Spending more than you earn is a management flaw; presidential candidates seem to ignore it
In a presidential election year, there is no shortage of candidates making promises. And the question that, in the overwhelming majority of cases, goes unanswered in electoral debates is actually obvious: where would the resources come from to deliver on everything that is promised?
The answer is complex and almost always avoided by the candidates, but it is closely tied to a serious problem in the country: the public deficit, that is, the fact that the country spends more than it collects.
According to a World Bank study , of 32 Latin American countries, 31 spend more than they collect. And Brazil is one of the worst in this scenario, with a fiscal deficit that last year reached almost 4% of our Gross Domestic Product (GDP), much higher than the average of all the countries analyzed, which was 2.4% of GDP.
The problem is made worse because a large share of government resources is consumed by payroll. According to a recent report published in the media, federal personnel expenses have been growing dramatically since 2012 and last year reached 41.8% of the country's tax revenue.
In other words, almost half of the taxes we pay go to payroll, and the same happens in the states. According to another recent article, last year almost all Brazilian states spent more than half of what they collected just to pay active civil servants, retirees and pensioners.
Not to mention the social security problem, which, in addition to the widely debated actuarial imbalances, is also directly related to the number of employees who will one day retire.
In other words, as important as debating solutions to the great and serious problems we have is discussing how we will have the resources to implement them. In this context, little is said about something essential in this equation: initiatives to improve processes, increase productivity and reduce the size of the public machine.
Some candidates propose shrinking the State by privatizing activities that the private sector can perform, varying in degree and scope. This is undoubtedly a necessary move, but even if the broadest proposals of this kind were applied, the sectors that could be transferred to private enterprise are only a portion of the government structure. We would still have an enormous public apparatus to fund.
Others talk about reducing the number of ministries, but the few changes generally made in this direction are no more than a mere regrouping of agencies, keeping the same size and only changing the ministries they hang from. That is, when they do not multiply again shortly afterward to accommodate political arrangements.
The lean concept, or lean thinking, has helped companies reduce their waste, enabling them to achieve more results using fewer resources. In other words, it focuses on improving how work is done, as an essential way to optimize the use of scarce resources.
Unfortunately, the application of this model in Brazilian public management is still timid. If this logic of always aiming to eliminate waste, of finding and ending rework, of seeking every day to add more value in everything that is done, and other concepts of lean management were embraced by those who govern – and now by the candidates –, we would undoubtedly focus the public debate on ways to make better use of resources, and not just on promises.
A serious discussion along these lines would have to start with a complete review of what is (and what is not) “value” for the citizen. That would certainly lead to a deep application of process improvement principles in public management. We would eliminate the enormous wastes that exist, the overlapping of responsibilities and activities among agencies, etc. But little has been done in this direction. And citizens suffer more and more from enormous bureaucracy and inefficiency whenever they need a public service.
Look at digitalization, which has brought simplification to processes in the private sector. There are initiatives of this kind in public agencies, but what has the impact been? Have they significantly increased the productivity of services, making it possible to do more with less? The impact is still very small.
We hear almost nothing about concrete proposals for a new human resources structure for civil servants that would make it possible to modernize the public machine. For example, with plans to freeze the replacement of vacancies and for voluntary severance, career restructuring, reassignment of staff in light of new optimized processes, alignment with market conditions, motivation and incentive mechanisms tied to process improvements, etc.
