Externally supported Public Financial Management (PFM) reforms often have limited success in developing countries. The reforms commonly introduce new laws and systems that are not fully implemented or used, especially by distributed agents—budgeters, accountants, and such in sector ministries, provinces, and districts. This article asks why this should be expected and what could be done about it. It builds a theory of institutional change and tests such using data from a survey of public sector accountants in Eastern and Southern African countries—one sub-set of which was distributed. The evidence supports a simple explanation of why distributed end users often limit PFM reform success: they are likely to support incumbent institutions and question reform alternatives and are less engaged in reforms than more concentrated agents who champion reforms. The article suggests that research and practice needs to better account for the influence of distributed agents on externally supported reform success.
Many public sector reforms in developing countries fail to make governments more functional. This is typically because reforms introduce new solutions that do not fit the contexts in which they are being placed. This situation reflects what has recently been called the 'capability trap' in development—which results in many interventions producing new forms that are not functional in states across the globe. The work on capability traps suggests that reforms can yield more functional influence in even the most complex states, however; if reformers adopt non-traditional approaches to doing reform. In particular, the work suggests that reforms will tend to be more contextually fitted if: (i) They are driven by problems that agents in the context care about; and (ii) They are introduced iteratively—through a stepwise process where ideas are tried and lessons are learned and used to adapt (or fit) ideas to context.
The capability traps work embeds these ideas into an approach to doing reform called Problem Driven Iterative Adaptation (PDIA). This approach has deep roots in various literatures but many observers still ask how PDIA-type reforms could work to foster successful reform in complex hierarchical developing country governments and whether these approaches really help foster reforms that better fit such complex contexts. This paper responds to such question by describing an action research study where PDIA is being used to retell a story of reform that has to date been limited. The action research study is in Mozambique’s judicial sector and will examine whether and how a problem driven iterative approach can (i) flush out the contextual factors that often limit reform success, (ii) provide a viable route to find and fit reforms that actually foster greater functionality, and (iii) promote the authority needed to ensure change is implemented and institutionalized.
This paper synthesizes the approach I take to looking at governance in nations states. The approach emphasizes ends as the starting point for any view of governance. (Asking about what governments do rather than how they do them). I also emphasize means; but in thinking about what it takes to produce ends, not as stand-alone factors. I provide some detail on the specific ends and means I look at in nation states and promote the idea of using governance dashboards and narratives to look at governance (not hold-all indicators). I also discuss how my approach might be useful in the current discussions about including a governance indicator in the post 2015 development goals. I expect that some will disagree and even disapprove with the approach I discuss, but I hope that the approach nonetheless offers a useful contribution to current discussions.
The coherence and effectiveness of engagement with the world's 'fragile and conflict-affected states'—beyond ethical imperatives and geo-strategic considerations—turns on answers to two vexing questions. First, on what defensible basis is any given country, at any given historical moment, deemed to be (or not to be) 'fragile'? Second, if a defining characteristic of state fragility is low levels of capability to implement core responsibilities, how can international agencies best support domestic public organizations to acquire capability? The first issue may appear to be a methodological one (wherein more and better data would provide a firmer empirical foundation on which to base key decisions) but any determination, especially of marginal cases, must also be grounded in a correspondingly comprehensive theory of change. Similarly, the optimal response to the second issue may appear to be importing technical and rigorously verified ('best practice') solutions, but in fact it is more likely to require a qualitatively different strategy, one able to experiment with alternative design specifications and adapt in real time to changing contextual realities (thereby iterating towards customized 'best fit' solutions). To this end, an alternative approach to the theory, measurement and practice of engaging with fragile states is outlined, in the spirit of rising concerns across the development community that prevailing strategies have demonstrably reached the limits of their effectiveness.
Andrews, Matt, Marco Cangiano, Neil Cole, Paolo de Renzio, Philipp Krause, and Renaud Seligmann. 2014. “This is PFM”.Abstract
The acronym PFM stands for Public Financial Management: But what is public financial management? This short note tries to demystify the concept, drawing on perspectives of specialists in the area who work in different contexts and bring different views (from academia, the multilateral and bilateral development agencies, think tanks, government, and civil society). The note is not meant to be prescriptive but rather offers an entry point to a fuller discussion on the constituent elements of PFM systems, how and why PFM reforms have emerged, and where the gaps are for future attention.
