INSTITUTIONS, PUBLIC MANAGEMENT AND CONTROL IN THE XXI CENTURY
BY
EDUARDO B. GRINBERG
A)Control and Government.
1)Nineteenth Century
2)Twentieth Century
3)Twentyfirst Century
B)>Institutional Role of Control
1)Classical Constitutional Theory
2)Modern Constitutional Theory
C)Wheel of Control
D)Content and framework of Control
Economic Content
a)Public Sector
Economic Design
Budget
III)Financial System
b)Private Sector
I)Control of Competition
II)Defense of Consumers
c)Decentralization
I)In Public Sector
II)In Private Sector
2)Non Economic Content
a)Strengthening
I)Institutions
II)Environment
III)Education
IV)Public Health
b)Combatting
I)Terrorism
II)Arms Trafficking
III)Drugs Trafficking
IV)Criminal Organizations
V)Public Corruption
E)Conclusion
INSTITUTIONS, PUBLIC MANAGEMENT AND CONTROL IN THE XXI CENTURY BY
EDUARDO B. GRINBERG
A) Control and Government.
1)Nineteenth Century
The nineteenth century represents the beginning of the modern state, where control was included inside the powers and faculties of the national legislature or Congress. But the natural development of Congress as an institution for legislation, or making laws, made it increasingly more difficult to carry out the control over the administration sector of the government with an effective performance. For this reason, different nations saw it necessary to create special organisms for getting real control related to administration. These organisms were Courts of Accounts in countries that were influenced by Continental European law (especially French law), and general controllers or general auditors in those countries that were influenced by the Anglo-Saxon system. The objective of the system in the nineteenth century was the legality of the acts and the judgment of the accounts, especially in the Court of Accounts. The economy and the effectiveness of administration were not included in the role of control. This issue was reserved for the Congress as an organism of control over the policies of government, where the court of accounts was not involved. Finally, we can say that the distance between control and government was wide.
2)Twentieth Century
The principal characteristic of control in the twentieth century was the control of the economy, and effectiveness of administration. In the old Courts of Accounts that were born in the European system, it was necessary to include these objectives. While it was being developed, control learned a new word. This is management. And the old concept of administration remained in history. In this way, we say that the distance between control and government was narrowing, in relation to the nineteenth century.
3) Twentyfirst Century
At the end of the twentieth century, peoples and countries, and all the world are witnessing and participating in the most important technological change, we think, in all of the history of humanity. The big revolution in information, transportation and communication has brought a new concept and a new word: "globalization". The real physical distances between countries and continents have disappeared. While during the last centuries, the twentieth included, any country could develop different policies in an isolated manner, in these times, and in the near future, it will be necessary to develop the management of governments in accordance with common policies. Isolation is the most dangerous attitude that any country can take. The open policies about economy and the new role of the public sector build the new framework. For this reason, the concern of control, besides economy and effectiveness, shall be involved in the design of the program of government. In this way, government and control shall walk shoulder to shoulder. What will be the new challenge in this issue?
B) Institutional Role of Control
1)Classical Constitutional Theory
All that we have said up to now is narrowly related with the development of the modern democratic system and new rules about constitutional systems. The old theory about the classical division in three powers is out of fashion. Around this classical system new powers and institutions were born to consolidate democracy in order to strengthen human rights to raise the real participation of the people and to achieve finally the best performance of the political system.
2)Modern Constitutional Theory
The new role of public attorneys, new mechanisms for consulting people, new organisms to evaluate the designation of judges and their performance that used to be a specific role of the national legislature, the strengthening of the press, and the appearance of new benchmarks for building an international system of justice for special types of crimes against humanity, complete the new framework where the new ideas bring to us new concepts about constitutional rights and make different the old vision of nation and sovereign. The most important challenge for people is to understand that any people of any part of the world are also their brothers and sisters. While the national constitutional systems that were observing one hundred years ago the human rights of the citizens in their own countries only, in these times they must watch what is happening not only about themselves but also about human rights and life standards in other parts of the world. This new framework is the source for a new role and performance of control . While in the classical constitutional systems each one of the three powers was the border of the others, the legislative, judiciary and the executive administration, nowadays the systems of control and judiciary systems are the two pillars over which the other multiple powers, as I have mentioned before, develop their roles. In this case, the challenge is to understand that the old differences between national and international markets, national and foreign citizens, national and international law begin to disappear. All that we have said is related to history because the old concepts of domination, confrontation and imposition must be replaced by cooperation, agreement, and integration.
