The Limits of Institutional Reform in Development

Dysfunctional reforms and icebergs that sink

I'm reading some work by Lewis B. Dzimbiri from the University of Malawi. His work examines the gap that exists between reforms on paper and reform results. Read the full article at http://www.ajol.info/index.php/aa/article/download/87546/77225

He argues that the blend of western systems and traditional systems will always create this kind of gap. I like the study a lot, although I think 'hybrids' need not be western formal systems plus local informal systems. What one wants is a system where the formal rules, norms and cultural cognitive structures align and allow functional behavior.

Multiple icebergs (rules of the game) are always present in any setting, and agents must navigate between these icebergs...

Dzimbiri's argument gels well with the idea I have of reforms as institutions as icebergs, however. First, there are many icebergs in any context and we need to recognize that agents are navigating between these icebergs...not having their behavior shaped by any one iceberg at any one time. So reforms should take the full iceberg landscape into consideration. Second, when trying to establish a new rule of the game, one needs to ensure that all components of the rule are provided: formal regulative mechanisms, normative devices, and cultural cognitive structures. If you only reproduce the parts you can see, and not the cultural cognitive and normative foundations, you get an iceberg without foundation: the kind that sinks.

Here is a section that captures his argument:

The current administrative system in Africa needs to be understood as amixture of the traditional indigenous and western structures and valueswhich continue to co-exist side by side. At independence, Africangovernments inherited administrative structures which were gearedtowards the requirements of the ex-colonial powers. For Balogun (1986),most African countries had experienced a dilemma in terms of whichadministrative culture to adopt. To go back to the good old days ofdespotism and kingdoms or to come to terms with the Westernadministrative system which co-existed with indigenous structures andvalues for close to a century?

Political and administrative reforms were undertaken in manyAfrican countries due to changes in political objectives and greater volumeof governmental role, especially in development (Hyden 1975). For Leys(1974), it was a move from law and order orientation of government toone of development. A hybrid administrative system is one in which thesuperstructure (institutional arrangement) mirrors the Western model while the value system remains unchanged. According to Khandwalla(1977), the wider culture influences the functioning of modernorganisations.

Thus, the wider culture has a significant impact on the extent to whichcitizens obey and follow national constitutions, laws, rules andprocedures created for the effective functioning of nations andinstitutions. For example, Dzimbiri (1996) noted that while organisationalstructures and process in Africa mirror exactly those in the West, andthat Western management theory and literature is used by trainers intraining experienced managers, the latter are too aware of the gapbetween what the theories propose and the actual practice inorganisations. For example, while the literature talks of merit, competence,official verifiable qualifications for deciding recruitment or promotion ofofficers in organisations or public service in general, managers as well astrainers are aware that such objectivity or meritocracy is overtaken byextended family considerations, nepotism, bribery and favouritismwhich are in line with some African cultures. The dilemma of the trainerat this point is whether he/she should be talking of nepotism andcorruption which are hard realities in the organisations where thesemanagers come from, or should continue to talk of merit or objectivity aspropounded by western literature when this is not what is happeningon the ground.

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From political economy analysis to political economy engagement

Building on the post I just drafted, I would summarize PDIA as a process of political economy engagement, where one is constantly pushing on, learning about, and responding to, political contexts. This is different to political economy analysis where one looks at an writes about political contexts, assuming what one sees is both accurate and real. I think we need to move beyond PEA to PEE.

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Politics and PDIA

I am not a political scientist. As a result, some readers have not been able to find enough 'politics' in the language I use to discuss the limits of institutional reform or in the idea of PDIA. This is interesting, because I see politics all over the book and PDIA. Indeed, I see PDIA as a strategy to effect change and development in contexts where one expect problematic politics. Let me explain.

In the book I argue that political analysis has an important place in development, but is limited. First, it is static and is typically done during project design. But change is dynamic and requires adaptation throughout the muddling through process. Second, it typically focuses on what can be seen and even more narrowly on what outsiders think are the power structures and relationships in a given context. But contextual realities are often hidden, below the sea level in multiple institutional arrangements (ice bergs) in the context being examined, so much goes unseen in these analyses. Third, political analysis often describes either a context that is open to change or one that is not, but often (not always) fails to tell us what to do in the context. But we need to know how to manage politics in real time, not just observe what is observable.

