The Limits of Institutional Reform in Development

Governance Indicators post 2015...my take

A belated welcome to 2015...sorry for being off line so long.

I thought I'd kick this year off with some links to a paper I recently wrote about governance and the post-2015 goals. Here is the link. I tried to be constructive and try to suggest how measures and targets could be useful...but any reader will see this is tough. 

You see, governance targets are likely to lead to signaling and skin-deep change if they are constructed in the typical fashion--emphasizing cookie cutter processes that make countries look good. You need processes or deep adaptive change associated with the targets...as well as targets constructed around context specific, functional issues... 

this will be a big ask...

Another functional governance indicator: civic registration (and statistical capability)

I'm writing this using an iPad app so hopefully it works. Today I wanted to revisit my proposal made quite frequently this year (sorry for being persistently irritating) about using birth and civil registration as a governance indicator. I like it as an indicator because I don't understand how governments can exercise authority on behalf of citizens if citizens are not recognized as such...how do governments engage with their authorizers in such circumstances? )knowing what kinds of services they need, where, in what amounts etc) and how do citizens engage with governments in such circumstances? (ensuring there is accountability and responsiveness, etc.). Below is a post I made about this last month, drawing on some data on the web... Before getting to the post, let me offer some thoughts on statistical capabilities in general. Statistical capability is a fundamental thing I would emphasize for those thinking about post 2015 indicators. I think it is more than frustrating that most of the MDGs to date have been assessed using periodic external assessments and most poor countries have not enhanced their own capabilities to generate, analyze and use statistics in decision
making since 2000. Morten Jerven's book Poor Numbers showed that data quality is still hugely problematic in development...even after a data driven exercise like the MDGs (as I write this I'm wondering how the international community could pretend it was promoting a results based process with no effort to embed local measurement of results). I think it would be hugely valuable if the post 2015 indicators focused on five or six key types of data (birth registration, death registration, perhaps formal economic activity, and some others) and succeeded in encouraging twenty poor countries to establish regular and good quality census processes. I would expect positive impacts on governance in these countries. Here is my earlier post:

I have been scouring the web for pictures to help illustrate why registration -- of children and the more general population -- is a vital measure of governance. Andy Norton from ODI got me back on this topic.

Registration coverage is an indicator of the degree to which governments know where people are, which materially influences the capability to govern. Note from the graphs that this is a missing capability in most developing countries, where many children and adults simply are not registered. Note the numbers of children not registered in places like Africa (in the pie chart).

Note also that the registration records are not getting better in many countries, as shown in the bar chart, partly because there are few serious efforts to construct registry mechanisms that can work in these contexts.

Note also that the problem is most severe when one looks at rural groups. So improvements to registry levels will improve governance capabilities and especially help improve governance for distributed groups.

Debt and governance? Could we get some functional indicators here?

This year I blogged quite a bit on using debt statistics as indicators of governance.

A number of readers found it a strange idea. I don't. If you think of governance as 'the exercise of authority by governments on behalf of citizens to further citizens' interests' then I think debt levels become really important to think about (and as indicators). They are part of a set of indicators related to the role governments play in the economy that I alluded to yesterday (in reflections on ports, trade and the use of turnaround times and other such metrics to indicate how well governments are exercising the authority they have to facilitate trade).

Why is debt related to governance?

Governments are authorized to play a key role in fostering macroeconomic stability in their countries. Debt levels are a key factor influencing such stability. Governments are authorized to incur debt on behalf of citizens, but this authority needs to be tempered by considerations of medium and long term fiscal stability. A similar measure could focus on monetary stability in a country, which is also a role governments (or government organizations like Central Banks) are authorized to play).

Why does debt matter in development?

In many developing countries, past debt crises have had seriously negative effects on development prospects, including human wellbeing. In many senses these crises sit alongside conflict and fragility and natural calamities as the major causes of extreme suffering in developing countries (and recently in more developed OECD countries like Greece).

An indicator?

Now I don't think a measure of this kind is easy to think about or calculate. This is because different countries seem to have different appetites for debt and there is no fixed rule on whether high or low debt levels are 'right' or 'wrong'. I discussed this earlier in the year on my other blog (http://matthewandrews.typepad.com/mattandrews/2013/01/dos-the-usa-exhibit-bad-debt-governance.html).

I did come to aproposal for thinking about and measuring governance in relation to national debt, however. I thought the figure here might be helpful in thinking through the idea. It shows in blue the 2010 level of Debt as a % of GDP in about 70 countries. In red it shows how far the 2010 level departed from the ten year average (where the departure is measured in number of standard deviations).

