Public management revisited

The economic, social and environmental dramas are well known. They result not from the lack of resources or information, but of outdated forms of social and political organization. We must rethink the decision process itself.

(Ladislau Dowbor)

A necessary precursor for innovation to occur is to have a highly networked economy, with continuous feedback loops established between different individuals and organizations to enable knowledge to be shared and its boundaries to be pushed back.

(Mariana Mazzucato)¹

We have the financial and technological resources, and we know what must be done – at a global level, it is about seeking an economically viable, socially fair and environmentally sustainable society – and we even have the details in the 17 Sustainable Development Goals, 169 targets and 230 indicators. We know our dramas, hunger, unemployment, inadequacies and inequality in education, health dramas, environmental destruction, financial chaos and so many problems we face. Systematizing, quantifying and publicizing our problems is fundamental, but when we have a convergence of so many critical trends, we must consider not only the dramas, but the management processes that allow them to deepen, or that prevent them from being faced. With absurd ideological simplifications such as waiting for “the markets”, reducing the public sector, expanding privatizations, diversion of public money to debt service, and above all the generalized prioritization of financial gains, we have a crisis of the problem-solving process itself. The institutional impotence that plagues Brazil and so many other countries has to be faced, generating the necessary governance, and streamlining the decision-making process of society. The slow-motion catastrophe is gaining speed.

The articulation of the State, corporations and civil society

Corporate stronghold over governments is a key problem. BlackRock CEO Larry Fink manages US$10trn, Biden’s budget is US$6trn dollars. Markets alone do not solve our governance problems. Where in another era we had countless companies that faced each other in the market to provide adequate services, today we have corporate giants, and platforms that control finances, communications, information and even private behavior. They have decisive weight in parliament, in the executive and in large part in the judiciary. The private appropriation of public policies is a central challenge, and it means that we have lost both the regulatory power of free business competition – which subsists only in areas of small and medium-sized companies – as well as the medium and long-term planning systems that played and still play an important role both in the European Union and, of course, in China and other countries. The globalized and financialized world has lost its two main regulatory mechanisms, market competition and economic and social planning².

We are societies much too complex to be managed by ideological simplifications such as neoliberalism. In our recent study O Pão Nosso de Cada Dia³, we proposed a set of solutions based not on ideological Manichaeism, but on monitoring what works, under what conditions and with what forms of organization, in the different sectors: Producing cars, T-shirts and tomatoes can be regulated within the framework of private property and market mechanisms, but large infrastructures such as transport, energy, communications and water and sanitation need a systemic vision, long-term planning and decisive participation by the State. Another vital area of the economy, which today has become dominant, concerns intermediation services such as finance, commodity trading, legal intermediation and the like – the toll collectors of any economic activity – need regulatory systems and in particular state-owned sectors, to balance the force of cartelization: the digital revolution has expanded the power of intermediation, and generated a costly tollbooth economy. And a fourth area that has become a giant, is that of social policies, with health, education, security and the like: where it works, it is ensured in the form of public policies, free of charge and with universal access.

In other words, when we look at how and where different areas of activity function properly, education in Finland, urban policies in Denmark, infrastructure planning in China, financial intermediation in Germany and Sweden, the healthcare system in most European countries, the conclusion is that it is not a matter of a bigger or smaller State, but of the State managing the sectors in which the public and systemic vision is essential. Daily consumption goods can regulate themselves by market mechanisms, within a legal framework that controls the formation of monopolies and the environmental impacts. Large infrastructure networks need a long-term vision, systemic objectives and public planning, with strong State participation.

Financial intermediation and communication platforms need to be strongly confronted with regulation, as they naturally tend to form demand monopolies. Social policies require decentralized and participatory forms of management since they are capillary networks of services that must reach every home, every child, and every community. In other words, instead of ideological simplifications, we need to opt for the forms of organization and decision-making processes that work best according to the different areas of activity. We can call this set of different subsystems mixed and articulated management systems. It is not about ideological simplifications, but looking at what works, a question of common sense. Privatizing Petrobras and subjecting the country to the fluctuations of international oil markets, when we have the raw material and the complete technical chain in our hands, is understandable by the interests involved, but a disaster for the country.

