Institutional Reforms are Often Limited Because a Solution Focus Blurs the Context

 

In my book, I offer various reasons why institutional reforms are limited in development. One of these reasons is simply that reformers overlook the change context. This is a big deal, given that all serious theory on institutional change starts by noting that context is vital (think of path dependence theory, North's work on insitutional change, Dobbin's research, Goodin's studies on institutional design, Kathleen Thelen's work, the models of Roy Greenwood and Roy Suddaby, among others).

One of the reasons why I believe reformers often overlook the change context is because they have a pre-defined solution in their heads, informed by a pre-defined way of seeing the world. The following is the bulk of an introduction to a recent paper by Anna Persson, Bo Rothstein and Jan Teorell, which makes a similar argument that is relevant to yesterday's posting on the limits to anti-corruption reforms in Uganda. The gist: When a fixed agenda pre-determines what we think the problem is, and what the solution should be, we risk overlooking the realities of the reform context and producing limited institutional reforms. 

See: The most recent edition of the journal, Governance. Or. Persson, Rothstein and Teorell's paper  on the SIDA web site:  'The failure of Anticorruption-Policies: A Theoretial Mischaracterization of the Problem'

http://www.sida.se/PageFiles/39460/Failure%20Anti_Corruption%20policy%20(2).pdf

Here is the bulk of this paper's introduction:

If you drive on the beautiful roads in the mountains surrounding Cape Town in South Africa, you will eventually – and in the middle of nowhere – reach a road toll station with a sign on it stating that “This is a corruption-free zone”. Similar signs can be found outside the Ministry of Water and Irrigation in the Kenyan capital of Nairobi, on the main campus of University of Nairobi, on the doors of the Kilwa district office and the Mwanza health office in Tanzania, as well as in many other places on the African continent. While these signs do not necessarily tell us the truth, they still give us an important key to understanding the real-life context of many African societies. If you have to explicitly state that a certain place is a corruption-free zone, this should say a lot about how epidemic corruption is perceived to be in society at large. More specifically, this should lead us to suspect that corruption is not the exception to the rule, but the rule. While to some maybe little more than a technical detail, we argue that this empirical insight can help us solve the puzzle in focus of this study, namely: Why does corruption in Africa prevail despite a large number of efforts to fight it?

In recent years the fight against corruption has become a major industry, involving all the international organizations (Mungiu-Pippidi 2006; Médard 2002). Since Africa is home to the majority of the most thoroughly corrupt countries in the world, it is no coincidence that the African continent has been the major target of this anti-corruption movement. Consequently, in the last fifteen years most African states have initiated anti-corruption reforms, supported by the  international community. While not all elements of these reforms are in agreement on all terms, they still share a social construct of what corruption is about and how to challenge it. More specifically, contemporary anti-corruption reforms typically follow the policy implications stemming from principal-agent theory. Within this framework, corrupt acts are conceived of as the result of an information and interest asymmetry between an agent (either in the form of a bureaucrat or a ruler) – assumed to act in his or her own self-interest – and a principal (either in the form of a ruler or citizens), typically assumed to embody the public interest and hence being “a highly principled principal” (Klitgaard 1988). Ultimately, in line with this analytical construct, the main goal of any anti-corruption effort should hence be to increase the costs of corrupt acts for agents in line with Robert Klitgaard’s (1988) observation that “discretion plus monopoly minus accountability equals corruption” (Lawson 2009; Rose-Ackerman 1978; Teorell 2007; Andvig & Fjeldstad 2001). In practice, this has meant the introduction of a wide range of formal mechanisms and institutions, including monitoring mechanisms, increased transparency, checks and balances, democratic election mechanisms, a free press, the establishment of independent anti-corruption agencies, wage increases for public officials, the strengthening of civil society, as well as the introduction of independent court systems (World Bank 2000; Stapenhurst & Kpundeh 1999; Van Rijckeghem & Weder 2001). To date, however, few successes have resulted from the investment.

As a consequence, most African countries remain more or less as corrupt as before the anticorruption reforms were initiated. In fact, in some African countries corruption even seems to have become more entrenched along with the efforts to curb it (Riley 1998; Szeftel 1998; Doig & Riley 1998; Kpundeh 2004; Johnston 2005).

A large number of researchers now agree that the overall failure of anti-corruption reforms is by and large the result of an implementation problem. In particular, there seems to be an absence of actors willing to enforce existing laws by reporting and punishing corrupt behavior and, as such act as “principals” (Lawson 2009; Fjeldstad & Isaksen 2008; Svensson, 2005; Riley 1998; Kpundeh 2004; Ittner 2009). Even in places where media have traditionally done a relatively good job in exposing corruption, the levels of reporting and prosecution remain low (Harsch 1993). Building on this insight, this paper explores the motivational structure guiding the African population in the choice between corrupt and non-corrupt behavior. The results of an interview study conducted in Kenya and Uganda – two arguably typical African countries when it comes to the problems of corruption and anti-corruption reform – reveal that the failure of contemporary anti-corruption reforms in Africa can at least partly be understood as a consequence of that they are based on a mischaracterization of the problem of corruption in contexts with systematic corruption. More specifically, our analysis reveals that anti-corruption reforms in Africa fail as a result of that they ignore the collective action problem character of corruption in the African context. In line with the logic of collection action theory, we cannot assume the existence of “principled principals”, willing to hold corrupt officials accountable, such as suggested by the principal-agent framework. Rather, the rewards and costs of corruption – and hence the existence of actors willing to enforce reform – should be expected to depend critically on how many other individuals in the same society that are expected to be corrupt (Aidt 2003; Lui 1986; Cadot 1987; Acemoglu 1995; Mishra 2006). In a context in which corruption is the expected behavior (such as it seems to be in Africa), the benefits of corruption should be expected to outweigh the costs, and vice versa. Consequently, insofar corruption is the expected behavior in a particular society we should expect monitoring devices and punishment regimes such as suggested by the principal-agent framework to be largely ineffective since there will simply be no actors willing to enforce them. This holds true even if we assume perfect information and even if everyone condemns corruption and realizes that a less corrupt outcome would be more beneficial for the society at large. In short, in a context in which corruption is the rule rather than the exception, any anti-corruption reform is likely to turn into what Elinor Ostrom (1998) calls a second-order collective action dilemma. Ultimately, since the supposed “principal(s)” are also corrupt and not acting in the interest of the society but instead pursuing his, her, or their narrow self-interests, anti-corruption reforms based on the principal-agent framework break down, such as we have recently witnessed in the African context.

Comments

[Clay Wescott]

You point out in your book that successful projects focus on problems that local people care deeply about, and are flexible in implementation. In other words, they are what Nassim Taleb calls: "antifragile". In the face of the volatility, disorder and shocks that one finds in the countries where we work, the antifragile gets better. Antifragility allows us to deal with the unknown, to do things without understanding them, and do them well. Just like your brain needs to be challenged, and your body exercised, a good project gets better as it faces stress.