The graph shows that countries like Japan, Greece, Italy and Jamaica had relatively high levels of debt in 2010 (high blue bars) but these numbers may have been considered quite acceptable given debt to GDP levels in the prior decade, which were high or up and down. Governments in these contexts are expected to take time responding to high debt levels (because they seem authorized to have such levels). In contrast, Germany, the UK, Ireland and the USA had higher deviations from the norm (the red line) even though the actual level of debt/GDP was not as high as other countries. Governments in these countries can be expected to respond quicker to debt issues than others, because their authority to incur debt is lower.

Note this is not measuring whether debt is good or bad. Instead, I guess it's like talking about 'governance on a leash'…. And the leash is just a lot longer in countries like Greece than it is in countries like Ireland… because of past experience, political 'rules of the game', etc. If we have measures that capture the length of the leash and the level at which countries are testing the length of the leash, we might have an indicator of the extent to which governments are acting within the authority they have (or pushing on its boundaries). Sounds like a potential functional governance indicator to me.

Ports, trade and governance: Another functional indicator

In the past few days I have blogged about a few potential indicators of governance: road deaths, peace/conflict, and hunger/food security. These are ideas for potential indicators if those pushing to include governance in the post 2015 exercise get their way. Some have asked why they are about improvements in services and if I don't care about issues like participation, transparency, etc. This is a reasonable question. In reflecting on it, let me acknowledge clearly that these are specific examples but are not comprehensive; there are many other potential indicators one could include here. I would also say:

1. The examples are not merely about service delivery (if service delivery is a 'mere' thing in countries with little to no services). Rather, they reflect how responsive governments are to things that citizens generally care about. In this way, they meet one of my concerns with other so-called governance metrics (that do not reflect a theoretical idea of 'governance'). In terms of theoretical validity, all of these are the kinds of things that citizens give governments authority to work on (where I define governance as the exercise of authority by governments on behalf of citizens).
2. The examples are as normative-neutral as I can get, which is important when we recognize that governance processes actually (empirically, in reality, and appropriately) look different in different countries. What I have tried to identify are the roles that governments are typically authorized to play in countries, and which have an important influence on development. These are roles that foster development positively when well played; when poorly played, these roles can hinder development. Governments can take many different routes to play these roles well (allowing for variation in approach) but these roles are pretty much common to all governments.
3. Finally, for those who think these are just indicators of service provision and not governance, I would like to suggest that governance should not be seen an end in itself (or at least not only as an end, which I will address in a couple of days). Governance is mostly a means to an end, reflecting "the exercise of authority by governments on behalf of citizens, to further the interests of citizens". If one thinks in this way the key indicators of governance are not how transparent or participatory government is, but how well governments are playing the roles citizens have authorized them to play (which we should assess by looking at the results of many different government interventions in metrics like road deaths, peace and conflict, and hunger and food security). This is not to say that normative 'good processes and characteristics' like transparency and participation don't matter. They may frequently be important factors in fostering performance on these other indicators (as means) and do have value as ends themselves (in fostering an accountable relationship, which I will discuss in a few days' time). But they are not the be-all and end-all of governance.

So, let me suggest a fourth indicator of governance that relates to the economic role of the state: trade competitiveness.

Governments across the globe are commonly entrusted with many roles when it comes to economic management. They are commonly authorized to manage many key aspects of a country's trade regime, for instance, and have the sole authority to set laws in this domain, tend to own the country's ports, regulate movement of persons and goods across borders, and more.

We know that trade matters a lot to developing and developed countries. And we know that governments that play this role well have a significant impact on their countries' trade performance and economic growth. Consider the figure alongside and how governments are given authority over many of the factors that a recent World Economic Forum publication found were key to facilitating cross-border engagements (http://reports.weforum.org/global-enabling-trade-2013/view/appendix/). These include laws and quotas, and import/export fees and phytosanitary requirements and procedures and customs procedures and import/export procedures and border administration and transport infrastructure (ports, roads and more), transport services (regulated, monitored, often run by the state), regulations and physical security. Whew. A long list. And a complex one, involving many government-government and government-private sector relationships. And requiring real governance solutions to work!

There are many potential indicators of the governance performance of states in this area. The World Economic Forum has many that deserve attention (especially a report co-authored by my colleague Robert Lawrence http://www3.weforum.org/docs/WEF_SCT_EnablingTrade_Report_2013.pdf).

Many of these indicators capture real performance in the system and show that developing countries have real problems that require serious governance interventions. The figure alongside shows the average turnaround time in ports across the globe, for instance, which is a function of many of the factors mentioned above and is more problematic in developing countries than developed countries (creating bottlenecks for trade and development, as discussed in a fascinating OECD report on trade and world cities, http://www.oecd.org/gov/regional-policy/Competitiveness-of-Global-Port-Cities-Synthesis-Report.pdf ).

Imagine a governance goal that focuses, among other things, on decreasing turnaround times in major ports? Could this mobilize governments to do the hard work of making ports work better?

