The Limits of Institutional Reform in Development

Christopher Pollitt on 'Limits': It is of 'benefit to the developed world too'

My friend Matt Crowley took this great picture of my book in his recycling bin.

Thankfully the book is not just being recycled. Chris Pollitt from Erasmus had the following to say about it in the review in the International Review of Administrative Sciences:
"The author uses both ‘big picture’ statistics of World Bank and other interventions, and detailed case studies in particular countries and sectors to show that, time and time again, the positive
effects of western-style reforms are either negligible or short-lived. Implementation gaps are routinely huge."

"Andrews does not rest with critique.Commendably, he also wants to outline a better way. He sets out what he terms Problem-Driven Iterative Adaptation, and finds some examples from the field to show that it is already sometimes possible. PDIA begins with the diagnosis of particular problems, understood as existing in specific contexts. It encourages the articulation of largely home-grown solutions rather than reaching for international best practices. It seeks to broaden the cast of actors commonly involved in such reforms, so as to incorporate more context-rich local knowledge, and also so as to improve local ownership."

"Finally, one might remark that, although this book is focussed on the developing world, much of the critique can be applied, albeit in diluted form, to many  developed countries. Consider the innumerable ‘best practice’ reforms apparently adopted by/pressed upon the CEE countries while they were candidates for EU membership. Or the activities of the influential OECD public management/governance section, collecting and dispensing benchmarks and best practice, usually with precious little in the way of contextual information or analysis (OECD, 2011). Or even the UK government – signalling itself as a flagship of public management reform by repeatedly re-jigging the same institutions, apparently on the basis of very little good evidence. Perhaps a more modest, adaptive, locally-informed, context sensitive approach to public management reform would be of benefit to the developed world too?"

“The Limits of Institutional Reform” should be read by anyone working with governments in international development

It is really great to have my own son read the book I spent years writing. Even if it is only pretend reading!

Some more engaged readers offered reviews in the past few months. Here are select comments from a couple:

Paolo de Renzio of the International Budget Project wrote in the International Public Management Journal:
"Every now and then, a book emerges in the international development field that sheds new light on old debates, providing fresh insights and offering novel ways to think about some of the most pressing policy issues. In my view, Matt Andrews’new book belongs in this category. His diagnosis of why efforts to promote institutional reforms in developing countries have gone wrong, and some of the principles and tools that he proposes for how to deal with this issue, are likely to shape debates in this area for years to come—and indeed, they have already."

Philipp Krause of the Overseas Development Institute said in Development Policy Review:
"One may disagree with Andrews’ diagnosis or solution, but he is helping to open up a broad range of scholarship for development policy and research to exploit. Books like this one help break down the artificial boundaries between scholarship on developing countries on the one hand and OECD countries  on the other.  “The Limits of Institutional Reform” should be read by anyone working with governments in international development. Readers in rich countries will probably find it just as interesting a lens to view their own governments as well."

 

Positive reviews of Limits...

Thus far I have ten reviews of my book in academic journals. All have been positive and all help me think about improving my work in the next book. Here are some highlights in the first of a few blog posts:

Richard Allen from the IMF wrote in the International Public Management Review:
"Matt Andrews has written a timely and important book that crystallizes thinking he and others have been developing over several years, and is underpinned by rigorous theoretical and empirical analysis. It is to be hoped that the lessons of the book will not be lost on the governments of developing nations, and more especially on agencies such as the World Bank, who need to adjust their development models to reflect the radically new approach to reform set out in the book. Andrews uses vivid language and colorful examples to highlight his important messages, and make them relevant to practitioners as well as scholars. The book deserves a wide readership."

Julien Barbara reviewed the book for the Australian Journal of Public Administration:
" As a former development practitioner managing the Regional Assistance Mission to Solomon Island’s Machinery of Government program, charged with responsibility for helping the Solomon Islands Government to strengthen key governance institutions such as its electoral and accountability institutions, I found Matt Andrews’ The Limits of Institutional Reform in Development an important and insightful contribution for those concerned with institutional reform in the region."
Julien also challenged the idea of PDIA in a manner that I have found very helpful:
" Is PDIA more or less viable in different types of contexts? The institutional reform challenges facing Solomon Islands as a small, post-conflict fragile state will be very different from those facing dynamic Asian economies such as Vietnam or China. Is a modicum of institutional functionality required as a starting point? What about highly politicised and contested political environments? Does PDIA work better for some institutional reforms than others and why?"