"Leadership" is not a common topic for research in international development. In recent years, however, prominent studies like the 2008 Growth Commission Report noted the importance of leadership in development. This and other studies focused on individual leaders—or heroes—when referencing what leaders did to foster development. The current article asks if heroes really lead development. It deconstructs the implied theory behind a ‘hero orthodoxy’ into four hypotheses; about how change happens in development, who leads it, how it emerges, and how it is bought to completion. Through a qualitative study of twelve interventions in contexts like Afghanistan, Sierra Leone and Kosovo, the article shows that these hypotheses are too simple to really help explain who leads development. It appears that change is complex and requires complex multi-agent leadership interventions.
This paper argues that attempts at state-building in Afghanistan have led to institutions that are not robust. The state institutions and organizations continue to be highly dependent on external resources and technical expertise, and lack of critical mass of people able and willing to maintain them when external support recedes. I contend that Afghanistan may have fallen into a "capability trap" that can lead to an actual decrease in state capacity in spite of an appearance of progress.
This capability trap has been facilitated by four conditions:
1. High expectations on the government without sequencing or prioritization
2. More weight on immediate results than on establishing capable institutions
3. A limited menu of acceptable options for institutional arrangements, leading to strong pressures for simple "transplantation"
4. A top-down model of implementation
Thinking about state-building thus needs to shift towards helping to structure or guide a process through which the problem-solving capacity of a broader range of actors can be brought to the fore, and more contextually fit models can emerge, that are less reliant on external expertise, resources, and legitimacy.
Governments can play great roles in their countries, regions, and cities; facilitating or leading the resolution of festering problems and opening new pathways for progress. Examples are more numerous than one might imagine and raise an important question: How do governments get great? This paper identifies 10 cases of great governments to answer 4 dimensions of this question: What kinds of interventions or changes help governments achieve greatness? Who leads these interventions or changes, and how? When do the interventions occur, and why? How are these changes sustained and implemented to ensure they yield results? The paper suggests two sets of answers to these concerns, combining such into rival theories that could explain how governments get great: "Solution and leader driven change" (SLDC) and "Problem driven iterative adaptation" (PDIA). It proposes using these two theories in future research about how governments foster the kinds of achievements one could call great and argues this research should employ a version of Theory Guided Process Tracking (TGPT) called systematic process analysis.
Leadership is an under-studied topic in the international development literature. When the topic is broached it is usually in support of what might be called a "hero orthodoxy:" One or other individual is identified as the hero of a specific achievement. The current article offers a three part argument why this orthodoxy is problematic and wrong for many developing countries, however. It suggests first that heroes have not emerged in many countries for a long period and individuals who may have been considered heroes in the past often turned out less than heroic. It posits second that heroes are actually at least as much the product of their contexts as they turned out to be the shapers of such. It proposes third that the stories about hero-leaders doing special things mask the way such special things emerge from the complex interactions of many actors—some important and some mundane. Leadership, it appears, is about multi-agent groups and not single-agent autocrats. The conclusion posits that romantic notions of heroic-leadership in development become less convincing when one appreciates these three arguments. It calls development theorists and practitioners to go beyond the heroic-leader perspective.
A key argument in my book is that reforms that actually improve functionality and yield institutions that work in complex contexts typically happen step-by-step. In Mozambique I say poco-a-poco.
The book explains the rationale for this by referring to the 'muddling through' work of Charles Lindblom. I argue that we need to create processes of 'purposive muddling'to overcome the limits of institutional reform in development.
During Sudan’s ‘interim period’ from the end of civil war in January 2005 until South Sudan’s independence in July 2011, foreign development agencies provided extensive support and billions of dollars in aid—for which institutional development and capacity building of the nascent Government of Southern Sudan were core priorities. This six-year period thus provides a major case study in modern-day state-building. As a framework for analysis, the paper utilizes the Paris Declaration on Aid Effectiveness—which was signed in February 2005, shortly after Sudan’s peace agreement. Assessment of how the Paris principles were utilized in Southern Sudan underscores the limits of the prevailing orthodox approach to development, particularly in fragile post-conflict environments. In such complex, highly challenging contexts, orthodoxy often fails.
