The impact of globalisation on public
administration in developing countries is, on several fronts, posing serious
challenges. The impact of market forces on public services is bringing about
adverse repercussions. The privatisation of public enterprises, especially the
loss making units are unable to get suitable buyers and are hence being sold at
low prices. The situation prevails in India also, where the privatisation is
being faced with a lot of resistance. As Self (2002) observes “Privatisation
came at a cost in the form of increased unemployment (especially among older workers),
that put pressure on the welfare budget, human effects (in loss of pride and
purpose among workers made redundant), and increased economic inequality (with
a rise in profit and fall in wage in the privatised industries)”.
The contracting out process is also
open to corruption and mismanagement. The process becomes immensely complex and
difficult to manage as the need for constant monitoring and supervision adds to
the already heavy load of work and cost of the public agencies. While the cost
for service provision could be reduced, the quality of service remains lower in
some of the countries. These problems offset some of the financial gains
achieved by marketisation for increased managerial responsibilities.
The introduction of user fees goes against
the principles of equity and ability to pay. In developing countries, this
approach is likely to lead to higher cost of essential services that a larger
section of the impoverished population may be unable to afford. The consequence
could be a deepening of the already existing inequities and intensified
dissatisfaction and dissent among the citizens. Many developing countries
including India are being pressurised by World Bank to increase tariffs and
withdraw subsidies across a number of areas.
As Huque points out, the process of
marketisation of the public sector in developing countries leads to several
associated problems. Firstly, the highly publicised gains in efficiency and
reduction in public expenditure is often surpassed by the extremely high indirect
costs and artificial enhancement of productivity, small savings in terms of
money and manpower are attained at the expense of some of the fundamental
principles of public service as well as loss of confidence of the public in the
competence of the government and its agencies. Secondly, there is an erosion in
the power, credibility and legitimacy of the governments. Weak governments in
developing countries have little bargaining power in their dealings with the
resourceful, organised and highly competent service providers from the private
sector as well as the influential international agencies and multinational
corporations. Thirdly, consumers of public services are already in a weak
position in developing countries due to inadequate protection from the
government and the existence of regulations titled in favour of the service
providers. As a consequence, the consumers emerge as the weakest party after
the introduction of marketisation in public administration.
The developing countries are yet to arrive
at a stage of development where the provision of public service can be handed
over to private providers without the risk of major disruption or threat to the
interest of the consumer plans. Privatisation will not appeal to the citizens
unless the costs and benefits are carefully calculated and demonstrated to
benefit them. The marketisation of public administration at the insistence of
donor agencies has led to a host of undesired outcomes. Instead of making
governments more economical and efficient and consumers more powerful and
conscious, marketisation of public administration in developing countries has
eroded the power of the consumers and the governments, while contributing to a
stronger position for the private sector and international agencies.
Globalisation and associated changes
are facilitated by the establishment of knowledge based societies and a certain
level of sophistication in information technology, but most developing
countries talk about the basic features necessary for performing public
administration functions. In spite of promises and pressures towards
marketisation, corporatisation, privatisation, customer-orientation and
development of the third sector, the results are far from satisfactory in the
developing world. At the same time, the methods and mechanisms for establishing
a system of democratic governance, characterised by accountability and
transparency are yet to be materialised.
However, it is not to be construed that
market-oriented reforms are not suitable for improving public services in
developing countries. There is, in fact, a need for initiating reforms in the
basic social, political and economic activities that would prepare the grounds
for the introduction of reforms to roll back the State, recover costs from users
and expose public service providers to the market forces in order to bring out
the best in them.
Globalisation has come to stay and as
Tony Blair, the British Prime Minister, once commented, it is, irreversible and
inevitable. Presently, one observes that globally the new managerial forms such
as reinventing, reengineering, structurally adjusting etc, designed and
propagated by the corporates are gaining prominence. At the same time, there
are counter pressures generated by citizens who are demanding participation,
transparency, efficiency, social justice and democratisation.
