On minister and marginal productivity

But how could a PM of any country decide who to enter who to exit? It is very difficult to determine in the context of public services where mostly decisions are driven by the interest of the party in power. However, the yardstick of measuring the productivity of Ministers, in the absence of more rigorous criteria, could be the level of services and their quality that the respective ministries are supposed to deliver to the public. A PM can scan through newspaper reports on different ministerial activities for, say, atleast six months and then arrive at a decision. In developed countries, the mood of the media is said to be taken seriously before embarking on a change in the cabinet. It would, perhaps, not be an exaggeration to say that, in most cases, media sets the mind of the top executive in this respect. Thus, energy and power ministry or its minister could be held responsible for a fault in the whole system as a result of which public sufferings tend to mount. In consequence, the axe might fall on the top brass -- the minister in charge. And, since an elected government comes to power with the commitment to serve better the public, any deviation therein could be faced with firing the respective minister. Examples to this effect are in abundance in different countries -- both developed and underdeveloped. In India, we heard of ministers resigning just because of a train accident in which the respective minister had probably a little role to play.

In economic jargon, there is a concept called "zero marginal productivity". If you harvest say 40 maunds of paddy with six labours which could be done by five labours, then the marginal contribution of the last labour must have been zero. In fact, you could have harvested more than 40 maunds with the withdrawal of that person. In that case, the contribution or the marginal productivity of the last person would have been negative. I presume that when the donors disliked a fleet of 60 cabinet members, it must have been from marginal productivity point of view. In fact, it is quite possible that the exit of seven ministers from the cabinet is not going to reduce the output of the government -- measured say in terms of GDP growth, quality of services, security of people etc. In that case, the seven can be said to have had zero marginal productivity. Again, the output might even rise with their fall in which situation, the marginal productivity of the unlucky seven could be negative. Zero marginal productivity occurs when workers do not have sufficient space, equipment and monitoring mechanism to optimally use labour time. Only gossips become the output. This is applicable everywhere.

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But suppose, with the exit of the seven, the output of the government falls. What could be the interpretation? First, it could be that those who were dropped from the cabinet were more productive than those were not. The sum total productivities of the former might have outweighed that of the latter. Second, it could be the case that there are still ministers with negative or zero marginal productivity. To raise the output, there must be another reshuffle and downsizing till the cabinet comes to an optimal size with positive marginal productivity. Of course the optimal size is difficult to determine quantitatively. Just bear in mind -- as available reports suggest -- that the government has to spend about Tk. 15 million per minister per year on account of just logistic support. If we add another Tk. 5 million on account of other costs, the total cost per minister comes to about Tk 20 million per year or 1,200 million for the whole cabinet excluding Honourable President, PM and the Speaker of the house. The total cost of the cabinet could be a rough indicator keeping in view the size of the economy, per capita income and other social indicators. The 'quick and dirty' estimate of Tk.20 million per head shows that the citizens of Bangladesh are paying Tk. 10 per head every year just to maintain a cabinet of 60.

The reaction to the reshuffle -- as newspaper reports suggest -- does not seem to be relieving either. My neighbor Professor Ahamed is a hard-boiled BNP supporter. I went to see him to get his reaction to the recent reshuffle of the cabinet. He seemed to be perturbed and kept mum fixing look on the TV screen (not on me). A little later, we went to his bedroom and opening before me a daily he said, "...see, even Manab Jamin is not happy with the reshuffle and I agree with their arguments". I went through the paper and found his heightened hypes justified. As could be learnt from various newspaper reports, even the Alliance leaders of the party in power expressed their utter surprise and disgust about the change and its dynamics. Some of them even hinted -- as also reported by papers -- that there are still people in the cabinet who nurture terrorism.

Whether the above allegation is true or not is yet to be verified. But what has so far been established is the fact that there were definite corruption charges raised by a particular donor against a particular minister (and ministry), the much maligned wheat and rice scam, the foul play with fuels, a worsening situation with regard to the security of the citizens etc. These allegations were widely published in news media and should point at the probable list of ministers who should have been the first to be fired.

In contrast to this, surprisingly, the dropped ones were not in much agony of the public. Admittedly, there might be one or two such cases. It appears that some of the ministers with a lot of charges against them relating to corruption and mismanagement of ministries survived this time. The calculus then was neither media mood nor efficiency measured in terms of the quality of services or management, but something else.

And so long 'something else' dominates the actual performance criteria, the situation is unlikely to improve. The public has its own way of assessing things which people in power often fail to realise. Take an argument. During the past Awami League regime the cabinet size was under 40. The average growth rate of GDP ( a sign of economic progress) was nearly 6 per cent per annum and other indicators were not atleast as bad as of today. Compared to that, the cabinet size now is sixty plus and GDP growth rate is yet to reach the earlier level. Could an increase in the size of the cabinet increase the size of the cake?

The size of the government and hence of the cabinet should be as minimum as possible. Big government results in smaller output and vice versa. This is an empirically tested observation. A government that vies to generate resources from the domestic front by taxing people on all sides, should not indulge in wasteful use of resources. A big cabinet is such a wasteful venture of scarce resources. I conclude with the impression that even a further downsizing of the cabinet would not affect the output of the government -- to say the least -- and hence the marginal productivity of some of the survived ministers might still be zero.

We hope that in future, the Honourable PM would give more importance to the performances of the ministries as revealed by the media, donors and public opinion polls published in some of the newspapers. That would, possibly, raise output of the government even if the size is small. Mere political and other considerations would result in lower level of output even with a big-bang!

Abdul Bayes is professor of economics, Jahangirnagar University/