The author is a Director at the World Bank. The views expressed in this article are his personal views and do not represent those of the World Bank, its management or the Executive Directors.

    But there are very few concrete and specific practicable proposals for action. This article is a modest attempt to fill in this gap by presenting a proposal that would make use of the mix of already existing institutions with the potential to make a difference. Unfortunately, with a few exceptions, they are either ineffective or inadequate or structurally flawed.

    There are at least several caveats to the proposal and the analysis presented here which need to be stated at the outset. First, it must be conceded that there is hardly any country in the world where corruption has been eradicated or eliminated. The best we can expect is that the incidence and intensity and thus the inimical effects of corruption will be minimized over time. Second, a system of checks and balances can flourish only if various countervailing forces such as the parliament, judiciary, press and the civil society organizations are allowed to play an independent role. If they are made subservient or repressed nothing worthwhile will happen. There should be no presumption that any one entity whether it is the executive or the judiciary or the media or civil society will enjoy monopoly power or act as a self-righteous body of vigilance. It is the interaction of these various entities which will generate the optimal results.

    Third, we are not proposing any new institutions but arguing for the revitalization, revamping and re-engineering of those already existing under the constitution. There is a common tendency and an easy way out for both national governments and international donors to abandon the existing institutions and create new agencies which start out with a big bang but soon fall in the same whirlpool of inaction and ineptitude. The reasons for their failure are precisely the same as those which explain the non-performance of the existing institutions. Unless the underlying dynamics is set right the institutional morass will continue to grow. The history of Pakistan is laden with creation of a whole plethora of new institutions which have been given fuzzy mandate, inadequate resources, little operational autonomy and are never held accountable for results.

    Finally, this proposal does not favour the periodic, swift, abrupt, highly visible and publicized, extra-institutional measures against recalcritant officials which has been the norm in Pakistan since the 1958 screening of senior civil servants done by Ayub Khan. The subsequent actions by successive governments resorting to the purging of 303 or 1500 civil servants have paradoxically created greater insecurity, uncertainty and unpredictability which are the breeding grounds for increased corruption. The recent handling of the IPPs has done more harm to foreign private investment flows rather than taken the corrupt among them to task.

    The approach advocated in this article is to create an environment whereby the acts of misdemeanor and malfeasance are exposed routinely, increased vigilance and scrutiny is exercised continuously, early detection, investigation and fixing of responsibility are carried out resolutely and disciplinary actions against those found guilty are taken promptly. Such an environment would act as a more effective deterrent in curbing corrupt practices than creating many laws and anti-corruption agencies with enormous powers which are misused.

    This approach will not work if the federal and provincial investigation agencies are not organized on modern and professional lines. It will also be difficult to implement it if the government does not do away with the widespread and mindless application of the Official Secrets Act which has given shelter to the opacity of decision making by the politicians and the civil servants. Outside the matters of national defence and internal security all decisions particularly in matters of public finance, foreign trade, contract awards and allocation of other public resources should be wholly transparent and made public.

    The seven pillars of good governance can make the difference provided (a) they are headed by widely respected, strong and competent managers of known integrity (we have many of them in the country) (b) the terms of reference, responsibilities, functions and powers of these institutions are clearly defined (c) there is no political interference in their working but at the same time they are held publicly accountable for their actions and the results (d) they are provided adequate financial resources and professional staff of caliber (e) they follow open and transparent procedures and processes.

    The question that arises is: Why are these seven institutions not working effectively? Why should we expect them to perform differently? The five elements identified above are missing in most of these institutions and if we do have, by coincidence or design, the combination of these elements in place the results are simply outstanding. PIA under Noor Khan and Asghar Khan and the PIDC under Ghulam Faruq are the examples which come readily to mind as the best practices of this model. If the present leadership is indeed committed to this concept the model outlined above can be applied in practice.

    What are these seven institutions and how can they make the difference? First, is the Parliamentary committees particularly the Public Accounts Committee. Bipartisan committees chaired by respected and qualified MNAs or Senators and staffed by full-time professional and technical personnel should hold regular hearings, confirm the appointments of those heading these institutions, receive annual reports of performance, question the reported irregularities and recommend action against those found prima facie responsible for wrong doings. The recent work by the PAC shows that timely deliberation and follow-up are of essence if the Committee has to acquire the biting teeth.

    All procurement contracts above a certain financial limit, all fiscal exemptions and concessions, modifications to the SROs should be placed before the PAC. The proceedings of these Committees should be open to public and the media. The temptation for the members of these committees to harass or intimidate the concerned officials or get involved in micro-management is very strong under the political culture of Pakistan. If this happens these committees will be more of a nuisance than an agent of good governance.

