By Hema Senanayake – 

Hema Senanayake

In brief, nothing happens without the presence of the necessary conditions. A French mathematician and philosopher namely Pierre-Simon Laplace documented this phenomenon in 1814 as the causal and scientific determinism. What does this mean? Let me explain it through a simple example. If you want to make a plane fly, then you need to set the aerodynamically necessary conditions in order to make it fly. This is exactly what aeronautical engineers do; they set the necessary conditions. In science Laplace’s above hypothesis is an important one. Subsequently this idea transformed to be known as “cause and effect” principle.

Venerable Maduluwawe Sobitha knows the idea of determinism in a different perspective. Being a Buddhist monk he knows well that the Buddha had told that, “There is a cause for everything that comes into existence and it ceases to exist when the cause ceases to be.”

In view of both scientific and Buddhist philosophical perspectives the sudden change that has been occurring in the political landscape must be the outcome of being set the necessary conditions. Venerable Maduluwawe Sobitha and a host of civil society activists including many professional organizations and trade unions have set the necessary conditions for this transformation. The society collectively demands “good governance.” Accountability is the basis of good governance. Everybody, including president himself must be accountable; the media should play the pivotal role of holding everyone accountable. The truth must be told about the president or anyone else.

The Opposition has promised to establish an All-party-government, if Maithripala Sirisena wins the election on 08th January 2015. What should be the size of the government? This is not the exact question in mind of Ven. Sobitha and other civil society activists. Rather they are concerned with the administrative part of the government and essentially not about the size of the government. For example JVP wants a larger government but a smaller administration. The UNP favors for a smaller government and a smaller administration. But none favors for a lager administration. Extensively large Cabinet of Ministers is symbolic for a large administration. On top of it there is an Executive Presidency which is costly as is alleged by JVP relentlessly. The common symptoms of such a government are waste and corruptions. Should this end?

A fairly young UPFA parliamentarian Vasantha Senanayake has been convinced that the concept of larger administration should end. A couple of months ago he suggested to reduce the number of ministries to around 25. He submitted this proposal direct to the President and tried to bring a bill to the parliament but due to whatever reason he himself withdrew the bill when it was taken up for debate. This was happened when he was with the government. Subsequently, he crossed over to the opposition side. The said proposal was to limit the number of Cabinet Ministers that could be appointed by the Head of the State through a constitutional amendment. This idea was well resonated with Ven. Sobitha and other civil society activists. It will be well resonated with many people even in the future.

However, in the MOU signed by and between the common candidate of the opposition and others, there is no clue as to the number of Ministers in All-party-government. But this is quiet understood since the MOU is a broader policy document. However, Prof. Rajiva Wijesingha writing an article recently said that the number of Ministers to be appointed by Mathripala Sirisena could increase from 25 to 35 initially. I am not agreed because of moral principles. Twenty five must be twenty five not thirty five. If they are concerned with providing opportunity for all constituent parties to participate in the administration then rotational arrangement would do the necessary compromise between the requirement and morale principles. However, the issue of morality is not what I wanted to write; instead I want to write about the economic fundamentals of the size of the government.

In general, the size of the government is determined by the size of the national budget. However the quantitative figure of the national budget is not good for comparison and for policy planning purposes. Therefore economists use the ratio of “budget to GDP”; whereas GDP stands for Gross Domestic Product. In 2008 Zimbabwe had the biggest government. Its budget to GDP ratio was over 90%. In 2014 this ratio for Sri Lanka is around 21%; in Denmark the value of the said ratio is 56%. The United States has a ‘budget to GDP ratio of 41%. It seems the picture is complex. Sri Lanka has a smaller government as at now in compared to all OECD countries. So, is it fair to complain about having a larger Cabinet and “costly” Executive Presidency”? Why this question is not answered by Dr. P.B. Jayasundera or other economists in the government or in the opposition? I do not have an answer for the last question but I may try to reply for the question one before the last.

Without looking at the economic efficiency factor we cannot answer this question. Economic efficiency is what matters the most. You may have a large government with high efficiency. That is the case with Denmark. Or you can have a larger government with rampant inefficiency. This was the case with Zimbabwe in 2008. Sri Lanka has a relatively smaller government (the ratio is 21%) in compared to India (the ratio is 27%) when determined by the “budget to GDP” ratio. Is MR’s government efficient than Indian one? Or how do we know that any government is inefficient? Let me explain briefly.

Economically the role of the government is to produce common interests for the wellbeing of the society. Education service is a popularly known common interest in Sri Lanka. The government is to produce this service. Whatever the expenditure incurred on the Ministry of Education is duly added up to the GDP calculation. But the wellbeing of children is determined by the quantum of service they consumed or used. The use of service is really taking place in the classrooms in the schools or in Universities or in any other institute. This is the service part what matters to the wellbeing of society. Also there is an administrative part without which the service cannot be produced. This part consists with the administrations of schools or Universities and on top of it the relevant Ministry. Now let us add another Ministry to this system. Is the wellbeing increased? No. Is the GDP increased? Yes, because the additional Ministry’s expenditure added to the GDP calculation. So, is the efficiency of the economy increased? No. Put another few Ministry’s to take care of the education. You now know what would happen to the economic efficiency and to the country’s GDP figure. In this example, when inefficiency increases the GDP too increases. Truly, that is the case with highly inefficient system of government.

Put all the Ministries and the Executive branch together; cut the administrative expenditure by half and put that half to produce real consumable services at the point of “consumption”; then you have the same GDP as before but the wellbeing of the members of society is reasonably increased. That is economic efficiency.

Therefore, in general, it is not the overall size of the government what should be concerned with by Ven. Sobtha and other civil society activists, when Maithri’s administration is set up hopefully. Instead, it is the shear administrative part which should be concerned with. So that, the civil society would be able to set the necessary conditions to have an efficient government. Explaining the economic efficiency factor is not fully over. But this is the beginning.