COLUMN: Algorithm for change in the public sector

Namik Čolaković
Namik Čolaković

The functioning of the public sector is a chronic problem for all countries that have undergone or are still undergoing the transition process, so that everything that is detected as contentious and negative in the process and that needs to be changed is present in BiH. Most of these deficiencies have already been recognized, defined and thematized in numerous studies, analyzes, expert and scientific papers and expert opinions, and they relate primarily to the cumbersomeness and complexity of the state structure and accompanying administrative apparatus, misunderstanding of the real role of the public sector in the modern age, and incorrect and the unprincipled participation of the political establishment within this structure.

Given that the range of public sector structures is very complex and broad, encompassing public administration with ministries, agencies, regional and local government bodies, public institutions, public enterprises and monetary and non-monetary financial institutions, this implies that research in this field is specific and extremely demanding.

Generally, more comprehensive and thorough public sector research in the world emerged during the economic crisis of the 1970s. On this occasion, several methods of analyzing public sector efficiency were developed and the first analytical models sought to find out whether larger public sectors and public expenditures also contribute to increasing social utility and social well-being. In the years that followed, these analyzes and methods were qualitatively improved from both macro and micro aspects, with macro analytical methods focusing on the efficiency of total public spending, and micro analytical treating the consumption of certain categories of public expenditures and determining the cost/benefit ratio in individual budgetary functions.

In principle, the efficiency of the public sector is viewed through the relation between fiscal benefits and the quantity of public goods versus the quality of public services, where the measure of an efficient public sector is the quality of public services provided and public goods produced. This leads to the conclusion that an efficient public sector brings customers a higher level of quality of public services provided and lower prices and vice versa.

There are several areas of socioeconomic indicators that can influence the growth of public sector performance, which include administration, education, health, infrastructure, income distribution, stability and economic performance. Each of these indicators also have sub indicators, so for example the administration indicator contains sub indicators – the level of corruption, bureaucratic procedures, quality of the judiciary, and the grey economy. Most public sector indicators are measured and ranked at the level of the World Economic Forum in the Global Competitiveness Index, where all interested public and private leaders are provided with impartial information, enabling them to adequately shape their strategies in line with the requirements of modern times.

The transition process has shown that in all countries that have been or are still part of this process, a change in the public sector is needed, which should ensure the efficiency, fairness and equity of all users, but also become a basis for competition in institutions at all levels. The challenges of the new age have directed all the public sector institutions to very complex requirements, which need to improve the current situation, and the whole concept of these changes has put into focus the real needs and demands of users. The question is how much BiH society is prepared for such a turnaround, and it is obvious that the extent of the changes required would require radical interventions.

Perhaps the recipe lies in embracing Japan’s kaizen philosophy and practice of continuous improvement, based on a concept that, instead of suddenly generating major changes, continually approaches improvement and focuses on making small improvements over time. Ultimately, these small improvements could lead to desired changes. The thoughts of the great British and world statesman Winston Churchill can be cited in support of this: “You can make progress every day and every step can be fruitful. However, there will be an ever more permanent, ever ascending, ever better path ahead of you. You know you will never get to the end of the journey. But this, because you have come this far, does not discourage you, it just adds joy and magnifies the climb.”

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