crisis management – Building State Capability

COVID Budgeting – Fiscal Response and Challenges

Guest blog written by Imaad Syed

Most governments across the world responded to challenges of the COVID-19 pandemic through fiscal and monetary support measures. Coordination and implementation issues aside, these measures have been instrumental in saving lives and livelihoods in the short-term. However, budgeting challenges remain given the massive outlays for the COVID response. In this blog post, we briefly overview the scale of fiscal response, types of fiscal measures, and budgeting challenges ahead.

Distribution

National governments were quick to deliver significant fiscal stimulus packages in response to the economic crisis due to coronavirus lockdowns. These packages varied in size and location (Figure 1). New Zealand had the largest fiscal response of any major country at 19.5% of its GDP (second overall behind Tuvalu at 29%), followed by Singapore (16.1%), Canada (12.5%), and the United States (11.8%).[1] Approximately 70% of countries had a fiscal response of 5% of their GDP or lower (Figure 2). Lesotho had the largest fiscal response among countries in Africa at 10.2% of its GDP, while United Kingdom (9.2%) and Chile (8.4%) had the largest fiscal response in Europe and South America, respectively.

Figure 1: Map of global fiscal response to COVID. Excludes Tuvalu to highlight differences among countries. (Source: IMF)

Figure 2: Distribution of global fiscal response to COVID (Source: IMF)

Measures

The fiscal response to COVID has largely centered around relief for taxes and fees, employment incentives, and economic stimulus.[2]

Taxes and fees relief: Most governments have extended filing deadlines and reduced tax rates to provide relief to individuals and businesses. Other measures include:
- Deferring tax installment payments and writing off interest on late payments
- Extending payroll tax exemptions and deferring sales tax remittances
- Suspending increments in government fees and charges
- Increasing corporate tax thresholds and rebates
- Removing import tariffs on critical medical supplies

Listen to our sixth virtual discussion on Leadership Through Crisis

On May 1st, 2020, we hosted a sixth virtual discussion with Matt Andrews, who answered audience questions on his new Public Leadership Through Crisis blog series.

Thank you to ALL those who attended our sixth session and for engaging with us. If you missed the session, you can listen to it here or in the player below.

BSC’s new Public Leadership Through Crisis blog series offers ideas for leaders questioning how they can help and what kind of leadership is required in crises. Each blog offers a few ideas as well as questions for reflection, thus creating a space for learning and contextual reflection.

Listen to our fifth virtual discussion on Leadership Through Crisis

On April 24th, 2020, we hosted a fourth virtual discussion with Matt Andrews, who answered audience questions on his new Public Leadership Through Crisis blog series.

Here are some of the questions he answered:

- Since the pandemic requires quick decision making at the national level, this might pose a threat for democracies and citizen inclusiveness, how can countries (especially Developing ones) improve the inclusive decision making process especially when we see more digitalization in many areas of our lives.. perhaps big investments will be required on digital government.
- Interesting point about more junior people being hired at this point. As the economy is slated to open up in stages (those with immunity first), my suspicion is that the younger, less risk population (likely fewer pre-existing conditions…age is one of them) will be allowed out first. What will this do for economic equality for middle-aged, older people whose retirement savings are likely decimated at this point?

Thank you to ALL those who attended our third session and for engaging with us. If you missed the session, you can listen to it here. We are now holding these virtual sessions every Friday morning at 9am EST. Follow our blog to get registration information!

COVID-19: Planning for Tomorrow’s Problems Today

Guest blog written by Peter Harrington

When he started his blog series on crisis leadership on these pages, Matt Andrews asked: can public leaders navigate high winds and big waves in little boats? We could add to that question: how do you build the boat when you are already at sea and the storm is raging?

For most governments, the mechanisms to deal with this crisis did not exist, and existing ones were not designed for it. As a result, much of the response is being improvised in the middle of a hurricane, and more recent blog posts on Liberia and Bahrain have explored this.

This challenge gives rise to a very common pattern: crisis responders will focus on the problems that have to be solved right now. It is a natural way to go about the job; prioritise what is urgent and solve the problem, then move on to the next. But anyone will familiar with the so-called Eisenhower matrix (‘Urgent versus Important’ 2×2 shown below) will know that we ignore ‘important but not urgent’ issues at our peril.

Source: Vinita Bansal’s excellent Techtello article on ‘How to Prioritise and Master Productivity’

The current crisis is no different, and this post is dedicated to the problems which will become critical in the next few weeks and months as the crisis evolves, and which must be planned for (those in quadrant 2 of the matrix and need to be scheduled for action through strategic thinking NOW). Leaders need to make sure they put in place resources to tackle these ‘tomorrow problems’.

COVID-19 is impacting every sector. But for simplicity’s sake, I am going to focus on the two main, broad dimensions of the crisis: the medical (or public health) side in this blog post, and the economic side in the next post. These two dimensions are intimately connected – what happens in one, including the policies implemented, profoundly affects the other. It’s vital to consider how these interdependencies will play out as the crisis evolves, and some countries are doing that already. But forward planning will be especially important in developing and transitional countries which have yet to bear the full brunt of the pandemic. Continue reading COVID-19: Planning for Tomorrow’s Problems Today

Public Leadership Through Crisis 19: How do political leaders commonly structure their roles?

written by Matt Andrews

The Public Leadership Through Crisis blog series offers ideas for leaders questioning how they can help and what kind of leadership is required in the face of a crisis (like the COVID-19 pandemic).