C)Wheel of Control
As we said before, the characteristic of control in the nineteenth century was the control of legality. The control of effectiveness was the profile of control in the twentieth century. The performance of control in the twentyfirst century will be about government planning because control will also be a part of determining the objectives of government. The twenty-first century will accumulate legality of the nineteenth century, effectiveness of the twentieth century and its own characteristics, to be part of determining the action of government in this new century.
D)Content and framework of Control
All that we have said until now, presents a new framework of control that shows a strong institutional participation. For this reason, we want to say again that control of public management, and the judiciary control will be the two pillars over which other powers will develop their roles.
1)Economic Content
For this reason, we ask ourselves which points in government planning will be admitted or rejected by control in the next decades.
a)Public Sector
Of course, control will accept only a public sector that will obtain its objectives inside of a framework of legality and effectiveness, because in these aspects the circle begins.
I)Economic Design
But introducing control in government planning will accept or reject several definitions. We suppose that understanding the technology revolution in communication, information, and transportation, control will accept only economic policies that are open and will reject all of those policies that make a country isolated. To obtain this goal, countries should create rules for international trade, and other rules for domestic markets to obtain a real free market, and does not permit the existence of barriers that impede the connection of a country with the rest of the world. In this aspect of government planning, control will make a permanent surveillance.
II) Budget
From the last half of the twentieth century, we observed that the general rule about budgets was a continuous deficit. As a consequence of that, to overcome the problem, states printed money and the logical consequence of that was inflation, and the avoidance of local currency. Besides, the states also became businesspeople through public enterprises, especially in public services. In this way, with the absence of local currency, there was an absence of services for the people as a result of ineffectiveness. Revenues and expenditures were not related to each other. The projection of revenues in the budgeting process was the result of fantasy and a big imagination.
What must control do in the near future? What will be the challenge? The challenge will be to pressure and to force public management to obtain the real relation between revenues and expenditures to get an equilibrated budget. To get this it will be necessary to pass from the public to the private sector the enterprises of public services. The final objective after achieving this will be the existence of a real and stable local currency. Should control be an instrument to fulfill all of these goals? This is the challenge.
III)Financial System
The most important characteristic of the financial system in the twenty-first century will be an unregulated financial system where the entities that make it up will develop freely their activities. For this reason, it will be necessary to enforce on those entities many requirements, strengthening the overall system. Control should mark the guidelines and outlines for obtaining that objective.
b)Private Sector
I)Control of Competition
In the twenty-first century, there will be the existence of free markets in the private sector. Deregulation will be the characteristic of markets in the private sector. This is in contrast with what was happening in some decades of the twentieth century. We must remember different government rules about prices, established limits of production, and fixed portions of the market for commercialization. Many countries in the world incorporated these policies overall, after the crisis in 1929. The United States was the model during the presidency of Roosevelt who established a wide array of rules to solve the big crisis. It was in correspondence with a world in which isolation was the rule. But these kinds of policies are not applicable in the twenty-first century where globalization, that means the removal of borders, and each country should be connected with the others. As we said before, isolation is the worst attitude that any country could take in the coming years. For all of these reasons, when the markets develop their actions freely, there comes the necessity to apply a strong policy in order to set rules for the promotion of free and fair competition.
II)Defense of Consumers
The defense of the consumer like the defense of competition comprises an important part of the container where free markets will develop their actions. There is an interaction between these factors in order to establish prices, quality of goods, and to have a continuous supply for the consumer. The support of the free markets and the existence of good mechanisms for the defense of the consumer and competition will be one of the most important challenges in this new century.
c)Decentralization
I)In Public Sector
In the public sector, centralization in the execution of actions of government was characteristic of the idea of isolation and regulation. The decision about how to spend money was very far from what people needed. The government spent more money than necessary and people did not receive solutions to their problems. The opposite of this idea is decentralization that permits to closely align needs and spending. With decentralization, we can remove many steps in procedures that result in increased spending and become inefficient. But fiscal reforms will be necessary because we must ensure the closeness between resources and expenses. As a consequence of what we have just described, that we all know very well, we think that local government like municipalities, for instance, cities or towns, will be best positioned to permit us to avoid many instances of intermediation to get more efficient and competitively priced services. Finally, from this model, a new development will come of municipalities and these municipalities will grow like small public enterprises. Then the strengthening of local government means a strengthening of democracy, more participation of the people, and the best institutional quality.
