With a burgeoning population, Pakistan needs massive public sector reforms to manage its planning, governance, public financing systems and the effectiveness of the ways it collects its revenue. A reform agenda championed from the top leadership makes the reform not just impactful but also useful for enhancing service delivery to the citizens. In Punjab, with more than 24 percent of the population living below the poverty line, an approximate 28 million people, public financial management systems must be efficient enough to ensure that public service delivery reaches those for whom it matters the most.
Innovation these days is a buzz word, especially with digital technologies stepping in, but traditionally public sector has not been able to grasp innovative approaches as effectively as other sectors. In the Global South, especially due to the cumbersome processes and a massive workload due to inefficient systems, innovation in the public sector has not been explored fully. Punjab has been experimenting with its e-governance agenda for a few years now, however, only a few truly scaled up examples of these innovations, many only worked as proto-type solutions and were not scalable beyond a certain scale. A recent innovation done by the Punjab Finance Department is the ‘Punjab E-pay’ system that has automated payments of 12 services through a simple smartphone application. The scaled-up use of this application in its second phase might have to undergo a stress test, nevertheless, it is a good step in the way the government is embracing technological innovation.
The value of innovations, especially at the public financial management systems is immense. When these systems at the central level of the government improve, the services automatically improve and citizens benefit. There has been a lot of discussion on how evidence-based planning and development and public financial management is the only solution for equitable distribution of resources. But how does it work? Is it possible to capacitate all public sector officials for innovation? Is it also possible for governments to free up resources for experimenting with innovative approaches?
This is where development partners come in. Innovation requires both finances and dedicated time, which is usually not available in the public sector who are busy firefighting and managing key day to day issues. Development partners can offer time, technical expertise and financial space for innovative pilots that can be later scaled up. When meagre resources are available on the fiscal side, innovative solutions that can support the capability to manage public finances or increase collection can add substantial value. Punjab has a total outlay budget of close to PKR 2 trillion and collects own sources revenues in the tune of Rs. 250bn +. However, various assessments done by international agencies such as World Bank suggest that there are inefficiencies in spending and budget execution and also substantial tax potential exists which is not collected. For example, Rs. 100 billion potential exists just under property tax collection If coverage is enhanced. Similarly, the Punjab Revenue Authority has identified over 150 taxable services, but the potential collection is still a much lower level.
With the sudden outbreak of the COVID-19, stark gaps have appeared for disaster risk financing and distribution of financial resources to those suffering economically. Where governments intend to park huge sums to support those who have become economically inactive is unquestionable, the deficit of finding accountable, transparent and credible mechanisms is resulting in a slow response.
These are tricky problems and no straightforward solution exists as with the high degree of informality in the economy (as much as 16 million workers in the informal sector) it becomes very difficult to identify the true beneficiaries. There is a risk to spend significant public money yet not be able to reach the most vulnerable. Innovation and research can add value in identifying both process-based, and technology-supported ideas that can provide credible solutions.
In these challenging times, the Sub-National Governance Programme funded by DFID has launched an open innovation grant competition that is inviting innovative ideas to not only support the more traditional issues of public financial management and enhancing taxation but also looking for innovative solutions to manage disaster finance management. Other agencies and development partners have also come up with research innovation grants to work in partnership with the government for solutions in these critical times.
It is hoped that these endeavours will help, identify, pilot and scale innovative solutions that will not only bring efficiency in public resource management but also significantly improve the experience of citizens and ensure improved public service delivery. Better systems, which are efficient, transparent and inclusive, will surely result in better services.
The writer is a policy commentator and communication strategist