In the book I discuss contexts in which reforms occurred with lots of political analysis but failed to achieve objectives because of the above limits. I found that projects with more impact did not necessarily have lots of political economy analysis up front but instead focused groups in the context on problems they cared about (where enough political support could be located to allow for an entry point) and allowed step by step progression or iteration (to allow political obstacles to emerge, and to respond to such, and to build political support as the change emerged) through broad groups (to ensure that political support was not overly concentrated and to promote inter-agent accountability). This is the essence of PDIA.

• Use a problem as an entry point where there is enough political support to initiate change.
• Go step by step with the change so that you don't demand too much political support at a time, and can learn about the political realities as they go along, and build political support on the basis of each step. Experiments with results help to spread the risk that political authorities may take in supporting change as well.
• Allow flexibility and learning in the process so that you can adapt to the political realities that you see when you push into the context.
• Work with groups and not individuals, to expand the political support you have for change, and to bolster support bases for those who give you support.

Just because my language is not typical to the political economy literature does not mean I ignore politics in development, and just because I don't actively argue in favor of more external political economy analysis in projects does not mean I don't think about managing politics in change processes. I think politics matters a lot and we need to have change processes that take politics seriously. In fact, PDIA is all about working dynamically in complex political settings where I assume we don't see the realities upfront but need to learn and adapt as we go along.

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The reality of budget reform in Lesotho’s health care system: A case of poorly adapted reform ‘with limits’

Taryn Vian and William Bicknell from Boston University's School of Public Health wrote a really interesting article on reform in Lesotho that has just been published in the journal Health Policy and Planning. They examine a reform that began in 2005 and has as yet not been properly evaluated—meaning that no one has asked about implementation of reform by deconcentrated or distributed entities (like clinical personnel working in clinics).The authors find that the reforms have had the kind of limits I discuss in my book—first, there are implementation gaps (they have new performance budgeting mechanisms that are not really being used); second, they have a major problem with getting users in clinics to use the new systems. The authors offer two crucial lessons from the case: adapt reforms to the context and realities of health sectors in developing countries… and measure the implementation of reform. Change only matters if it changes functionality…

Here is the abstract to the article (I have adapted and added and re-structured it a bit) which you can access in full at PBB in Lesotho health sector article

Lesotho has been implementing financial management reforms, including performance-based budgeting (PBB) since 2005 in an effort to increase accountability, transparency and effectiveness in governance, yet little is known about how these efforts are affecting the health sector. Supported by several development partners and $24 million in external resources, the PBB reform is intended to strengthen government capacity to manage aid funds directly and to target assistance to pressing social priorities. This study designed and tested a methodology for measuring implementation progress for PBB reform in the hospital sector in Lesotho. We found that despite some efforts on the national level to promote and support reform implementation, staff at the hospital level were largely unaware of the purpose of the reform and had made almost no progress in transforming institutions and systems to fully realize reform goals. Problems can be traced to:

• a complex reform design,
• inadequate personnel and capacity to implement,
• professional boundaries between financial and clinical personnel and
• weak leadership.

The Lesotho reform experience suggests that less complex designs for budget reform, better adapted to the context and realities of health sectors in developing countries, may be needed to improve governance. It also highlights the importance of measuring reform implementation at the sectoral level.

Context and the Limits of Institutional Reform, continued: Change in Korea

My previous post noted that reforms often run into limits because they overlook contextual realities. The book has an entire chapter on this, addressing questions like "what is it about context that should be looked at?" "why do so many reformers not look at context?" and " how might reformers get a better handle on context?"

In answering the first of these questions, I suggest that contexts are full of iceberg-like institutional structures that comprise regulative, normative and cultural cognitive elements. These are formal and informal elements--not one or the other. This is important to recognize, because the informal elements are often unseen, and are also the elements that give institutions their stubborn durability.

Possibilities for change depend on this durability, especially of dominant structures. Possibilities for change are also influenced by the presence and viability of alternatives, the extent of disruption in the context, and the relative support agents give to new alternatives over dominant incumbents.

