Good Governance in the shared public domain

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Good governance in the shared public domain

Speech held at the symposium on
‘Good governance, a basic condition for economic development;
towards a Surinamese agenda’
organized by ‘Vereniging van Economisten in Suriname’
(Suriname Association of Economists)

H.R. Lim A Po

1.0. Introduction

1.1. Global developments are leading to a rethinking of how public and private responsibilities for policy and governance should be ordered. Important aspects of these developments are

· globalization and liberalization;

· emancipation and democratization; and

· trenchant information and communication technologies.

Induced by these developments, a rearrangement of public and private interests is taking place. This process of reordering is causing a shift of responsibilities for policy and governance - from the public sector (the state) to the private sector (the market).
In addition, these developments have increased awareness of the fact that there is something referred to as the shared public domain: a social midfield, in which state, market and civil society share the responsibility for public tasks. It is believed that the importance of this collaborative partnership, as an instrument for development, has been underestimated up to now. We observe as it were, a paradigm shift of mechanisms that structure society, which can be characterized as a shift from ‘state plus market’ to ‘market plus democracy’.

1.2. In Suriname, public discussion about this rearrangement of public and private interests through privatization and about this reallocation of responsibilities to the shared public domain has not really begun as of yet. By means of this speech, I would like to intensify this public discussion. I would like to do so by sequentially outlining (i) how the paradigm shift influences the views on legitimacy and effectiveness of state, market and civil society as structuring mechanisms, (ii) what the characteristics are of the shared public domain and (iii) what the requirements are for good governance in the shared public domain. The privatisation issue also involves good governance; however, it is beyond the scope of my speech.

2.0. State, market and civil society

2.1. State, market and civil society as structuring mechanisms, each have their own foundation of human configuration. The foundation that applies to the state is ‘force’, to the market is ‘exchange’ and to the civil society is ‘association’. Due to this difference, the capacity to structure society has been given substance in different ways in each of the three sectors.

‘Force’ is given substance by politics. Society is being shaped, as politics believes it should be shaped in the public interest. Economic motives give substance to ‘exchange’. Structuring here results from the pursuit of individual economic interests. In the case of ‘association’, the structuring of society is a function of social linkages in which citizens co-operate with each other aiming at that which they jointly consider to be in the public interest. Insofar as necessary, they are willing to subordinate their own group interests to interests of the public.

2.2. Two conflicting forces determine the relationships between the three mechanisms and their underlying principles: complementarity and conflict. These mechanisms supplement each other while competing with each other for supremacy.
Complementarity is a function of a common, overriding and all embracing objective of each of the three structuring mechanisms to encourage development. Development in this respect should be interpreted in a broad sense. Both functional (‘as a process’) and intrinsic (‘as an objective’) development is more than economic progress. It comprises an increase of economic efficiency as well as social justice and sustainability.

2.3. The struggle for supremacy between the structuring mechanisms results from conflicting contemporary political views. Until recently those views were more or less extremes, but ever since liberal democracy and market economy became the dominant doctrines in the world (Fukuyama’s ‘end of history’), there are in fact only differences in emphasis related to historic and cultural factors. The most important differences in emphasis are between the strict capitalist-oriented Anglo-American model and the more socially-oriented Rhineland model. The first model is connected with a societal order in which ‘competition and conflict’ are the dominant values. In the second model, the dominant values are ‘consensus and compromise’. The paradigm shift of ‘state plus market’ to ‘market plus democracy’ has an impact on both of the liberal doctrines. However, in the first doctrine, civil society neither supplements nor corrects functioning of the free market and of the liberal state, while in the second doctrine, intervention of civil society within the free market and the liberal state is considered to be legitimate and effective.

To me it is beyond doubt that the Rhineland consensus model fits our own current and normative societal order better than Anglo-American adversialism. In a plural society like ours, reconciling differences of opinion through political coalitions, accommodation and social tolerance are critical in building the necessary confidence between citizens and in institutions.

3.0. Roles in a new paradigm

3.1. The roles of state, market and civil society as structuring mechanisms need to be redefined against the background of the contextual developments outlined above. In addition, the redefinition should have as points of departure a development objective that in principle governs all aspects of society and a social-democratic political orientation. I will make an attempt to that effect.

