Choosing a Government

15^th February 2008

The Malta Independent - Friday Wisdom

This is not meant to suggest to any of my readers, whose vote may still be up in the air, which box they should tick on the ballot paper. In the end that is a decision everyone should take for themselves.

What I suggest is to analyse what realistic expectations we should have from our central government and what attributes we should look for in choosing one that can be expected to deliver best on our expectations.

Being the first election post EU accession and post euro adoption it is appropriate to reflect that the role of central government, while still important and decisive for our well being and development, is not as all embracing as it used to be.

The area of manoeuvre for central government has been substantially curtailed and will continue to be eroded as government gets slimmer, leaving more space for private initiatives.

EU rules are putting discipline on government as to what it can and cannot do. The government is no longer free to decide on administrative matters which go against the working of the single market or other EU principles.

As temporary derogations approach their expiry it is very doubtful if any of these can be renegotiated or extended unless we can trade them for our consensus on some crucial EU decision. Such events can hardly be pre-planned but have to be exploited as and when they arise using the necessary combination of negotiating skill and diplomacy.

Euro adoption has removed from government’s tool box monetary and exchange rate policy decisions, while fiscal policy has to be kept oriented towards reaching an overall neutral budget position by 2010. This leaves little room for traditional fiscal largesse for governments who over-promise to get into power.

At the other end of the spectrum local government has been eroding, with considerable benefit to the citizen, many of the capillary decisions that are best taken at local level. Governments are not only being compressed from the top and bottom but also from the sides where operational space has also been encroached by the forces of globalisation. These have forced governments throughout the free world to privatise many of the functions which traditionally were the domain of central government.

The need to allow free competition means that whole swathes of public services in sectors such as banking, telecommunications, postal services, logistics (port and airport operations) and gaming among others have migrated from the sphere of influence of central government to the private sector which is largely outside its influence (except for its regulatory functions). Such private operators generally tend to look more favourably to conservative governments who consider lower taxation as more effective than increased social spending for generating economic growth, although the strict divides between the left and right of the political spectrum have broken down as many parties attempt to occupy the central strip.

So given this reduced room for manoeuvring for central government and the prospect that exploitation of our economic potential to its maximum is likely to demand further roll out of the privatisation process (rather than whole corporations of which there are little left to privatise the next privatisation wave is likely to involve processes that currently reside with poor accountability and consequent low efficiency within the maze of central government) what attributes should undecided voters look for in choosing a government that could be expected deliver the highest level of economic growth on a sustainable level?

I propose three criteria for this purpose – freshness; inspirational vision; management ability to execute effectively. I am not sure whether these criteria could be prioritised by level of importance as essentially they are attributes which depend on and reinforce each other and are all critical for delivery of continued growth and stability.

Let me devote a short paragraph to each. Freshness is important for a government to carry on its work with enthusiasm and to shed off prejudices against new approaches for solving old problems. The eye has a habit of getting used, warts and all, to its normal environment and after sometime problems which stick out like a sore thumb to a fresh pair of eyes, become accepted normality to the accustomed eye. The chaotic situation of the approach to City gate is possibly the best example for this reality. So undecided voters will have to decide who can bring more freshness to government’s working. Is it Dr Sant who has been training for the job for sixteen years or is it Dr Gonzi who has already been at it for four years?

Vision is important for a new government.

Governments have to make up for the reduced space for operational manoeuvrability by being inspirational visionaries in order to stimulate private productive investments without which no government can deliver what is expected of it. Governments without vision or with the wrong vision could make a mess even if blessed with substantial natural resources. Venezuela and Zimbabwe are mere contemporary examples. Singapore in contrast, notwithstanding its lack of natural resources, has through inspirational and visionary leadership developed a go-go economy at the cutting edge of technology, shipping and financial services.

Lastly the government needs to have the ability to translate its vision into effective execution with management attributes of accountability and transparency through rigid application of governance rules. We need a government that does not shy away from taking the right decision rather than the most popular one. We need a government that explains the raison d’ etre of its decisions and commits itself to firm targets that can be measured. We need a government that makes its decisions based on meritocracy rather friendships and allegiances. We need a government prepared to appoint only a handful of ministers rather than a whole army of them, and then proceed to pay these few a salary commensurate to top jobs in the private sector but insist on full and total accountability of their operations so that corruption gets truly eradicated. Paying ministers peanuts and forcing them to give up their lucrative private practice bodes poorly for such prospect.

Choosing a government should go beyond emotions and be subjected to a process of rationality. Unfortunately we have quite often to choose from the lesser evil.