Gresham's Law Syndrome and Beyond:An Analysis of the Bangladesh Bureaucracy | The Daily Star
12:00 AM, July 27, 2015 / LAST MODIFIED: 05:12 PM, July 27, 2015

Gresham's Law Syndrome and Beyond:An Analysis of the Bangladesh Bureaucracy

Invoking an economist to analyze Bangladesh's bureaucracy

The book's title is eye-catching all right.  Gresham's Law Syndrome and Beyond:  An Analysis of the Bangladesh Bureaucracy, written by Akbar Ali Khan, a former senior civil servant, academic, economist, and a student of history.  The author has used all these qualifications to good advantage in composing this book in which, Khan explains, he “seeks to analyse the roots of Gresham's law syndrome in Bangladesh” (Chapter 1, “Prolegomena”).  Nine more chapters, logically arranged, round up the business end of the book.  The topics contained within each chapter are similarly structured in a rational pattern that sees each one of them flowing seamlessly into the next.  That makes the book rather easy to follow for the fairly knowledgeable reader, although some of the subject matter for not a few of them would be, I suspect, an arduous exercise to work out.

Gresham's law in economics, for those in the know, predicts that bad money eventually drives good money out of circulation, and this is likely to happen when authorities do not differentiate between the 'good' and the 'bad'.  However, Khan extends the law to cover other areas, like the bureaucracy:  “The law is valid not only for money market; this is equally relevant to personnel administration.”  And with equally deleterious results for a country's institution or organization.  How?  “A strong nexus of community of selfish interests is established between opportunist politicians and dominant bureaucrats.  This creates a vicious cycle which perpetuates the grip of the bad and wicked on administration.”  Khan contends that the idea of modern bureaucracy, based on merit, and being legal and rational, is incompatible with the idea of Gresham's law syndrome, but, nonetheless, asserts that many developing countries, including Bangladesh, display many of the features of the syndrome.

Khan displays a strong sense of history when he observes that, although the tradition of the British rule was continued by the post-colonial rulers in East Pakistan and Bangladesh, “much of the transplanted institutions turned out to be isomorphic mimicry”.  The institutional dysfunction is exemplified by two phenomena:  unusually low rank of government effectiveness, and decline in governance.  “This has created a situation where bad employees dominate the good.”  In terms of the Gresham's Law Syndrome, the author identifies the following symptoms manifesting themselves:  erosion of confidence in the recruitment process; diluting merit in recruitment by a pervasive quota system; politicization of promotion; inability to punish delinquencies and reward the efficient; inappropriate compensation; and deprofessionalization through inappropriate structure.  These and other issues are discussed in detail in Chapters 3 through 8, while Chapter 9 provides a plethora of prescriptions to remedy the ills of Bangladesh's bureaucratic system.

Khan evinces a sound sense of history in Chapter 2 (“Historical Roots of Civil Service in Bangladesh”), where he traces the historical roots of Bangladesh administration during the ancient and medieval periods.  While he concedes that the bureaucratic system of Bangladesh appears to be a legacy of the British raj, he qualifies his contention with the observation that it is not a total clone of the raj, as it incorporates indigenous elements.  However, the British were so successful in their experimentation with the civil service in India that the system was replicated in Great Britain itself with the implementation of the major recommendations of the Northcote-Trevelyan Report in 1854.  The British, though, could not halt the phenomenon of corruption that was rampant in both ancient and medieval India (including Bengal). 

Even though the members of the elite Indian Civil Service (ICS) by and large remained above corruption, they “coexisted and compromised with corruption” as a matter of exigency.  By tolerating, and even encouraging, bribery/corruption, which Indians had been familiar with from ancient times, they were taking recourse to a cheap tool for exercising control over a restless population.  In fact, to cite an example from Khan, during the raj, corruption was so pervasive among the Indians in PWD (Public Works Department) that it was familiarly known in official circles as “Plunder without Danger”!  When Pakistan was created, its elite cadre (CSP) failed to emulate the ICS in terms of its tradition of incorruptibility as “a symbiotic nexus was established between grand and petty corruption.”  That unhealthy tradition continues in Bangladesh.

