Ismail Lagardien: Capture paves path to ruin

Ismail LagardienThe National Development Plan (NDP) is clear: avoid institutional and state capture. Five years ago, almost to the day, on November 11 2011, we presented the first draft of the NDP to the Presidency of South Africa.

It was one of those days when you feel especially proud of the work you have done, but you remain aware that there is a lot more to be done.

Eight months later, on August 15 2012, the revised NDP was handed to South Africa in a joint sitting of parliament where all political parties supported the plan. Even then, we knew that there was a lot more that we could have done.

Those of us who worked on the NDP – from the commissioners to member of the secretariat – knew that we had produced a good plan. We knew that it was an almost great plan.

We also knew that we could have produced a plan that surrendered to any one of the ideological tendencies that swirled around society.

We remained focused, nonetheless, and put together a plan that was based on the resources we had, as a country, on conditions as they existed, and projected a future that we thought was possible. It seems rather passé, but you can only work with what you have.

The NDP is the most comprehensive plan for South Africa that had ever been tabled and that has been produced since. It built on the spirit of the Freedom Charter, the constitution and the pledge of the Nelson Mandela government, and incorporated the disparate plans produced over the first 18 years of democracy into a single document.

No prior, nor subsequent plan attempted to address almost every aspect of South Africa’s political economy – from healthcare, community safety, job creation and education to a professionalising of the public service and more – into a coherent whole.

There were many stand-out features of the plan that can be discussed in great detail. The one that is relevant for this discussion is the chapter that deals with professionalising the public service and stamping out unethical conduct among employees in public institutions.

So, with the issue of state capture coming into focus in recent weeks, I have been thinking about the ways in which privilege, access, the sharing of opportunities, patronage and nepotism, and the culture of do ut des, the Latin equivalent of “you scratch my back, I’ll scratch yours”, pervades public institutions.

These practices are at work across the public sector and result in significant rent-seeking – the use of institutional resources for personal pecuniary gain – and it can help us understand the notion of state capture. Rent-seeking more broadly defined to include the sharing of privilege and opportunity also helps us understand institutional and cognitive capture.

These forms of “capture” of a particular institution by a coterie or a cabal of persons is often used for personal gain or for entrenching their power and influence. This is as true globally as it is within sub-national institutions.

One of the causes of the 2008 global political economic crisis is, precisely, the fact that Wall Street bankers had “captured” public policy-making in the US, which resulted in cognitive capture. All together this amounted to the control over knowledge and information, and sharing of opportunities.

In his masterful account of the crisis, former International Monetary Fund chief economist and immediate past Reserve Bank of India governor Raghuram Rajan explained that these forms of capture better explained the cronyism that was at the base of contemporary capitalism.

On its part, the NDP is quite crisp and forthright on the vision of a capable development state. Employees in public institutions should do the work they are employed to do, as a first order priority.

There can be no shirking of responsibilities or manipulating legal systems for unethical pecuniary gain or privilege. Linked to this, the NDP stressed that persons who worked in public institutions had to be prevented from doing business with these (same) institutions.

It does not matter how it is spun, but making extra money on the side, sharing of opportunities among one another, and among political affiliates, will cause chronic weaknesses in the system, and can amount to ethical collapse.

On this basis, the NDP is clear. Governance structures for public institutions (including state-owned enterprises) should be simplified to ensure clear lines of accountability, stable leadership and transparency. It all starts, I believe, with irregularities being shaken out of the system, and opening up of institutions to greater diversity of thought and expertise, more efficient and effective operations, and above all avoiding lapses in ethical conduct.

When we review South African political economics of the past several weeks, it is quite apparent that institutional and cognitive capture has set us on a path to ruin.

We may not be able to change the entire system anytime soon, but we can start cleaning up our own individual backyards. If we are to achieve the vision of the NDP, we would do well to “liberate ourselves from conditions that hinder the flowering of our talents” – and not prevent our fellow citizens from reaching their own destiny.

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