Issue link: https://maltatoday.uberflip.com/i/1546553
19 maltatoday | SUNDAY • 13 SEPTEMBER 2026 OPINION next economic reform is governance professional autonomy, merit and institutional memory. Political leaders are democratically entitled to set direction, but institutions must be capable of providing con- tinuity, expertise and challenge. When too much knowledge dis- appears with changes in leader- ship, when appointments become overly politicised or when profes- sional advancement is perceived to depend on allegiance rather than capability, the state loses something economically valua- ble—competence. This is also where the principle of meritocracy becomes impor- tant. Meritocracy is sometimes caricatured as elitism. In reality, the alternative is often not equal- ity but patronage. In a small coun- try, this is especially costly because the talent pool is finite. Malta cannot afford systems that leave capable people outside positions where they could contribute be- cause they lack the right political, social or professional connections. Nor can an economy that wants to move towards higher-value ac- tivity tolerate institutions where competence is secondary. As economies become more knowl- edge intensive, the ability to iden- tify, develop and reward talent becomes increasingly central to national competitiveness. The economic relevance of all this becomes clearest when we look at productivity. We regularly speak about Malta's productivi- ty challenge as though it belongs mainly to businesses. Firms clearly need to invest more in technolo- gy, management, skills and inno- vation, but national productivity is also shaped by the quality of the environment in which those firms operate. Every unnecessary administrative procedure absorbs productive time. Every delayed decision, ties up capital. Every unpredictable regulatory inter- pretation increases risk. Every weakly designed public project can create costs elsewhere. Con- versely, efficient institutions lower transaction costs across the entire economy. Good governance is therefore a form of productivity infrastruc- ture. The same is true of innovation. Malta wants more start-ups, scale- ups, research, intellectual proper- ty and technologically sophisticat- ed firms. But innovation does not flourish simply because grants are available or because a strategy de- clares it a priority. It requires insti- tutions capable of rewarding ex- perimentation, competition and competence. It requires finance that can distinguish between productive risk and speculation. It requires regulators willing to understand new business models without either suffocating them or abandoning standards. It requires universities, government and in- dustry capable of working togeth- er with credibility. Above all, it re- quires a culture in which access is less important than ability. Underlying political culture There is also a deeper cultural challenge that cannot be solved through constitutional draft- ing alone. Institutions ultimate- ly reflect the behaviour of the people who inhabit them. We can improve procedures, cre- ate oversight bodies and modify appointment systems, but if the underlying political culture treats criticism as disloyalty, scrutiny as obstruction and public institu- tions as extensions of whichever party happens to govern, formal reform will eventually be absorbed by old habits. A more mature system requires something different: an ethic of restraint. Power should be exer- cised with the understanding that institutions do not belong to the government of the day. Independ- ent bodies should not be regarded as adversaries when they disagree. Public servants should feel able to provide unwelcome advice. Criti- cism should be treated as part of democratic life rather than as an attack on legitimacy. The quality of governance ultimately depends not only on the rules governing power, but on the culture govern- ing those who wield it. This should also extend beyond central government. Malta re- mains highly centralised despite the fact that many of the issues citizens experience most directly are intensely local. Transport, de- velopment, public spaces, waste and community cohesion often manifest themselves at neigh- bourhood level long before they are understood nationally. Strong- er local government, more mean- ingful consultation and structured citizen participation can improve both legitimacy and policy design. A deeper constitutional renewal could therefore examine not only how power is constrained at the centre, but how responsibility is distributed across the state. Crucially, such renewal should not belong exclusively to political parties. If constitutional reform is to rebuild legitimacy, citizens need to feel that the process be- longs to them too. A serious pro- cess could combine expert con- stitutional drafting, civil society and social partner participation, citizen assemblies, parliamentary debate and democratic ratifica- tion. The objective should not be to produce another patchwork of amendments but a settlement ca- pable of commanding broad own- ership for a generation. There is always a temptation when governance returns to the national agenda to respond through a sequence of visible fix- es. Amend a law, create another authority, change an appointment mechanism, introduce another code. Some of these may be nec- essary, but Malta should resist confusing reform with accumula- tion. More rules do not automat- ically produce better governance. Sometimes they simply produce more bureaucracy. The objective must instead be to design insti- tutions that are clearer, more in- dependent, more competent and more accountable. That is where governability be- comes essential. Malta needs a system capable of long-term de- cisions even when those decisions are politically difficult. Productiv- ity reform, infrastructure invest- ment, education reform, pensions, planning, energy and transport all extend far beyond a single elec- toral cycle. Yet political incentives naturally favour visible interven- tions with immediate returns. Strong institutions should help compensate for that bias by pro- tecting long-term thinking from short-term political pressure. Renewal from a position of economic strength This is also why governance re- form should not be framed as a response to failure. Malta is in the fortunate position of being able to undertake institutional renew- al from a position of economic strength. That should be treated as an advantage. Countries often wait until stagnation, fiscal pres- sure or crisis forces them to re- form. Malta does not have to. The economic model itself is al- ready telling us that the next stage will require deeper capability and this places the focus on the quality of the state. Malta has spent decades suc- cessfully renewing its economic model. Perhaps the next great renewal must therefore be insti- tutional since development will increasingly depend on how well we govern ourselves Malta has spent decades successfully renewing its economic model. Perhaps the next great renewal must therefore be institutional since development will increasingly depend on how well we govern ourselves