3.2. Compared to the market and civil society, the state as a structuring mechanism is unique because it performs its public tasks ‘compulsorily’ and not ‘voluntarily’. State authorities are being used forcefully and consistently. The fundamental public tasks of the state are to ensure law and order, safety and security as well as guarantee social justice for all. The responsibility of the state for law and order is based on the notion that the rule of law and an independent judiciary are guarantees for freedom and equality. Both of these basic values are the cornerstones of democracy. Social justice as a responsibility of the state ensues from ‘ human solidarity’, the third basic value of a social-democratic system. The current focus on the protection of political and social human rights within the international order shows clearly that ongoing global developments have increased the topical interest of these fundamental tasks of the state.

The public tasks of the state however are not restricted to these fundamental tasks. The state also has a public responsibility for the course and the result of development. This responsibility is subject to a far-reaching re-orientation in the wake of the contextual developments noted above. Different from the past decades, the state is no longer considered solely and fully responsible for the public tasks related to development. We can currently distinguish these public tasks into those for which the state indeed bears full responsibility (such as infrastructure) and those for which the state does bear the ultimate responsibility, but shares its responsibility for sound policy making and the implementation thereof, as well as governance with others. Poverty alleviation may serve as an example in this respect. In this example the state, market and civil society jointly bear responsibility.

3.3. Participation in the market is theoretically voluntary, but due to the economic interdependence of citizens, it is a ‘practical necessity’. The market is important because of its capacity to create prosperity by transforming individual interests into general interests. While each individual attempts to realise his own preferences, the price mechanism ensures co-ordination. In this manner increased economic efficiency serves the public interest.

Two fundamental reservations must be made with respect to this orthodoxy. The first reservation is that economic efficiency presupposes the market to function according to a number of preconditions. In case of non-compliance with these conditions such as the existence of monopolistic positions and unequal access to information, economic efficiency is no longer an automatic result of the market mechanism.
The second reservation is that from a development point of view increased economic efficiency per se does not lead to overall welfare and well-being. Increased economic efficiency should at all times be balanced against social justice and sustainability.

The result of these two reservations is that the market must be conditioned to guarantee that the general interests of society are met. Framing, supplementing and correcting the free market by means of regulations by the state and by means of participation of those involved in the economic process will strengthen the economic, democratic and moral legitimacy of the market.

3.4. Associative clusters are the components of civil society. These clusters are based on voluntariness and as citizens join multiple clusters, patterns of overlap emerge.The aspirations of civil society could be reduced to two issues. The first is the political side of civil society. By identifying collective problems and reinforcing public opinion, civil society attempts to influence political processes at a state level. The right of freedom of speech is central in this respect.

The other aspiration emphasizes the social side of civil society. The underlying reasoning here is that the associative clusters of civil society are social networks in which social capital is stored in the form of capacity to co-operate. By utilizing this social capital, civil society adds value to the development process and it may ‘justifiably’ bear co-responsibility for public tasks. It this respect reference can be made to tasks such as health care and environmental protection. These are tasks, which the government cannot handle ‘alone’ and due to their nature cannot be left only to the market mechanism. On the other hand, they are well suited to be dealt with in institutionalized partnerships of state, market and civil society. In this respect the right of co-determination is key.

Exercising this right of co-determination presupposes willingness on the part of the state to share its regulatory and executive powers with social organizations over which it has no direct control. Experience shows that, in crisis situations, such willingness is often expressed, but that unfortunately, politics still hesitate to actually share responsibility for policy making and implementation with civil society. After all politics would lose its primacy in favor of the primacy of civil society.

On the other hand, it also presupposes that civil society has the capacity and the strategic willingness to induce the transformation of citizens from subjects of policy to co-actors in policy-making and policy-implementation. In general it seems that there is a willingness to go this route, but said willingness insufficiently recognizes the specific expertise, which is required from civil society for its effective participation in policy-making and governance.

The rest of my speech will deal firstly with the notion of the shared public domain and thereafter with the requirements of good governance applicable within said domain. I will not deal with the political side of civil society, in other words, not with its influence in political processes.

4.0. The shared public domain

4.1. The shared public domain is a socio-political system consisting of more or less autonomous sub-domains. The state considers the sub-domains to be part of its public task and responsibility but ‘out-sources’ the regulation and implementation of policy in these sub-domains to institutions, which are partnerships of state, market and civil society. Examples of such sub-domains are town and country planning, environmental protection, public housing, health care, education, social insurance and employment conditions.

Inherent to the nature of public tasks is that ultimate responsibility for these tasks rests with the state. This also applies to the sub-domains within the shared public domain. The difference between sub-domains outside and inside the shared public domain is that for the first category -such as administration of justice, police and taxes -the state bears full responsibility, while for the second category, responsibility for decisions regulating these sub-domains is shared between the state, market and civil society.

