Ismail Lagardien: Making policy on the run

IsmailEconomic public policy-making in South Africa has come under severe threat. State institutions are in various states of collapse and public officials are unsettled.

Economic policy-making is done on the hoof. This does not bode well for the prospects of expanding the economy to absorb labour, inspire innovation, research and development, and for spreading growth and shared prosperity across all public groups in the country.

There is nothing that scares workers, investors, business people or banks more than uncertainty. Every worker would like to know that he or she will be rewarded for his or her work.

Every pensioner would like to be assured that he or she will get a pension at the end of the month – however small it may be. Every investor wants to know that his or her money will be safe.

And every parent wants to be assured that his or her child will get a decent education from a public school. This, at the most basic level, is what economic certainty is about. It is not about confirming textbook theories. With alarming frequency, new threats are presented at every stage of the policy process, with little or no consideration for the overall, long-term objectives of the state and of governance. This is either a very good thing or it is a very bad thing – depending, of course, on one’s personal disposition.

It is certainly true that creative disruption can lead to exciting innovations, but willful disruption driven by senses of erasure and revenge are necessarily disastrous. This was the lesson, anyway, that the Chinese communist party learnt after the calamitous cultural revolution of May 1966.

Nonetheless, in some ways, governance, leadership and accountability in South Africa are simply being undermined – quite often for reasons that are ill-conceived. In other ways governance and leadership are forced to reconfigure priorities in ways that may be detrimental to the long-term stability and the very sustainability of the state.

Under ideal conditions, and driven by increasingly progressive ethical considerations, economic policy-making usually starts with identifying society’s priorities followed by sequencing of policies, implementation, monitoring and evaluation over time. All of this is, of course, based on how much money the state can accrue through taxation, loans or investment returns, among others.

This is true across polities. Well, at least not in North Korea, the economy of which remains a mystery.

Put very simply, policy makers take a broad look at the country (and its publics), consider all social conditions and expectations, and then draw up a list of priorities and a sequence of implementations. Public officials and agencies of the state would then “get to work”, so to speak.

Over time, their work may include a wide range of activities, from establishing foreign trade relations, building infrastructure, investing in healthcare, education and community safety to setting standards. This is, of course, not exhaustive, but the general idea is that governance moves ahead on several fronts over time, with some issues enjoying greater priority than others.

For instance, the state would spend money on opening trade missions abroad, on innovation, research and development at the same time as it would invest in infrastructure and improve access to healthcare, education or public transport. The state would also be responsible for regulating or deregulating aspects of the economy, ensuring that private property is protected, that contracts are honoured, and that community safety and social security are promoted and protected. All of this takes time. We have, however, reached a point, in South Africa, where demands are being placed on the state to redirect resources in somewhat arbitrary ways, not all of which are unjustified, it should be said. However, the arbitrariness and almost weekly vacillations of political demands – by political factions and civilians across society – means that the economic policy-making process is disrupted often and that long-term planning and implementation have to be stopped periodically.

Under these conditions very little work gets done and the energies of public policy makers are spent on hastily finding new funds, reorganising priorities and addressing the demands of rebellions across society. They have to do so increasingly in the middle of budget cycles. In an era where revenues are declining and everyone is feeling insecure, there is little to gain from periodic raids on the country’s treasury. It is also foolhardy and short-sighted to bring the country’s most stable institutions into the ideological cross-hairs of political factions.

Couple this with the expectation that policy makers should respond to arbitrary demands by making public policies on an ad hoc basis – and we have a catastrophe in the making.

The idea that we live in a world of increased social and economic complexity, and of ecological uncertainties is increasingly valid. This places growing pressures on policy makers.

Certainty might not be achievable any time soon, but policy-making on the hoof is an even less attractive prospect. As it goes, the country will probably be heading into a tempestuous period of political activity.

Someone will have to explain to the poorest of the poor in rural South Africa that there are more important things than the failings of two decades of democracy.

Also read:

Bankrupting SA an option

Focus on improving basics

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