First French review of 'Limits'by Raulin Cadet from Quisqueya University, Haiti

Les limites des réformes institutionnelles dans les pays en développement!

Les limites des réformes institutionnelles dans les pays en développement! C'est probablement une traduction imparfaite de l'ouvrage de Matt Andrews "The limits of institutional reform in development." Néanmoins, je veux croire qu'il reflète suffisamment bien le message du titre anglais de l'ouvrage. Après les jeux avec mes enfants, c'est avec la lecture de cet ouvrage que j'ai débuté mes vacances. Bien que je ne sois pas un spécialiste de l'économie institutionnelle, l'intérêt que me suscite cet ouvrage me porte à prendre la liberté de vous la présenter. Ce sera fait sans trop de commentaires, évitant ainsi trop de faux pas dans un domaine qui n'est pas le mien.

Beaucoup de réformes institutionnelles ont échoué parce qu'ils ne tiennent pas compte du contexte des pays où elles sont implémentées. Voici ce qui me semble être le message central d'une bonne partie de l'ouvrage de Matt. Evidemment, ce n'est pas la première fois qu'une telle thèse est véhiculée, comme le montre d'ailleurs la bibliographie de l'ouvrage. Cependant, je note que jusqu'à présent on continue à proposer à des pays en développement des réformes importés d'autres pays, comme si les expériences d'échecs ne suffisaient pas.

Comme le souligne l'auteur, les pays receveurs de dons arriveront difficilement à rappeler aux donateurs les leçons à tirer de l'expérience des réformes passées. Il me semble que l'ouvrage pourrait convaincre certains donateurs de bonne foi, si donateurs de bonne foi il y en a, à comprendre qu'il faut arrêter de pousser les pays receveurs de dons à faire, à la va-vite, des réformes importés et prêt-à-porter. Si donateurs de bonne foi, il y en a pas, à mon sens, l'ouvrage pourrait convaincre certains dirigeants de pays receveurs de dons à définir des stratégies de financement budgétaire qui les rendraient moins dépendants des pays donateurs.

L'argumentation de l'auteur s'appui sur de nombreuses expériences de réformes institutionnelles. Certaines réformes similaires entreprises dans des contextes différents aboutissent à des résultats opposés.  Matt analyse aussi l'expérience de succès de certaines réformes entreprises en tenant compte du contexte des pays concernés. Sur la base des leçons tirées des expériences relatés dans l'ouvrage, l'auteur propose l'approche problem-driven iterative adptation (PDIA) pour faire des réformes. Il s'agit d'une approche développé dans un article qu'il a publié en 2012 avec Lant Pritchett et Michael Woolcock. Cette approche s'appui sur la thèse que "les réformes ne tiennent comptes du contexte que si elles sont des réponses à des problèmes identifiés localement."

En lisant l'ouvrage, je ne fait que penser à mon pays, Haïti, qui reçoit des dons mêmes pour les élections, et qui a implémenté tellement de réformes prêt-à-porter, importés sans tenir compte de son contexte. J'ai aussi pensé à mon pays, lorsque l'auteur insiste sur le poids des normes informelles, en indiquant que les citoyens peuvent accepter pour normale ce que des étrangers peuvent considérer comme de la corruption. C'est probablement le cas de relation ministre-parlementaire, en Haïti.

LSE Review of books finds 'Limits' makes a 'substantial contribution' to the understanding of reform

LSE Review of Books review of 'limits'
Aug 24, 2013

Book Review: The Limits of Institutional Reform in Development
Blog Admin

Developing countries commonly adopt reforms to improve their governments yet they usually fail to produce more functional and effective governments. In this book Matt Andrews argues that reforms often fail to make governments better because unrealistic initiatives do not fit developing country contexts and are not considered relevant by implementing agents. Maria Kuecken finds this is a must-read that makes a substantial contribution to the field of institutional reform.
The importance of good governance in developing countries has been emphasized and re-emphasized. Multilateral and bilateral organizations, particularly in the last two decades, have dedicated huge amounts of resources to try to make governments work better. But for all that institutional reform is so highly regarded by the development community, the results of such reforms typically leave much to be desired. In The Limits of Institutional Reform in Development, Matt Andrews, an Associate Professor at Harvard’s Kennedy School, takes an in-depth look at why reforms are not as successful as we hope and explores concrete strategies to circumvent these failings.