This is the second of four blogs addressing questions about political engagement in crisis response organization. The questions are: Who are political leaders and what roles do they play in crises? How do political leaders commonly structure their roles? How can political leaders structure their roles more effectively? I will offer some thoughts on the second of these questions here and, as usual, ask questions for you to reflect on.

How do political leaders commonly structure their roles in crisis?

Let’s start with recognizing that political leaders differ in a myriad of ways, and political leaders organize themselves quite differently in response to crises as well (as shown in studies like this one from Christensen et al). Different structures often reflect different personalities, political cultures, available tools, and more.

Even with the differences, some fairly commonly observed ways politicians respond to crises. One of these ‘common responses’ pertains to how they organize their response: Many politicians centralize and try to move towards a command and control deciding and operating mode.

This is the core observation of Paul ‘t Hart, Uriel Rosenthal and Alexander Kouzmin in their 1993 classic: “One of the more enduring ideas about governmental response to crisis is the expectation that government decision making becomes highly centralized.” Continue reading Public Leadership Through Crisis 19: How do political leaders commonly structure their roles?

Public Leadership Through Crisis 18: Who are Political Leaders and What is their Role?

written by Matt Andrews

The Public Leadership Through Crisis blog series offers ideas for leaders questioning how they can help and what kind of leadership is required in the face of a crisis (like the COVID-19 pandemic).

I have used a few blogs to discuss the need for governments to reorganize when facing crisis, adopting flat, fast and flexible structures. There are various versions of such structures but I propose a snowflake mechanism that allows one to have a central coordinating team (like a snowflake nucleus) that interact with organically emergent set of relating teams, all acting, learning and sharing with the full system.

I see this kind of mechanism operating in crisis responses like the 2014 Ebola experience in Liberia and the 2020 Covid-19 experience in Bahrain. These mechanisms allow for what Mark Moore calls the ‘decentralized mobilization of energy’ where the entire governmental system works together to solve the crisis. Some might think this sounds like chaos, but it is the kind of mechanism needed when you face huge tasks fraught with unknowns and need rapid work and learning at scale.

A key question can be raised in designing such mechanism: “Where do political leaders fit in?”

I will address four issues related to this question in the next set of blog posts:

Who are political leaders and what roles do they play in crises?
How do political leaders commonly structure their roles?
How can political leaders structure their roles more effectively? And
Is it ever appropriate to criticize political leaders during times of crisis?

In this blog I offer some thoughts on the first question and, as usual, ask questions for you to reflect on—thinking about the political leaders in your crisis situation and the roles they play.

Who are ‘political leaders’ and what roles do they play in crises?

There are many sets of political leaders in government. Perhaps the most obvious are the formal politicians who have been elected to run the executive operation of government (the President or Prime Minister, Governor or Mayor) and the formal politicians who have been elected to run the legislative branch of government (the Congress or Parliament or Town Council). Continue reading Public Leadership Through Crisis 18: Who are Political Leaders and What is their Role?

Public Leadership Through crisis 17: ‘Keep an eye’ on how your crisis response impacts Public Value

written by Matt Andrews

The Public Leadership Through Crisis blog series offers ideas for leaders questioning how they can help and what kind of leadership is required in the face of a crisis (like the COVID-19 pandemic).

This post captures the second part of my interview with Mark Moore (you can find the first part here). It asks how governments should think about public value in times of crisis—and especially about the potential public value tensions implied in choosing different courses of action in response to crises. For instance,

‘Stay-at-home’ orders might promote public health (a public value) but is this at the expense of economic well-being (another public value)?
Rigorous contact tracing might promote public health (a public value) and even be key to helping countries break out of isolation and promote economic well-being (another public value) but is this at the expense of rights to privacy for individuals (another public value)?

These tensions matter a lot, because the organized action of government always impacts on public value(s); creating and promoting some types of value and (potentially) undermining other types of value. Given that actions in times of crises are rapid and experimental, these impacts on value(s) can be particularly unexpected and unplanned. How does one manage such impacts?

As with prior blogs, I provide Mark’s video, then offer thoughts and questions for your reflection.

Mark begins answering my questions with some basic concepts from his work on public value, to help show how complicated the topic is—and how hard a challenge it is for governments to think clearly about the public value implications of their work (especially in times of crisis).

Continue reading Public Leadership Through crisis 17: ‘Keep an eye’ on how your crisis response impacts Public Value

Listen to our fourth virtual discussion on Leadership Through Crisis

On April 17th, 2020, we hosted a fourth virtual discussion with Matt Andrews, who answered audience questions on his new Public Leadership Through Crisis blog series.

