A complete overhaul of the public sector's human resource management practices and mentality is needed to build strong institutions. Once we have capable and honest manpower, they build the right institutions, not the other way around
A famous Japanese proverb is very relevant to Nepal's development: vision without action is a daydream and action without vision is a nightmare. If we agree with Joel Arthur Barker's view that 'vision with action can change the world', that's what Nepal is missing in the current development initiatives.
While the short-to-long-term visions bombarded post-state restructuring, and actions are being taken, we observe diverging visions and actions, leading to government inefficiency and a larger trust deficit in public services. This phenomenon has led to widespread public despair, with emigration abroad and decreased private investor's confidence.
The 2024 Nobel Prize in economics is much related to Nepal's development paradox. "Why Nations Fail" authors Daron Acemoglu and James A. Robinson were joined by their research co-author Simon Johnson in winning the Economics Nobel Prize for 2024 for the demonstration of the 'importance of societal institutions for a country's prosperity'. They demonstrated divergence in the development around the world, evidenced by political and economic institutions, and incentives sharing among businesses, individuals and politicians. The authors concluded, "Nations fail economically because of extractive political and economic institutions as they prevent them from embarking on a path to economic growth."
Institutions comprise four resources, namely, physical, financial, information and human resources. Out of those, humans are the most dominant as they make use of all other resources, best or worst. Evidence demonstrates that individual talents are the utmost need of today at every level of society, along with an institutional framework to transform those talents into a positive force. As an example, emerging Asian nations such as South Korea, Malaysia and Singapore were able to identify and develop the right talents at home and abroad in politics, administration, industries, health and education and then established a strong institutional framework to mobilise them effectively.
The capacity of the institutions comes from three aspects. The first is the organisational capacity involving the right structure, authority and responsibility relationships, and size of the organisation. The second becomes legal and institutional capacity that involves legal and policy framework, procedures and processes, regulatory and supervisory power; and capacity and sufficiency of physical and financial resources. The final but critical is human resources. Human resources make use of all other resources and act on behalf of the institution. Thus, the success or failure primarily depends upon the people associated with the institutions.
The quality of public service delivery and pushing to a higher development trajectory is also associated with poor human resource management systems at public institutions, from acquisitions to maintenance functions. The entry process to Nepal's public sector is tough, requiring strong motivation, dedication and talent with tireless knowledge and skill development in various subjects beyond the job-related factors. One with a foreign degree from a renowned university is rarely able to enter the public sector on a tenure basis. The selection process is the same for all, regardless of the academic background and experience, unless one is under a certain "reservation" group that competes within that group only.
The examination system is another key issue with paper-based subjective judgement at almost all levels, although the contents flow from general to specific and analytical question patterns. Therefore, we have shut the door to the public sector for highly competent experts. The focus of the Public Service Commission is not on selecting a 'person job fit' but a 'job fit person' such that a person's post-selection performance is not associated with the entire selection process.
Nepal's public sector still does not believe in capacity building through higher education and training. We can claim this because higher education and training are not linked to career growth but rather discouraged with a late-promotion mania. The majority spend more than half of their career on studying the promotion materials to appear in exams.
On the other hand, short courses are primarily taken as an opportunity for foreign trips rather than pure learning. From the much lower to the head of the government, learning, getting skilled and re-skilled once involved in certain positions may not be mandatory for getting promotions and awards nor are they needed to perform extraordinarily. The performance appraisal is kinda just formality. Even today, top-most key positions are being filled based on some connections, rather than past job performance and individual competency.
Therefore, a complete overhaul of the public sector's human resource management practices and mentality is needed to build strong institutions, as evidenced by the 2024 Nobel laureates. The key reform should be on recruitment, capacity development and career growth. Once we have capable and honest manpower, they build the right institutions, not the other way around. Before that, the precondition is to have acts, rules and bylaws in place that regard the academics, skills and job performance during the entire job life of any employee of any level, based on their role.
If recruitment, placement and growth are based on competency and performance, it reinforces individual behaviour to the organisational change and development in the medium to long run, resulting in the formation of the right institution.
Bhatta is the Deputy Director at Nepal Rastra Bank