It does not come as news to most that efforts to change the rules of the game in developing countries, though widely touted as crucial, fall short of their anticipated outcomes. Due the breadth and country coverage of reforms, it may be difficult to arrive at a global understanding of their effect. But understanding the setting is crucial, and Andrews begins by creating this picture. He relies on commonly accepted indicators to show that the majority of reforms, typically intended to produce “a market-friendly, disciplined, and modernized government, ”do not induce tangible improvements. Since indicators can only provide one aspect of the story, Andrews then delves into case studies in order to highlight specific characteristics that seem to be common to unsuccessful reforms.

So, why do reforms fail? In short, Andrews argues that reforms are generally enacted as “signals” – while they may succeed in terms of appearance, their oversimplification and over-specification lead to failure. For example, after the devastating 2010 earthquake in Haiti, there was a push from the international community to establish international building codes. As it turns out, reforms had already been attempted to improve existing building codes but suffered from a lack of enforcement inspectors, trained builders, and compliance accountability. In this case, can the establishment of new building codes really be considered an appropriate reform?

When a reform is used for signalling, context – especially informal context – is largely ignored. This means that reforms do not adhere appropriately to the specificities of a given scenario. Reforms as signals also try to imitate pre-established forms of best practice, almost always defined by outside actors. While following established standards might seem initially logical, this “isomorphic mimicry” usually succeeds at reproducing only some elements of the practice in context. Problematically, only a few key agents typically spearhead reform, rather than creating a diverse network of support. Moreover, Andrews methodically explains how “what you see is not what you get” because reform adoption can assure external legitimacy without actually changing the existing institutional structure.

The first half of Limits thus paints a fairly unflattering picture of institutional reform both in theory and practice. But Andrews’ primary contribution follows in the latter half of the text in which he discusses a different method of bringing out governance reforms: using Problem-Driven Iterative Adaptation (PDIA). A mouthful of a term, PDIA “emphasizes the importance of problems as entry points for change and the reality of iterative process as the means by which change typically transpires.” Put simply, the process is crucial. Though PDIA is based on existing notions, Andrews underlines the importance of adaptation in enacting reform. He relies on several examples to illustrate how some existing reforms exhibit PDIA characteristics, even if only at the margin in certain cases. But shifting focus to a more PDIA-based approach in institutional reform necessitates institutional reform in the development community itself, and Andrews tempers his suggestions by discussing the likelihood that elements of PDIA will be adopted.

Limits is laden with institutional theory and jargon that some readers might perceive as heavy, especially those new to this topic. However, Andrews frequently recalls the primary messages of previous chapters, demonstrating their links with the topic at hand, to keep the reader on track throughout the book. Andrews also continuously invokes a basic metaphor – that of a carpenter fashioning wooden pegs to fit in existing holes – in an effort to simplify the main ideas underlying institutional reform. His approach renders the book more accessible and ensures his messages will reach a wider audience.

Although Andrews notes that much of what he discusses coincides with views on governance from leading scholars and practitioners, his book builds further on existing ideas by providing concrete suggestions in an area that can, at times, appear abstract. The Limits of Institutional Reform in Development is an important text – a must-read – that makes a substantial contribution to the field of institutional reform.

Pdia to overcome the limits of institutional reform

This post was in the Development Post blog on May 29. http://www.development-post.com/blog-posts/are-best-practices-in-development-fit-for-purpose/

Are best practices in development fit for purpose?

Matt Andrews of the Harvard Kennedy School of Government has been making waves across development and governance circles. He was in town last week promoting his new book, The Limits of Institutional Reform in Development, and the problem-driven iterative adaptation (PDIA) process, and Development Post went along for the presentation. We haven’t read his book yet but we’ve read several articles and papers authored by him on the topic.

What is PDIA?