II) In Private Sector
In the private sector, the challenge in the twenty-first century, will be an important development of small business. The problem in the private sector is the same problem as in the public sector because the big enterprises with the idea to make everything, fell in bureaucratic procedures and high costs. The big enterprise should be in the twenty-first century an enterprise of planning and engineering that emits guidelines and outlines , and the small business will be the subject in the execution of production of goods and services.As a consequence of the small business enterprises, we can get a better economic democracy, and a better distribution of wealth. Also with this process the highest institutional quality will develop.
2)Non Economic Content
a)Strengthening
I)Institutions
Principles of non-economic content are indispensible for better economic development. We must begin from the political system. All that I said before will be impossible in a dictatorial system where human rights would not be incorporated. For this reason, the great challenge in the twenty-first century consists in obtaining strong institutions in a real democratic political system. As we said before, the independence of justice and control should be the most important characteristics of new and strong democracies. No people can develop themselves in a country that is undeveloped ethically.
II)Environment
The fight against the bad environment, and the fight to get the best quality of life, will be another challenge. The development of production should accept new rules because it is necessary to understand that it is impossible to satisfy people with goods and services in an environment that does not contribute to the happiness of the people.
III)Education
We are perhaps now in the most important challenge in the 21st century. While in another stage of history, military forces, the development of agriculture and ranching, or the activity of factories, were the most important characteristics, without a doubt, in the near future, the key of development will be knowledge and information. For this reason, education is the central point of different policies in different places of the world. As this issue will absorb energy and resources, in each state, possibly education will be very expensive and also possibly different states will carry out education policy with ineffectiveness in spending money. For this reason, the development of education should be made using the concepts of decentralization that we talked about before. The execution of education policies should be in local government hands, with a very important participation from civil society, the family, and the private sector.
IV)Public Health
All that we have said about education, we can apply in another challenge of the twenty-first century which is public health. In fact, the federal government cannot solve the different problems about public health, and it is necessary, also, to open participation to civil society, the family, and the private sector. On the other hand, the regional agreements of governments (European community, NAFTA, Mercosur, etc.) should make the rules and build the instruments of control to achieve in education and public health the best effectiveness in the execution of different programs.
b)Combatting
I)Terrorism
II) Arms Trafficking
III)Drug Trafficking
IV)Criminal Organizations
V)Public Corruption
The twentyfirst century will have other kinds of challenges. Different peoples in the world shall watch especially enemies that can carry out policies that lead to harm. Each of the different points that we remarked before have a clear objective. Terrorism wishes to achieve the failure of institutions through violent means, impeding the development of the democratic system. Political changes shall be produced by the normal mechanisms of a democratic system to support stability in different countries. Arms trafficking is part of the terrorism action and criminal behavior, and for this reason must be combatted with precision. Drug trafficking has created a parallel economic system in the world, where the most significant victims are the youth and public health. The development of drug trafficking means the development of the deterioration of the world-wide society. It is necessary that the different states in agreement build the different rules and procedures to attack this enemy. We must pay attention to the different financial systems to avoid money laundering, and we must watch the origin of investments. Almost all of the points that we are talking about in this area are carried out through criminal organizations that must be attacked with the similar force and decision of the other issues we have talked about before. And finally, in our summary, public corruption shall be prevented and eliminated through the most principal instrument and institution that we have talked about since the beginning our speech: CONTROL.
E)Conclusion:
In this conclusion, we would like to include a new sector of society, perhaps the most important of them. This sector is related to the association of volunteers and non-governmental organizations. These institutions permit the people to mobilize for the benefit of the under-privileged levels of society. The action of this organization in very important issues like education, public health, and social assistance develop and strengthen the idea of decentralization. And this strengthening of decentralization means more participation. And more participation means more democracy. And then we have just arrived to the key of the 21st century because the world needs more democracy and the problems of people can be solved with democracy. In Argentina, former President Raúl Alfonsín, used to say that with democracy we can eat, we can cure, we can educate, and we can live. This is very true for all the peoples in the world. To get democracy in all the countries of the world is the most important challenge in the 21st century.
Finally, we can say:
Democracy equals institutions, public management, and control; and it also equals development and the alleviation of poverty.
Eduardo Benjamín GRINBERG
President of the Court of Accounts of the Provincia de Buenos Aires
República ARGENTINA
Street: Uruguay N° 292, 10° floor, apto “A”.
Ciudad de Buenos Aires (1015) – República ARGENTINA
Phones and Fax Numbers: 54-11-4375-3570 or 4793-6014
e-mail: eduardob@arnet.com.ar