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Opinion

Rightsizing

FIRST PERSON - Alex Magno - The Philippine Star

What the administration really wants, and what we all need, is “downsizing.” We have a fat, overpopulated bureaucracy that cries out for some trimming down.

What we are told is that the administration intends to do “rightsizing.” This means the bureaucracy will be reorganized in the most optimal way, adding personnel where that is needed and getting rid of people who hold redundant jobs.

“Rightsizing” could actually lead to “downsizing” if done correctly. It could lead to “upsizing” if badly executed.

If I recall correctly, the last time a comprehensive reorganization of the bureaucracy happened was in the late seventies, after Ferdinand Marcos Sr. put the country under martial law and promised a “revolution from the center.” A commission was organized to review the bureaucratic structure with an eye to streamlining it. I remember, as a political science student, we were required to closely study the rather voluminous report of that commission.

A separate commission was formed to study the educational system and propose reorganization measures. We might have to organize a new commission for the educational system.

The new Marcos administration might have done better if it announced the formation of a commission to do a comprehensive study of our bureaucracy. That is the necessary first step. The recommendations emanating from that commission could form the basis for any reorganization.

There is peril in reorganizing government without a comprehensive plan. After she took power in 1986, Cory Aquino promised to trim government. By the time she left office, the public payroll was substantially longer than when she came.

One major reason for the ballooning of the bureaucracy during Cory’s time was the enactment of the 1991 Local Government Code. In the name of “devolution,” local government units (LGUs) went on a hiring spree using their share of the budget. The hiring spree was beneficial to incumbent officials. The best way to buy votes is to hire the voters, thereby shifting the cost of political maintenance to the public coffers.

An unreasonably large public payroll is a drag on any nation’s development. Since the payroll takes precedence over capital expenditure, a bloated bureaucracy eats up whatever may be available for economic investments. Since we operate on a chronic budget deficit, any economic investment can only be funded through borrowing. This is why our infrastructure simply deteriorated during the two decades we were working to climb out of our debt hole.

When I worked for former president Fidel Ramos, the unwritten rule was to frontload the economic reform agenda. Reforming the bureaucracy took the back seat. No president wants to fire at his own army. This is why no president in the post-EDSA period put real priority on reorganizing the bureaucracy.

Besides, reforming the bureaucracy is a costly proposition. When we dismiss or retire civil servants, government must shell out separation and retirement pay packages.  We might have to borrow to execute a reorganization plan.

The benefits of bureaucratic reorganization accrue further down the road, too late for one administration to actually benefit from it. This is why there is little political motivation to undertake reorganization.

Meanwhile, the bureaucracy just grows and grows. It is, after all, an organism designed to corner as much of the budget as it could to expand each agency’s turf. Adding personnel positions is the best way for an agency to (at the very least) secure its share of the budget year after year.

I suspect the two areas of the bureaucracy that grew fastest over the past three decades are the local governments and the legislative branch.

It has been noted that local governments tended to add to the payroll rather than make economic investments as their share of the internal revenue allocation grows. Over the next few years, because of the Mandanas ruling that gives local governments a larger budget share, the additional funds would likely go to hiring than to pump priming local economies.

Our Congress has been growing its budget over the past years. The institution has power over the public purse and that translates into larger appropriations for itself.

Using an old formula covering a certain population size to merit district representation, we have grown the number of congressmen. In addition, the party-list system (based on an anomalous representation method) adds 50 or so seats to the House of Representatives.

Each congressman hires staff that, in turn, requires a larger operating expense. Each committee requires more honoraria and allowances, as well as more staff members. There is no check on this. As an independent branch of government, the chief executive cannot discipline congressional spending.

The result is a Congress with the highest cost per piece of legislation passed. It could also have the most obscene concentration of people paid to do nothing in particular. There are thousands of horror stories to tell relating to this.

When President BBM announced his policy of “rightsizing” government, it is generally understood the policy applies principally to the regular agencies of the executive branch. Indeed, he began applying the policy to agencies directly under the Office of the President.

Employee unions in the executive branch quickly raised a howl, making the false argument that cutting the public payroll would somehow jeopardize our economic recovery. What they really want is to preserve the status quo that unfortunately involves keeping employed civil servants doing nothing in particular.

It is not clear how President BBM will pursue his policy of “rightsizing.” He might consider assembling a commission of management experts to validate the program.

RIGHTSIZING

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