It is being felt that globalisation has
benefited only a few, and the majority, especially in developing countries,
continues to live in deteriorating levels of poverty. This is mainly due to the
increasing powers being exercised by multilateral financial institutions in
these countries, which is reflected in their economic and social policies.
Hence, time and again, there have been anti-globalisation protests the world
over voicing concern for the decreasing democratic norms. Joseph Stiglitz
(2002) comments. “If globalisation continues to be conducted in the way that it
has been in the past, if we continue to fail to learn from our mistakes,
globalisation will not only succeed in promoting development, but will create
poverty and instability”.
A three day Congress of political personalities
from around the world in Sao Paulo, Brazil in October (27-29) 2003, passed a
Declaration which called for “Reshaping globalisation, which favours rich
countries and corporations to the detriment of the Planet’s poor”. The
declaration decried attempts to dismantle all forms of global governance to:
minimise the role of the Untied Nations, undermine multilaterial institutions,
promote unilaterialism and the consecration of the market; and impose the will
of the powerful to decide the future of the mankind.
The predominant viewpoint of the
developing world is that the process of globalisation, needs to be active,
orderly and cooperative to serve the common interests. It is being widely
asserted that the concept of development needs to undergo transformation
through effecting changes in policies and institutions. The Neo-liberal
argument, which gave prominence to market forces, has been supplemented by
renewed accent of the World Bank, IMF, and WTO on poverty reduction, equity,
participation, human rights and partnership. This new trend is called the
Pragmatic Neo-liberal Development Model. This Model favours market-oriented
reform accompanied by investment in human capital, infrastructure, safety nets,
democratisation and rule of law. The Pragmatic Neo-liberal Development Model
can be diagrammatically presented as: Pragmatic Neo-liberal Development Model Investment
in Human Capital and Infrastructure State Rehabilitation and Capacity Economic
Prosperity Building + Safety Nets Democratisation and Rule of Law Source: Atul
Kohli, Chung-in-Moon, George Sorensen, 2003, States, Markets and Just Growth, United
Nations University Press, Tokyo.
This paradigm features a market-based
strategy with the following features:
• It is holistic as
it encompasses political and social in addition to conventional macro-economic
dimensions
• It is synergistic
as these dimensions are complementary and mutually reinforcing
• It is complex as
efficient market systems are deemed to require the supportive action of
effective Nation States.
Joseph Stiglitz (op.cit.) also
advocates developing and using more policy instruments to pursue broader
objectives of development, including sustainable, egalitarian and democratic
development. He argues that the new paradigm for development should seek to
explore ways to achieve an overall transformation of society effectively. He
prescribes a crucial role to government to promote competition and act as a
referee in the market economy, and encourage provision of public goods by the
private sector.
Globalisation process has taught some
lessons (positive as well as negative), especially to the developing countries.
It has brought to the fore the need to appreciate the significance of
indigenous local systems of administration and governance, as well as adapt
them in accordance to the new trends in globalisation. The process of
globalisation, in the context of developing countries, has to bring in
political, economic and social empowerment to the local level so that they may
achieve sustainable participatory development in an equitable and just
environment. Any discussion on creating an adaptive environment to the new
trends in globalisation has to give prominence to the concept of Good
Governance about which we shall be discussing in Unit 17 of this Course. It is
Good Governance that can foster democracy, fairplay, justice and equity. Good
Governance must ensure sustained development opportunities for the poor and
deprived people of the world. It entails, among many other things, new economic
policies and institutions, as well as new life styles and preferences. Above
all, as has been pointed out, it must be able to reconcile individual advantage
nurtured by the market with a tolerant concern for all.
CONCERN
FOR GLOBAL JUSTICE AND ACCOUNTABILITY
As the inexorable processes of
globalisation proceed, there are bound to be major issues of global justice
that need to be faced. Stiglitz (ibid.), for instance, talks of ‘more humane,
effective and equitable globalisation’ and suggests five high-priority goals in
this context: ‘honesty, fairness, social justice (including concern for the
poor), externalities (protection of life and promotion of security), and
responsibility (individual decision makers to take responsibility for their own
actions and for the consequences of their actions). Similarly, special emphasis
has been laid on ‘participation’ in the sense that the agencies responsible for
global level decision-making must allow people to voice their views and
opinions in respect of the decisions that affect their lives.
