Economic Research Forum (ERF)

Ministerial rotations and effective government in Lebanon

773
Possible solutions to Lebanon’s multiple crises are well known. But as this column explains, while the necessary technical approaches and expertise are readily available, political elites continue to face incentives to undermine state authority and appropriate institutional capacities for individual gains. New evidence indicates that rotations of ministries among political parties do not make the government any more effective.

In a nutshell

To facilitate the political action required to address Lebanon’s current crises, elites have promoted the principle of ‘rotation’ of ministerial portfolios among parties in the formation of a new government in order to ‘break the mould’ and enable reform that would have not otherwise been possible.

Analysis of a novel dataset on ‘significant’ legislation and 72 ministerial changes in nine key ministries in all governments between 2005 and 2020 makes it possible to assess whether rotations increase legislative output.

Contrary to the narrative of political elites, rotation decreases output of significant legislation. The explanation lies in ‘memory losses’ within institutions following a rotation to the strategies of political parties.

Lebanon’s many overlapping crises require immediate and decisive political action to mitigate their fallout on the population. Political responses have always been slow – not only since the government of Prime Minister Diab resigned in August 2020.

Legislative production has historically been low in Lebanon. The average number of laws passed per year between 1990 and 2009 was 80.2 compared with 186.3 for a set of European countries (Mahmalat and Curran, 2020). Sluggish legislative response to changing environments or even crises has repeatedly been identified as a core reason for many of Lebanon’s socio-economic challenges.

The formation process of a novel government has now adopted the principle of ‘rotation’, aiming to change the party affiliations of ministers holding key ministries in order to ‘break the mould’ and speed up reform.

The argument goes as follows. Over time, several government institutions have become deeply entrenched with political elites. Their bureaucracies have become ‘bastions of privilege’ to elites of political parties (Leenders, 2021), which abuse their political power for political patronage by, for example, allotting employment to core supporters (Diwan and Haidar, 2020; Salloukh, 2019) or appropriating procurement contracts for connected firms (Atallah et al, 2020; Atallah et al, 2021).

These long-standing allegiances are assumed to have reduced the incentives for politicians, parties, and bureaucrats to change the status quo since they risk losing profits from such rent-seeking activities. Changing the affiliation of a minister is therefore supposed to ‘break the mould’ and foster novel formation of interests within and across ministries that enable reforms that would not have otherwise been possible.

But can rotation facilitate reform? Existing research finds evidence and explanation both in favour and contradicting this hypothesis. Researchers, however, have largely focused on established democracies with strong bureaucracies, making their results not immediately transferable to countries like Lebanon. Moreover, existing work is largely theoretical, rather than practical, as comparable datasets for ministerial productivity were missing. Data on ministerial output in developing countries are scarce, and Lebanon is no exception to that.

We have tested this hypothesis based on a novel dataset of legislative activity that allows us, for the first time, to establish comparable measures of ministerial legislative productivity in a developing country (Mahmalat, 2020). The details of the model and the data can be found in a working paper available on the LCPS website. And by means of spoiling the key result, we answer this question with a resounding ‘no’.

Contrary to the narrative propagated by political elites, rotation of ministries does not increase ministerial productivity. We investigated the number of ‘significant’ legislations passed by nine key ministries in all governments between 2005 and 2020, which includes 72 ministerial changes.

We found that rotation decreases output of significant legislation, a result that is robust when controlling for the individual effects of governments, ministries, and their budgets. But the affiliation to political parties appears to matter, pointing to differences in the way political parties approach legislative production.

Moreover, our results show that incoming ministers have even less output than the average ministry after rotations when they take over a portfolio that has been held by another party for more than one term before.

These results provide important clues about why rotations affect legislative activity.

First, institutions experience ‘memory losses’ following a rotation in the form of staff either leaving or obstructing the work of ministers by withholding information in order to prevent incoming administrations from reaping the benefits of previous efforts. These memory losses appear to depend on the extent to which outgoing political parties were willing and able to penetrate institutions with supporters over time by using public employment as a patronage tool.

Second, incoming ministers face challenges to understand who to trust in a new institutional environment. As allegiances of civil servants to elites of political parties can trump those to administrative superiors, incoming ministers tend to slow down work until they fully understand which civil servants and contractors to trust in that they facilitate their work and priorities.

These findings cannot speak in favour of parties maintaining a grip on particular ministries. The opposite holds true. Rotation cannot substitute for the formation of a competent government independent of party elites. Our results show that maintaining grip over a ministry can decrease its capacities in various ways, in particular as clientelist networks affect the accountability of civil servants.

In order to improve ministerial productivity, reforms are needed to increase transparency, such as by digitizing work processes, accountability, such as by strengthening merit-based criteria for performance evaluations and promotions, and meritocracy, such as by curbing the opportunities for parties for ad hoc hires that circumvent the Civil Service Board.

Possible solutions to Lebanon’s current multiple crises are well known. The challenges are less one of technicalities, but of politics. Both the necessary technical approaches and expertise are readily available, yet political elites continue to face incentives to undermine state authority and appropriate institutional capacities for individual gains.

Blaming ministerial affiliations for sluggish political responses is simply wrong. Rather, a government independent of the destructive influence of political parties and their elites, with a mandate for extraordinary legislative powers in certain policy areas and for a limited but predictable period of time, would be more promising. As long as established power structures remain intact in that ministers and their bureaucracies depend on party elites, no rotation of ministries is going to ‘break the mould’.