Here are some of the questions he answered:

I am curious to explore the impact of the COVID-19 on the global value chain. For sure it impacted in a way the supply chain, but what will the global value chain post covid-19 be?
I would like to have your thoughts about the impact on the travel industry and possible evolving requirements for global travel going forward.
What will the role of public investment and public infrastructure? Do you expect a Keynes’ come back?
If we think about the Sustainable Development Goals Agenda, how do we should change and improve a new narrative?

Public Leadership Through Crisis 16: Empowering work and learning, even if things seem chaotic

written by Matt Andrews

The Public Leadership Through Crisis blog series offers ideas for leaders questioning how they can help and what kind of leadership is required in the face of a crisis (like the COVID-19 pandemic).

The last few blog posts have offered various lessons from practice – in Liberia’s 2014 Ebola crisis and Bahrain’s current Covid-19 crisis. I offered these lessons at this point partly because they provide excellent applied narratives on the importance of adopting fast, flat and flexible organizing structures when faced with crises. Regular readers will know that I like the ‘snowflake version’ of such structures (where many satellite teams locate themselves organically around a central coordinating nuclear team). I will offer more detail on various aspects of these in-practice structures in posts to come – including how political leadership relates to the snowflake, what ‘nuclear’ teams could look like, what information flow through structures might be useful, how satellite teams can be identified, how work could be organized, etc.

In this post and the one that follows, however, I want to share the broader idea on why fast, flat and flexible structures are vital in the face of crisis, and offer thoughts on how leaders (or authorized supervisors) might see their role in such a system, and how leaders might navigate the public value concerns organizations face in crisis situations.

To offer these thoughts, I’d like to introduce readers (and viewers) to Mark Moore, a Professor at the Harvard Kennedy School whose work on public management is legendary. His work on Public Value has had a significant impact on public policy education and thinking across the globe. He participated in a Zoom interview with me, and I am breaking it into two parts (one in this post and the other in the next post).

This part of the post reflects on Mark’s comments about the importance of leaders mobilizing work and learning through the crisis, even if it seems chaotic. Here is the video; my thoughts follow, with (as usual) a set of questions at the end for your reflection.

I began this discussion by asking Mark for thoughts on how to organize in chaos (often what crises pose for us), and particularly about the challenge of getting bureaucratic leaders to let go of controls and allow flexible coordination. Mark responded by reflecting on the difficulties encountered during crisis: resources are overwhelmed and not in the right places, gaps persist, [my addition] people face a direct threat, and lack knowledge on exactly what to do.

Given this perspective, Mark notes, “the idea that we can manage our way out of crisis using plan and control is misplaced.” Existing organizing structures—and the controls they provide—were not created for the crisis, are over-stressed by the crisis, and do not allow the learning you need to deal with the crisis.

Mark opines, however, that you have an unusual asset in crises: “the urgency to do tasks”. He notes that, “During crises you can’t forget about the task [as organizations sometimes do]” … “The tasks are staring you in the face all the time.”

Mark suggests that the goal of leadership in times of crisis should be to leverage this urgency and promote learning through the creative action of ‘your people’. “Can you depend on your people to just start acting, [and] report on what they do, so that information can be recorded and you as an organization can learn?”

Continue reading Public Leadership Through Crisis 16: Empowering work and learning, even if things seem chaotic

Public Leadership Through Crisis 15: The COVID-19 Crisis in Bahrain

written by Matt Andrews

The Public Leadership Through Crisis blog series offers ideas for leaders questioning how they can help and what kind of leadership is required in the face of a crisis (like the COVID-19 pandemic).

Hamad Almalki is the Undersecretary for National Economy at Bahrain’s Ministry of Finance and National Economy. He is a graduate of the Edward S. Mason mid-career Masters in Public Administration program at the Harvard Kennedy School.

My Zoom interview captures Hamad’s reflections (as of April 3) on Bahrain’s response to the covid-19 pandemic. It is an interesting case, especially because Bahrain has –to date—managed to control the crisis better than most other countries (as evidenced in the relatively flat curve here—the red line at the bottom of the chart, showing the situation on April 2-3).

It should be noted that Bahrain is an island-state in the Middle East with a population of about 1.5 to 2 million people. That makes it about the same size as Philadelphia in the United States, or just more than twice the size of Boston. It is similar in size, or larger, than many countries (including Latvia, Estonia, Trinidad and Tobago, Timor-Leste, Cyprus, Mauritius, Malta, Iceland, and more). I make this observation because the case will be more relevant to specific places or levels of government than others (as with all cases).

This post works progressively through different parts of the interview, such that readers (and listeners) can more easily digest thoughts emanating from the full 1.5 hours. As with all blog posts, I conclude with a set of questions for reader reflection.

PART 1. A strong, inclusive, coordinated head start

Bahrain began preparing for the Covid-19 crisis 3 weeks before they experienced the first case. They “watched China very closely” and knew it was just a matter of time before the virus came to their shores. A 24 hour War Room was operational by February 13, coordinating an inclusive, varied group of experts focused on three streams of work – medical, economic, and social. The focus on all three streams from the start has meant that Bahrain has been able to balance concerns in all three streams at all times. Continue reading Public Leadership Through Crisis 15: The COVID-19 Crisis in Bahrain