinctions between economic and political goals, between the state and the market,
between public and private, between legal and illegal), which is based on the idea of fixed
and stable boundaries. Since the nature and the historicity of states vary from one country
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to country, this model of the idealized state put forth by theories of European state
formation and the attempt to impose the “rule of law” can only fail.
Taking into account all these considerations, the privatization of public enterprises
has necessarily a political signification, and a different signification in each country.
Broadly categorizing it, these privatizations can involve:
• a means of capturing resources for the profit of the reigning nomenklatura (Russia,
Poland, most African countries where privatizations actually occurred).
• simply cosmetic gestures that correspond to an organized resistance or strongly
entrenched political and bureaucratic power (Iran, Egypt, and many African countries
where privatizations were not actualized).
• a true attempt at rupture with the preceding order (the case of the Landers in the
eastern part of reunified Germany)
• informal practices (Mozambique, Russia, China)
• captured by parallel networks (Nigeria, Ivory Coast, Cameroon)
• used as a means to launder money (Senegal, South Africa, Mozambique, Russia…)
These privatizations are inscribed in particular historical trajectories and thus take on
precise meanings with respect to political economy and modes of government. Therefore,
the privatization of public enterprises can also correspond to:
• the modification of modalities associated with an “economy of pillage” (SubSaharan Africa, Russia)
• the exacerbation of factional struggles (Sub-Saharan Africa)
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• a strategy for the displacement of exterior rents (Sub-Saharan Africa, North
Africa)
• the increased consolidation of a circle of influential actors (Morocco)
• a strategy for the fragmentation of potential rivals (Tunisia)
• the institutionalization and affirmation of the principles of federalism (the eastern
Landers of Germany)
• the end of a political parenthesis and the return of dominant economic actors (the
case of Portugal at the end of the revolutionary period and the return of the “great families”
to the national economy)
In this context of privatization and liberal ideology, reforms of the state
administration entail a certain number of practices or measures that must be avoided or
regarded with circumspection
The cosmetic ministers and the government of technocrats. Countries undergoing
reforms generally know how to present the ideal profile of a minister:
technical
competence; apparent apolitical positions; the adoption of “modern” language and
discourse, as well as the latest jargon. But reforms do not issue from ministers, nor do they
simply arise from discourse. And hence one must take into account the real structures of
power that are often situated outside (or at least partially) of government. Another version
of this politics of facades lays in the formation of a government of technocrats. The
international lending agencies and the “modernizing” elite are both tempted to think that
economic and administrative reforms essential to the modernization and democratization of
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the country will take place more easily through the technical means and the depoliticization
of measures taken by the government. This of course denies the fact that reforms are
necessarily political.
By barring politics from the debate, political forces lose their
credibility and the process of democratization is implicitly hindered. Government has to
assume the political nature of reforms (be they economic, administrative or so on).
Constituting and utilizing an efficient and isolated group in the heart of the
administration.
In anticipating the results of reform processes, governments and
international lenders are often tempted to utilize such groups in order to put forth and make
acceptable new texts, new modes of intervention, and new plans of action. But this strategy
risks reinforcing the weaknesses, or even the demise, of the administration in place by: 1)
demobilizing other parts of the administration, 2) removing select technocrats who are part
of this central group from the difficulties involved with the concrete implementation of
reforms, and 3) by aggravating the loss of legitimacy of the public sector and accelerating
the creation of parallel economic and administrative structures; 4) taking time in reshuffling
organization and getting bureaucrats to adjust to new institutional arrangements.
Another variant: the partial and temporary privatization of public services.
Facing the enormous constraints and sometimes the demise of the administration, there is a
temptation to privatize certain regalian functions, such as customs, the tax system, and even
national security for a temporary duration (the time to “get the administration up to level”).
