Bureaucracy's Contribution to Economic Growth

Neo-liberals will scream 'bureaucracy contributes to economic growth? Now we've heard it all.'

Actually, I'm a passionate bureaucrat; a good bureaucratic system is fair and usually good at administering government policy. It's far from the only contributor to economic growth if you consider the growth rates of eg Georgia (8.8% in 2006) and Germany (2.7% in 2006). It needs to be adequately funded, though, partly to reduce the risk of corruption and also to make sure that bureaucrats are not overloaded with work (here I hear hollow laughs) - governments have a habit of adding to their workload without considering the consequences.....

An article in 'Sociology' (June 2007) by Henderson, Hulme, Jalilian and Phillips suggests that bureaucracy can contribute to poverty reduction, for a variety of reasons, eg through fair redistribution of resources, or enabling people to participate in society without having to pay bribes. For this to work, however, bureaucracies need to have Weberian (Max Weber) characteristics. These they summarise as:

'public administrative organisations characterised by meritocratic recruitment and predictable, long-term career rewards, which will be more effective at facilitating capitalist growth than other forms of state organisation'.

Let's unpack the characteristics in the case, thinking of the countries I have worked in recently, eg Tajikistan, Georgia, Ukraine.

Meritocratic recruitment .....hmmmm. In at least one of these (and they will all remain nameless) you pay a bribe to the person above you, so you are taken on. In one finance ministry the sum required was reported to have five figures, in USD. This even happened in Lithuania five years ago or so, when the head of a firestation was found to taking a share from his subordinates' wages. Often when a minister changes, many employees change, too - those who come in, are the minister's friends.

Leading to the next point of 'predictable, long-term career rewards'. Hm, hmm, hmmmm. In none of these countries would I want to put money on having a long-term job in the public sector. Partly due to minister changes, above, and partly because some politicians play with ministries like little children. One ministry I know has been restructured at least twice last year, including recruitments and dismissals, and there is talk of more of the same.

Under these circumstances what hope is there of building up a cadre of experienced public servants who can be secure in the knowledge that their decisions, made on a legal basis (if they are) will not work against them at some later stage?

I wonder what the economic growth might be like if there was an experienced cadre, no corruption and good tax compliance in these countries? It should be gynormous - and even the poorest would be able to participate adequately in economic growth, rather than waiting for crumbs to fall off the rich man's table.