Public sector reforms
Education in Fiji - Part III
Last week we attempted to set the backdrop to the wave of reforms that swept through the public sector throughout most of the world in the 1980s onwards.
In the process, we went through a series of historical events and developments that eventuated in the need for drastic reforms in the public sector that would help curtail the ever-increasing public budget, alleviate and/or remove the burden of development from government and improve public service delivery.
There were a number of queries from readers regarding the links between these world events and public sector reforms.
There were also a number of requests for more on the developments highlighted.
Let’s begin by addressing those first.
World War II
THE passage to new public management-informed reforms from the late 1970s onwards is linked to policies adopted after World War II ended in 1945.
That war, often referred to as “the war to end all wars”, exacted some 70-85 million deaths.
This included 21-25.5 million military personnel, 29-30.5 million civilians and 19-28 million deaths because of famine or diseases in the aftermath of the war.
The photos of devastation in London and Europe that were posted in this column last week (20/01/24) clearly highlighted the enormity of the effort and finances needed to lift Europe back to its feet.
For those of you who were incredulous about the devastation of London, here is a bit of the facts leading to the Battle of Britain.
WWII started on September 1, 1939 when Germany invaded Poland.
After that, Norway, Belgium, Holland, Luxembourg and France fell in a period of just over six weeks.
As it became clear that the battle to defend France was futile, a huge evacuation effort (Operation Dynamo) followed where more than 338,000 allied soldiers were extracted from the beaches and harbour of Dunkirk between May 6 and June 4, 1940.
The Nazi flag went up in Paris in June 1940 as Hitler turned his baleful gaze on Britain, the lone symbol of defiance amid a vanquished Europe.
The Battle of Britain followed from July 1940 to May 1941.
This was a battle fought entirely in the air and ultimately the German Luftwaffe (air force) wilted against the determination of the Royal Air Force in September 1940.
After that, Hitler ordered systematic bombing of London for 56 days and nights.
These bombing raids continued till May 1941 when Hitler’s ill-fated focus moved to Russia.
Those bombings of London, which became unannounced and relentless night raids, are well caught in numerous novels.
The end result was a physically devastated London amid a drained Britain led by a pugnacious and resolute Sir Winston Churchill vowing to crush Nazi Germany.
The point is that both London and Europe were devastated by the Nazi Blitzkrieg as early as 1941.
More destruction was to follow until the middle of 1943 when the more objective Germany military analysts began to acknowledge the inevitability of defeat.
Of course, Hitler hated to hear this and the war was forced to shudder to a halt at his doorstep in a pulverized Berlin in May 1945. The rest is history.
What is important for this article is that the devastation left behind by that war warranted two sets of expenditures; one, money to cater for a jobless and homeless people.
And two, money to start rebuilding shattered countries and tattered economies.
This money largely flowed in from the US as the reconstruction of Europe began.
Readers will note that it was largely these European powers who had colonies all over the world.
In the case of Britain, it was said that “the sun never set in the British Empire”.
That empire could no longer be sustained because of more pressing needs at home, so the colonies had to be released leading to the decolonisation wave.
Decolonisation wave
The decolonisation wave of the 1950s and ‘60s followed in the aftermath of WWII.
It needs to be noted that with the establishment of East Germany in October 1949, the world was divided into an Eastern Bloc (led by the USSR) and a Western Bloc (led by the US).
Ongoing decolonisation led to the emergence of new nations that necessitated the establishment of a new world order.
These new nations also had to be supported towards adopting, maintaining and supporting proWestern democratic regimes as Marxist and Socialist ideals of poverty eradication, equal distribution of wealth, classlessness and egalitarianism appealed greatly to the deprived masses in these countries.
In order to keep these developing countries “within the fold”, aid and foreign investment became key instruments of influence and control.
This is why foreign involvement (or interference) was often seen in democratic elections in the developing world.
Anyway, as discussed in the last article, huge amounts of foreign aid money (and foreign investment) failed to translate into sustained economic development and growth in developing countries.
What did happen instead, largely because of mismanagement, corruption and a range of other factors, was that dependence on foreign capital increased.
Ever-increasing foreign borrowings ended with the debt crisis of the 1970s.
This fed into the prolonged global recession of the 1970s and ‘80s.
Link to the need for reforms
Now coming back to how these developments led to the need for new public management-informed reforms, we need to focus on the roles that governments had to adopt in the aftermath of WWII.
Firstly, they had to re-establish their public services.
Then, they had to package and implement emergency social welfare programs beginning with direct supplies of food, medicine and other essentials.
Thirdly, they had focus on kickstarting their economies focusing on sustained growth.
This applied both to the devastated economies of Europe as well as the newly independent nations in the developing world.
What is important for this analysis is that in the developed world, the public bureaucracy as well as the welfare component of the national budget began to grow unchecked with growths in population as well as growths in dependency of the population on government.
This experience was slightly different because it involved both economic growth as well as migration from developing countries.
In the developing world, the same sort of growth was seen in the government bureaucracy as well as the welfare budget.
The situation, however, became alarming because economic growth failed to match the needs of the country and dependency on ever-increasing amounts of foreign capital became a necessity.
An additional factor that fed into this equation was that governments became the primary drivers of development and growth.
Thus, major infrastructural development projects dotted the historical landscape as roads, bridges, hospitals, schools, etc. became national development priorities.
In the absence of reliable, committed and sustained foreign investment, especially in developing countries, government lobbied-for and used aid money for development projects.
The end result was that government became the biggest employer, social welfare programs became a necessary part of governing and foreign aid became an integral part of the economic policy mix.
We outlined earlier that establishing a new world order became important as newly independent nations began to look for international sources of assistance.
This played out in tandem with a division of the world into two blocs.
With the widely prayed-for fall of the Berlin Wall in 1989, that Cold War came to an end.
This meant that part of the reason for propping-up regimes and maintaining close alliances in order to keep countries within the chosen bloc, became less relevant.
The need to assist developing countries who were constantly falling short on governance, etc. was thus being seen differently.
Attendant financial burdens had to be shifted and a new model of development had to be implemented for economic growth.
In both the developed and developing economies the size of government had to be reduced with concomitant increases in opportunities for growth in the private sector.
I hope we are now able to see the links more clearly.
We will move onto the rationale and model for reforms next week.
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