In these cases, private foreign companies (being mostly French, English, American, and
Swiss) take over the verification of accounts and the administration of public services. This
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measure is not only inefficient (due to the resistance of local people, the impossibility of
escaping the political origins of administrative inefficiencies, the absence of
apprenticeships), but it also often produces perverse effects, such as motivations for “wild
privatizations”; the delegation of state sovereignty to third parties, which can lead to local
resistance movements to foreign parties and the impossibility of continuing with
administrative reforms. In theory, national solution is always possible and even sometimes
preferred by government (but not always – for technical, political or corruption reasons).
But in reality, it is most often foreign companies because of competence or capital. Of
course, one can be less negative for privatization of enterprises. Anyway, the lack of
competence to control the specifications and more broadly the terms of reference the
contracts is a serious problem. So the government must not rely too much on concessionary
companies, but must develop also a competence inside the administration to be able to
control.
The suppression of discretionary public interventions. The almost immediate and
universal response to administrative corruption is to suppress the discretionary character of
state interventions so as to avoid all personalized interactions between agents. However,
the relationship between corruption and discretionality is not unequivocal.
Indeed,
corruption can allow for the creation of discretionality and flexibility when these are in
short order. Corruption is not a matter of technique, but is a political concern. Government
has to face this difficult issue politically.
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• The establishment of of purely technical measures destined to eliminate fraud
and illegal behaviour.
Computerization, administrative restructurings, repressive
techniques, the privatisation of surveillance, and so forth…obtain particularly poor
economic results since they do not account for social and political phenomena that are
inherent to fraud and illicit behaviour. On the contrary, these technical measures benefit
those who are most able to take advantage of new modes of accumulation, and to act in the
political realm in order to rework fraudulent techniques. In other words, fraud, smuggling,
tax evasion, black market, money laundering etc. cannot be fight by technical measures
only. In most country, there is an illusion of technicity. These phenomena are socially and
politically embedded and it is by political measures that government can fight them.
Government cannot only rely on technical measure (even if they can be useful, of course),
but must have the courage to see the political dimension of it (that is to say let the judicial
actors to do their work, punish the politicians that are implied…)
The obsession with new rules. The concrete implementation of good intentions
(establishing “rule of law” and legislating new rules) confronts the real functioning of the
political economies of countries undergoing reforms. This is less a matter of the absences
of rules, or the imperfect and even perverse nature of existing laws as it is a question of the
systematic circumvention of these rules and laws. Problems arise because legal or official
texts are not respected. Changes in legislation do not modify this behavior, which is based
precisely on strategies that seek to play off rules. The inadequacy of rules is not at issue.
Rather, the systematic non-respect of rules is what is at hand, both extant and new rules
being subject to the same processes. It is not only a problem of implementation. It is also a
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problem of conception of these new rules that are often “imported” from “models” in a
technical and partial manner and forget all the environment that make a new rule efficient.
The most obvious institutional arrangement to improve this situation is an efficient
and functioning independent justice system and a curb to impunity (most often political
impunity) .
The myth of transparency. Transparency is today one of the master words evoked
with reference to the principles underlying the rule of laws.
Indeed, the virtues of
transparency are obvious in theory. But in reality, they are far from proven: the dramatic
increase in information – which often gives rise to contradictory facts – does not simplify,
but rather destabilizes the formation of judgments and may even facilitate the expression of
particular interests associated with particular kinds of information. Furthermore, objective
information does not exist and its treatment is thus irrelevant.
Finally, the myth of
transparency goes hand in hand with the illusion of the possibility of the exhaustive
incorporation of information (even though selectivity is the constitutive principle of the
gaze) and the domination of simple ideas. Given this, more than transparency, one runs the
risk of communicating or transferring opaqueness.
Systematic liberal discourse. To the extent that administrative reforms (downsizing,
privatization and deregulation) are inscribed in a more general process of liberalization
reforms, they are inevitably subject to a congenital disease: the loss of credibility and
legitimacy of the “public” domain. Without entering into the details of the consequences of
such an approach, one point merits our attention: the absence of competent civil servants
for the realization of reforms and the brain drain (either towards the private sector or
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towards foreign countries). There is a contradiction between the liberal discourse on
privatization, deregulation, downsizing on one hand and, in the other hand, the need of
much more competence for the conception and implementation of these reforms.