This is not to say that we don't see reforms in many countries now, but many of the reforms we do see are not having as much of an impact on port performance as one would hope. I believe that this is because port and trade reforms suffer the same isomorphic tendencies as other reforms. Smart folks have identified a model for what reforms should look like and international organizations push countries to adopt these reforms. So you get countries' port reforms assessed against an international blueprint (that asks whether there is private sector involvement, specific kinds of policy oversight, and more). But many of the countries that do well in adopting these reforms see lower levels of functionality at their ports—and trade—than others. I write about this briefly in my book, reflecting on a World Bank study of trade reforms, but one can also see it when looking at a recent study on why cargo spends weeks in African ports (http://issuu.com/world.bank.publications/docs/9780821394991). One interesting finding in this study is that reforms that improve competitiveness of ports (as suggested by the blueprint) do not always improve functionality of the port because the context is not characterized by a competitive economy that fosters appropriate incentives. The result is what I would call a square peg in a round hole and an example of a country (or countries) where governance reforms should have focused on improving functionality GIVEN the context instead of reproducing best practice forms that don't fit.

The proposed indicator does not capture a form (like private engagement) but rather focuses on a key functional aspect of trade and port management, which always involves governance. These data could be used to indicate governance quality in a country or even in different parts of a country (as in the table below, showing Indian ports and variation in the average turn around times over three years). The table shows another potential measure to use in this respect—the average length of pre-berthing detention.

There are many other measures one could think about in this area—and other areas where governance matters for economic wellbeing. It will always be important to present these measures in a contextually sensitive way, to foster contextually relevant discussions of governance and governance reform. For instance, one would want to show data on capacity utilization and traffic for the ports shown in this chart (as below) to better understand why turn around rates might be high or low (Cochin's low utilization rate may explain its low turnaround times for instance). Putting data like this together can go a long way to inform governments about where they need governance reforms (the negative outliers or negative deviants) and even where they can learn about doing governance reform (from the positive outliers or positive deviants).

The goal is to adopt indicators that are real, relevant and that foster thinking about governance solutions that matter (improving the way governments exercise the authority citizens have given them to manage key national resources like ports).

 

 

 

 

Hunger, food security and governance

The last couple of days I have reflected on two measures that I think could be useful if we need governance indicators in the post 2015 development discourse. These were measures of road deaths and peace / conflict. The idea behind both is simply that governance is about governments exercising authority on behalf of citizens to further the interests of citizens.

There are many ways in which citizens give governments authority to manage things like roads, vehicle registration, military and policing affairs, diplomacy, and a range of other factors that influence road deaths and peace/conflict. Improvements in these metrics undoubtedly reflects some improvement in governance. And these improved measures also reflect real improvements in the well being of people in developing countries.

This is the kind of measure that matters. It's not a measure of process or of some normative characteristic of good governance. Rather it captures the results of governments exercising authority in better ways.

A third indicator in this spirit captures hunger or food security. Governments influence key factors that determine levels of hunger and food security (like affordability and availability and quality and safety of food...see http://foodsecurityindex.eiu.com/).

There are a variety of measures in this area, including the Global Food Security index and the Global Hunger Index (shown below). It is amazing to think that a range of the countries that do really badly on this index (and on the peace and road safety measures I showed the last few days) actually do well on so-called governance indicators and measures of things like transparency and public financial management. They have the right form but lack the necessary functionality to actually govern. A hunger index would show this and would not let countries get away with reforms that only made their governance look better.

Peace, governance and an indicator that matters

John Lennon wrote about Christmas, peace and war over 30 years ago. The core idea of his song was that war could be over...if we want it to be.

Now we know that wars continue, and that conflict is probably the most damaging thing for a country to go through. Peace us huge when it comes to economic growth, social development, and so forth.

But peace is a product of many complex things, many related to a broad version of governance (where governance is the exercise of authority by governments on behalf of citizens).

If powers that be insist on adopting governance indicators in the post 2015 exercise, they could do a lot worse than including an indicator that captures peace. The chart shows an example of this, in a set of scores from the Global Peace Index produced by the Institute for Economics and Peace (http://www.visionofhumanity.org/#/page/indexes/global-peace-index).

I agree that indexes like this always have critics, but it seems to me that this kind of index could provide a good focal point for those thinking about improving governance in a real way. And in an important area for development. Like the road deaths indicator I mentioned yesterday.

Road deaths and governance

This graph from the World Health Organization shows how severe the road death situation is in developing countries. This is a complex governance issue that needs to be addressed in different and appropriate ways in different contexts. But it would be a great focal point for international organizations looking to measure functional governance. So many governance improvements are required to shift these numbers and the spillover effects of improvements will be huge. And targeted to poorer countries and even more to poorer countries experiencing growth.

Focusing governance indicators on capability gaps, continued

In my post a couple of days ago I gave some ideas of governance indicators that capture critical gaps in state capability in developing countries. These included road deaths, birth and civil registration. I like these indicators. If governments in low income countries can improve their performance on these indicators then I am certain we will see improved governance, which I define as 'the exercise of authority by governments on behalf of citizens.'