These factors are referenced in one of my favorite pieces on Korean institutional change, by Chung H. Lee. Titled, The Political Economy of Institutional Reform in Korea, it addresses the importance of contextual factors in the Korean change process, especially the informal elements of dominant strcutures. Here are some of my favorite references to contextual issues we should all think about in order to limit the limits on institutional reforms in development. Taken from: http://www2.hawaii.edu/~lchung/Political%20Economy%20of%20Institutional%20Reforms%20in%20Korea%5BJAPE%5D.pdf

 [Institutional reform] requires changing formal institutions such as constitutions, laws, and property rights as well as informal institutions such as sanctions, taboos, customs, traditions, and codes of conduct, which govern the way that individuals in society interact with each other. These are local-specific conditions that any attempt to reform the country’s formal institutions must take into account, as they are slow to change and may not be compatible with newly introduced formal institutions.

One of the difficulties in changing institutions is that the durability of informal institutions constrains the type and speed of change that may be made in formal institutions because the newly introduced formal institutions will have to be compatible with informal institutions if they are to be effective. This is a conclusion that Lin and Nugent (1995, p.2362) reach, as in the following quote, after an extensive survey of the literature:

[M]ere transplantations of successful institutions from DCs to LDCs [are], at best, unlikely to have the expected positive effects on performance, and, at worst, may have rather disastrous effects. Where to start and how to bring about the reforms in a country are questions that can be answered only with serious consideration of the country’s existing institutional structure and human and physical endowments.

The point is that institutional reform is a path-dependent process with initial conditions—the existing formal as well as informal institutions—constraining the type of new formal institutions that can be introduced for immediate effect.

 

Regular reviews and feedback help reformers manage contextual complexities and adapt reform designs

The following post was received as a comment from Martin Johnson. I have worked with Martin in various countries and always find his stories of working on long term reform in places like Albania, Uganda and Pakistan fascinating. He I also one of the founders of the PFM Board (with Mauro Napodano), a blog space where you can go for all things Public Financial Management (http://pfmboard.com/)

By Martin Johnson, Principal Consultant REPIM

Matthew Andrew’s 'The Limits to Public Financial Management Reform in Development' draws attention, among other things, to the widespread use of governance and related reforms that are ‘best-practice’ in design but are short-term and seem to ignore context and the myriad layers of minor and major context-specific issues that must be negotiated before technical solutions have even a chance of being adapted properly, never mind implemented at the front line by people that matter (however insignificant or distant those people may appear to project designers or project implementers).

He is not alone in being frustrated by observing the widespread use of this approach and it is no surprise that he presents so much evidence of success in terms of ‘signals’ and so (relatively) little impact from that apparent success.

The time is ripe for a weighty tilt against this paradigm. The evidence that Matt has assembled is certainly weighty. It is also persuasive and certainly has the potential to begin shifting the paradigm.

A fair amount of my own practical experience chimes with much of the analysis and evidence in Matt’s book. This includes coming into contact with projects that aim to support governance reforms but have unrealistic or inappropriate log-frame design, both in terms of nonsensical periods of time over which fully-formed reforms are expected to be designed and delivered and in terms of the contextual “constraints” that are simply overlooked or assumed away.

In one case I had an unusual opportunity to periodically review a major PFM reform over a ten year period. The anticipated achievements in its original design (covering a period of just 2.5 years – a period typical of many development partner-supported governance reforms) were unrealistic to the point of being wholly unachievable. The support would have resulted in abject failure and closure after (or even before) year 2.5 had it not been re-scoped shortly after it started – an interesting story in itself, but one for another time and another place. Even after re-scoping it remained over ambitious and was on the verge of closure on several occasions because of an apparent failure to deliver results (including when very good results were being delivered!).

The story of that reform is one where what was delivered after ten years was more or less what was possible within that period in the highly difficult change management environment of the country concerned (where what Matt refers to as ‘cultural cognitive influences’ are extremely strongly embedded). Interestingly enough, whilst a number of different development partner staff members came close to closing the project at various points in its lifetime because of ‘lack of results’, it managed to survive (sometimes narrowly) in part because it was subject to a regular and independent review process that explained to the development partner on most of these occasions that ‘context’ was being addressed and that progress was commensurate with context, even if it was not commensurate with the project’s over-ambitious design.

