Should Countries Run Like Businesses? by Intan Balqis

The role of government has always been debated. It’s the reason why different political ideologies came about in the first place. Some say that countries should be run like a business and that a country will run more efficiently if it’s governed by a businessman. In fact, multiple businessmen have been leaders; United States’ President, Donald Trump, and Italy’s former Prime Minister, Silvio Berlusconi. The question is, is there truth to back this hypothesis?

In history class, we learned that leaders were selected naturally to establish and regulate a system in families and tribes, until it evolved into monarchy and democracy or a combination of both in city-states and eventually countries. In Malaysia, we are a democratic constitutional monarchy that holds a general election once every five years. Throughout Malaysia’s history, our Prime Ministers have had careers in medicine, law, as civil servants and as political activists. In regard to being businessmen, former Prime Ministers Dato’ Sri Najib Razak worked at Bank Negara and Petronas while Tan Sri Muhyiddin Yassin worked at a few corporations such as SGS Ates Sdn Bhd. However, neither is perceived in the public’s mind as businessmen more prominently than they are politicians, unlike Donald Trump.

To answer the question posed, it is essential to list a government’s role. According to the World Bank, good governance by a government is defined by Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption. Overall, these six dimensions capture the need of a government to take care of the country and its citizens’ welfare. This contrasts with a businessman’s role in a company, to maximise shareholder values or in other words, ‘profit’.

Additionally, this does not include the fact that different political leaders value each good governance dimension differently and plan on fulfilling the dimensions differently. It is not as clear cut a metric for businesses where the higher the profits, the better. It is the choice between a flourishing economy that caters to top income earners or an economy that prioritises equality which comes with a caveat of higher taxes for top income brackets. It is also the choice between a more efficient privatisation or a more inclusive nationalisation of services. On the subject of fulfilling their respective roles, the prime minister changes once every five years while the heads of a business organisation do not typically change as much. How do you then sustain a vision? This contrast is an example of why countries cannot be run like a business.

However, it is also untrue that ‘profit’ or the economy should take a backseat in good governance. Both the government and the general public cares for the country’s financial stability. This has led to prominent and controversial policies such as Malaysia’s Prime Minister Dato’ Seri Anwar Ibrahim’s administration implementing new government taxes on nearly all imported goods and cutting diesel subsidies as well as the United States’ President Donald Trump’s administration increasing protective tariffs to ultimately reduce fiscal deficits. However, policies that only target increasing government revenue and reducing government spending can come at a cost. When business leaders make decisions, it is a matter of impacting the company’s profits and ultimately its workers. When policymakers make decisions, it has a large-scale impact. Whole lives can be upturned and the people’s welfare can be disrupted. Hence, when considering a country’s finances, there should be a balance between the economy and welfare. Sure, government revenue may increase by 5 billion ringgit, but is it worth paying more for groceries?

A government must be run on the basis of general principles, not particular strategies. Drawing from the aforementioned World Bank indicators for good governance, the six dimensions only have general outlines. For example, Government Effectiveness “captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies”. Hence, a government should work its way backwards, that is to first identify the need to increase the quality of, for instance, basic health services, and then implement the best strategy. To simply look at what other countries are doing and implement the same strategy or worse, to enter into the administration with a vanity strategy in mind without first considering alternative strategies is a slippery slope. Policies are not ‘one-size-fits-all’. Business majors learn investment strategies, managing resources and adapting to changing market conditions depending on the state of the business, so should politicians make policies not just to fulfill an ideal image, but because the country needs it.

Businesses run on competition. It’s a dog eat dog world. Although this phrase can also be applied to politics in terms of political campaigns and elections, it should not be applied to the government. A country runs on beneficial symbiotic relationships, both with its people and with other countries. Trade between two countries is a showcase of mutualism where the country with a comparative advantage on specific goods will export so that the country importing the goods can benefit from it. On the other hand, providing aid to a country in need is a showcase of commensalism. For a business, helping out another business with no reciprocation is unheard of. For a country, helping others is regarded as a human responsibility, and isolationist policies to only protect one’s own should be looked down upon. On the same note, caring for the welfare of its people is also an important commensalism relationship. Providing quality living with no discrimination based on politics, race, or religion should be the end goal of every government interaction. There is no need for a ‘payment’ (like election votes, loyalty, etc.) to be made on behalf of citizens for a government to effectively carry out a good strategy. There is no bartering system in governing.

We all think that whatever the government does, it should be efficient and effective in the least costly way possible. However, this does not translate to running a country like a business. It is a matter of welfare versus profit as the main end goal to achieve. Given the relatively shorter term of a government, trying to ensure long-term stability with policies that cut to the root of the problem instead of only aiming for short-term gains should be prioritised. Moreover, in ensuring efficiency and effectiveness, equity for all should also be in the equation. No citizen should be left behind for the benefit of the greater good. A country is a much more complex ecosystem with more stakeholders relying on it compared to a business. Therefore, although certain business practices may inform good governance, the fact that the government has different fundamental goals than a business prevents a country from relying on good business strategies as its blueprint.

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