Sourcing out of public tasks to the shared public domain is done for reasons of legitimacy and effectiveness. Legitimacy is achieved because public support for decisions increases with participation of market and civil society. Consequently, it strengthens the democratic quality and degree of policy-making and enhances the implementation capacity of institutions.
Shared responsibility contributes to effectiveness because it improves the quality of the development policy. Indeed, a development policy, so designed in this way, will not only be geared to economic efficiency but also to social justice and sustainability.

4.2. The participation of state, market and civil society and each with its own foundation of human configuration, results in unique dynamics within the shared public domain. Within partnerships of the three sectors, policy is jointly established through a trade-off of policy options. But due to the functional relationship of the three sectors, one sector cannot impose its preferred policy option on another despite existing asymmetry in the balance of power between the sectors. On the contrary, each sector is dependent on the others to attain its objectives. Therefore each sector will attempt to pursue its own objectives by choosing, from its own perspective, those policy options that may become part of the general policy thereby contributing to the realisation of common development objectives. In this manner development policy takes account of sector specific interests through a process of consensus and compromise rather than conflict and contention.

4.3. The shared public domain also has other specific institutional characteristics in addition to its internal dynamic. The most important is decision-making at a policy level within bodies composed of the state, market and civil society. Examples in our country are the Planning Council and the Land Authority (which unfortunately do not function) within the area of spatial planning, the Environmental Council that will find a legal basis in the Environmental Act currently being drafted and finally in the area of employment conditions, the establishment of the Social and Economic Council for which a draft legislation will be submitted to Parliament for approval shortly.

4.4. Because of these special institutional characteristics governance in the shared public domain is also of a special nature. It is an interactive process in which individuals and public and private institutions participate to find solutions for social issues with policy dimensions. Three particulars become clear.

The first particular concerns the subject matter of decision-making. It is all about decisions, which are interwoven with policy issues and therefore complex by nature. The decision-making process is knowledge-intensive and both analytical and integrative. In order to solve these problems, they have to be reduced to manageable proportions without losing sight of the many-sided interests of the parties involved. Additionally, the ‘collective creativity’ of those participating in the process is heavily relied upon to enable a consensus and compromise to be reached.

Secondly, the process is participatory. Decisions are not taken without involvement of all interested parties. The process offers at least the possibility for all parties concerned to contribute.

The third particular is the style of decision-making. Within the shared public domain, decisions are taken by a combination of ‘negotiating’ (aimed at compromising by trading-off policy options) and by ‘problem-solving’ through a joint orientation on general policy and willingness to subordinate the group’s policy preferences. Neither ‘confrontation’ nor an exploitation of asymmetric relations belongs in this style. It requires instead a process driven by a belief in the added value of co-operation.

5.0. Good governance in the shared public domain

5.1. As for each form of governance, good governance in the shared public domain has to be safeguarded. The governance will have to conform to the principles of due care. The three pillars on which these principles for good governance in the shared public domain rest, are (i) access to information; (ii) procedures for public participation and (iii) control exercised by politics and law.

5.2. Two aspects should be distinguished as far as access to information is concerned. The first is that access to all factual information is relevant for sound decision-making. All persons, who are currently or potentially involved in decision-making, must, in principle, have access to the same factual information (a ‘level playing field’). Access must be free and unhampered.

The second aspect concerns the policy dimension of decision-making. Policy is always aimed at development in broad terms, so that includes not only economic efficiency but also social justice and spatial planning geared at sustainable development. This policy framework of general objectives has to be translated into specific policy strategies and policy options. This translation is a political responsibility because it presupposes political choices. The choices and the underlying considerations should be clearly expressed and publicly communicated by politics. Only then will they be perceived as something common (‘ownership’) and form the basis for effective transformation into norms that determine behavior in the specific sub-domains of the shared public domain. They are preconditions for effective decision-making. When politics does not discharge of this responsibility, the danger exists that decisions in the shared public domain are either not taken or will be only a shot in the dark and will run the risk of not being implemented.

5.3. The participatory process has two forms of participation. Participation can be through representative organizations or directly, subject to the rationality of the specific sub-domain concerned. Clear examples, in this respect, are the sub-domain of employment conditions, in which representation is necessary because it concerns the promotion of collective (general and group) interests and the sub-domain of environmental protection, in which collective interests, and also specific individual interests are at stake.