From our understanding, his PDIA is not yet another “best practice” approach to institutional reform, but rather focuses on the process of reform. Funded by results-based lending, PDIA begins by identifying the problem, and emphasizes experimentation with different ideas using an iterative process. Monitoring and evaluation is built into the process, and there’s an instant feedback loop. Sounds like common sense, doesn’t it? That’s what we thought.

So what normally happens? The traditional approach to reform in international development is to begin with solutions, where developing countries are told to introduce, for example, international accounting standards when there are very few internationally accredited accountants in the country.

In his presentation Matt told an amusing story of an IMF official visiting a central African country to help improve their public financial management (PFM) systems. Upon arrival at the Finance Ministry there were about four members of staff there, writing their budget using a pencil and paper. The IMF official rocked up…to show them how to do accrual accounting.

“How’s the idea that in three weeks, we teach them how to transfer those numbers on to an excel spreadsheet, instead?” asserts Matt. Is this possible? What is the IMF official incentivized to do? To get another country to adopt accrual accounting, or to train them how to use excel? And on what basis do developing countries receive funding? By solving problems or adopting externally imposed international best practice?

Matt writes about Afghanistan in this Foreign Policy article, how the 2003 reforms transformed the quality of the government’s financial management and budgeting so that it ranked higher than a middle-income country in 2008. And we’ve all heard reports of corruption being rife in Afghanistan. South Africa is another example; they have the second most transparent budgets in the world, according to the Budget Transparency report, and yet they’re sliding on all governance and corruption indicators.

“The bottom line is that many governments – developed and developing – adopt the new, good, better and best practices in form but do not see improved functionality as a result. The reforms are limited and should thus not be considered successful.” – says Matt in this PFM post

PDIA sounds remarkably similar to a design thinking approach to policy design that Christian Bason from Mindlab in Denmark talked to us about earlier. Matt’s suggestion, if widely adopted, could shift the way development is funded by fully embracing the results-based approach, and by creating what he called institutional reform incubation trust funds – that is, financial support for a period of incubation of policy ideas. This is no different to what’s going on in the private sector – Twitter was created during a day-long tech brainstorming session, also known as a “hackathon”. So could incubation trust funds for policy-hackathons be the way forward institutional design and effective public service delivery?

Matt’s book is at the top of our reading list, and as soon as we send our delightful upcoming Summer edition off to press, we’ll hit the download button on our Kindle. If you want to learn more, here’s a great book review by Oxfam’s Duncan Green and this World Bank paper documents their experience experimenting with PDIA in Sierra Leone achieving positive results.

Have you heard or read about PDIA approach? If so, drop us a line, tell us what you think.

Larry Schroeder endorses 'Limits'

Larry Schroeder from the Maxwell School at Syracuse wrote the following about my book, in Governance (http://m.sog-rc27.org/index.php/news/47-news-from-governance-june-20-2013):

As someone who has observed less than fully successful attempts toreform institutions in developing countries, I find Andrews’s list of under-lying causes of failures to be both compelling and on target. He posits thatsome countries simply go through the motions of making changes in rulesand regulations, with minimal intention of following through on thereforms. By making changes that external parties want, the recipientcountry “signals” to the donor that it has made the recommended changesand, therefore, deserves the accompanying development funding.However, within a few years, it becomes obvious that little or nothing hasreally changed.

...

Andrews recommends a “problem-driven iterative adaptation” (PDIA)approach to institutional reform efforts. He argues and illustrates, withanalysis of 44 health sector reform projects undertaken by the World Bankand the Global Fund, that projects focused on a well-defined problem anddesigned for flexibility were much more likely to be successful than pre-conceived, isomorphic approaches.

Given the need for flexibility, successful PDIA-based reform effortsshould be incremental, focusing on the local situation and determiningwhat seems to work in that context, and when an approach is observed notto be working, reformers should learn from their mistakes and be allowedto make necessary changes in design. This argument is buttressed withexamples from anticorruption reforms in Indonesia and decentralizationefforts in Rwanda. Finally, Andrews reports on an interview-based analysis of leadership in 12 cases of successful reform interventions in “diffi-cult” country settings. This analysis strongly suggests that successfulreform requires more than a single champion to lead the effort. Found tobe particularly important was broad leadership with multiple agents participating at the implementation stage.

