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.
.