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Opinion

Political economy of the size of government: What shakes and what Shapes


Bangladeshpost
Published : 22 Jun 2020 08:07 PM | Updated : 07 Sep 2020 08:12 PM

Jamaluddin Ahmed

(Continued from last day's section, Part:4)

The debate over the size of the cabinet is considerable. It is argued that large cabinets allow powerful stakeholders to influence policymaking as Campbell (1996) argued ‘’a large and broadly representative cabinet at least gives dissenters a sense that their stances have received consideration in the secrecy of cabinet deliberation’’. 

Campbell (1996) identified 7 general opposition to the reduction of cabinet size. These are, first: it requires creation of super ministries, which can run into constitutional or legal obstacle. Second: in the countries with government of political coalition get it easier to distribute 25 posts than 14. 

Third: the reduction of cabinet may reduce the scope of Prime Ministerial patronage.  Fourth: a trade off can achieve a good coordination within super ministries with coordination at the cabinet level. Fifth: the larger ministries may lead to the emergence of independent power bases for the super ministers and heighten the political stakes in case of conflict. 

Sixth: the reduction in the number of ministers in the cabinet reduces the chief executive’s ability to construct supportive coalitions. Finally, super ministries reduce visibility of junior ministers and hence the capacity of the cabinet to identify their talents or weaknesses.  

Opponents of larger cabinets argue that first: it loses general image of the highest decision making body of the country that comprises of a large number of ministers that a country can hardly afford. Second: it may be helpful to entrenched corruption accommodating larger number of stakeholders in the cabinet, as witnessed during 1990 in Bangladesh, Benzir- Sharif regime in Pakistan. 

One may recall available evidence that there was stalemate in the activities of the government as a result of clique among the members of cabinets in 1979-1990 periods.  Third: with a gap created for reason of clique among politicians, the bureaucrats mostly take advantage of handling the administration to isolate people from the politicians. 

Fourth: the large cabinet offer opportunity for creating an inner or ‘’kitchen’’ cabinet-an inner core of the most powerful ministers, friends and family members of the prime minister, leaders of the coalition parties in government, including the head of the government. 

Such kitchen cabinets have been experienced as a symptom of the weakness of the center. The very existence of the kitchen cabinet may result in the creation of unofficial and informal meetings of excluded and resentful ministers, ultimately resulting in creating chaotic politics within the government. 

For example, chaotic politics among the cabinet members during 1979-81 period may be identified as one of the causes of the undesirable death of the BNP’s founder president Zia. Subsequently after his death, the elected president Justice Sattar officially and publicly had handed over power, on the ground of corruption and chaos within the party, to military dictator Ershad who systematically damaged the democratic institutions. T

he kitchen cabinet has distinguished ancestry and had been  frequently used  during wartimes (Manning et al 1999). Fifth: larger cabinets become expensive in the foreign aid syndrome developing and corrupt countries. For example, countries like Bangladesh where salaries of the government employees are paid from public borrowings and foreign sources. In such context, Bangladesh cannot afford huge number of ministers more than thrice of the OECD average of less than 20 ministers.   

Currently, most cabinets in the OECD countries have around 20 ministers; by contrast, the average size of the cabinets was just over 18 during 1987-95 in the European and African countries. The highest average during that period was 32 in Canada and smallest was Switzerland, just below 8. Following some four decades of expansion after 1945, there has been light trend toward further reduction in the cabinet size of the OECD in the past decade. 

The Australian government reduced the number of government departments from 28 to 18 in July1987 and cabinet portfolios 16. The cabinet was further reduced to 14 in 1996. Similarly, Canada radically reduced the size of its cabinet in 1993. The Hungarian cabinet was reduced from 20 in 1987 to 15 in 1999. 

These are proven to be the beginning of downsizing the government from the top for right sizing of public sector. Because, reducing the role of public sector enlarges the role of private sector that is private institutions of the society. Downsizing of public sector means that less money is taken and spent by the government and more money left in the hands of the people, to be spent in the market place, broadly defined.  

Less borrowing by the government means that there is less crowding out in the market for money, and, therefore, more capital available for private borrowing and job creating investment. Currently, popular terms for the conceptual process of reducing the size, scope, role, and cost of government-shrinking government, some would say- are rethinking, dis-inventing, reinventing, reengineering, and privatizing.

The result of the study conducted by António Afonso  and João Tovar Jalles (2012) on 108 countries on the Economic Performance, Government Size, and Institutional Quality from 1970-2008, employing different proxies for government size and institutional quality reveal  several conclusions regarding the effects on economic growth of the size of the government: i) there is a significant negative effect of the size of government on growth; ii) institutional quality has a significant positive impact on the level of real GDP per capita; iii) government consumption is consistently detrimental to output growth irrespective of the country sample considered; iv) moreover, the negative effect of government size on GDP per capita is stronger at lower levels of institutional quality, and the positive effect of institutional quality on GDP per capita is stronger at smaller levels of government size. In addition, the negative effect on growth stemming from the government size variables is more attenuated for the case of Scandinavian legal origins, while the negative effect of government size on GDP per capita growth is stronger at lower levels of civil liberties and political rights.

(To be continued) 


Jamaluddin Ahmed is General Secretary, Bangladesh Economic Association and Chairman, Janata Bank