The full working paper can be found on the webpage of the Lebanese Center for Policy Studies. The authors wish to thank Sami Atallah, Matt Loftis and Paul Makdissi for valuable comments and feedback.

 

Further reading

Atallah, Sami, Ishac Diwan, Jamal Haidar and Wassim Maktabi (2020) ‘Public Resource Allocation in Lebanon: How Uncompetitive Is CDR’s Procurement Process?’, Lebanese Center for Policy Studies.

Atallah, Sami, Mounir Mahmalat and Wassim Maktabi (2021) ‘Public Infrastructure Procurement in Post-Conflict Power Sharing Arrangements: Evidence from Lebanon’s Council for Development and Reconstruction’, Lebanese Center for Policy Studies (forthcoming).

Diwan, Ishac, and Jamal Ibrahim Haidar (2020) ‘Do Political Connections Reduce Job Creation? Evidence from Lebanon’, Journal of Development Studies 31: 1-24.

Leenders, Reinoud (2012) Spoils of Truce: Corruption and State-Building in Postwar Lebanon, Cornell University Press.

Mahmalat, Mounir (2020) ‘Policymaking in Data Poor Countries – Measuring the Lebanese Political Agenda in a New Data Set’, International Development Planning Review 42(4): 407-30.

Mahmalat, Mounir and Declan Curran (2020) ‘Fractionalization and Reform: A Framework of Political Collaboration on Reform with Application to Lebanon’, Economics of Governance 21(2): 187-214.

Mahmalat, Mounir, and Sami Zoughaib (2021) ‘Breaking the Mold? Why Ministerial Rotations Cannot Make Up for an Independent Government in Lebanon’, Lebanese Center for Policy Studies.

Salloukh, Bassel. F. (2019) ‘Taif and the Lebanese State: The Political Economy of a Very Sectarian Public Sector’, Nationalism and Ethnic Politics 25(1): 43-60.

Most read

Sanctions and carbon emissions in Iran

How are Iran’s energy use and emissions of carbon dioxide affected by the imposition of economic sanctions? This column summarises new research that analyses a range of different scenarios and which takes account of multiple economic, social and environmental dimensions, notably what happens to growth and energy intensity, and whether sanctions are lifted.

Economic roots of early marriage in Iran

Despite the documented harms of being married off before the age of 18, particularly for girls, early marriage remains common in parts of Iran. This column summarises research that sheds light on the economic factors that drive this practice, using unique provincial data to show that poverty, inflation and income inequality are key determinants –while religiosity is not. The findings suggest that economic policies can play a crucial role in reducing the prevalence of child marriage.

Can a free trade area in services boost trade within the Arab region?

With trade in goods among Arab countries remaining modest, trade in services could play the pivotal role of an engine of growth in economic integration within the region, as well greater participation in global value chains. This column outlines progress to date and what needs to be done to make a success of AFTAS, the Arab free trade area in services.

Natural disaster literacy in Iran: survey evidence from Tehran

The frequent floods, earthquakes, and heat waves in the Middle East and North Africa underscore the urgent need to assess the region's preparedness for natural disasters. This column summarizes the state of 'natural disaster literacy' in various parts of Tehran, the capital of Iran and one of the most populous metropolitan areas in MENA. Data from a survey conducted in the winter of 2020/21 enabled the development of a disaster literacy index, which helps to identify the city's most vulnerable districts.

Should Arab countries join the WTO’s agreement on government procurement?

Not all members of the World Trade Organization are signatories of the institution’s Agreement on Government Procurement – the GPA. Indeed, although many developing economies are now joining the agreement or at least acquiring observer status, it has long been thought that the costs outweigh the benefits. This column re-evaluates the pros and cons of GPA accession for Arab countries.

Financial development, corruption and informality in MENA

Reducing the extent of informality in the Middle East and North Africa would help to promote economic growth. This column reports evidence on how corruption and financial development influence the size of the informal economy in countries across the region. The efficiency of the financial sector in MENA economies reduces the corruption incentive for firms to seek to join and stay in the formal sector.

EU climate policy: potential effects on the exports of Arab countries

The carbon border adjustment mechanism aims to ensure that Europe’s green objectives are not undermined by the relocation of production to parts of the world with less ambitious climate policies – but it could impose substantial costs on developing countries that export to the European Union. This column examines the potential impact on exporters in the Arab world – and outlines possible policy responses that could mitigate the economic damage.

Climate change threats and how the Arab countries should respond

The Arab region is highly vulnerable to extreme events caused by climate change. This column outlines the threats and explores what can be done to ward off disaster, not least moving away from the extraction of fossil fuels and taking advantage of the opportunities in renewable energy generation. This would both mitigate the potential for further environmental damage and act as a catalyst for more and better jobs, higher incomes and improved social outcomes.

Exchange rate undervaluation: the impact on participation in world trade

Can currency undervaluation influence participation in world trade through global value chains (GVC)? This column reports new evidence on the positive impact of an undervalued real exchange rate on the involvement of a country’s firms in GVCs. Undervaluation acts as an economy-wide industrial policy, supporting the competitiveness of national exports in foreign markets vis-à-vis those of other countries.

Child stunting in Tunisia: an alarming rise

Child stunting in Tunisia seemed to have fallen significantly over the past two decades. But as this column reports, new analysis indicates that the positive trend has now gone dramatically into reverse. Indeed, the evidence is unequivocal: the nutritional health of the country’s youngest citizens is rapidly deteriorating and requires immediate and decisive action.




LinkedIn