THE general election is over. At the hustings, the opposition had championed for a smaller government.
The government contends that its size at 1.4 million and with a ratio of one public employee to 20 citizens is an appropriate one. If anything, public-sector size should increase as the population expands.
Prime Minister Datuk Seri Najib Razak has cranked again the flywheel of public sector reform with the merger of two education-related ministries. What does all this imply for the role and size of the public sector?
Public-sector size is a function of the role of the state. That role can span from statism, where the state has substantial dominance over the economy and society, to minarchism or minimal statism.
The statist centralised planning of the socialist system, largely prevalent in the now-extinct USSR and whose vestiges are evident in the socialist countries of Cuba and North Korea, requires the state to plan and execute in detail its socio-economic programmes. This will augur for an extended bureaucracy.
At the other extreme, the laissez-faire system requires the government to play a minimal role in the economy. Robert Norzick and the economic luminaries of the Austrian School of economic thought such as Schumpeter and Milton Friedman argue for a "night-watchman" role of the state in the economy. Such a role should, therefore, conduce to a leaner government.
An intermediate system is the mixed-enterprise system. Here, the state has a role in setting the economic direction and facilitating, through loose regulation, the economic growth of the country. This Anglo-Saxon model takes on many shades of statism.
In France and Italy, where state welfarism and state intervention keep the economy afloat, the Anglo-Saxon model takes on a more statist hue. Spain and Greece, that practise the Mediterranean version of the Anglo-Saxon model, target public spending on employment regulation and employee compensation.
As a consequence of such interventions, governments in those countries have become so lumbered with scary public debts and budget deficits that they have dragged the Eurozone into a quagmire.
An even more statist strain of the Anglo-Saxon model is the Nordic model of capitalism. Adopted in various degrees by Denmark, Sweden, Finland and Norway, the Nordic model advocates extensive welfarism and redistribution of income through expansionary fiscal policy.
A more successful variant of the Anglo-Saxon model is the Rhineland model of social capitalism of Germany. The Rhinelandic approach advocates a supportive role of the state where required. It has been successful in increasing labour productivity amidst wage restraint. That approach has contributed to Germany being the strongest-performing economy in the EU.
China's authoritarian hold on the economy still persists. Notwithstanding, with continued economic liberalisation, China's state capitalism is getting closer to the Anglo-Saxon model.
Malaysia's New Economic Model (NEM) -- and past growth models -- represent the Anglo-Saxon model of a mixed-enterprise system bordering on statism. Together with the government's raison d'etre of improving citizen's access to health, nutrition, energy and education and its intolerance of income disparity, the NEM signals continued government involvement in the economy.
However, such state intervention will not compromise the position of the private sector as the engine of growth. This social capitalism is in line with John Rawls' proposition that public policy must aid the least advantaged in society.
The philosophical underpinnings of the NEM are anchored in norms of justice as they are in sound socio-economic principles and practice. It should, therefore, be the cornerstone of all government interventions in the economy.
That is why the assertion of a putative bloat in the government is rather misplaced. Such an assertion arises from a comparison that is perhaps wrongly made. That comparison is between the public-sector size of governments of a libertarian mould and that of Malaysia.
Malaysia's social capitalism of regulating the open economy to reduce inequalities that competitive markets inexorably create naturally bodes for a bigger government.
With annual emoluments at RM59 billion and comprising a quarter of public expenditure much has been done to check the expansion of the public sector.
Rigorous scrutiny and moratorium on posts creation, abolishment of posts left long vacant or redundant, restructuring for flatter structures and exit policies have eased the pressure on establishment expansion.
Streamlined business processes and e-government have also enabled the government to provide more services with the same or fewer resources.
Community participation in the provision of service delivery as, for example, community policing, has, in some measure, stemmed the pressure creating more jobs. The pooling of human capital and training facilities to fight crime by the police, army and prison authority is another instance of the judicious use of public resources.
More can be done to defuse criticism over the size of government. Some of its workforce concentrated in staff functions, especially at the central agencies, can be redeployed towards improving the delivery of critical public services such as health, education, transportation and security.
Sharing resources through strategic alliances across government can curb recruitment that would otherwise be utilised in a silo fashion.
Enlarging job specifications by merging related posts will not only reduce their numbers but also enhance the productivity and job satisfaction of public employees. Flexible schemes of service that offer human capital mobility across the cross-section of the public service will enlarge the talent pool within the public service. Service improvements thereby should assuage any protestation of a government bloat.
It is technically feasible to right-size the Leviathan. However, the task may not be an easy one. It will require a fundamental review of the role of government.
Prof Datuk Dr John Antony Xavier is with the Graduate School of Business of Universiti Kebangsaan Malaysia
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