I am in London and Manchester today, presenting on my new book. Tonight I'm at ODI in London and tomorrow I'm at the University of Manchester. Details here. (http://www.odi.org.uk/events/3162-matt-andrews-pfm-governance ; http://www.policy.manchester.ac.uk/events/2013/professor-matt-andrews-esid-seminar-and-book-launch.htm)
We all like to look good, especially in the eyes of others. This is why so much was made earlier this year when Afghanistan scored 59% on the Open Budget Index (OBI) measure of budget transparency. Its score made it look about as good as the more developed Italy, which registered 60%. This performance generated applause from a variety of observers, who reflected on the reforms that made such score possible. These included producing a new pre-budget report, including output information in budget documents, and creating a citizens budget that explains funding commitments in layman’s terms. The Ministry of Finance, a variety of donors, and some contractors got major pats on the back for these endeavors.
And they are all good things, and constitute a good achievement. And the OBI statistics are important for all of us thinking about transparency and accountability and governance. But when one looks at the OBI assessment in full (and not just the average score) there are some significant caveats to note (that are not picked up in reports of the average scores). In particular, while Afghanistan was transparent in telling citizens what it intended to do with money, it did really poorly when asked about transparency in its budget execution process. It did not do well in bringing out mid-year reviews, or producing year-end reports or audits showing what money was actually spent on, when, how and with what effect. When I calculate the scores it received for transparency in this area of the budget process—where money is actually spent—Afghanistan only registers 39% compliance. This contrasts with 67% when looking at transparency in budget preparation. The result is a gap of 28 points between transparency in budget formulation and execution.
This gap is evident in the OBI data and discussion documents. It means that while Afghanistan produces great looking budgets, we have very little idea about what it actually does with its money after these budgets are published. Incidentally, the gap is only 1.8 for Italy according to the OBI data. While Italy may not look as good as one might expect for an OECD country, it is just about as good as it looks. Afghanistan, on the other hand looks as good as Italy but what you see is not what you get (wysinwyg). It has good looking governance but I’m not sure if you can say that this kind of governance is also ‘good’. And this is after a decade of concentrated and expensive reform.
The above table shows the OBI data and the calculation of gaps between transparency in formulation and execution for Afghanistan, Italy and a few other countries. All of the countries have similar OBI scores but very different gaps, such that Italy, Bulgaria and Chile look about as good as they are but Uganda and Afghanistan look much better than they are.
When looking at various governance indicators I find that a large proportion of developing countries seem to be producing ‘good looking governance’ like this. I see this with Global Integrity’s measures of processes and systems to combat corruption, for instance. Uganda surprises everyone on this index to yield a 72% score, similar to that of Italy, Chile and Bulgaria—and higher than neighboring Kenya. However, Global Integrity also publishes an ‘implementation gap’ (which is the difference between the quality of a government’s laws and the implementation of the laws) and Uganda scores more than 45 on this measure. Italy scores 12, Chile scores 20, Bulgaria 23, and Kenya 33 (as shown below). Again, we see developing country governments getting strong average scores that suggest all is good and well but actually only reflect ‘good looking governance’.
One could look at this kind of evidence and respond in a number of ways. One could say that the gaps I observe are probably only apparent in some countries, so it isn’t a real problem. One might also argue that you could expect gaps when reforms are new and that these close over time, so it isn’t a real problem. My recent research suggests both of these responses are not valid. By my estimates the vast majority of developing countries have gaps and ‘good looking’ governance problems and the gaps are growing in many countries after reforms—not closing.
I argue in my recent book that this is because many reforms are adopted as signals—to garner better governance scores and ensured continued support from outsiders—and not real efforts to improve governance. This approach to reform results in new laws, systems and processes being introduced that do not fit the local context, demand more capacity, political will and other content than is available, and are led by groups far too narrow to ensure diffusion and deepening of change. The result is a reform limited to changes in form, but without functionality. Good looking governance rather than good governance.
I believe that there are ways we in the development industry could do reform differently and better. The approach I suggest is (i) driven by real problems in the contexts undergoing reform, (ii) involves multiple agents in iterative processes of experimentation, learning and adjustment, and (iii) ultimately results in the production of hybrid structures that may or may not yield better scores on indicators but provide a more functional set of rules for governing. The process is called PDIA (problem driven iterative adaptation) and is something I and colleagues Lant Pritchett and Michael Woolcock have identified by looking at principles of successful change in developing and developed countries. It offers an approach to fostering development that could be the future.
If, of course, we value governments that actually perform; where transparency matters and laws are implemented and budgets are executed. Right now, I think we care about looks a lot more than this kind of real, performance. And this is why we continue getting good looking governance more often than anything we could honestly call good (or good enough) governance.