The Standard Group Plc is a
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Standard Group is recognized as a leading multi-media house in Kenya with a key
influence in matters of national and international interest.
President William Ruto assents to the Supplementary Appropriation Bill (National Assembly Bill No. 8 2025) at State House, Nairobi. [PCS]
President William Ruto has so far had a fairly volatile government with lots of reshuffles. The changes were informed by a realisation that his government was failing almost at every turn in serving Kenyans.
Just this week he has had to reshuffle Principal Secretaries for performance and political reasons. Will the latest reshuffling work?
Students of organisations know that having properly defined principal-agent relations is core to both intra-organisational accountability and effectiveness. Here, we should think of the principal as the “boss” and the agent as the “employee.”
In order for the boss to get the right employee, there must be clearly defined roles, clear mechanisms of enforcing accountability, and a proper screening mechanism to hire qualified employees.
Otherwise, the “boss” often ends up with problems of adverse selection (hiring the unqualified/unsuitable employees) or moral hazard (hiring employees who know that the boss cannot enforce accountability).
This may sound like “theory” to some, but the most successful companies in the world and governments take seriously issues of principal-agent relationships. And so should we – both in the public and private sectors.
Now let us apply this concept to how President William Ruto has organised his governing coalition so far. From the get-go, he failed on both questions of adverse selection and moral hazard. His leadership team, both in Parliament and within the Executive branch were not selected on suitability, but ethnicity and political loyalty.
Most of them were simply terrible at their jobs – so terrible in fact that he had to let them go in series of reshuffles.
Then there was the question of moral hazard. Having been selected on the basis of ethnicity and political loyalty, the boss’s employees had little incentive to deliver results.
Their key performance indicators (KPIs) were not tied to results, but to continuing political loyalty and being from the right ethnic group. People do not change their ethnicity willy nilly, and it takes a lot to ditch the access to the feeding trough that is the public sector.
If you add to these challenges the fact that we have a public administration system that has scarcely been reformed in the direction of efficiency for decades, then you can understand why the president has failed to make the government machinery work.
The incentives inherent to the principal-agent relationships from the president to “street bureaucrats” who interact with wananchi are simply off. To be blunt, the system is simply not structured to deliver results. And no amount of reshuffles can fix that.
-The writer is a professor at Georgetown University
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The Standard Group Plc is a
multi-media organization with investments in media platforms spanning newspaper
print operations, television, radio broadcasting, digital and online services. The
Standard Group is recognized as a leading multi-media house in Kenya with a key
influence in matters of national and international interest.
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