Decentralized network management

Updated forms of management have shifted in both the public and private sectors. Large private corporations with units in numerous countries and in various sectors work with decentralized systems, articulated in a network, to optimize the decision-making process. In the case of Brazil, with its territorial dimension, regional diversity and 5,570 municipalities, the current centralized system, in which the allocation of resources ends up being essentially in Brasília, is irrational both at the local management level, which does not have the resources corresponding to needs, as for the central government, mired in micro negotiations. The study by Marcélio Uchôa, O que os administradores municipais precisam saber (What municipal public managers need to know), shows, in particular, the impotence of small and medium-sized municipalities⁴. The decentralization of resources, accompanied by network management, will allow the different levels of government to monitor in detail the financial flows and achievements, naturally depending on ensuring widespread digital inclusion, a precondition for any rational management of resources, with due controls.

For municipalities, the decentralization of resources is essential, with the possibility of organizing proximity finance, with municipal public banks (as in Germany, China, and in numerous other cases), community development banks, credit cooperatives and evidently an increase in predictable transfers, allowing for adequate local planning. The 1988 Brazilian Constitution is unbalanced, with more charges being transferred to the municipalities, but not the corresponding resources, requiring a reformulated federative pact. It is important to reiterate that a computerized network system allows the information and financial flows to be monitored at the various levels of government, while ensuring the necessary control and management flexibility, according to the diversity of municipalities and regions. We are in a digital world but with analogic public management.

Digital inclusion

With the shift of a wide range of economic activities to the immaterial economy, quality digital inclusion, the generalized connectivity of all economic and social agents, and even of individuals, have become fundamental. In terms of cost-effectiveness, digital inclusion is the initiative with the greatest multiplier effect, as it radically increases the options available to individuals, corporations and the various levels of public administration. In Brazil, it is a widely underused resource, as can be seen in the reports of the Internet Steering Committee (CGI), with a quarter of the population excluded, and a limited portion of the population with full-quality access. Exclusion, or only partial digital inclusion, deepens inequality: how can children study without internet access?

Although it is associated with cutting-edge economic activities, today digital inclusion and access to technologies, in general, are vital for any small producer. The small farmer needs artificial insemination, soil analysis, meteorological information, price information, and consultation with potential customers: connectivity breaks isolation, and it even makes it possible to break the tolls of middlemen by facilitating the sale of products to the final consumer. It is important to remember that the traditional transport infrastructure makes it possible to articulate the economic agents in the territory, but it involves very high costs. Network connectivity has very low costs, as electromagnetic waves come from nature, a natural vehicle for articulating all activities. The prices we pay for access do not result from costs, but from the high profits of oligopolies that charge tolls on transmission channels that belong to nature. As with water and energy supply networks, high-level and widespread access can be provided as a public service, essentially covering costs.

Digital initiatives such as Piraí Digital, which ensured internet signal coverage throughout the municipal territory, with very low costs, show how an economy can be stimulated zed by freeing up access to communication and networking in all areas of activity. The experiences of Kenya and countless others show how direct contact between economic agents makes it possible to escape the costs imposed by banks and other financial or commercial intermediaries. In the age of the knowledge economy and society, the delay that Brazil is showing in the technical base and in the process of digital inclusion is catastrophic. The refusal of Minister Paulo Guedes, in 2021, to authorize the financing of 3.5 billion reais to ensure internet access in public schools shows a radical misunderstanding of the priorities and scientific-technological dimensions of development. In fact, with knowledge becoming the main factor of production in modern economies, ensuring performing systems of access for all has become essential.

In Brazil, dramas such as hunger, deindustrialization, reprimarization, scientific and educational backwardness and other deformations are widely studied and known, but we need to turn our attention to the decision-making process that allowed and continues to allow the divorce between the short-term private interests, including international ones, and the interests of the nation. We need a modern management shock both in public administration and in its relationships with the various economic and social agents. But the issue is much broader. At the international level, we have a global economy, but national governments: the result is chaos and violence. The reinventing government would not be an overstatement.