The same rationality determines how the participatory process of the sub-domain concerned has to be institutionalized. The process relating to the promotion of collective interests by representative organizations are of a ‘closed’ nature. In cases where individual participation should be possible, the process will be ‘open’, so that anyone, whose interest is threatened or damaged, is able to freely join in the decision-making process.

In both cases, the process will have to be flexible. A style of decision-making that combines ‘negotiating’ with ‘problem-solving’ is hardly compatible with rigidity. However, flexible processes will also have to contain safeguards of due care. Firstly, the formal safeguard of the principle of hearing. In our legal system, the promotion of public interests is not an obligation so overriding that individual interests do not matter. All citizens, whose interests are threatened or damaged, should be notified and be given sufficient opportunity to make their point of view known (‘notice and hearing’). This should also be the case with policy matters.

The most important substantive safeguard is the prohibition of arbitrariness. Decisions need to reflect a proper weighing of all of the interests involved. The interests of those who have been involved in the process and those of the public should be taken into account. In addition, the interests of each and everyone who could be affected by the decision-making, irrespective whether he has joined the process or not should also be considered. In the decision-making process several principles are important. These include the principle of equality (‘equal cases must be treated equally and different cases with due observance of their difference’), the principle of proportionality and subsidiarity (‘damaging effects of alternative measures have to be considered’) and the principle of legal certainty (‘legitimate expectations must be entertained as much as possible’).

5.4. As mentioned earlier, the state bears the ultimate responsibility for all decisions concerning a public task. This also applies to decisions taken in the shared public domain. This ultimate responsibility may be explicitly reserved by the state when decisions in a particular sub-domain of the shared public domain are either subject to state supervision, or only of an advisory nature and therefore not binding for politics. The latter will be the case with regard to general advice of the Social and Economic Council if the current draft legislation is approved.

If there is a dispute the ultimate responsibility for a decision with binding force becomes relevant. The ultimate responsibility will then, subject to the nature of said dispute, lies either with politics or with the (administrative or ordinary) court. First-mentioned is the case in which the dispute concerns the suitability of the measure that was decided on and the second is the case in which the legitimacy of the decision is contested. The latter will be the case if the decision was taken in contravention of any statutory regulation or of one of the principles of good governance that should have been observed in the decision-making process (‘the principle of hearing’ and ‘the prohibition of arbitrariness’).
On these grounds, any interested party should have the right to approach the court for legal protection.

6.0. Conclusion

6.1. In concluding I would like to make a few observations that specifically concern civil society and the shared public domain in the Surinamese context.

6.2. Our current constitutional set-up was inspired by the old paradigm of ‘state and market’, in which the state not only bears the responsibility for law and order, safety and security and social justice, but also for driving and achieving overall development.

6.3. References in the Constitution (articles 4 sub e, 6 sub b and 159 in conjunction with article 52) to a participatory democracy supplementary to a political democracy, should be considered a formal recognition of the role of civil society as a structuring mechanism in addition to the state and the market. In reality however, civil society is just as marginally involved in making development policy as the market is. The conclusion may be drawn that citizen participation in policy-making beyond the structures of political democracy, is (still) not a living norm.

6.4. The Constitution does not provide a basis for the recognition of what I have characterized as the shared public domain. There are indeed reference points in other regulations and as mentioned earlier, an example is spatial planning as a sub-domain for which the 1973 Planning Act and the 1980 Land Reform Acts prescribe ordering with due observance of policy established within the framework of partnerships among state, market and society. These statutory regulations have not been implemented, though. This is, without a doubt, due to a lack of living and experiencing participatory democracy. An equally important reason however, is perhaps the fact that successive governments failed to indicate a general policy framework for policy-making within specific sub-domains. As indicated earlier, such a framework is a precondition for effective policy-making in sub-domains of the shared public domain.

6.5. That was the bad news. The good news is that we are about to embark nationally on a programme for constitutional and public sector reform. Structuring the shared public domain will have to be an essential item on the agenda. As an initial impetus, the shared public domain will have to be mapped integrally. Subsequently a model has to be developed for shared responsibility through partnerships within the respective sub-domains of the shared public domain. Finally a coherent system of ordering has to be established for the entire shared public domain. I advocate this approach because I am convinced not only of the need for safeguarding good governance within the shared public domain but also of the rewards that the shared public domain as a driver for development and as a guardian of the quality thereof can generate.

Hotel Torarica

March 14, 2003