A direct appeal for value-based and
justice-oriented approach has been made by John McMurtry (1998) in his Unequal
Freedoms: The Global Market as an Ethical System. He has given a call for
establishing and elaborating a moral framework for globalisation and a system
of justification. McMurtry focuses on the underlying values that drive
globalisation, including what he refers to as the value programme in which assertions
such as “We must compete in the new global marketplace” are seen as given,
natural, unalterable. As he argues, in a value programme:
‘All people enact its prescriptions and
functions as presupposed norms of what they should do. All assume its value
designations and value exclusions as givens. They seek only to climb its ladder
of available positions to achieve their deserved reward as their due. Lives are
valued, or not valued, in terms of the system’s differentials and measurements.
All fulfil its specified roles without question and accept its costs, however
widespread, as unavoidable manifestations of reality’.
The value programme, as McMurtry
bluntly states, underlying the global market system consists of “Efficiency of
factor allocation, comparative advantage, increased export earnings, rise in
market share, increased Gross Domestic Product (GDP) performance and annual
incomes, and, above all, vastly increased returns on investment in an area of
chronic underinvestment”. The major assumption is that the global market system
is superior to any other. The underlying premise is that the private sector is
efficient and the government is inefficient. Thus, “Whatever the market does is
good, and whatever government does is bad, unless it can be shown to serve the
market”. So, what is clearly evident is that the value programme of
globalisation is a closed system of choice; the acquisition of money drives
society, and the impact on the civil commons is either ignored or discounted.
But, as McMurtry asks, if the common interest is not protected and advanced by
the State, then the State loses the justification for its existence.
Globalization involves decisions by a
network of organizations whose coordination seems nobody’s business. Crucial
decisions are being taken by a variety of international actors whose
accountability remains an unanswered question. In this context, the insightful observation
of Joseph Stiglitz (op.cit.) deserves to be quoted: "Unfortunately, we
have no world government, accountable to the people of every country, to
oversee the globalisation process in a fashion comparable to the way national
governments guide the nationalization process. Instead, we have a system that
might be called ‘global governance without global government’, one in which a
few institutions -the World Bank, the IMF, the WTO - and a few players - the
finance, commerce and trade ministries, closely linked to certain financial and
commercial interests - dominate the scene, but in which many of those affected by
their decisions are left almost voiceless.”
The United Nations Development
Programme (UNDP) report on ‘Accountability in Global Governance’ has also
reinforced this notion: globalisation poses a real problem, particularly for
the Third World countries who are vitally affected by international decisions,
which they are often unable to influence and in which they are not always
participants. The UNDP points out that it: “It is easy to imagine that if all
governments in the world were both democratically elected and equally
represented in international organisations, there would be far less of a
problem of accountability in global governance. However, it is worth noting
immediately that even in such an ideal world, the capacity of people to hold
international institutions to account would still be very limited.
In the first place, there is an
unavoidable ‘democratic deficit’ in international organisations because people
do not get directly to elect (nor to throw out) their representatives on the
WTO, the IMF, the World Bank or the United Nations Security Council. Instead,
those who live in democracies get to elect politicians some of who form a
government, which appoints ministers who represent and choose delegations to
represent a country. For this reason, even in an ideal, universally democratic
world, international economic governance is removed from representative
government. Even if they so wished, citizens could not use their votes
effectively to influence, restrain or hold to account their government in its
actions in an international organisation. And even less directly in countries
with highly developed systems of parliamentary accountability such as the
United Kingdom, the oversight by Parliament of international institutions is
weak. In most developing countries it is yet weaker. Thus, globalization leaves
the question of ‘accountability in global governance’ wide open.
Thank for reading.
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