The budget must grow

In economics, the term “ratchet effect” is borrowed from mechanics. It is the case when a thing must be further increased because it could not be reversed.

The annual budget of Jordan suffers from the “ratchet effect” because we always base the figures of the new year’s budget on those of the previous year. Thus, we create the dynamic to cause budgetary figures to go up. If we survey Jordan’s budgets since the beginning, we will find that they have demonstrated the same tendency without a single exception. It may have happened in the depression years of the 1930s, but I have no evidence to attest to this conclusion.

We also build institutions, either on ad-hoc basis to deal with an emerging situation or on a permanent basis as to replace an existing dysfunctional one. What happen mostly is that the ad-hoc becomes everlasting and the old as well as the new permanent ones manage to go on.

Ailing public companies, which shed most of their equity and lose year in and year out, also manage to survive all attempts to bring them down. The reason is that the workers in these companies always manage to generate cash, not profit, to pay their salaries.

We created so many control and supervisory bodies to replace government ministries, but both survived. Examples are abundant. The Higher Education Council, the Energy and Minerals Regulatory Commission, the Jordan Tourism Board, the Electricity Regulatory Commission, the Telecommunications Regulatory Commission and so on.

It is reported that Prime Minister Omar Razzaz plans to decrease the number of Cabinet posts to sixteen by abolishing ministries and asking some ministers to shoulder two or three of the current Cabinet posts.

This formula has been tried before. As long as ministers act like CEO’s of their respective ministries, they will only be overburdened and negligent of some of their duties. We need first to redefine the duties of ministers, deputy ministers and heads of independent public corporations and commissions. A ministry may be abolished both de jure and de facto, yet it still could be represented by a minister in the cabinet.

To assume that existing ministries or departments are superfluous or mere contributors to disguised unemployment is not right. Under the current system of bureaucracy, these departments are needed. If we change the beaurocratic procedures, then and only then these ministries or departments become an added burden, and they should be eliminated.

To counter the ratchet effect of the herbicidal growth of bureaucracy and government expenditure, we need a restructuring strategy. Or else we will create a mess that even the government would not be able to handle.