Friday, September 10, 2010

Detectives to supervise service delivery

It is widely acknowledged that the biggest failure of our government bureaucratic machinery lies in its inability to ensure the effective implementation of the myriad welfare and development programs.

Traditional supervisory mechanisms within the government suffer from numerous deficiencies. Apart from the badly mis-aligned incentive structure, dys-functional chain of command, and poorly motivated individuals, existing supervisory architecture is inherently over-burdened and over-stretched in many dimensions. Field supervisors invariably have too many locations, spread over too large an area, with a vast variety of activities, and all this without adequate training, logistics and resources.

In this context third party assessment, by a professionally competent and independent agency, has the potential to improve the quality of public service delivery and program implementation.

The theoretical case in favor of an external assessment is unexceptionable. It flies against any logic to have a supervisory mechanism constituting the very same people whose services are being monitored. Such independent monitoring is all the more important given the unmistakable shift in focus from a merely quantitative to a qualitative assessment of government's activities.

One of the biggest breakthroughs in improving the quality of public construction works in recent years have come from the introduction of mandatory third party quality control checks. Typically government departments call open competitive tenders and contract out engineering works - roads and drains, water and sewerage, buildings, etc - for execution through contractors and then the regular department officials supervise the quality of execution.

However, this arrangement posed the inevitable conflict of interest, wherein the supervisory engineers often colluded with the contractors to dilute the quality of works. In the circumstance, third party quality audits, consisting of random and surprise inspections of works at each stage, by competitively selected external agencies, emerged as a preferred strategy to elicit an independent feedback about the quality of works. In recent years, this has become a mandatory requirement in all projects being implemented by both central and most state governments.

Extending the logic of TPQC beyond engineering works, it is natural to deploy it in an independent assessment of various government programs. The services of independent agencies can be utilized to obtain feedback about the functioning of institutions like schools, hospitals, and even various government offices, apart from the quality service delivery in various government programs. They can range from the specific - which teacher, doctor or official is taking bribes or irregular in work or ineffectual, quality of a work or service delivered etc - to the general - sources of leakages or bottlenecks or delays in the delivery of a service, inefficiencies within the system, and so on.

Instead of the third party assessment duplicating the existing regular supervisory mechanism, a mandate involving randomly sampled inspections may be adequate. The certainty of follow-up action, punitive or remedial, on its findings will be powerful enough deterrent to ensure its effectiveness.

The critical ingredient for success in this market is integrity and credibility of the agency. In other words, third party assessment agencies are in the business of selling integrity. In complex socio-political environments, where the avenues for incentive distortions are numerous and mostly unanticipated, managing such a business can be a herculean task.

Most often, a successful engineering TPQC agency, which starts off as a team of a handful of committed people with exceptional integrity, loses the way as it expands to take in more work. In a rapidly emerging market, where success immediately begets more success, with a resultant proliferation of business opportunities, firms often bite off more than they can chew and in the process end up diluting their standards and ultimately losing credibility. With time, many of these firms end up being indistinguishable from the government supervisory mechanism.

Rigorous internal quality controls are therefore fundamental to success in this business. Once lost, credibility is very difficult to recover. The general lack of qualified professionals, coupled with the need to attract people with integrity and keep them honest, would require the development of a robust business model.

All this of course assumes that the head of the institution is himself committed towards improving the system, an itself often debatable premise. However, it cannot be denied that third party assessment equips officials with a hitherto unavailable and powerful force multiplier that dramatically increases their span of control and thereby supervisory effectiveness. In other words, all things being equal, effective use of third party assessment has the potential to considerably improve the quality of government service delivery channels.

Critics would surely allege that this is a back door entry of private agencies into the basic governance functions itself. However, it needs to be borne in mind that the success and widespread adoption of TPQC with engineering works has not generated voices calling for scaling back the regular engineering supervision.

However, it is important to be clear about their scope of work and objectives, so as to ensure that it does not become an excuse and cause for further erosion of the already weak regular supervisory systems. Fundamentally, the outputs of the third party agency should be a feedback for only the highest level of administration, preferably only the Head of Department, and should complement, not supplement, the role of the regular supervisory architecture. A third party assessment service would differ from a regular survey (or opinion poll), in the continuing and qualitative nature of the engagement with the agency.

For all those venture capitalists, in search of an idea to fund, partnership with the government in the creation of a competitive market for independent service quality assessment would do more than any other innovation to atleast partially address the persistently stubborn implementation failure of Indian bureaucracy.

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