Lessons for the next government: The ABC of Guyana’s public investment management regime

Introduction

 

Surprisingly, considering what appears to be the public’s main preoccupations today, thus far I have already received an unusual number of queries concerning the notion of “pathological altruism”, which I had introduced in recent columns that discussed the Venezuelan PetroCaribe scheme. Because 1) this notion has a much wider application to public policy in Guyana, and 2) in light of the forthcoming elections and therefore the prospect of a new government, I shall, over the next several weeks, respond to these queries by way of selectively returning to a topic that I had considered in some detail approximately two years ago. That topic was a critical examination of the then existing regime of public investment management in Guyana. Let me however declare upfront that I will not attempt to repeat here in any detail the substance of my previous rather extended discussions on this topic, particularly my evaluation of what I had labelled in these earlier columns as Guyana’s “troubled projects.” Interested readers can independently review these columns in the Sunday Stabroek electronic archives, March to August 2013.

 

Lesson 1: Pathological altruism

 

20131020cliveReaders may recall I had sought to show in my recent discussion of PetroCaribe that the notion of pathological altruism is from a methodological standpoint, as old as the proverbial saying: “the road to hell is often paved with good intentions.” As indicated this saying has been recently modernized and reformulated in what is reputed to be a seminal publication, Pathological Altruism (2012), co-edited by Professor Barbara Oakley, a systems engineer at Oakland University, Michigan. Her basic thesis is that empirically it can be shown that all too often intentions aimed at helping others, particularly government social policies intended to serve the poor and the powerless, instead lead to their harm. Pathological altruism thus refers to the unintended harm directly caused by well-intended actions.

Importantly, she goes on to argue that, if ex ante well-intentioned actions or proposals were to be carefully scrutinized this ex post outcome might more often than not be foreseeable, especially if risk, uncertainty and other contingent occurrences are fully taken into account. Put more directly, she is asserting that in situations where attempts to promote the welfare of others result instead in their harm, independent external observers or analysts might well have foreseen this outcome. Clearly this formulation represents an unmistakable call for heightened roles of public, independent, expert, and professional interactions in the design and implementation of public policies and programmes aimed at helping those in need.

The consensus is that, in practice, the above circumstance obtains over wide swathes of public social policy. Thus to take a random example, well intentioned public financial and other safety net support for teenage pregnancies in Guyana might well unintentionally and indeed perversely so provide material incentives for this risky teenage behaviour to emerge. This example reveals that altruism is rooted in concern for others’ welfare and not self.

This is selflessness and not selfishness; a desired core value in most cultures, belief systems and religions.

Significantly, such benevolence is valued universally; it is also considered to be subjectively pro-social and never objectively anti-social; values are often held to be subjective, in the sense that what one person thinks is good, others might think is harmful.

Similarly from the example given above, pathological refers to negative outcomes, produced by well-intended actions.

Methodologically, this is obviously the domain of both risk and uncertainty, which are intrinsic to all areas of public policy, since we know from experience that unplanned occurrences and other contingent events are ever-present in all future-oriented human activity.

Based on the above arguments, the lesson to be derived here is that governments should, even for the most a priori desirable public policy interventions, recognize that they are likely to be embedded with pathological altruism and so plan accordingly.

This is not, however, as fatalistic as it might first appear. To the contrary, the lesson to be observed above all is that a premium should be placed on effective and efficient modalities for ensuring there are well-designed, well thought-out, and thoroughly evaluated trade-offs for all intended publicly designed, financed or executed spending.

As I will discuss more fully in coming columns, this should be a recognized feature of the ABC of a well-integrated public investment management regime for Guyana in the 21st century. It should also be borne in mind that the particular issues of pathological altruism differ significantly from the issues found in other areas of the management of a country’s public investment regime. This is because 1) pathological altruism involves distinctive ‘irrationalities’ in personal and group behaviour; and 2) this notion explicitly acknowledges that value-laden decisions invariably accompany situations which might result in “the road to hell being paved with good intentions.” These subtleties will be illustrated in the next section.

 

Concluding observations

 

Certain individual, group, and social behaviours of ruling political elites seem to foster pathological altruism. Consider the following two examples: 1) Empirical evidence suggests that where vanity, especially political vanity is prevalent among the ruling elites, this often tends to promote emphases on prestige and white elephant projects ostensibly aimed at bringing “benefit to the masses” while they glorify the political leaders and their parties.

Typically these elites would display considerable impatience with publicly expressed cautions, let alone criticisms, of their intended actions. 2) Similarly authoritarian-type political regimes often portray absurd egocentric certitude; little to no confidence in public feedback and interaction in regard to the policy proposals they put forward; outrageous willingness to minimize or dismiss risks and uncertainties in their policy proposals; and also a marked inability to distinguish the difference between potential and most likely outcomes.

In Guyana the ruling political elites seem incapable of recognizing the principle that precisely because their vanities, egocentric certitudes, and the dangers of a ‘little learning’ are so deeply intertwined with their policy prescriptions that they are likely be too closely invested in them and therefore need even more to operate on the principle of critical interaction to ensure balance.