    Second, is the State Bank of Pakistan. An independent and autonomous State Bank provides a guarantee against the excessive and irresponsible actions of the politicians and the bureaucrats in economic management. The federal and provincial governments will be guarded in their spending decisions if the State Bank refuses to honour their cheques beyond the given Ways and Means limits. At the same time the regulatory and supervision functions of the State Bank act as a safeguard against the possible malpractices in the award of credit and recovery of loans. It must be recognized that there has already been significant improvement in the working of the State Bank since it was granted autonomy.

    Third, is the Auditor General of Pakistan. The constitutional protection given to the office of the AG has not been fully utilized in Pakistan to unearth and detect financial bungling rampant in the public sector agencies. The extended time lapse between the occurrence of the financial irregularity and the actual detection and reporting by the auditors, the lack of professional expertise and lack of prioritization among core and peripheral cases have muted the efficacy of this office. The AG should commission third party audits by professional firms of repute, use the broader 'value for money' concept and enlarge its scope of activities to cover all major public sector commercial and industrial enterprises.

    Fourth, is the Pakistan Revenue Service. Tax collection in Pakistan has caused a lot of grief to the economic managers in pursuing a prudent fiscal policy. The renaming of the Central Board of Revenue will be purely cosmetic unless there is major reorientation and restructuring of the incentives, pay, recruitment, promotion, training, performance evaluation, procedures and processes. The new goal-oriented, result-based organization can generate higher tax yields if the basic compensation package and reward structure for the tax officials are such as to inhibit temptations for side deals with unscrupulous tax payers. At the same time there should be enough flexibility to penalize those who continue to indulge in these deals.

    Fifth is the Federal/Provincial Public Service Commissions. Most of the current difficulties in governance have arisen due to the politicization of the higher services in the post-1973 period. There is a general recognition that the merit-based system of recruitment, appointments and promotions, despite many shortcomings had served the nation better than the present sifarish based and buy-the-post system. The responsibilities for all recruitment and promotions should be reverted to the Commissions without any exception but only men and women of proven integrity and impeccable credentials should be appointed as chairman and members of the Commission. There is no harm in appointing retired officials or judges but these appointments should not be a reward for loyalty to the party in power or for favours shown to the authorities. The Police Commissions should also be set up on the same lines.

    Sixth, is the Federal/Provincial Ombudsman. The fanfare with which these offices were established under the Zia government died down fairly quickly. They are now perceived to be grinding the same millstone as the rest of the bureaucracy. In fact, they can become an effective instrument for quick, fair and judicious redress of the grievances of the common citizens against the arbitrary harassment of the overzealous or corrupt officials. There are very few people who are aware of the scope and mandate of this office and who have trust in the organization. A proactive educational role, a demonstration effect of its reach accompanied by selection of the right persons to the job can make it work.

    Seventh is the Federal Election Commission. A powerful, independent and assertive FEC can play a preventive role by careful screening, scrutiny and investigation of the candidates for all tiers of elected offices and disqualifying those who are ill-reputed and of dubious character. They should forcefully enforce the criteria prescribed under the Constitution augmented by appropriate rules and regulations. This fundamental shift in the quality of our elected public officials would bring about a significant change in the overall structure of governance in the country.

    Together, these seven pillars, if allowed to work effectively, will be able to plug in some of the conduits that lead to corrupt practices. The most difficult question to answer is: Who will bell the cat? Who has the courage and guts to put these changes in place? Of course, an enlightened government which has a sense of history rather than sights fixed at the next elections is the only one capable of doing it. Pakistan hasn't been fortunate in having such a government so far.

    At least three recent initiatives by the present government provide some hope for actions on these lines. First, the level of frustration felt by the top leadership of the country with the existing institutional framework has reached such heights that the army had to be called in to take over the affairs of WAPDA. While this surgical operation had become inevitable there is a danger that the situation will revert to status-quo ex-ante if the underlying governance structure is not set right and the army gets back to the barracks after the operation is complete. Reliance on the army to diffuse the entangled web of morass in our economic institutions is a short-term palliative but in the longer term, a solution can be found by strengthening and reinforcing these basic pillars.

    Second, the bold actions taken by the Punjab government recently in doing away with the discretionary allotment of urban plots, unearthing ghost schools, taking on the examination mafias head on, introducing merit in the admissions to medical colleges and taking punitive actions against the officials found guilty of negligence of duties does augur well.

    Third, the agreement recently concluded with the IMF and the policy framework to be pursued are indeed the right steps to overcome the pressures of fiscal and external payment imbalances. But the macroeconomic determinants of these imbalances lie in the weaknesses of the same key economic institutions. Unless these institutions are turned around on a lasting basis the gains from this agreement and the debt relief may be limited to a short duration and the costs may outweigh the benefits. A secure and self-confident leadership will find dividends in form of electoral victory, too, if these changes are implemented seriously and sincerely.