From my own experience, therefore, I have come to appreciate one of Matt’s conclusions with regard to ‘best practice’ and the short term nature of many governance reforms - the need for regular reviews to address context.

Reform Content and the Limits of Institutional Reform in Development: Anticorruption Commissions

Yesterday I reflected briefly on some of my book's ideas about the influence of context on institutional reforms in development. The book argues that many institutional reforms face limits because reformers overlook the change context.

I noted that this is often the case because reformers have solutions in mind before reforms begin, and these solutions cloud any view on contextual realities and how these might require different reform designs and a different reform approach in different contexts. I also noted, in the Korean example, that much of the contextual complexity reformers need to consider is out of sight to external observers anyway;  informal norms and cultural cognitive scripts are unwritten and frequently unrecognized.

The book proposes ways of thinking about this issue and crafting reforms that actually work in complex contexts. A key idea is that problems provide entry points to tough contexts. More on this to follow in future blog postings.

Before getting to this, however, I wanted to propose a second reason why reforms are often limited in development. It also relates to the idea that reformers have pre-designed best practice solutions in mind. This does more than just blind reformers to the context, it also has reformers introducing highly specified content that is seldom supported in the countries undergoing reform.

These highly specified best practices often include particular kinds of laws and organizational forms that governments are encouraged to reproduce because they seemed to work elsewhere. Getting back to the example of Uganda and corruption, I would argue that anticorruption commissions were proposed as such 'best practices' in the 1990s. Many countries were encouraged to adopt these commissions, with the following example showing how African governments were 'carpet-bombed' with this practice at one stage:

www.u4.no/publications/measuring-success-in-five-african-anti-corruption-commissions/

The example that many countries were encouraged to follow was that of Hong Kong.  A 2000 article in Finance and Development (by Jeremy Pope and Frank Vogl) points to this example as one other countries (like Nigeria, in the article) should follow [emphasis is mine]:

See:http://www.imf.org/external/pubs/ft/fandd/2000/06/pope.htm

Nigeria has a long way to go, but it can be encouraged by examples of
effective approaches in other countries. National anticorruption agencies, for
example, can go far beyond merely identifying and prosecuting corrupt officials,
vital as this is. They can also assist in creating an environment in which large
public works proceed without corruption. They can operate in ways that command
the respect of contractors and contribute to the building of a business
environment that is imbued with integrity. Although these aspirations sound
utopian, they can be realized, as Hong Kong SAR has demonstrated.

...

The ICAC [anticorruption commission] has been pivotal to the success of transparent public procurement in  Hong Kong SAR.

Pope and Vogl point to specific evidence in the Hong Kong example to show how projects can be completed without corruption--under the auspices of an anticorruption commission. The example is one that I could see many countries showing interest in, centered as it is on infrastructure and development:

Michael Wiehen and Peter Rooke, members of Transparency International's Board
of Directors, recently examined the procurement processes involved in developing
Hong Kong SAR's Airport Core Program (ACP), which included construction of the
Hong Kong airport, as well as of high-speed rail and road connections, a major
suspension bridge, and a cross-harbor tunnel. The total capital cost of the ACP
exceeded HK$160 billion (US$20.6 billion at the current exchange rate of US$1 =
HK$7.75), making it one of the largest infrastructure projects ever undertaken
anywhere in the world. The ACP was virtually free of corruption...

The authors are obviously making an argument in favor of using anticorruption commissions to foster this kind of successful project. They then note some of the factors that made for an effective anticorruption commission and project in Hong Kong:

• Hong Kong SAR's clear, strict Prevention of Bribery Ordinance and strong
  Independent Commission Against Corruption (ICAC), which has impressive legal
  powers and a staff of about 1,350 professionals;
• clear rules and effective control mechanisms for selecting and procuring
  consultant and construction services and equipment supplies, supervising and
  monitoring the implementation of contracts, enforcing the accountability of
  government staff as well as of consultants and contractors, and resolving
  disputes;
• the establishment, for ACP purposes, of special institutions such as the New
  Airport Projects Coordinating Office (since dissolved), which had a
  dispute-resolution team that stepped in whenever problems occurred, and the
  Engineering and Associated Consultant Selection Board, which is also involved in
  non-ACP projects; and
• a favorable working environment, including appropriate salaries for civil
  servants, a high degree of professionalism and pride among the officials, and a
  relatively small society in which businessmen caught offering bribes or
  otherwise trying to manipulate the processes find it difficult to obtain other
  business, making corruption a high-risk activity.