I want to offer some comments on the last post and this post before continuing, in answer to those who have asked me why I am engaging in this conversation at all:

• First, I did not initially want to engage in this conversation: I am not an avid supporter of including governance indicators in the post-2015 goals. I still believe the idea has not been treated seriously enough to warrant the attention it is getting (see my posts that question how much we know about what governance is, etc. http://matthewandrews.typepad.com/mattandrews/2011/09/making-good-good-governance-indicators-the-construct-validity-question-1.html; http://matthewandrews.typepad.com/mattandrews/2013/01/uncomfortable-thoughts-on-governance-can-we-ever-say-it-is-good-or-bad.html). Let me go further and say I also question the value of MDGs as a whole. I have yet to see a thorough analysis of their influence and I think there are many unanswered questions about this (see http://matthewandrews.typepad.com/mattandrews/2013/05/what-is-the-story-with-mdg-performance.html; http://matthewandrews.typepad.com/mattandrews/2013/05/fousing-on-growth-versus-creating-post-2015-mdgs.html). And I would describe myself as a critic of the post 2015 'goal defining' process. It seems to be incredibly expensive, centered on ensuring the importance of international organizations, and full of consultations that do not/will not ask tough questions about the effectiveness of past MDGs and about how much we really know about the world, issues like governance, etc.(see posts http://matthewandrews.typepad.com/mattandrews/2013/02/post-2015-mdgs-should-be-shaped-around-country-specific-problems-not-global-agendas.html; http://matthewandrews.typepad.com/mattandrews/2013/11/the-cost-of-post-2015-indicator-consultations-money-well-spentor-not.html; http://matthewandrews.typepad.com/mattandrews/2013/11/the-delusion-or-deception-of-mdgs-and-measurement.html).
• But I am convinced that there will be post 2015 indicators, and that there will be a post 2015 governance indicator. The list of people who have convinced me of this is extremely long. I believe it.

  Given this, I am worried that the post 2015 governance indicator will be a bad one. Many 'indicators of governance' reflect highly normative prescriptions of what good governance 'should be' and lack theoretical or empirical foundations about what governance is or how it matters, across highly different contexts (http://www.tandfonline.com/doi/pdf/10.1080/13600810802455120).I see lists of ideas referring to 'transparency' and 'rule of law' and 'openness' and other concepts that are often not well considered and seem to me to reflect characteristics experts in advanced Anglo or Nordic countries might wish on governments in developing countries. I question whether many of the concepts have any relevance in developing countries and believe that they are actually detrimental (in my book I argue that these kinds of indicators foster 'signaling' where countries do reforms that make them look better but don't make them any better).

• So, I am now trying to be constructive, and suggesting a course of action to identify indicators of governance that I think could actually make the world better. This does not mean that they cannot be gamed. All indicators can be gamed and, as Philipp Krause notes, the political pressure to game governance indicators might be higher than for other indicators. I expect this to be the case (my entire argument about signaling and the application of isomorphic mimicry makes this point). I also expect unintended consequences with all governance indicators. We are talking about governance here, not pick-up basketball. Governance is about authority, power, and politics. It I about real, big-time winners and losers. So governance reforms (which indicators are intended to inform and motivate) are about the redistribution of authority and power. All indicators and reforms in this area will have dark sides to them, whether one is talking about road deaths or population registers or improved transparency or whatever. It is crucial that those discussing indicators accept this, and agree to the risks of what they are doing. If we were doctors and had to make the oath they do, would we be constructing these indicators?
• These are IDEAS, not final and formal proposals… I hope that they promote discussion, but they are not intended as hard and fast recommendations for any of the high-level, low-level, mid-level or any-level committees working around the world. This is not my first post on the topic so I do hope the others will also get some attention (http://matthewandrews.typepad.com/mattandrews/2012/10/a-systematic-approach-to-governance-indicators.html). As always, however, I am aware that some ideas are better than others...and all ideas need to be plugged in to generate any real energy.

  

Now, let me get back to current ideas I have for indicators.

Those I suggested on Monday are what I would call 'state capability indicators' that reflect on basic capabilities governments need to even pretend that they are 'exercising authority' in meaningful ways.

As my silly drawing shows, these capabilities are like the bridge governments need to exercise authority in effective and responsible ways. As readers of my work would know (especially if you have read the 'capability trap stuff' coauthored with Lant Pritchett and Michael Woolcock), I believe that we often find developing country governments facing these capability limits. The problem is often exacerbated by many governance reform agendas (and governance indicators informing such) prescribing solutions that do not focus on building missing capabilities but actually put existing capabilities under extreme pressure.