The dangers of wide-ranging and urgent conditionalities. In order to respond to
the problem of widespread abuses and misappropriations, as well as the misuse of funds,
international lenders tend to put pressure on recipient countries and hence both reinforce
conditionalities and make compromise at all costs.
In the case of most states and
administrations undergoing reform, the result of this action is usually the inverse. Exterior
pressures incite governments to utilize double language, to put forth pretences, to
diversions and even illicit practices. The lenders often accept not quite orthodox
arrangements, including dubious, makeshift, and provisional solutions. Often they fail to
penalize abuses and counter-performances and doing so, they tend to weaken the very
institutions that are to be strengthened via reforms (namely, the state bureaucracy). Recent
experiences have tolled the bell for such conditionalities (which have been diverted by both
recipient countries and donors themselves) and call for a return to the original and narrow
definition of conditionality, that is to say, less a question of shorter list (which is different
from each kind of reform) than a question of conception of the conditionality (and the
original and narrow definition of conditionality was a financial one).. The consequence, for
governments under reforms, is to discuss with the leading donors in order to come back to
this original and narrow definition of financial consitionality. Conditionalities would be
restricted to specific programs (financing electricity plants, for example) and not be
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extended to reforms which are political processes before being economic or administrative
ones.
Emphasis put on sought-after results and not on actual practices. The donors’
attitudes, which insist upon desired results and disregard the means by which they are
obtained, have one unintended consequence: the informal and non-institutional
reinforcement of extant regimes. The priority placed upon objectives (“more market,” “less
state,” and “reforms at all cost”) over means used to arrive at them is such that donors are
particularly tolerant as to the ways and means by which African countries liberalize and,
above all, privatize. For most donors, the emergence of capitalism depends upon the
concentration of wealth and the rise of an entrepreneurial bourgeoisie. Moreover, the
adoption of management techniques by rational enterprises and the anchoring of market
mechanisms constitute the necessary and sufficient conditions for economic development.
Finally, donors are not all that concerned with either modalities for accessing wealth or
sociopolitical processes that accompany transformations in economic management.
However, it seems that quite troubling sociopolitical effects can issue from particular
manners of implementing reforms: increase of inequalities, of corruption, of
patrimonialism, even criminalization. If they really want to reform, the governments have
to get in mind all these sociopolitical effects to better negotiate.
The dispersion and fragmentation of state decision-making. Through their
expertise and their conditionalities, donors (World Bank, IMF, European Commission)
contribute to the breakup of the state’s centers of decision-making. This dispersion of
power and controls affects administrative efficiency, and hence its legitimacy.
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Furthermore, by aggravating the fragmentation of the administration and society, central
political power becomes more and more limited.
The inversion of legitimacy. Due to the supremacy of the international over the
domestic is particularly pernicious. It often has consequences for state legitimacy. For
example, insofar as political leaders depend largely on external resources to balance their
budgets (direct public funding; access to international financial markets because of
“credibility” stemming from the signature of structural adjustment programs with Bretton
Woods institutions; fiscal receipts obtained from large international investors - oil, mining assured by the adoption of reforms) or on access to modern administrative techniques, they
tend to pay more attention to the financial exigencies of international lenders than the
economic and political demands of citizens. Because international legitimacy is critical for
both economic and financial realms, this reversal relegates the quest for political and social
legitimacy to second rank. The loss of legitimacy of public power is thus accelerated by
this external priority, which has damaging consequences for democratization. A political
conclusion can be made: in terms of democratization and even in terms of efficiency of
reforms, it seems better for government to accept the difficult task to impose a national
political debate rather than to put the responsibility of difficulties on international lenders.
In conclusion, two points can be underline in terms of recommendations: first, that
we cannot think as if there was some “best” model or practice since all questions about
reforms are politically and historically embedded; second, thinking in terms of techniques
may be illusory since the roots of reforms (be they administrative, economic or
institutional) lies in the politics.
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