I have not blogged this summer...much. Now, though, I'm getting back into teaching and thought it a good time to close the gap between my intention to share ideas and the actual sharing I do. So, here goes!
I am teaching a class on management this semester. Anyone who knows me will probably laugh at this as I am not the best at managing my diary, my desk or any other aspect of myself.
The course is called "Getting things done: management in the development context". It is not a course on what good governance looks like, and what developing countries 'should do'. Instead, it focuses on how to get policy ideas implemented--no matter what they are--second best, third best, or one hundredth best practice. What Richard Rose would call 'Relevant Practice' (http://www.abdn.ac.uk/socsci/staff/details.php?id=richard.rose).
I am starting out with a few weeks where we discuss reasons why intended change often falls short of implementation, and good governance ideas fail to materialize. I will keep you updated on ideas coming from my students (the MPAIDs...a really smart bunch who always teach me a lot). Please share your ideas too... I will be on the blog every day...
Anyway, I thought I would provide some thoughts today on Argentina's good governance reform story between 199o and 2002. I'm writing this up for my upcoming book.
It is really interesting, starting in the early 1990s with President Menem and his finance minister Carvallo. They partnered with the IMF, World Bank and others in implementing multiple reforms in the 1990s, with over $3 billion spent in World Bank Public Administration, Law and Justice sector projects alone. The country privatized, liberalized, and modernized to the delight of many around, and were lauded by the external community.
Consider thoughts from the Managing Director of the IMF: “Argentina's determined adjustment and reform efforts were rewarded with strong capital inflows, a sharp recovery…and average real economic growth of over 7 1/2 percent per year.” The Bertelsmann Transformation Index (BTI) folks write that Argentina was “widely hailed as a case of successful market reform” in this time.
These positive sentiments were reflected in a World Governance Indicator (WGI) score of 0.32 in 1996--second in Latin America (with Chile perennially at the top).
Then crisis hit--in the form of contagion from the Mexico, Russian and Asian financial crises and in domestic political fighting. Both kinds of crises, it must be said, were common in Argentina and should perhaps have been foreseen by reform designers. They undermined many of the earlier reforms, however, with initial problems emerging in blocked attempts at liberalizing the labor sector and some privatizations. New fiscal rules were violated, and many reforms dried up or were stopped in their tracks.
The fall out was quick, and government effectiveness scores dropped quicker than the economy--to about 0.1 in 2000 and all the way to about -0.4 in 2002. Ats stage Argentina's government was about tenth in Latin America.
Observers make direct links between the drop in government effectiveness scores and failures with governance reforms. Anne O. Krueger from the IMF described Argentina as the model of a country that “Tried little, failed much” in the 1990s, claiming that it exhibited “a reluctance to follow-through, to confront the structural changes.” The BTI folks noted that “Consistent, coherent reforms [we]re not discernible" at the time, claiming that "Tentative initiatives never got off the starting blocks" and suggesting that there were "doubts whether reforms of the 1990s increased efficiency at all.” One observer suggested that, “For all the changes enacted during the 1990s [the system is still] one of rampant cronyism...”
If youwere just stopping at one point in history  it might be reasonable to accept such statements, but the idea that IMF and BTI reports could say that reforms had not really happened in the 1990s seems amazing given that these organizations were among those who called the 1990s reforms exemplary just 5 or 6 years earlier. Also, when one looks at the record, Argentina had over 40 World Bank sponsored projects in the 1990s and over 80 percent of these were rated satisfactory or highly satisfactory.
How can reforms be considered fantastic in one period and then called a mirage in the next?
Doesn't this violate some basic ideas about reforms actually having greater influence over the medium to long term than the short run?
In my opinion, such a story helps understand why externally influenced governance reform frequently does not have sustained influence over the medium and long run. My interpretation is that countries like Argentina--and administrations like that of Carlos Menem--adopt reforms to garner short run external support. Reforms are like signals. Effective signals are impressive, hence the reforms countries agree to are typically considered good, better or best practice by the external community. They are the subject of projects and are the basis of legislation. But beyond the legislation, they are hard to adopt and implement. Contextual problems--like repetitive crises in places like Argentina--make them politically infeasible or beyond local capacity, to implement. They thus fail in the medium term, leaving an implementation gap.
I wonder how others see this? Is my perspective on Argentina out of left field? Are there examples of externally influenced reforms that look similar or different?
By the way, those who want to read about using Public Administration, Law and Justice projects as measures of governance activity should read Kim Moloney's great 2009 piece on this (http://ras.sagepub.com/content/75/4/609.short)