Rising standards for accurately inferring the impact of development projects has not been matched by equivalently rigorous procedures for guiding decisions about whether and how similar results might be expected elsewhere. These 'external validity' concerns are especially pressing for 'complex' development interventions, in which the explicit purpose is often to adapt projects to local contextual realities and where high quality implementation is paramount to success. A basic analytical framework is provided for assessing the external validity of complex development interventions. It argues for deploying case studies to better identify the conditions under which diverse outcomes are observed, focusing in particular on the salience of contextual idiosyncrasies, implementation capabilities and trajectories of change. Upholding the canonical methodological principle that questions should guide methods, not vice versa, is required if a truly rigorous basis for generalizing claims about likely impact across time, groups, contexts and scales of operation is to be discerned for different kinds of development interventions.
Public sector reforms are commonplace in developing countries. Much of the literature about these reforms reflects on their failures. This paper asks about the successes and investigates which of two competing theories best explain why some reforms exhibit such positive deviance. These theories are called 'solution and leader driven change' (SLDC) and 'problem driven iterative adaptation' (PDIA). They are used to analyze data emerging from a case survey involving thirty cases from Princeton University's Innovations for Successful Society (ISS) program. The bulk of evidence from this study supports a PDIA explanation, but there is reason to believe that SLDC hypotheses also have value. It seems that PDIA and SLDC are two viable paths through which positive deviance can emerge; although PDIA seems to provide the wider path for more positive deviance.
The prevailing aid orthodoxy works well enough in stable environments, but is ill-equipped to navigate contexts of volatility and fragility. The orthodox approach is adept at solving straightforward technical or logistical problems (paving roads, building schools, immunizing children), but often struggles or outright fails when faced with complex, adaptive challenges (fighting corruption, upholding the rule of law, establishing democratic institutions). South Sudan, the world’s newest country, presents a post-conflict environment full of complex, adaptive challenges. Prior to the signing of the Comprehensive Peace Agreement (CPA) in 2005 South Sudan had no formal institutions of self-governance. During the CPA period and after independence in 2011, foreign development agencies have contributed billions of dollars of aid and technical assistance to "build capacity" in the nascent Government of South Sudan (GoSS). The donors utilized approaches and mechanisms of support that at least nominally reflect the prevailing aid orthodoxy. We argue that orthodox state building and capacity building more or less failed in South Sudan, leaving the world’s newest country mired in a "capability trap" (Andrews, et al 2012). Despite countless trainings, workshops, reforms, and a large corps of foreign technical assistants embedded within state ministries, there is an absence of real change, and GoSS now "looks like a state" but performs as anything but. The challenges presented by this new, complicated, post-conflict country demand innovative approaches to building state capability which go beyond importing "best practice" solutions while feigning "client ownership." We explore one such approach to disruptive innovation that has emerged: Problem Driven Iterative Adaptation (PDIA). To escape from the world's newest capability trap, South Sudan’s government and its international donors must challenge themselves to imagine innovative paths to state building, which diverge from "business as usual" and attempt to create something that lasts.
This paper begins by noting that Uganda has been a public sector reform leader in Africa. It has pursued reforms actively and consistently for three decades now, and has produced many laws, processes and structures that are 'best in class' in Africa (and beyond). The problem is that many of the reforms have been limited to these kinds of gains—producing new institutional forms that function poorly and yield limited impacts. Various kinds of data showed—in various areas (civil service and public administration, public financial management, revenue management, procurement, and anti-corruption)—that laws are often not being implemented, processes are being poorly executed, and there is insufficient follow-up to make sure that new mechanisms work as intended. The paper suggests that government should reframe its reform agenda to address these limitations and close the gaps between what Uganda’s system looks like and how it functions. The proposed approach to doing reform in the future is called problem-driven iterative adaptation (PDIA) and builds on past reform activity (rather than proposing an entirely new set of solutions). PDIA will require Ugandans to work together and own their reform processes more actively than ever, coming to terms with the problems they face and working iteratively—in broad groups—to find and fit local solutions to these problems.