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PDIA and the epidemic of cheating

The following is an article that suggests PDIA offers an appropriate, roll up your sleeves and get to work approach to solving complex problems like cheating... In the Indian Premier League cricket context and beyond. It first appeared in Live Mint.com

http://www.livemint.com/Opinion/3ADaM7VyCYwzHwLCRcBuaM/An-epidemic-of-cheating.html?facet=print)

Sun, Jun 02 2013. 08 28 PM IST

An epidemic of cheating

In a winner-take-almost-everything society, there is a powerful incentive to cross a few lines to get ahead

A file photo of an IPL match. The most infamous of the recent cases of cheating and dishonesty is the one related to the Indian Premier League (IPL). Photo: Virendra Singh Gosain/Hindustan Times

A pandemic of cheating appears to be upon us.

The last few months have been depressing even for the optimists among us. Cases of cheating and dishonesty are everywhere you turn. I define cheating as acts by otherwise normal individuals or institutions that cut corners or break rules to get ahead. The most infamous of these is the one related to the Indian Premier League (IPL). The multifaceted nature of the allegations boggles the mind—betting, spot fixing, match fixing, insider trading—juvenile Srees and greedy Appans are popping up everywhere. Not to be outdone, occupants of Main Street are contributing their own stories. A whistle-blower at Ranbaxy revealed a long-term fraud that resulted in a $500 million fine the company paid to the US Food and Drug Administration (FDA). That sordid story is laid out in a Fortune article, appropriately titled “Dirty Medicine”. I am willing to bet (figuratively, of course) that your disgust for the cheating will be accompanied by a grudging admiration for the audacity and ingenuity of the methods employed. In one instance, the article talks about how company officials aged an operations manual to cheat inspectors by keeping it in a steam room overnight.

To be fair, the virus appears to have afflicted many other countries as well. Previously revered companies such as Apple in the US have been charged with shifting revenues to tax havens. Senator Carl Levin, a Michigan democrat, summed it up thus: “Apple sought the holy grail of tax avoidance. It has created offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere.” Apple has not been accused of breaking any laws. European authorities have similarly charged other companies such Google, Starbucks and Amazon. Apple Operations International, its primary offshore holding company registered in Ireland, has paid no taxes on $30 billion of net income over the last three years. That’s a dream device called i-no tax.

The problems at IPL began with a birth defect. The constitution of the Board of Control for Cricket in India (BCCI) was amended to permit an honorary member to bid for commercial interest. So-called independent members sat quietly while changes to the constitution consolidated power in the president of BCCI. Like the nowhere tax jurisdiction of Apple International, BCCI is governed by no one—not the government, not by shareholders, and not by the public. The only authority it accepts, its own constitution, was hijacked by its president because of the passivity of its members. For any president of BCCI to be removed, a two-third majority in a secret ballot is required. The late Hugo Chavez of Venezuela must be doffing a hat in his grave at the masterful use of a constitutional mechanism to protect authoritarian rule.

Is there really a problem? If so, what can be done? Is the cheating pandemic merely coming to light because we are seeing more cases being reported? Or, is there more cheating than ever before? Is it because of the large magnitudes that we are taking note now?

While it is difficult to know precisely, there is probably some truth in each of these observations. In the IPL case, terrorism-related wiretaps, security cameras, and mobile phone records played a role in the original investigation and continue to play a role in the prosecution strategy. There is qualitative evidence to believe that cheating has indeed increased.

The gains from getting to the top of your profession, of boosting your net income with tax evasion and of betting with loaded dice are enormous relative to the dangers of getting caught. In a winner-take-almost-everything society, there is a powerful incentive to cross a few lines to get ahead.

Beyond the talking and the writing and the screaming on TV, can anything at all be done? In a paper entitled Escaping Capability Traps Through Problem-Driven Iterative Adaptation (PDIA), professors Matt Andrews, Lant Pritchett and Michael Woolcock of Harvard University talk about a systematic, local, iterative and adaptive method to address complex problems and bring about sustainable change. If the problem is endemic, then, according to Andrews et al, the solution has to come from local discussion, engagement and iterative improvements. No force fitting of external solutions is likely to solve it, they say. The problem itself has to be decomposed into its constituent parts—too much power in one office, non-independence of members, for instance—and then adaptive solutions tried for each part. Easier said than done, for sure, but no substitute for the hard work and the trial and error nature of it all.

