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For Effective Reforms In Sindh, Improve Public-Private Partnership

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Lack of accountability in Sindh has led to an under-provision of services, particularly to the province’s poorest and most vulnerable groups, and has undermined incentives for private sector investment, writes Raja Masroor Hassan.

There is a general myth that Sindh’s performances in its regulatory environment is positive, especially in partnership selection criteria and fairness of bids and contracts and its institutional environment, including the stability of its public-private partnership agency, resourcing of project selection and implementation, and institutional transparency and accountability.

UK-based magazine The Economist included Sindh as a ‘potential model of best practice’ in its study evaluating the environment for public-private partnership in Asian countries. But the magazine seemed to have ignored the fact that corruption is rampant in the province, and nepotism reigns supreme. Those who are supposed to work towards betterment of the people are instead benefiting themselves.

Public-Private Partnership, if implemented well, can help overcome inadequate infrastructure that constrains economic growth, particularly in developing countries. Poor infrastructure is often a reflection of constraints that governments face, for instance, lack of public funds, poor planning, or weak analysis.

Public-private partnership can help overcome these constraints by mobilising private sector finance and helping improve project preparation, execution and management.

It is about time this myth of Public Private Partnership’s effectiveness in the context of Sindh is busted for greater good of the province. The hype over the success of public private partnership is nothing but wishful thinking.

Sindh requires a new approach to ensure accountability and trust that combines supply-side and demand-side reforms.

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The creation of new forms and institutions alone is insufficient to tackle corruption. Past approaches to corruption have focused on such administrative actions like developing new institutions or improving the capacity of institutions through new technologies and imported rules – with little to show for them.

Such form-based capacity building is important, but is not sufficient if the underlying perverse incentives remain unchanged. To end corruption, we need more multi-faceted approaches rather than merely enhanced ‘policing’.

In particular, Sindh should mix supply-side changes that directly adjust the institutional incentives facing civil servants with demand-side reforms that enhance the role of citizens and firms in demanding improved performance.

To create a growth-enabling environment and generate better jobs across Sindh through private sector-led growth, the Sindh government must reform the way it governs the province, by improving accountability and transparency to restore the citizen trust in the state.

A lack of accountability has led to an under-provision of services, particularly to Sindh’s poorest and most vulnerable groups, and has undermined incentives for private sector investment. And the situation has deteriorated in recent years according to public opinion polls.

Without improving the governance environment, with particular attention to enhancing state effectiveness and accountability, sustainable growth in Sindh will not be possible.

Weak governance is a root cause of the inadequate quantity and low quality of service provision in Sindh. Inefficient budget management, reflected in low levels of public spending on HD and weak budget execution, compounds other systemic inefficiencies. Public resources are allocated unevenly across districts, and their distribution is not related to outcome indicators.

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Limited management capacity at the divisional and district levels leads to inefficient resource management and failure to effectively translate policies into action.

Poorly-defined intergovernmental relations and a wide rural-urban gap with an uneven balance of economic and political power serve to undermine political incentives for effective reforms.

 

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