One of the pillars of economic development is governance.
Programs like the broad-based Washington Consensus relied upon improving governments to ensure that economic reforms such as trade liberalization and privatization of public enterprises. The alphabet soup of major donors like the World Bank, USAID and DfID have a applied wide-stroke solutions to governance.
The policies that made up the Washington Consensus did not help out Latin America, says BU Associate Professor of International Relations, Kevin Gallagher in the Guardian.
The 30-year record of the Washington consensus was abysmal for Latin America, which grew less than 1% per year in per capita terms during the period, in contrast with 2.6% during the period 1960-81. East Asia, on the other hand, which is known for its state-managed globalisation (most recently epitomised by China), has grown 6.7% per annum in per capita terms since 1981, actually up from 3.5% in that same period.
As with all development challenges, the solutions are often more complicated than the proposed solutions. Governance reform is not an exception.
Harvard University researcher Matthew Andrews says that the one-size-fits all approach to governance reform is misguided.
In The Limits of Institutional Reform in Development, Andrews proposes what an approach to governance reform that he calls Problem-Driven Iterative Adaptation (PDIA). His approach leans on a locally driven approach to reforms that involve allowing more emergent change as opposed to top-down and technocratic fixes.
Alan Hudson of the ONE Campaign shared an example of PDIA in action in his review of the book.
One example of this approach is seen in Burundi’s HIV/AIDS Control and Orphans Project. In that project there was a clear focus on the problem, but also flexibility about how best to address it. For instance, anti-retroviral treatment had not been part of the initial project plan, but when such treatment became affordable the plan was revised to take account of this change of context.
To learn more about PDIA and the challenges to governance, I posed a few questions to Andrews about the topic.
Why does the one-size-fits-all approach to governance fail?
A number of reasons. First, contextual factors determine what kind of institutional change is possible and what is not. So context must be considered seriously when doing reform. A one size fits all approach commonly fails to take context into consideration. Second, one size fits all reforms tend to be the ‘best practice’ variety that demand a lot to work properly. Most commonly the content required to ensure functionality is not present in many places, hence the best you get are new institutional forms that look better but do not function. Third, agents who are embedded in extant institutional structures are highly unlikely to simply move from the rules they know to a one size fits all solution. Change happens through a process, where agents identify the need for change (typically because of some kind of threat or problem they cannot ignore) and then find and fit contextually relevant solutions (that are politically accepted and practically possible). One tends to bypass this process when importing one size fits all solutions…which routinely guarantees limited acceptance of these solutions and ensures that they are poorly capacitated.
Why then, in your opinion, do large donors and actors apply such a standard of governance reform?
I argue that governance and institutional reform has been informed and driven by a ‘reform as signal’ syndrome. Governments need to get external legitimacy and staff in donor agencies need to move money and create projects that will pass the board (World Bank) or get approval in the congress (bilaterals). Governance reform projects are hatched relatively quickly, must be pre-programmed, and must do the trick of sending the message that the government is doing the right things. This leads to a focus on best practice solutions, which the government officials and donor agency staff members come to see as ‘the right rules’ to adopt. These best practice reforms send strong signals that I see reflected in governance indicators…but a few years later the governments fail to implement the reforms. At this stage, one sees new projects trying to produce the same best practices again. In my book I show examples of this from places as diverse as Argentina (with fiscal rules), Niger (with procurement laws) and Uganda (with anticorruption regulations).
To what extent do you view development as a complex system?
Development and state building are inherently complex. Both involve multiple agents, in multiple institutional settings, facing problems that (if we are honest) we don’t really understand and certainly do not know how to solve. Development and state building are not commonly treated as complex problems, however. Rather, we have a technical agenda where we pretend that we have the ‘right’ answers and just need to do these properly.
You set forward Problem-Driven Iterative Adaptation (PDIA) as the solution. It sounds an awful lot like Easterly’s searchers. How is it the same or different than what Easterly proposes?
There is strong overlap with Easterly’s ideas, as well as ideas coming from a variety of other people. I think PDIA should be taken seriously because it brings a lot of these ideas together into a comprehensive approach to doing development better, not because it is an entirely new idea. Note, however, that I would not characterize it as a ‘solution’ because I am concerned about anything being characterized as such in a development arena that lusts after easy solutions. Rather, I think it is a proposed process that could be used to help find and fit solutions to the complex problems of development and state building.
What is an example of PDIA in action?
When I look at the way functional institutions emerge, I see PDIA all over. Let me give an example from a developed country, Sweden. The Swedish public financial management system is currently being presented as a model for all other countries to learn from. Articles cite the country’s fiscal rules, etc. as the things other countries should look at. I think that he better lesson is about the process through which these emerged. Starting in 1992 one sees Sweden facing up to some serious fiscal problems, with a group of civil servants using data and stories to show that the problem was caused (to a large degree) by weaknesses in the public financial management system. The officials used data to show that Sweden’s system was weaker than Italy’s, which got the politicians calling for change. Once the space was created for change (problem driven, as it was), a group of officials began gathering lessons from reform experiments in the 1980s, and trying some new initiatives to learn about potential solutions. They drew ideas from inside and outside the country and took five years experimenting before they started formalizing solutions in laws. The iterative process of experimenting, learning, adjusting and changing has continued since that time…with political will for change growing constantly and capacity to do new things emerging gradually through the iterative process. What Sweden has now is a system in which many agents are constantly engaging and capable of adapting to challenges and threats.
This is PDIA and, in my opinion, this is what good governance is about as well.
As post-2015 framework discussions heat up, what are ways that governance goals and targets can be enshrined that will steer away from applying single solutions to governance?
I think this is tough, as there is a gung ho attempt to force some routine governance indicator into the post 2015 framework. I think this is going to foster more reforms as signals. To counter this, I would focus on building a menu of potential governance indicators, all focused on a tubal functionality (not specific forms) and I would ask countries to choose which indicators they want to focus on and what their targets are. I would then combine donor funding into large trust funds that allow a flexible process of problem analysis, experimentation, and diffusion. This gets one away from single indicators and stuffy projects. I recently discussed a proposal in these articles.
The attention towards governance is rising when it comes for development. Why should people pay attention governance in addition to issues like health, education and economic growth?
I don’t think the question should be about governance or other setcoral focal points When you look at the governance of an organization or sector or country you are analyzing the rules that drive agents in the organization, sector or country. The rules impact behavior, which impacts results. Hence, the reality is that very few interventions in health, education, or economic growth (and beyond) do not have a governance focused some kind. Think of efforts to change the processes through which medicines are purchased and supplied, or attempts to improve the mechanisms to hire teachers and assure that the teachers are present in classrooms, or initiatives to adjust laws or regulations impacting the creation and functionality of small businesses. All of these examples are institutional reforms targeting governance in the different sectors.
Your findings seem to have broad development applications. Have you thought about how PDIA could be used for health systems or security sector reform?
Absolutely. My book actually draws on a study about problem driven change in the health sector, where I make the argument that problems drive change more effectively than opportunities. I think that any time you are changing the rules of the game you need to go through a process. This is what PDIA is.