12-18 August 2016 #821

Government vs GDP

Big cabinets create a big mess, and perpetuate an ad hoc system
Manish Jha

When newly-appointed Prime Minister Pushpa Kamal Dahal was taking his oath of office at Shital Niwas last week, the question on everyone’s mind was how big his cabinet would be.

Would he, like his predecessor KP Oli, also have six deputy prime ministers and 40 ministers? Oli justified his jumbo government on grounds that he faced clear and imminent danger from the Nepali Congress. It is such cynical justification for the politics of survival at the taxpayer’s expense that has kept this country from developing.

Prolonged political transitions may benefit politicians, but the people bear the cost. We have now already paid for expensive governments for 20 years. Big cabinets create a big mess, and perpetuate an ad hoc system. Not all transitions need big cabinets. Take the case of the first post-1990 government led by KP Bhattarai, it had only 11 ministers, yet it successfully organised elections and quickly drafted a new constitution, spurring economic growth.

These days, it is all about ministerial berths in governments that last no more than nine months.  Such frequent government change and big councils of ministers raise the operational cost of government. The clash of partisan and personal interests also makes teamwork difficult.

Statistics show that bigger cabinets hinder economic growth. Data from the past 26-year timeline of 23 councils of ministers allows us to correlate GDP growth with cabinet size (see graph). The biggest-ever government after 1990 belonged to Baburam Bhattarai in 2012, and the GDP growth rate during his tenure was a mere 3.8 per cent, with the level of corruption rising to historical levels. When Chief Justice Khil Raj Regmi replaced him in an election government, he had just 11 ministers, and GDP growth rose to 5.7 per cent. This correlation can be seen throughout the last 26 years. 

The focus of ministers in a big cabinet goes to government survival and maintaining ministerial portfolios. If the team is bigger, coordination becomes weak, thus impairing governance. Prime Minister Oli, for instance, had a run-in with Home Minister Shakti Basnet that strained his relations with Dahal. Oli also announced a free dialysis service for all kidney patients, but Health Minister Ram Janam Chaudhary was oblivious to the plan.

The new constitution has tried to address this problem by stipulating that ministerial councils should be no bigger than 25, however the rule was already broken by Oli and will probably soon be ignored by Dahal, and Deuba after him.

As we have seen in recent history, it is a chicken-or-egg question: the size of the council of ministers in turn leads directly to weak governments and more instability.

Read also:

Economic crisis, political solution

Nature of political regime doesn’t determine growth, governance does

22 governments in 26 years, Manish Jha

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