In Chapter 3 (“The Structure of Civil Service in Bangladesh”), the author takes stock of changing social reality and concludes that a number of cadre services of Bangladesh are getting increasingly redundant in the age of globalization.  On another topic (Chapter 4, “Departures from Merit:  The Most Complex Quota System in the World”), Khan decries the situation obtaining in the country where the government has taken no initiative to objectively assess the real impact of the quota system on the country's administration as a whole.  Specifically, he is critical of the situation that the “issues involved in the quota reservation for districts and freedom fighters were highly political and emotive,” and that the “quota system continues to be a sacrosanct issue in Bangladesh politics.”  In the same chapter, the author believes that, from the standpoint of the quota system, the credibility and effectiveness of Bangladesh's Public Service Commission (PSC) have been significantly undermined on grounds of lack of transparency and alleged corruption.

Khan continues on the theme of PSC's loss of credibility in Chapter 5 (“Recruitment and Training:  The Myths and Reality”), with the emphasis being on recruitment malpractices, and characterizes the constitutional body as having only the trappings of independence.  Chapter 6 (“The Challenges of Discriminating the Good from the Bad:  Appraising Government Executives in Bangladesh”) contains this delectable piece of repartee as recounted by a retired cabinet secretary in India:  I still recall a collector gushing full-page celebration of the personality of his probationer, a prospective son in law.  The report concluded with the prediction, “he will go far.”  His Commissioner, on review, recorded his own telling view cryptically, “The farther the better.”  Thus is performance appraisal appraised!  In Khan's censorious view, the “mechanism for identifying the poor performers and the incapacity of the government to punish delinquents has rendered the Bangladesh Civil Service into a sanctuary for inefficiency and corruption.  On the contrary, meritorious performance in Bangladesh Civil Service goes unrecognized.  Performance is rated on the basis of vague and imprecise personality traits.  This has rendered performance appraisal process into an instrument of cronyism.”

Chapter 7 (“Compensation in Bangladesh Civil Service --- the Imperative for a New Paradigm”) dwells on the touchy issue of the pay structure of the bureaucracy. In his view, the salary structure has created a “congenial environment for Gresham's law syndrome” with the outcome that the bureaucrats have lost their incentives to excel at the jobs.  Therefore, the best and the brightest no longer opt for jobs in the bureaucracy, preferring to go for the vibrant private sector instead.  At this point Khan offers a puzzling observation.  He deduces from the large number of candidates in the 34th BCS examination in 2013 that the market does not regard the compensation in the Bangladesh public sector as being poor.  One would be tempted to look for explanations elsewhere other than the pay package (which is generally lower than, for lack of a better word, “comparable” jobs in the private sector).  It could be that, for many Bengalis, the “prestige” of being a civil servant still outweighs anything that the private sector could offer.  Or, that there is job security and post-retirement benefits in government jobs.  Or that, they could not get lucrative private sector jobs, especially in the face of competition from the contemporary pool of the best and the brightest who do prefer the private sector.  Or, it could be, as Khan has referred to a survey regarding preferences for civil service jobs, that the avenues for aggrandizing oneself outside of honest means exist in the government/public sector.

In “The Vicious Circle of Politicization” (Chapter 8), the author digs deep into a phenomenon that has arguably contributed to the Gresham's law syndrome:  the politicization of the bureaucracy.  As Khan persuasively argues, “The depoliticization of bureaucracy is an essential precondition for administrative reforms to rid the civil service (of) Gresham's law syndrome.”  As the title of Chapter 9 (“Strategies for Reforms”) indicates, Khan offers all manners of prescriptions to remedy the malaise that has afflicted the Bangladesh bureaucracy, in effect, to rid it of Gresham's Law Syndrome.  There is a plethora of suggestions, something that is rather common in social science writings in Bangladesh.  Many of those he has suggested have been articulated in various books and journal articles by a number of Bangladeshi academics.  Hardly anyone doubts their sincerity in proposing them, but, as they say, the caravan of inertia and sameness rolls on.  Just when would the policymakers, politicians, and bureaucrats, and indeed, much of the general citizenry, would stop, take stock of the bad situation, and do something positive to improve it, is anybody's guess.  Till that happy scenario comes about, I am afraid, we will be left with being stuck in a situation prior to Khan's musings in “Beyond Gresham's Law Syndrome” (Chapter 10).  The long-dead British economist certainly seems to have cast a long shadow on matters other than economics. 


The reviewer is an educationist and actor.

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