Let me end on an encouraging note. Sociologists who work on the behaviour of aggregate (free) society believe that issues such as cheating are cyclical and ebb and flow with time. Societies that go through periods of material excess, often correct through a backlash. Like other historical pandemics, the hyper-materialism and uber-greed of our time will pass.

PS: “Lying is done with words, and also with silence,” said Adrienne Rich.

Narayan Ramachandran is chairman, InKlude Labs. Comments are welcome at [email protected] To read Narayan Ramachandran’s previous columns, go to www.livemint.com/avisiblehand-

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Arrested Development!

This came from Sophia Kagan and is available at whydev.org http://www.whydev.org/its-arrested-development-why-fixing-dysfunctional-states-is-a-bit-like-fixing-dysfunctional-families/#sthash.Jf3n5oeS.dpuf

It’s Arrested Development! Why ‘fixing’ dysfunctional states is a bit like fixing dysfunctional families

By Sophia Kagan | Posted in: Foreign Aid, Governance | June 26, 2013 | No comments yet.

The story of a ‘wealthy family who lost everything and the one son who had no choice but to keep them all together’ might not sound like a great allegory for why technical cooperation assistance to least developed countries has so often been unsuccessful, but look closer and important parallels emerge.

Anyone who’s laughed along with protagonist Michael Bluth’s futile attempts to get his family to be frugal, or to find employment to pay for their extravagant spending, will know that prolific spenders will always find creative ways around the limitations you place on them.

Cut personal credit cards and they will find a way to the company checkbook. Place them in jobs and they will shirk. Drive them to rehab clinics and they escape through the back door. Hilarity ensues.

But the joke might be lost on the citizens of countries run by kleptocratic dictators who, despite whatever institutional reform programs international financial institutions choose to throw at them, always seem to get away with lavish consumption.

Indeed, Bill Easterly’s The Elusive Quest for Growth: Misadventures in the Tropics reads pretty much like an episode involving the Bluth family… with some import licenses and domestic liability dollarization thrown in. According to Easterly, “a government irresponsible before an adjustment loan has unchanged incentives to continue being irresponsible” and will thus simply create the illusion of adjustment through creative fiscal accounting – freeing up funds for today by “borrowing from tomorrow” (eg. skipping infrastructure maintenance, robbing pension accounts, dodgy privatizations and the like).

Indeed, many would argue that it was not so much the policies of structural adjustment that led to disaster (though I would question the empirical evidence behind uninhibited liberalization!) but rather the fact that the prescription didn’t pay any attention to the wily nature of the patient. Thus, failing to get incentives right for elites meant that they gratefully helped themselves to donors’ money, introduced ostensible reform and surreptitiously sabotaged it.

A (developing) world of sponges?

So, can we equate Michael’s misguided but sincere attempts to change his financially irresponsible family with equally misguided donor intentions? And, have the disastrous consequences of ignoring political economy realities improved aid-giving?

Probably not, at least according to two recent books on development assistance – Development Aid Confronts Politics: The Almost Revolution by Thomas Carothers and Diane de Gramont, and The Limits of Institutional Reform by Harvard academic Matt Andrews.

Carothers and De Gramont outline why the modern aid enterprise which emerged in the late 1950s and 1960s was an apolitical endeavor, focused on socioeconomic objectives, and then track how this changed in the 1990s. This change was both in terms of increased ‘democratization’ aid, and also improved sensitivity to political realities in relation to aid projects more generally (but specifically public finance management).

The problem is however two-fold. First, according to Carothers and de Gramont the new changes do not go far enough – donors still invest relatively little in trying to understand political realities of countries and often prefer to fall back on ‘best practices’.

Second, just as the ‘political revolution’ is slowly gaining momentum amongst donors, it is increasingly becoming less and less relevant to least developed countries who can often choose from a host of less picky financial sources (eg. China, and other players, as identified in a recent Overseas Development Institute (ODI) Report). Russia rejected US assistance in September last year claiming it was too political, Bolivia followed suit last month and there is growing pushback in other countries too.