We refer to this as 'premature load bearing'; where governance agendas introduce new 'solutions' that are way beyond the capabilities of developing country contexts…and ensure that governments get stuck in a trap of continual reform and reform failure. With this in mind, I would not suggest that any indicators prescribe ways of dealing with the missing capabilities in road safety, child registration or other areas (these are the ones I discussed on Monday. There are more that could be identified). The goal of the indicator is to get governments building the capabilities that allow the passage of heavier loads (problems, challenges, etc) so that they can more effectively and responsibly exercise the authority they enjoy.

Today I would like to suggest other indicators of critical 'administrative gaps' that I feel compromise governance capabilities. I believe that closing these gaps will lead to better governance in countries, and I believe that developing countries have bigger gaps than the gaps in developed countries.

• The first gap relates to public finance. All governments have the authority to raise and spend money. This authority is given to them so that they can do the business of the people, financing policies that produce public goods etc. Now these policy choices are really different in different countries and the processes of determining these choices also differs. I have my own personal views on which kinds of policy choices are better and which kinds of policy processes are better, but I think we move into an area of contestable norms when discussing such things. However, I think there are some ideas about governance in this discussion that evoke pretty global norms and reflect practical and pragmatic realities of public administration:
  • Reliable budgets are 'good'. I believe it is pretty uncontroversial to say it is better if public organizations behave in ways they commit to behave. In a public finance setting this means that it is generally good if governments spend money in accordance with the budgets they set. Now this does not mean that actual spending should not be allowed to depart in some way from proposed budgetary targets, and it should not be read to say that there are never times where even drastic reallocations of funds make sense and are actually good practice. But in many developing countries the gap between proposed and executed budgets is large and persistent and undermines governance. If the gap were closed it would mean that governments are planning better, budgeting better, and executing in accordance with budgets better. All good things. This kind of indicator would be interesting to construct: I would look at it at three levels; 1. The aggregate gap of spending across government (is government aggregate expenditure more closely aligned with budgeted amounts than it was before?); 2. The gap between allocations to functional or organizational recipients in the budget (is government doing a better job ensuring that it actually allocates money across government in accordance with the budgetary promises, such that education/health/agriculture gets what it asked for and we don't see money routinely moved away to defense/presidential funds, etc.). 3. The gap between when money should be provided to spending entities and when it actually gets released (are finance agencies in government doing a better job of actually getting money to the service delivery agencies when they need the money to do the jobs and provide the services committed to people in the budget and associated plans?). PEFA indicators (PI1 and PI2) could provide interesting starting points for the first two aspects, but we would need to think carefully about the third one in most cases. We would also need to think of the time horizons for different parts of this indicator. Given how hard it might be to construct, I would suggest considering country specific indicators (where countries decide this is a major gap they face, the countries work with partners to define exactly how they will construct indicators, set baselines and define targets…the goal is not international comparison but rather domestic improvement).
  • Living up to commitments is 'good'. I believe it is pretty uncontroversial to say it is better if public organizations live up to their commitments. In public finance this means paying bills, to external creditors and internal staff. In many developing countries this is a major gap. External debt is not always a distinct problem but there are common concerns about payments of contracts and salaries and wages. These are often not paid on time, leading to penalties or work stoppages (in contracting) or strikes and morale problems (with staffing). It seems to me that governments are authorized to act on behalf of citizens when making financial commitments, and governments will be exercising this authority well when actually making good on these commitments. This kind of indicator would be interesting and difficult to construct: I would focus on debt, contracting and salary/wage payments of the state, as well as data on arrears. There are few countries in which one could find data on most of these commitments or on the payment of bills. As with the indicator on budget reliability, therefore, one would need to construct this kind of indicator from the ground up in many cases. I would argue that governance would be improved if this kind of indicator were constructed, and rudimentary systems were introduced to measure 'Bill paying'. A tough task technically and politically (but this is what post-2015 indicators are about if I am to believe the MDG folks when they say that their indicators help push tough agendas forward and that they want real ideas on how to improve the way governments exercise their authority—or govern).
  • I could think of other such indicators centered on other public finance issues (for instance, the 'procurement value' (are goods and services procured at the right times, with appropriate quality, and within budgets), and 'debt efficiency' (is debt accessed in a strategic and cost efficient manner?), and 'macroeconomic stability' (are public finances being managed in a manner that best fosters stability). These kinds of indicators reflect on whether governments are closing administrative gaps needed to effectively exercise their authority. I would focus on outputs and outcomes (as above) and not processes – understanding that the process solutions at the disposal of different governments are different. But the gaps can be closed by all.
• The second gap relates to what I might call 'policy legitimacy'. All governments need to have some policy legitimacy to govern, conferred by citizens or elites like the private sector. Note I am not talking here about democratic legitimacy (which is also important in my normative view but is not the topic here). If government policies are not reliable they will not enjoy legitimacy and one can expect that they will struggle to use the authority they have to do things only they can do. For instance, governments that introduce new laws and then do not implement them will struggle to exercise their authority in the legal domain. Similarly, governments that deregulate certain sectors in a formal sense but then impose red tape through other administrative barriers will not be considered legitimate. In considering such issues, I think it can be generally said that legitimacy results when governments do what they say they will do. It is better, then, to have a weaker law that you can actually implement—or a higher regulatory burden that you actually adhere to—than great laws or minimalist regulations that you don't adhere to. Here are some ideas for indicators in this area:
  • Being equally transparent about spending and spending promises is 'good'. The government budget is one of the major policy tools it has. It is the major tool that governments use on a repeated basis (every year) to communicate priorities, goals, and strategies. The transparency agenda has helped promote the idea that governments should make these 'policy statements' openly accessible to citizens, elites, etc. Indicators like the Open Budget Index now reflect on how open governments are about this. This is a good thing. But in many developing countries there is a gap between openness in the formulation of budgets (where they make their promises) and in the execution of budgets (what they actually do). (see my prior blogs on this, including the most recent where you will see some back and forth with Paolo de Renzio at IBP http://matthewandrews.typepad.com/mattandrews/2013/05/good-or-good-looking-governance-that-is-the-question.html;http://matthewandrews.typepad.com/the_limits_of_institution/2013/10/how-transparent-are-open-budgets.html). This is not so good. It suggests that governments don't realize the legitimacy they lose by making promises in a transparent way and then limiting information on how well they performed on these promises. Closing the gap could be a critical governance goal for many countries, and an indicator of such gap could be constructed using data from organizations like OBI. In some countries the strategy for closing the gap could center on being more transparent with execution; In other countries there may be a strategy that involves (at least in the short run) becoming a little less transparent in budget formulation while execution transparency is caught up. I imagine observers will not be terribly happy with the latter cases, because there is normative view that transparency is always good. I don't think this is true and also don't think it is realistic. Most countries find it easier to open up on their promises than their execution and the transparency gaps are high and growing and suggest a false level of transparency. Let's get real by closing these gaps.
  • Actually implementing the anticorruption laws a country has is 'good'. A similar gap exists in most developing countries when one looks at the quality of laws addressing corruption and the actual implementation of these laws. (See http://matthewandrews.typepad.com/mattandrews/2013/05/good-or-good-looking-governance-that-is-the-question.html).Many governments in developing countries have spent many years passing fabulous laws in this area and then do not implement the laws. This is surely not a good thing for what some might call 'the effective rule of law' (which surely means little more than 'governments implement the laws that exist' or 'citizens and other entities expect that existing laws will be executed'). I often like to point out that Uganda has the best anticorruption laws in the world but one of the biggest gaps (measured at about 50 by Global Integrity, with laws at about 100 out of 100 and implementation of these laws at about 50). Italy, by contrast, has a gap of something like 10 (laws are about 80 and implementation of laws are about 70). From a governance perspective we must surely agree that Italy is 'better governed'—not because it has better laws (which it does not) but because it actually implements its laws. Uganda's efforts to create fantastic laws (often as signals to donors, who readily accepted them, in my opinion) have actually undermined governance because they have undermined policy legitimacy: The government has introduced policies it cannot implement, which has exacerbated a gap that surely weakens its execution of authority. Closing the gap could be a critical governance goal for many countries, and an indicator of such gap could be constructed using data from organizations like Global Integrity. As above: In some countries the strategy for closing the gap could center on just implementing laws that are on the books; In other countries there may be a strategy that involves (at least in the short run) actually pulling back on some of the laws. I imagine observers will not be terribly happy with the latter cases, because there is normative view that better laws are always better (and much of the anticorruption agenda centers on introducing laws). I don't think this is true and also don't think it is realistic. Most countries find it easier to pass new laws than they do to implement the laws the implementation gaps are high and growing and suggest a false anticorruption agenda. Let's get real by closing these gaps.
  • Implementing regulations as they are written is 'good'. Let me propose one last policy legitimacy gap indicator here today. It reflects on the authority governments have to regulate economic behavior. The Doing Business indicators assess such regulations, and impose the normative view that 'less regulation is good'. This is a view that has led many developing countries to decrease the formal regulatory burdens facing business. These countries have changed regulations and streamlined formal procedures related to getting permits, paying taxes, and a range of other things. In most places the measure of success in this kind of reform is whether 'according to regulations' you can get through government processes in fewer days than before. So, countries declare success when (according to regulations) firms can get a construction permit in fewer days than they could before (as an example). But there is a problem. The Doing Business indicators only ask about written regulations, not actual practice. And in many countries Business Enterprise surveys tell us that there are huge gaps between what formal regulations say and what actual firms go through. Where regulations decrease the number of day it should take to get a construction permit from 30 to 5, for instance, one often finds that business enterprise surveys find many companies taking over 100 days to get the permits. This gap again undermines the legitimacy of the state and its policy goals: private organizations learn to discount what the government promises in such situations and all sorts of gaming ensues that limit the exercise of authority (governance). Closing the gap could be a critical governance goal for many countries, and an indicator of such gap could be constructed using data from surveys like Doing Business and Business Enterprise. The idea of such an indicator would be to calculate the gap between formal regulatory promise and actual administrative behavior. As above: In some countries the strategy for closing the gap could center on just implementing regulations that are on the books; In other countries there may be a strategy that involves (at least in the short run) actually re-regulating some sectors (or passing laws that create realistic expectations about how long it will take to do certain things, what kinds of loopholes exist, etc.). I imagine observers will not be terribly happy with the latter cases, because there is normative view that lower regulations and promises of lower regulations are always better (and much of the private sector development agenda is focused on this). As above: I don't think this is true and also don't think it is realistic. Most countries find it easier to change regulations to commit to 'more efficient administration' than they do to actually become more efficient and end up with serious gaps between what they promise and what they do. Let's get real by closing these gaps.
  • I'm sure I can think of many other indicators that relate to gaps like these—where governance will be enhanced if states do what they say in a more effective manner. It should be noted that the idea of focusing on these gaps is a dramatic shift away from current governance indicator proposals. These proposals often emphasize the one side of the gap—I often hear advocates speaking of 'making budgets more transparent' for instance or 'introducing anticorruption mechanisms like whistleblower laws' or 'deregulating for small business creation'. In my opinion many of these recommendations focus purely on the form of governance and promise to exacerbate gaps, reduce policy legitimacy and undermine governance (as in the silly drawing alongside). The proposal I have is to get away from this form based agenda and focus on the problem of becoming more functional—which involves discussing what forms are relevant and how to implement and execute on these forms. In my book I call this getting away from the 'what you see is not what you get problem in development'.

