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Newspaper content, this week, here in Portugal is all about the announced tax increase. This last resort measure was presented as the only chance of avoiding the 6.8% national budget deficit. As every opinionmaker is voicing his/her opinion, I might as well add my own to the pool.

Opinions are ranging from the defeatist, with Vasco Pulido Valente as the flag bearer, to the conformist -- Eduardo Prado Coelho springs to mind, as does Miguel Coutinho -- to the obvious -- I recall José Manuel Fernandes, Nuno Pacheco, Pacheco Pereira, Duarte Lima or Luciano Amaral.

Defeatist stands may be true, and are interesting as a kind of post-mortem analysis. I'm an avid reader of Vasco Pulido Valente's texts. It's profound to acknowledge Portugal hasn't been in the world lead pack since the XVII century and to recognize the country has been little over mediocre since the XIX century. It does, however, little to change the future, other than stating that something must change.

Conformist positions are non-significant when everyone knows that there is a problem to be solved. It's pretty obvious we need more income than expenditure, and it's also obvious most expenditure decreasing measures won't produce results this year. Conformist opinions may serve to stress the need for income raising decisions (read tax increase) and mask social dissatisfaction, but add little in the way of medium term solutions.

Where I am disappointed with opinionmakers is in the camp that is reciting the mantra of obvious solutions. It's consensual that we need to reduce costs with the state 'machine'. It's patent that the Portuguese state offers worse quality services than Spain, Ireland or most of countries close to us. It's in full sight that it uses relatively more resources while producing these worse services. Stating the obvious -- reduce expenses, improve services, reduce personnel, improve efficiency -- is a first step, but it is a baby first step. A lot more is needed deconstructing the present condition, understanding how we got here, and then removing the conditions that keep Portugal performing below standard.

If you ask the average citizen what causes the most drag to Portuguese economy, you'll end up with lots of people answering it's all the politics fault. In fact Portuguese Politics sport an image I think is even worse than in other countries (excluding the US, perhaps ;-) It's common for ministers to concede to lobbies, for Mayors or administrative directors to place family and friends in nice jobs or for any general political position holder to leverage their power gaining personal favours. I guess this type of behaviour exists outside Portugal, but here it is prevalent and accepted as a fact of life by the regular citizen dealing with the Administration.

The immediate conclusion is: we need better politics. We do, I agree. The quality of an organization is first and foremost the quality of its members. You can't make a top football team out of mediocre players (although you can make a mediocre team out of top players). The appaling scenario is that we have better potential politics around, but they are not interested in playing the political game. They smell the rot from a distance. Personally, I've observed around me quite a handful of people who would be great in charge of political positions in their field of expertise. None of these people I consider brilliant ever took a step to integrate politic life, but opted to pursue their objective of leaving their mark in the world, alternatively, in the 'free' society.

Continue asking around to identify problems in the Portuguese state, and the next runner up will be "The System". The System is our current Adamastor. It embodies the state itself, its external (inefficient) behaviour and its organizational problems. I stress the organizational problems here, as its the only element that can be dissected. You see, I believe both problems -- better politics/leadership and better organization -- are clearly intertwined. We don't have better organization because of lack of leadership, while we don't have better leadership because the environment won't promote brilliant people to leaders. To make matters worse, brilliant people won't bother to enter politics. We are doomed, into a vicious cycle of ever worsening organizational structure and ever worsening leadership, each step feeding the next.

In brief, we have an Administration that fails to attract lead managers and generally fails to promote service quality and efficiency. We have no serious shortage of quality managers in Portugal. I failed to mention, but we also don't have a serious shortage of good regular workers in Portugal. In a market that provides quality personnel, the Administration is trapped in a vicious cycle of worsening efficiency. Look back in history. Where did we observe this scenarion before? Dictatorships.

Dictatorships tend to enter this kind of cycle. The absolute power stability causes a 'rottening' of the whole State power structure. Slowly, the qualities needed to climb the hierarchy are more social than meritory and the whole structure suffers. The State organization never shrinks, slowly but monotonically grows until it collapses under its own weight. Short of external intervention, this is what happened to all dictatorships.

We don't live in a dictatorship. Portugal is a young democracy (~30yrs) , so this should not apply. Or should it? You see, as most modern western democracies, we are a dual party democracy. While there way more than two parties, power usually alternates between the two big parties (Socialist Party and Social-Democrat Party). The alternance rocks the Administration boat, throws off a few post holders, but is overall quite stable. We are observing the exact same Administration rottening that afflicts dictatorships.

Bear with me a couple paragraphs more. How do you avoid this rottening condition? From what I've exposed before, it seems simple. Attract quality managers, and they'll shape the rest of the organization. There are numerous examples of top managers saving entire organizations. Except, as I've exposed, the national administration does not seem to be able to attract quality managers. How to change that? Money!

Or not. Money incentive (salaries, various perks) is the primary response to increasing the ability to attract top personnel. It's been voiced over and over. Except really good people don't run for the money alone. Past a certain mark, financial earnings are just a form of keeping score and getting bragging rights. You need more. You need to provide the historical incentive. The ability to leave back something more than a tree, a book and a child. The ability to get higher level bragging rights. The Administration is such an immutable beast that most people don't believe changing its course to be within their reach, or believe it to be an effort that, if placed elsewhere, would produce more profound results. This is my guess at what crosses someone like Belmiro de Azevedo's mind when opting to stay the hell out of politics.

I personally believe we need the administration to be more agile, if it is to attrack top level manager into politics. We need administration managers to be able to put their ideas into practice and produce results easily. We also need them to be well rewarded financially. Lastly, we need to promote based on merit, and demote on failure. Under these conditions, there'd be no reason top managers would stay out of the Administration.

How to achieve that? Use the same method the 'free' economy uses: competition. Allow for competing services to exists. Allow for non-efficient services to close. There are services that can't provided under competition, namely the police or the military, and there are services where competition must be limited, like courthouses. However, most services can be placed in competitive environments. There's no reason we have only one entity responsible for roads, for example.

Competition allows for managers to exercise ideas easily. It allows them to easily crash into the ground too. That's a good thing. The success of modern economies is the result of competition, and competition is a relevant factor for overall success in many other models. Heck, even our own biological form is the result of competition. Incidentally, competition provides the instability to keep the machine lean and clean. Closure of non-efficient services will break the monotonic increase of workers in the Administration and will, most importantly, rid it of incompetent managers. You know that cousin in second degree of the wife of the mayor? He'd be gone in no time, as he would in the unsheltered outside world.

Why should National Administration be any different?