But, before we characterise donors as misguided technocrats who have finally ‘seen the light’ about understanding political landscapes, let’s look at Matt Andrews’ book on institutional reform. Andrews argues that donors have for too long been ‘hawkers of best practice’, not only failing to see how ineffective institutional reform has been through basic ignorance, but perhaps even engaging in willful blindness.

Ok, so he doesn’t actually say that in the book, but the implication certainly seems to be that donors are not just overly optimistic about developing countries’ capacity to push through painful reforms (that would never get through in the donor countries) but that they are guilty of lazy policy design and perhaps even ulterior motives. How else can we understand failure rates of between 40-70% according to the donors own calculations?

During the book launch at ODI, Andrews gave an example of a country so under-developed that Ministry of Finance officials were drafting the national budget with paper and pencil – not a single computer in sight. At the same time, it turned out that there was a World Bank consultant engaged to help the Ministry with some kind of sophisticated double accounting.

Some nations may need analysts and therapists, but not both at the same time.

Wouldn’t it have been better for the guy just teach the Ministry officials how to use Excel, and for the donors to supply a handful of computers? Perhaps. But that’s not what he’s going to want to put on his resume. He wants to boast about the technical sophistication he brought to this impoverished nation, and so does the army of technical development economists and specialists with sharp minds, expensive degrees and lofty career objectives. They certainly don’t want to experiment with new strategies and risk failure. Stick with the tried and tested and once legislation is passed, reap the media benefits and never mind about whether it actually leads to long-term change.

So what’s in store for the next season?

Where does that leave Michael Bluth and his donor community brethren trying to achieve economic prosperity? Carothers and De Gramont would advise him to hire governance consultants to undertake a careful review of the incentives which drive his relatives and work on reforming them. They would advise being ‘politically smart’ and ‘taking seriously how all aid programs in a country fit into and affect the broader political environment’. Andrews would pipe in with a focus on Problem Driven Iterative Learning (‘PDIA’) – get the Bluths together to focus on their own problems, reflect on the opportunities and stop focusing on best solutions. Andrews positively references such initiatives as Cash on Delivery, though some of the projects undertaken by Tony Blair’s Africa Governance Initiative, which provides technical know-how for policy making also seem to be consistent with his approach.

All jokes aside, this is a serious issue which exposes everyone’s flaws – the donors, the donees and perhaps even us, development practitioners. And of course, not all administrations in developing countries can be compared to money grabbing former socialites! Perhaps the most that a more ‘politically savvy’ approach can teach donors is how to separate those who are unwilling to reform from those who cannot for plausible political reasons (the Carothers and de Gramont approach) and design initiatives appropriately. Next, focus on small steps that reward enforcement not just passing flashy legislation not worth the paper it’s written on (the Andrews approach).

Most of all, don’t hold your breath. Development is long, painful and messy. Lucky that Arrested Development fans are such a patient lot.

 

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Hey good looking...

This comes from Kevin Grier's blog...http://wp.me/p3i6ru-cy

Hey Good Looking

I recently wrote that too much emphasis was being placed on various development score-cards and indices. I feared that people were confusing the map for the territory and were guilty of practicing cargo-cult science. I argued they were doing more harm than good.

Yesterday, I discovered the work of Matt Andrews, in particular, his distinction between actual good governance and what he calls mere, “good-looking” governance. That is to say countries can make themselves look good on some of these development and governance indices without necessarily improving what actually happens inside their borders.

Matt gives the example of the Open Budget Index, where Afghanistan received a lot of attention for getting the same score as Italy (insert Italy joke of your choice here). However, Matt points out that Afghanistan achieved its ranking by dong well on pre-spending transparency, it did quite poorly on actual spending accountability. He splits the OBI score into parts and produces the following graph:

So Italy actually has a much better spending process than Afghanistan and Uganda, despite the message of the overall OBI score.

Here’s how Matt eloquently puts it:

“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.”

Matt argues that this phenomenon both non-innocuous and widespread, “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.”

To put this in Angus-speak, just like Pacific Islanders after WW II ended, the folks who trust in these facsimiles of good governance will be waiting a very very long time for the cargo to fall from the sky.

 

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