Many reform initiatives in developing countries fail to achieve sustained improvements in performance because they are merely isomorphic mimicry—that is, governments and organizations pretend to reform by changing what policies or organizations look likerather than what they actually do. The flow of development resources and legitimacy without demonstrated improvements in performance, however, undermines the impetus for effective action to build state capability or improve performance. This dynamic facilitates 'capability traps' in which state capability stagnates, or even deteriorates, over long periods of time despite governments remaining engaged in developmental rhetoric and continuing to receive development resources. How can countries escape capability traps? We propose an approach, Problem-Driven Iterative Adaptation (PDIA), based on four core principles, each of which stands in sharp contrast with the standard approaches. First, PDIA focuses on solving locally nominated and defined problems in performance (as opposed to transplanting pre-conceived and packaged "best practice" solutions). Second, it seeks to create an 'authorizing environment' for decision-making that encourages 'positive deviance' and experimentation (as opposed to designing projects and programs and then requiring agents to implement them exactly as designed). Third, it embeds this experimentation in tight feedback loops that facilitate rapid experiential learning (as opposed to enduring long lag times in learning from ex post "evaluation"). Fourth, it actively engages broad sets of agents to ensure that reforms are viable, legitimate, relevant and supportable (as opposed to a narrow set of external experts promoting the "top down" diffusion of innovation).
There is an inherent tension between implementing organizations—which have specific objectives and narrow missions and mandates—and executive organizations—which provide resources to multiple implementing organizations. Ministries of finance/planning/budgeting allocate across ministries and projects/programmes within ministries, development organizations allocate across sectors (and countries), foundations or philanthropies allocate across programmes/grantees. Implementing organizations typically try to do the best they can with the funds they have and attract more resources, while executive organizations have to decide what and who to fund. Monitoring and Evaluation (M&E) has always been an element of the accountability of implementing organizations to their funders. There has been a recent trend towards much greater rigor in evaluations to isolate causal impacts of projects and programmes and more ‘evidence base’ approaches to accountability and budget allocations. Here we extend the basic idea of rigorous impact evaluation—the use of a valid counter-factual to make judgments about causality—to emphasize that the techniques of impact evaluation can be directly useful to implementing organizations (as opposed to impact evaluation being seen by implementing organizations as only an external threat to their funding). We introduce structured experiential learning (which we add to M&E to get MeE) which allows implementing agencies to actively and rigorously search across alternative project designs using the monitoring data that provides real time performance information with direct feedback into the decision loops of project design and implementation. Our argument is that within-project variations in design can serve as their own counter-factual and this dramatically reduces the incremental cost of evaluation and increases the direct usefulness of evaluation to implementing agencies. The right combination of M, e, and E provides the right space for innovation and organizational capability building while at the same time providing accountability and an evidence base for funding agencies.
In many nations today the state has little capability to carry out even basic functions like security, policing, regulation or core service delivery. Enhancing this capability, especially in fragile states, is a long-term task: countries like Haiti or Liberia will take many decades to reach even a moderate capability country like India, and millennia to reach the capability of Singapore. Short-term programmatic efforts to build administrative capability in these countries are thus unlikely to be able to demonstrate actual success, yet billions of dollars continue to be spent on such activities. What techniques enable states to "buy time" to enable reforms to work, to mask non-accomplishment, or to actively resist or deflect the internal and external pressures for improvement? How do donor and recipient countries manage to engage in the logics of "development" for so long and yet consistently acquire so little administrative capability? We document two such techniques: (a) systemic isomorphic mimicry, wherein the outwardforms(appearances, structures) of functional states and organizations elsewhere are adopted to camouflage a persistent lack of function; and (b) premature load bearing, in which indigenous learning, the legitimacy of change and the support of key political constituencies are undercut by the routine placement of highly unrealistic expectations on fledging systems. We conclude with some suggestions for sabotaging these techniques.
In Afghanistan in early 2002, the emergency character of the situation was clear, its problems complex, and the international community’s understanding of the realities on the ground limited. In July 2002, a nascent new government was established and with it came the task of building the capacity of the state to perform its key functions. What these were, no one knew or no one agreed upon. But enthusiasm and levels of ambition was high. In 2012, levels of enthusiasm are down. Capacity building of the government had proven to be a difficult task, and the processes of policy reform were highly fragmented, disjointed and uncoordinated. The search for homegrown, contextual solutions seems to have been overshadowed by donor mandates and policy prescriptions. Among Afghans, frustration levels ran high on the billions of dollars spent, which little results to show for it. A culture of blame has developed.