The authors include a paragraph that focuses on the anticorruption commission alone, listing further factors that are important to consider in thinking of its success:

The ICAC has been pivotal to the success of transparent public procurement in
Hong Kong SAR. Its work is carried out by three departments. The Operations
Department carries out the investigation and prosecution of offenses; the
Corruption Prevention Department examines the practices and procedures of
government departments and public bodies and makes recommendations on how
opportunities for corruption can be eliminated or reduced; and the Community
Relations Department is responsible for educating the general public about the
evils of corruption, instilling positive values in Hong Kong's youth—starting as
early as kindergarten—providing advice to business organizations on drawing up
codes of conduct, and harnessing support for the ICAC.

I really like the piece by Pope and Vogl, because it gives hints as to the CONTENT required to make an anticorruption commission work. Consider some of the CONTENT requirements: Laws and ordinances; Multiple departments with over 1,000 staff (in Hong Kong, a city state), clear rules and procedures for doing day-to-day things like resolving disputes, inter-organizational structures to implement the new day-to-day procedures, and things they call "a favorable working environment", "a high degree of professionalism and pride among the officials" and social  conditions and norms that "make corruption a high-risk activity."

This is a lot of CONTENT. A highly specified and demanding reform that takes a lot to work. So now we take this story to the many countries in which these commissions were introduced  and I ask the question, "Which aspects of the content were actually introduced in the reforms?"

The answer, in many cases, is "very little." Laws, the anticorruption commission in itself...maybe some of the senior management. Sometimes the formal day-to-day procedures. Most interventions did not staff these commissions properly (because there were funding issues related to a lack of political support). Most of them did not build the inter-organizational structures that made a difference in Hong Kong. Most of them did very little to establish the "favorable working environment" and the informal 'rules of the game' associated with such.

I'm not saying that reforms could ever 'create' this kind of informal or political content. It does seem to me that the content is required to make this kind of intervention work, however. Without it, many anticorruption commissons have proved nothing more than shells--or iceberg tips without foundations. As I say in the book, these are the kinds of icebergs that sink.

And these kinds of reforms are limited. They impose highly specified best practice forms on countries. These require a lot of content to work. But reforms fail to provide the content required to make them work. So they fail.

 

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

 

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

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

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

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

Here is the bulk of this paper's introduction:

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

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

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

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

The Limits of Institutional Reform in Development

I have a new book coming out in January 2013. It is called The Limits of Institutional Reform in Development. I intend to use this blog site to discuss topics related to the book. I hope you find it an interesting place to visit, and am asking for any readers to comment on their experience with reform in development--especially where that reform has been focused on changing institutions ('the rules of the game') in governments.

Here is the first paragraph from the preface to my book, which should give you an idea of its content:

This book emerged in response to mounting evidence that institutional reforms in development often do not work. Case studies and multi-country analyses show that many governments in developing nations are not becoming more functional, even after decades and hundreds of millions of dollars of externally sponsored reforms. These studies increasingly suggest that disappointing results cannot be explained by routine excuses either. One cannot simply blame governments in these countries for not doing reforms, for instance, because many governments remain deeply dysfunctional even after many satisfactorily completed projects introducing best practices advocated by international organizations. The work on institutional reform in development has seldom explored reasons for failure beyond such excuses, however. This has created a gap in the literature, which is important from both an academic and practical perspective. The academic challenge is to see if theory and evidence can help promote a better understanding of why many reforms do not lead to better governments. The practical imperative is more fundamental: Can a better understanding of past experience help improve the likelihood of more institutional reform success in more developing countries in the future?