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June 18, 2017

Can the Panama Papers end corruption?


June 18, 2017

Imran Khan recently tweeted congratulations to the nation as a serving prime minister will be under rule of law for the first time. Taking the Panama Papers to their logical end has been Khan’s raison d’être since the story broke. Politically speaking, it has paid off. The House of Sharif is rattled and some of the mud has stuck. Finally, in the run-up to the elections, this will be a core issue whichever side the camel sits.

But can a successful investigation into the Panama Papers usher in an era of corruption-free rule? Can investigating Hussain Nawaz put us on the path to good governance and transparency? Can questioning the sitting prime minister, through a JIT, set a precedent for bureaucratic autonomy? The argument in favour goes something like this: it is important to set examples right at the top because everyone else in the hierarchy follows suit.

However, the issue of corruption and good governance is more complex than what our brothers in the PTI may want us to think. The Panama Papers are an exclusive case of high-level tax evasion and fraud through legal but dubious means. The case has little bearing on the daily corruption which takes place at the local level – municipals or towns – which most citizens fall victim to. Secondly, the problem of high-level corruption such as the Hajj, NICL/NLC scam, involving politicians and senior bureaucrats, is directly linked to the ability of anti-corruption authorities to investigate such crimes. In other words, good governance boils down to the performance of your civil service (bureaucracy) at all levels.

The road to good governance is long and arduous. The United States, for example, was rife with corruption very similar to us in the late 19th century. During the Progressive Era (1880-1920), a broad middle-class coalition comprising the New York Municipal Research Bureau, American Social Science Association and Bar Association of the City of New York led a movement for civil service reform. The Pendleton Act, 1883 passed during this time allowed for a merit based appointment system into civil service. But despite these changes, political appointments did not end immediately. In fact it took more than 40 years for the US to lay the foundation of a modern bureaucracy in the 1920s. Interestingly though, it was not simply a case of ideological anti-corruption crusaders fighting for a fair system of governance.

The middle class had an axe to grind. At that time, political parties had built organisations, called ‘political machines’, which operated by offering shelter and jobs to their members and in return mobilised them at election time. Most of these members were immigrants from Europe. America’s protestant middle class held these Catholic and Jewish immigrants in contempt. The middle class thought of itself as more deserving of access to state power as these new citizens were ‘uneducated and uncouth’. Sound familiar?

The UK’s reform process is over a century long. The Northcote-Trevelyan Reforms in 1854 created a system of competition for appointments. There have been at least seven major reform commissions in the UK since. Nonetheless, it was politics that defined these reforms. The British middle class, empowered by industrialisation, was seeking access to civil service which was hogged by the aristocracy until then. Unlike the US, Britain was not a full democracy at the time which meant that political parties did not have mass patronage networks through which they doled out jobs and other favours. Ironically, the absence of democracy made the case of reform easier for the British state.

Our most comparable case is India which saw numerous highs and lows in its journey to reform the civil service. In 1966, the government of India established a permanent body called the Administrative Reform Commission (ARC) with the mandate to recommend changes to the Administrative Services. A second commission was formed in 2005. There have been seven Pay Commissions in India which review the structure and emoluments of all central government civilian employees including defence forces.

However, India also saw rampant politicisation of its bureaucracy, epitomised by the 1975 emergency during which Indira Gandhi ruled through the India Administrative Service. Finally, there is a tension between the upper caste middle class, a proponent of merit and accountability, and the marginalised sections of Indian society which justify access to state apparatus on the basis of democratic values such as inclusion and equality. This is best captured by the opposition to Indian governments’ attempts to accommodate scheduled castes and tribes in jobs, legislature and enrolment through reservations.

If there is anything to learn from the global experience of civil service reform, it is that reform is a political (not technical) process. Like any political process, it can be a zero-sum game – which means that a win for one section or class is invariably a loss for a different section. Therefore, it is important that any attempts at reform should be holistic in a way that they do not put anyone at a disadvantage.

Secondly, there are no shortcuts to civil-service reform. A broad middle class coalition including civil-society, unions, media and others is required to lead a movement for any radical change and even if that is present reform does not take place overnight. Meanwhile, those who think our prime minister’s appearance before the JIT is a great feat of accountability are confusing the end result for the process.

The writer is a freelance contributor. Twitter: @abdullahz88

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