Having spent nearly 10 years in Afghanistan, predominantly serving as an advisor to a number of Afghan government ministries, I have been able to observe these changes unfold. Through this experience, I have become convinced that the conceptual frameworks in place were not particularly well suited for solving many of the challenges Afghanistan faces. These conceptual models were based on importing institutional models and applying international best practices to the Afghan context, and were often severely disconnected from the reality on the ground. Much well-intentioned energy was spent, by some of the brightest people in the world, but effectiveness of most development programs remained low and their high ambitions remained unmet. This situation is not exclusive to Afghanistan, but few other countries have seen such an influx of resources paired with such low capacity in state institutions, which crystallizes out these problems quite clearly.
This paper can be seen as an attempt to explore alternative conceptual frameworks that could be used to look at how change unfolds in societies, and how this could affect our way of nurturing processes of change. To do so I draw upon insights stemming from systems thinking, complexity theory and leadership development, and aim to apply these insights on the challenge of facilitating institutional change and policy reform in a country like Afghanistan, or in fragile states more generally. An essential component of this way of thinking is to start from the premise that change is not as predictable and linear as most of our theories on development would like us to believe. Change proves much more stubborn, and whereas for some challenges we do have ready-made solutions on the shelf, in many cases these seem not to work in the complex systems that human societies are.
In this paper, I will propose a distinction between technical and adaptive problems. Adaptive problems can be defined as those problems where the problem definition is not clear-cut, there are no set procedures, no recognized experts, and no adequate responses yet developed. These are the types of problems that are most resistant to quick fixes, as they are complex with many moving dimensions and interactions between them. Imported strategies are often not appropriate, have unintended consequences, and tend to lead to implementation failures. Attempts to tackle these problems often cause resistance in the social system, as values, perspectives and worldviews are at stake. Technical problems, by contrast, are more clearly defined and less context-specific solutions are required. Best practice solutions can be imported and may actually work. For adaptive problems, they most likely will not.
In my view, one of the main failures of international development is to differentiate between problems that are technical and those that are adaptive; e.g. between problems that have a clear – though perhaps complicated - technical solution, and problems that need to be worked through in more open-ended ways and where the solution is not always clearly in sight. Technical problems are well served by our current reductionist way of thinking, whereas adaptive problems are not. These latter problems are deeply embedded in complex systems, where change is not always predictable and often non-linear. Dealing with adaptive problems requires different diagnostics, different approaches, and different management and accountability frameworks.
This paper explores ways in which approaches for tackling adaptive problems can be institutionalized and managed in practical terms. It stresses the need for space for endogenous change, which can only be created through the adoption of a common language and conceptual framework around the dynamics of change. It points to new ways of overcoming resistance and finding opportunities for change. It emphasizes the need for a learning infrastructure for synthesizing different sources of learning that can feed into a process of continuous adaptation and fine-tuning. It explores principles of emergent planning and building flexibility and experimentation into program design, and discusses performance management frameworks that can contain such approaches and provide the necessary accountability.
The book explores the conditions under which the Kecamatan Development Project (KDP), a nation-wide community development initiative, helped and hindered local institutional change as Indonesia embarked on a series of democratic reforms following the fall of the Suharto government in 1997. Deploying an integrated array of qualitative and quantitative methods – from ethnographies and interviews to case studies and matched comparisons – the research team sought to investigate how KDP, which allocated sources to villagers on the basis of participatory decision-making processes and the active inclusion of marginalized groups (such as widows), engaged with ongoing village conflicts and political dynamics.
At a time when many researchers seek to attribute development impacts solely to a project’s design, and to render judgments about efficacy, replication and scale-up on the basis of average effects, Contesting Development demonstrates that certain projects inherently have highly variable impacts, that this variance – when properly tracked – can be a valuable source of real-time feedback for making mid-course corrections, that the nature of the political context and quality of implementation matters at least as much as a project’s design for determining impact, and that even the best development projects generate conflicts because they alter (by design or default) prevailing social relations, expectations and power. Anticipating and responding adequately to the conflicts that projects generate is key to building legitimacy and sustaining effectiveness. As such, says Woolcock, the book’s key message "is the importance of understanding contexts and contests when designing, implementing and assessing development projects, especially those that seek to facilitate local level institutional change." While Woolcock’s regular employment is with the World Bank’s Development Research Group, at least fifteen HKS students were involved in this research to a greater or lesser extent over many years, and several of them continue to work on related development issues in Indonesia.