I will continue with more ideas in the weeks to come, but let me take a break now and wait to see what you all think of these ideas. In the meantime, for those who have asked: My book is now available in paperback at Amazon and Cambridge University Press.

More on registration as a governance indicator

I have been scouring the web for pictures to help illustrate why registration -- of children and the more general population -- is a vital measure of governance. Andy Norton from ODI got me back on this topic.

Registration coverage is an indicator of the degree to which governments know where people are, which materially influences the capability to govern. Note from the graphs that this is a missing capability in most developing countries, where many children and adults simply are not registered. Note the numbers of children not registered in places like Africa (in the pie chart).

Note also that the registration records are not getting better in many countries, as shown in the bar chart, partly because there are few serious efforts to construct registry mechanisms that can work in these contexts.

Note also that the problem is most severe when one looks at rural groups. So improvements to registry levels will improve governance capabilities and especially help improve governance for distributed groups.

Ideas for post 2015 governance indicators: Focus on state capability (or governance) gaps

Last week I was at the Overseas Development Institute and was asked about my thoughts on post-2015 governance indicators. I wrote about this earlier in the year, but let me catch up on the conversation here. I think that if we must have governance indicators we should capture key indicators of state capability that are not normative but are rather practical—and where this capability seems particularly lacking in developing countries, given gaps in performance that are visible and undermine governance (which I define as 'the exercise of authority by governments on behalf of citizens).

I am particularly interested in indicators that reflect improved governance (such that they have appropriate construct validity). Note that I am not proposing measures of governance—indicators indicate (they don't measure).

Here are some ideas.

First, road deaths. These are peculiarly high in developing countries and signal a significant gap in the capability of states. Look at the map below from the World Health Organization (WHO), and you will see that road deaths per 100,000 are generally three times higher in developing countries (especially in Africa). This is a major governance gap. States are given authority to ensure road safety and if they don't do this no one else will; Government must work in this area. In all countries. The reasons for gaps are hard to identify from the outset, given that road safety has many dimensions. But the dimensions all involve states. Think of the vital role governments play in the construction of the roads, regulation of roads, motor vehicles, pedestrian behavior, and more. Think of the role government agencies play in implementing these regulations; police, courts, drivers' license bureaus, and more. And this is an area where development demands greater state capability. More growth leads to more road use, as does the importance of having safe roads. Without doubt, lower road deaths will indicate better governance in developing countries (if road deaths are declining one can only argue that governments are exercising their authority to advance the interests of citizens).

What kind of indicator would I propose: Countries could take the baseline from WHO data and then propose an iterative set of goals to reduce the levels. How they do this depends on how they deconstruct the problem, which means that some countries might end up improving road construction; others might change regulations on public transportation; others might do totally different things. There is no 'best practice' solution we should expect—rather, we should be supporting a search for 'relevant solutions'.

Second, birth registration. These are peculiarly low in developing countries and signal a significant gap in the capability of states. Look at the plot from the World Bank's World Development Indicators database, and you will see that there is a positive correlation between a country's per capita GDP and the % of births that are registered. Note that the plot only captures developing and some middle income countries (the relationship is even tighter when OECD countries and other newly rich nations are included). This is a major governance gap. States are given authority to register children and if they don't do this—or at least give authority to others to do so—then children won't be registered. And then we have to ask basic questions: How do governments budget? How do citizens ensure they access services? How do children's rights agendas make any sense? These questions pertain to all countries. The reasons for gaps are hard to identify from the outset, given that child registration has many dimensions. But the dimensions all involve states. Think of the vital role governments play in determining the administrative rules of registration, and access to places where one can register, and more. Think of the role government agencies play in implementing these regulations, and in deciding what services can only be accessed by those who are registered, and more. And this is an area where development demands greater state capability. The development agenda routinely assumes that children are registered; in areas ranging from education to health care and even in the agenda around human trafficking. If we don't know where kids are, how do these other development agendas make any sense? Without doubt, higher birth registration rates will indicate better governance in developing countries (governments are exercising their authority to advance the interests of citizens).

What kind of indicator would I propose: Countries could take the baseline from data that exists (in UNICEF, WDI and other sources) and then propose an iterative set of goals to improve the levels of birth registration. Evidence of improved registration should include explanations of the new processes in place and stories of improved registration could also be routinely collected to validate the data. How countries improve the registration rates depends on how they deconstruct the problem. There is no 'best practice' solution we should expect—rather, we should be supporting a search for 'relevant solutions'.

Third, general population (or civil) registration. Francis Fukuyama has been advocating the idea that states need to have good population registration (and census taking) capabilities if they are to even try and govern. Andy Norton at ODI shares the view. As do various commentators and global organizations. I think it makes a huge amount of sense. Without accurate data about a population, and mechanisms that allow timely and consistent collection of such, how can governments effectively govern in a modern word? How can one budget, or know key things about democratic participation, etc.? How can one know the peculiar challenges faced by a country? But developing countries tend to have weak population registration mechanisms, and the deficiencies are most pronounced the more fragile and poor a country is. In 2011 Sulekha Patel showed that death registration is really non-existent in a large part of the world, and civil registries do not exist in many countries and have not been developed even as MDG and other initiatives have demanded data (see the charts below).

Rather than building permanent state capabilities, the MDG process has promoted the use of (mostly external) surveys to assess progress against targets. With very few lessons about how to move from these surveys to more formal civil registration processes. This more formal process would involve states, working probably with religious organizations (as one saw civil registries emerging from church registries in much of Europe). Experience in countries like Singapore, South Africa and others show it can be done. Without doubt, higher coverage of civil registration systems will indicate better governance in developing countries (governments are exercising their authority to advance the interests of citizens).

 

 

What kind of indicator would I propose: Countries could take the baseline from data that exists and then propose an iterative set of goals to improve the coverage levels of registry systems. As with birth registration, evidence of improved registration should include explanations of the new processes in place and stories of improved registration could also be routinely collected to validate the data. How countries improve the registration rates depends on how they deconstruct the problem. There is no 'best practice' solution we should expect—rather, we should be supporting a search for 'relevant solutions'.

I will discuss ideas to do with governance gaps in future posts, but have a couple of comments to close this post.

First, some people will probably identify that at last two of these proposed indicators emphasize data collection on the part of governments. I hope you do see this. It is imperative that we recognize the basic capabilities needed to govern, and data collection and analysis are top of this list. Morten Jerven's work shows that developing countries typically lack these systems. One wonders how the MDG process has progressed for so long with this knowledge? The fact that many developing countries will come to the end of the MDG period without strengthened domestic statistical systems is a fundamental failure of development. We must not repeat this.

Second, some people will look at the above proposed indicators and say "but the data we have are weak…how can we have an indicator like that?" I agree the data are weak, and baselines will leave a lot to be desired. But so do many of the baselines (and progress measures) for current MDGs. Are we deluding ourselves to really think that the data we have for infant and maternal mortality rates are accurate in most of the countries (or is it just plain deception that causes us to use these data to raise funds when we know they are incredibly problematic). Instead of just using data for evaluations and marketing an agenda, the proposals above make data part of the product. So: If the data are weak today then state capability is weak today too, and governance is compromised. If a global agenda can draw attention to this, and strengthen this area of capability, we will see better governance.

Finally, people may read the above and say things like "the indicators can be manipulated" or "there is a lot of politics behind that indicator" as if we should not have such indicators. Let me say as clearly as I can that anyone wanting to include any indicators about governance need to be comfortable with such complexity and messiness. Governance is about authority, power, politics, and the like, and it is messy. Governance indicators will be the same. Progress on these indicators will not be the result of clean and simple technical fixes. And assessments of the progress will never be easy or undisputed.